After years of planning, the hard part begins in school funding reform

Why Should Delaware Care? For the past few years, Delaware has been discussing how to reform its generations-old statewide school funding to better serve a modern classroom. The key question that has yet to be answered though is how a new formula will ultimately impact each school in the state.

Within the last two years, education leaders have tried to reform Delaware’s archaic public education funding system so schools have the resources to meet all students’ needs.

Last year, those conversations led Delaware’s Public Education Funding Commission — the appointed group tasked with recommending changes to the state’s 85-year-old school funding system — to unanimously recommend that lawmakers approve a hybrid funding framework, which would shift education spending away from a strictly per-student basis to one that directs more dollars toward students with higher needs.

This past summer, two bills that lay the groundwork for that funding system reform were signed into law by Gov. Matt Meyer.

The commission has also worked on its first implementation phase since the two bills were signed into law.

The first phase does not include implementation of a new formula, though.

Instead, the Delaware Department of Education is working on system updates during this phase, along with communication and training materials for those who will have a “key role” in changing the formula, said Brian Ray, the associate secretary of the finance and operations team at the Department of Education, during a public meeting this week.

Ray also said the commission’s working group will also have to consolidate existing funding appropriations such as teacher positions or different block grants into three main categories: base, opportunity, and operational funding.

The commission’s working group also established four subgroups to move forward with phase two and focus on equalization, multilanguage learners, vocational and career technical education, and students from low-income backgrounds.

Ray said each of the subgroups have met at least once, and “they’re starting to identify the variables and the processes we need to to work through to then make recommendations to [the full Public Education Funding Commission] to then review, vote, and move forward with into that next phase.”

Why was school funding being questioned?

Delaware’s current funding formula was established in 1940, with the state and federal governments providing about 70% of the funding while 30% is generated through district-level property taxes that residents vote on during referendums.

Before the bill, Sussex County had not conducted a countywide property tax reassessment since 1974, while New Castle and Kent County last reassessed property in 1983 and 1987, respectively.

The lack of assessments meant properties were extremely misvalued; some homeowners paid more than what the updated market called for and others paid too little.

Because of communities’ differences in wealth and in their willingness to support public schools, some – particularly in rural Delaware – are at a disadvantage when trying to compete for high-quality educators.

And a failure to pass or even hold referendums only furthers a gap between wealthy districts and those that are more economically modest.

Those concerns are exacerbated in areas in Sussex County that face a combined disadvantage of relatively low property wealth and high student needs.

Advocacy groups like the Delaware NAACP and Delawareans for Educational Opportunity filed a lawsuit in 2018, stating that the state’s education system did not provide an adequate education to all students. After a preliminary ruling allowed the lawsuit to proceed, the state settled the case, promising to reassess property and review statewide school funding reform.

The American Institutes for Research completed its independent assessment of education funding in Delaware as part of the 2020 settlement.

The group recommended in late 2023 that Delaware increase spending on public education by upward of $1 billion.

After both Democratic and Republican members of the State Senate’s Education Committee raised concerns in a March 2024 meeting over how the sum would affect taxpayers, the legislature chose to create the Public Education Funding Commission to examine the recommendation.

What has the PEFC done?

The committee held its first meeting in September 2024, and eight months later it unveiled an example of what the group called a new “hybrid formula,” giving a glimpse of what an overhaul of the funding system could look like.

By the end of the May 2025 meeting, the example produced as many questions as answers.

During the meeting, commission members were shown how the example formula would affect seven individual schools.

Those schools were Brandywine High School, Delcastle Technical High School, Frederick Douglass Elementary School, Lulu M. Ross Elementary School, the Charter School of Wilmington, Stanton Middle School, and Warner Elementary School.

Each of those schools, except for Ross Elementary, would gain about $1.29 million if that version of the hybrid formula example were implemented.

Ross instead would have lost more than $181,000.

Multiple members expressed concerns about Ross losing money because of its high population of students from low-income backgrounds and English-language learners.

“I doubt anyone in this room would accept a model that didn’t increase the allocations to a school like Lulu Ross that serves the population they serve,” said Commission Chair State Sen. Laura Sturgeon (D-Brandywine Hundred), who is a retired Spanish teacher.

The commission voted unanimously to approve a recommendation to move forward with a new hybrid framework in June 2025. Details from the May model were not included in the recommendation.

The approved recommendation only pushed forward the idea of a hybrid framework, and did not provide details as to the specific funding model that will be used to calculate a school’s new state support.

Last October, commission members also unveiled three categories for the funding model: base, opportunity, and operational funding. The three categories allow Delaware to use resource-based funding, or funding based on the number of students, and combine it with flexible dollars that will flow toward students that are multilanguage learners or from low-income backgrounds, among other student groups.

The Public Education Funding Commission also held multiple community listening sessions throughout last winter, and in April voted in favor of five different recommendations that ultimately called for the state to move forward with the hybrid model and to include a hold harmless so that districts would not lose dollars during the first years of implementation, among other recommendations.

In May, Sturgeon introduced two bills that came directly from the PEFC. One bill enabled the Delaware Department of Education to begin implementing the hybrid school funding model. It also includes a provision to mandate that no school receive less money under the model than it would have under the previous funding model.

The other bill established the PEFC as a permanent body to continue studying and evaluating the state’s funding formula in the years to come.

Both bills have since been signed into law by Meyer.

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