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Wednesday, June 22, 2005

Formulaic funding: good or evil?

Formulaic funding looks to be the big issue of discussion among the commissioners, with the camps already laid out.

What is "formulaic" funding? As laid out in the NPRM, it is a system of determining the level of funding using some formula based on size. Size is the only variable mentioned. No mention was made of income levels, rural vs. urban, cost of telecommunications, or any other factor. Perhaps other factors would be allowed to creep in to the formula. But basically, each applicant would get an amount of funding determined by the formula to spend any way it wants.

Is that better? I'm still on the fence about it.

  • Simple application: just send in your enrollment (for schools)
  • Less opportunity for fraud
  • Funding will go to the biggest applicants, not the applicants with the biggest appetite
  • Applicants would know the level of funding before the start of the program year
  • Applicants would have to live within a budget
  • Less incentive for unscrupulous service providers
  • Less need for paid E-Rate consultants
  • If size is the only factor, each student gets the same level of funding
  • You won't know 'til audit time if the services you're purchasing are really eligible.
  • Waste would be much harder to find.
  • How can we make a fair formula?
  • Some applicants will have to reduce their spending on telecom/Internet infrastructure. Isn't the goal of the program is to increase that infrastructure?
  • Applicants who had been very frugal will have an incentive to increase their spending to use up the entire lump sum they receive.
  • Hey, I'm an E-Rate consultant; less need for E-Rate consultants is bad.
  • Once the funding is more of a block, it would be easier to make a case for folding E-Rate funding into general education funding.
  • If size is the only factor, rich communities would get the same funding as needy ones.
Anyone else care to add pros or cons?

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