A new campaign concedes that some Oklahoma school districts’ budgets are substantially based on payments for “ghost students” who do not exist in those districts. As a result, activists argue that legislation tying state funding more closely to actual student enrollment would financially “destabilize” such school districts.

“Oklahoma House Bill 2078 would drastically destabilize local public school budgets in rural and urban districts across the state,” states an email campaign sponsored by OK Rural and Urban Public Schools United, the Oklahoma Rural Schools Coalition, and Tulsa PLAC (Parent Legislative Action Committee).

Under current Oklahoma law, state funding for schools is distributed based on several factors, including “the highest weighted average daily membership for the school district of the two (2) preceding school years.”

As a result, schools with declining enrollment can receive continued funding for students who transferred to other districts, graduated, or even moved out of state. Such students are informally referred to as “ghost students” since they exist only on paper.

This year’s enrollment figures show Oklahoma districts can claim more than 55,000 “ghost students” for funding purposes, which translates into around $195 million allocated to school districts to pay for the education of children who do not exist in those districts.

Legislation to reform school funding has already advanced from the Oklahoma House of Representatives.

House Bill 2078 would base school districts’ state funding on student enrollment from either the preceding school year or the current school year, whichever is higher. Under the legislation, schools would no longer be paid for students who departed two years ago.

In their campaign, OK Rural and Urban Public Schools United, Oklahoma Rural Schools Coalition, and Tulsa PLAC declared that a “radical change.”

However, to ease any financial disruption associated with its provisions, HB 2078 would also waive the current cap on school district savings, referred to as “carryover,” for the next two years. When the cap is reimposed in subsequent years, the bill boosts it by 20 percent.

Oklahoma’s 500-plus public-school districts reported $982 million in combined carryover savings at the end of June 2020, an increase of 48 percent over three years, and carryover could surge even more this year. Oklahoma schools received $160 million from federal COVID-19 bailout funding approved in March 2020, and another $650 million is going to schools from additional federal bailout funding approved in December 2020. Much of the school funding from the first, $160 million round of bailout funding remains unspent, as does the subsequent $650 million.

Despite the bill’s provision for increased savings at a time when districts are being flooded with federal cash, the campaign by the OK Rural and Urban Public Schools United, Oklahoma Rural Schools Coalition and Tulsa PLAC urges members of the Oklahoma Senate to oppose HB 2078. If school funding is based more closely on actual student enrollment with fewer “ghost students” included, the groups argue that change will “exacerbate” teacher shortages, “discourage and jeopardize educational innovation,” and “punish” students in declining-enrollment districts.

Rep. Kyle Hilbert, a Bristow Republican who authored HB 2078, has said the use of “ghost students” results in a “watering down of the funding formula” for all districts because the per-pupil allocation declines as enrollment figures are inflated by head counts that include nonexistent students.

However, state payment for non-existent students is a multi-million-dollar business in some school districts. Oklahoma Watch recently reported that if the provisions of HB 2078 had been in place this year, $10 million would have been redirected from Oklahoma City and Tulsa schools to other districts.

Under current state law, the Oklahoma City school district’s funding can be based on an enrollment figure that includes nearly 6,800 nonexistent “ghost students,” while Tulsa may be paid for nearly 3,300 departed students.

Just 22 districts account for 30,691 “ghost students” this year. As a result, just 4 percent of Oklahoma school districts will receive roughly 55 percent of current “ghost student” payments under the state’s existing funding formula.

While PLAC describes itself as a parent organization, one former PLAC member recently described the group as dominated by teacher-union activists and said PLAC often takes positions on legislation without any survey of its parent members.

The OK Rural and Urban Public Schools United, Oklahoma Rural Schools Coalition, and Tulsa PLAC campaign is being run through the site of The Action Network, which describes itself as “a mission-driven organization dedicated to building online power for the progressive movement.”