Vol. 3, Issue 6 June 2006    Bringing urban P-16 education resources to policymakers, parents, advocates, and district and school staff in the District of Columbia    Education News Research on DC Schools National Lessons Learned New Ideas   The State Education Office does not endorse the views expressed in the resources and reports contained in the SEO Ed Digest.	Related Links DCDOCS Subscribe to the digest. Education Center Find local information and resources. React! Share your thoughts about the digest. Research 101 Learn how to judge the quality of research. SEO_Ed_Digest@dc.gov Contact us.

 

This issue of the SEO Ed Digest covers recent and background research on the topic of public education finance.  The research in this digest focuses on the following subtopics: defining adequacy; legal challenges to state school finance systems; intra-district allocations; determining the cost to provide adequate education; school finance systems; the history of education finance litigation; and inter district fiscal equity issues.  This topic is relevant to the District of Columbia as we continually seek the best ways of funding improvements in the quality of public education and improved achievement for our students. 
         

 

 

In this paper, the author reviews previous studies of school finance equalization rulings (SFE) on education and re-estimates some of their most important results allowing for differential equity and adequacy effects.  The author argues that various papers on the fiscal effects of SFEs use different time periods, data sources, and model specifications, making comparison of results across the analyses less straightforward.  Thus, the author estimates the most important models in the existing literature using a common time frame and set of control variables.  Further, prior studies have not attempted to differentiate the effects of equity- from adequacy-based SFEs.  Therefore, the author re-estimates previous models by allowing for differential equity and adequacy effects.  Lastly, recent work has underscored the importance of accounting for serial correlation in panel data analyses that have been used to study the effects of SFEs.  The author, therefore, re-estimates previous models allowing for state-clustered standard errors.  The author’s findings vary greatly, but one conclusion he makes is that several of the findings from prior studies are based on standard errors that were likely too small.

 

 

This paper sets out the myriad of problems and interpretative issues of costing out studies.  The author argues that currently most costing out studies are usually contracted for by parties interested in increasing the level of spending for education (including teachers unions, state departments of education, and litigants).  They are seldom used as analytic tools to aid in policy deliberations.  The author argues that these studies do not and cannot provide a scientific solution to the governmental decision process.  Deciding on the right balance among different government programs and between public and private spending along with structuring the schools and their incentives is rightfully the province of the democratic appropriations process and not consultants hired by interested parties. 

 

 

A foundation principle of democracy in the United States is the idea that all citizens are entitled to a free public education in order to gain sufficient knowledge to govern themselves and to contribute to a productive economy. Over the years, however, Americans have deliberated over what level of education is sufficient and who is responsible for providing the resources necessary to deliver it.  This policy brief examines legal challenges concerning state school finance systems and offers guidance for state policymakers and educators as they consider what constitutes an adequate education, how much it costs, and who is responsible for providing the necessary resources. The author suggests some important steps for policymakers and leaders: 1) help their communities define not only what they want students to know and be able to do, but also how much they are willing to pay to achieve these goals; and 2) build partnerships with other public agencies to effectively leverage resources and minimize competition for limited public funds.  The author states that by taking a proactive approach to improving school finance systems, policymakers may be able to minimize or avoid litigation and the sometimes costly and unworkable solutions that accompany court decisions.

 

 

This paper explores the determinants of resource allocation across schools in large districts and examines options for improving resource distribution patterns.  Previous research on intra-district allocations consistently reveals resource disparities across schools within districts, particularly in the distribution of teachers.  While overall expenditures are sometimes related to the characteristics of students in schools, the ratio of teachers per pupil is consistently larger in high-poverty, high-minority and low-performing schools.  The authors explore these patterns in New York City, Cleveland, and Columbus Ohio by estimating de facto expenditure equations relating resource measures to school and student characteristics.  Consistent with previous research, they find schools that have higher percentages of poor pupils receive more money and have more teachers per pupil, but the teachers tend to be less educated and less well paid.  The paper concludes with policy options for changing intra-district resource distribution in order to promote more efficient, more equitable or more effective use of resources.  These options include allocating dollars rather than teacher positions to schools, providing teacher pay differentials in hard-to-staff schools and subjects, and adapting current district-based funding formulas to the school (and student) level.

