Stretching the school dollar

It is no news that American public education is facing a fiscal crisis, one that is unlikely to get significantly better any time soon absent major structural changes in schools. It’s also facing mounting pressure to boost pupil achievement. But how do district and state leaders prepare for a world in which they must do more with less?

To answer that question, we joined forces with AEI’s Rick Hess to produce Stretching the School Dollar: How Schools and Districts Can Save Money While Serving Students Best, published this week by Harvard Education Press. The book is the culmination of a joint Fordham-AEI project that brought together ten policy papers—now the book’s ten chapters

—penned by a varied set of authors and first presented for feedback in January 2010.

George W. Bush Institute’s James Guthrie and Vanderbilt’s Arthur Peng set the stage, declaring that “A 100-year era of perpetual per-pupil fiscal growth will soon slow or stop. The causes of this situation are far more fundamental than the current recession. Schools should start buckling their seat belts now.” Tracing the history of school spending, they show how adding more money and people, guided by the “supplement, not supplant” mantra, has brought the K-12 industry to today’s unsustainable state of affairs. Former Wall Street Journal reporter June Kronholz completes the picture by narrating what districts and states have done so far to trim costs and budget creatively. These measures, however, have not been enough.

So what to do? Several authors focus on the ways schools and districts can operate more efficiently today. Mike Casserly of the Great City Schools shows how large districts have shared information to fine tune their operations and save millions, and Marguerite Roza explains how careful budget analysis can uncover enormous waste. Stacey Childress highlights three districts that have taken a strategic approach to their budgets, aligning spending with their core priorities, and a team from the Boston Consulting Group distills lessons learned in helping districts streamline.

A second set of authors focuses on new opportunities for tomorrow. John Chubb shows the cost-saving potential of technology—as both a complement to and, at times, a substitute for traditional models of schooling. Steve Wilson shows that rethinking the teaching profession offers perhaps the greatest potential to conserve resources while improving schools—in part through technology but also by tackling salary scales, benefits, performance pay, and more. He contends that many teachers could be paid more—and better supported through professional development—in ways that would save money overall and improve the quality of schools.

Finally, former Arlington (MA) superintendent Nate Levenson and Harvard’s Marty West tackle the political challenges. Historically, reform has been accomplished by buying off threatened parties with more resources; this course of action, of course, is now largely unrealistic. Levenson uses his experience to illustrate what a financially savvy leader can accomplish—and what pitfalls await those who whose decisions are fiscally smart but politically dumb. West explains why politics block reform, including some of the reforms explicated in this volume, and urges rethinking federal and state funding schemes, school board elections, collective bargaining agreements, and more.

It’s time for schools to find paths towards greater productivity, yet too many budget cuts to date presuppose that they should keep doing roughly the same thing, with essentially the same work force—just with a bit less money. That approach doesn’t hold much promise that schools can be both radically more effective and more efficient. Far more fundamental changes are called for.

The barriers to such change are certainly formidable, so it is not crazy for superintendents to focus first on what’s easiest and least controversial, including optimizing operations, analyzing costs, and flattening central office organization.

But today’s budget shortfalls are just a prelude. Districts cannot simply close a few school buildings, lower the costs of food services, or raise class sizes slightly and expect to put their fiscal challenges behind them. To address the imminent crisis of state budget deficits, insolvent pension funds, and national debt, much bolder moves are required. In fact, stopgap measures may well do more harm than good: They let a district survive until next year, or the year after, at which point the big structural changes will be that much harder to accomplish. And of course the losers are the children whose education suffers as a result of poor financial decisions made by adults. A much better strategy would be to think bold today. This book is a great place to start.

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