 

 

This report focuses on the following question: What is the cost of providing all New York public school students a full opportunity to meet the Regents Learning Standards.  The report summarizes the major components of this costing out study.  Four conventionally recognized analytic strategies exist for addressing the approach of adequate: the professional judgment model, a statistical or economic approach (also known as the cost-function model), the “successful schools” approach, and evidence-based models.  The authors used a combination of the best features of all four strategies, with the “professional judgment” model playing a central role.  The authors found that, excluding transportation and debt service, public schools in New York spent about $31.7 billion in 2001-2002 to educate their students.  An additional $6.21 billion to $8.4 billion would have been necessary this same school year to ensure a full opportunity to meet the Regents Learning Standards to all students.  Further, 520 school districts would have required additional funds, while the remaining 160 districts were already spending at adequate levels.

 

 

In New York, as in a number of other states in which recent state court decisions have invalidated the existing system of school financing, the court decision has focused on the failure of the existing system to provide each student with an adequate education.  However, there is no consensus in the literature on how to operationalize the concept of adequacy.  The court decisions do not give policy makers the luxury of waiting for consensus in the academic literature; they must settle on a method for structuring an aid system that insures that each student has access to an adequate education. This paper provides guidance on how to accomplish this difficult task.  It also provides a critical evaluation of methods that have been proposed for determining the spending districts in a state would need if they are to provide an adequate education.  Particular attention is paid to the lessons that can be learned from the efforts in other states and in New York to operationalize the concept of adequacy.  This paper then discusses several cross-cutting issues that must be addressed no matter which method is used to determine the adequate level of spending. Among these issues is the possibility of creating perverse incentives by compensating for factors in that can be influenced by districts and the need for avoiding a system of adequacy determination that appears to dictate to districts and schools specific input mixes. 

 

 

In this report, the authors review the academic findings and court holdings that have debunked one of the great school funding myths of our time: that money spent on poor and minority students is akin to throwing money away.  The authors conclude that money spent on qualified teachers, smaller class sizes, preschool initiatives, and academic intervention programs boosts student achievement dramatically - especially for poor and minority students. The paper also focuses on the contemporary education funding concerns: How much money is needed to provide all students a meaningful educational opportunity; and what accountability practices ensure that funds are used to promote student learning.  The authors conclude that instead of reform without the possibility of enhanced resources, policymakers should advocate reform which incorporates high standards, continuing assessment, and adequate resources.  This includes new accountability approaches that provide regulatory direction and incentives for schools to devote resources to effective practices, while, at the same time, promoting school-based initiatives that create a positive climate for teaching and learning.

 

 

This report examines the finances and budget operations of the District of Columbia Public Schools and asks a number of questions, including:  Where are the District of Columbia Public School District's resources going? Is the school district managing its financial resources effectively? Should the school district be given control of its dollars? How does the school system spend its money compared with other major urban school systems? Does the DC school system have enough money to teach its students to high standards? Could current resources be spent more effectively?  The authors found that while DCPS has the third highest-funded school district of any major urban school system in nation, behind Newark and Boston, the school system seems poor for a number of reasons, including the following: while DCPS has seen significant enrollment declines over last several years, it has not thought about resizing; DCPS operates a large number of school buildings for the enrollment that it has; DCPS devotes a high portion of its resources to overall support costs and less on instruction; and DCPS has incurred an unusually large liability related to special education and transportation costs.  The authors also offer recommendations for improving the school district's financial operations.  These include: establishing a citywide task force to consider options for resizing district and redeploying proceeds into meeting some of the district’s unmet instructional needs; redeploy resources to classroom instruction, professional development, supplemental materials, tutorials, intervention programs, textbooks, transition schools, staff salaries; developing a transition plan for moving district’s transportation operations in-house or outsource entire operation; and naming a blue-ribbon committee to recommend specific strategies for reducing special education costs and bringing programs in-house.
 

 

State academic standards require that public schools have adequate resources.  In its 2004-05 state aid proposal, the New York State Board of Regents presents its estimate of the cost of those resources, which it refers to as foundation cost.  This paper analyzes five different school finance systems that would ensure that every New York school district has the revenue necessary to meet its foundation cost.  The first is a benchmark system in which the state combines general revenue with the revenue from a statewide property tax to pay for each district’s cost.  The second is a local implementation of that benchmark in which local school districts levy the same tax rate and the state supplements local revenue with enough state aid for each district to cover its cost.  In the third system, all districts levy the same tax rate except those for which revenue at that rate exceeds cost.  The fourth finance system is outlined in the Regents’ proposal, where each district’s tax rate is proportional to the income of its taxpayers. The final system is modeled after Maryland’s new system in which the state and local districts share the cost of meeting state standards.  The paper concludes by considering local flexibility to raise additional revenue above foundation cost. 

 

 

This paper is the final chapter in Bringing Equity Back, a book that examines the concept of educational equity and addresses the imperfect legacy of reform efforts since Brown v. Board of Education. This chapter argues that adequacy litigation offers a new path towards the ideal of equal opportunity and excellent education for all students. The author reviews the history of education finance litigation, focusing on the adequacy lawsuits of the last 15 years. These lawsuits contain immense potential for achieving the democratic principles that have characterized reform goals, but will only prove successful in realizing them when combined with public and community engagement.

 

 

In this report, the authors detail a comprehensive school financial condition indicator system (FCIS) they developed with input from state agencies, including the New York State Department of Education and the New York State Office of the Comptroller, and school groups. They build on previous research to create a comprehensive system that measures four components indicative of a school’s financial condition: short- and long-run financial condition, the economic condition of the school’s location, and student performance.  The model applies “fuzzy-based rulemaking,” a step-wise process of measuring data that incorporates informed judgment in the variables and allows for separate analysis of any of the four components so that targeted reviews can be made as needed.

 

 

This Powerpoint presentation provides an overview of education finance adequacy and highlights states that have conducted adequacy studies.  The author examines the following questions: Why have adequacy systems become relevant; what are the systems for determining finance adequacy; what are the weaknesses of each adequacy study; what measures do states use to define an adequate education; why undertake an adequacy study; what states have undertaken adequacy studies; what other states are currently undergoing an adequacy study; and the impact that previous adequacy studies have had.

 

 

Over the years, some researchers have questioned whether additional education resources impact student achievement -- essentially, whether money matters. Among other points, this brief finds the following: targeted resource allocation especially benefits disadvantaged children; improving the classroom environment for current teachers may be more cost-effective and yield greater gains than simply raising teacher salaries across the board; and family variables are among the strongest indicators of student achievement.

 

 

In a previous study, the authors of this report evaluated the equity of the state’s school finance system and concluded that overall, the structure of the system was designed to promote inter-district fiscal equity by taking into consideration both the relative need and relative wealth of each school district in the distribution of state support.  They also found that some components of the system, such as state retirement aid, were somewhat inequitable and that several components were designed to accomplish the same purpose, making the allocation system unnecessarily cumbersome.  The state uses a foundation formula for the purpose of distributing most state aid, under which a target level of revenue is established for each district, driven in large measure by the foundation level, a constant amount per student.  For this study, the authors were asked to pursue the professional judgment approach and the successful school approach to estimate the expenditures the schools need in order to fulfill state obligations.  Based on a set of costs for school resources and district wide services, such as administration and plant maintenance and operation, the authors estimated that when using the professional judgment approach, total costs would be $12,060 per pupil in elementary school, $9004 per pupil in middle school, and $9,599 per pupil in high school.  In order to implement the successful school approach, a successful elementary school would cost $6,161, a successful middle school would be $5,655, and a successful high school would be $5,910.  The authors conclude that while either of these approaches are more rational than methods that have typically been used to set the parameters of a school finance system, the figures produced should be viewed as reasonable estimates and not precise calculations. 

 

 

This report argues that imposing statewide student performance standards without adequate financial resources will result in school districts with above average costs not having the funds to educate their students to meet the new standards. The report includes a statistical approach for measuring the costs of public education and ways to integrate those costs into school aid formulas. It also reviews alternative approaches to the measurement of costs.

 

 

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