School Finance

Joshua Dunn
The Lobato school-finance case
The Colorado Supreme Court made a wise decision in the long-running Lobato school-finance case.
Photo by SalFalko

A wave of good sense swept through the Colorado Supreme Court earlier this week, which finally made a decision in the long-running Lobato school-finance case. Back in 2009, the court split 4–3 ruling that school funding was a justiciable issue, which paved the way for a bizarre 2011 trial-court decision holding that the state was underfunding education by billions of dollars each year—an opinion that ignored those inconvenient parts of the Colorado Constitution that limit the ability of the legislature to raise taxes. Complying with the trial-court ruling would have required the legislature to violate the constitution. But what are constitutional limits when we have strained claims of underfunding based on dubious costing-out studies?

In Tuesday’s 4–2 decision, the court wisely declined the plaintiffs’ invitation to launch a constitutional crisis. Holding that the state’s school-finance system was rationally related to the constitution’s requirement to provide “a thorough and uniform” system of public schools, the majority rejected the trial court’s decision in its entirety.

Even though the plaintiffs lost, it's unclear what the litigation’s long-term political effects will be. Three weeks ago, Colorado’s legislature passed a school-finance bill that will increase funding and—allegedly—accountability. Promoted...

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Education’s Fiscal Cliff, Real or Perceived?In our 2005 report, Charter School Funding: Inequity’s Next Frontier, we wrote, “U.S. charter schools are being starved of needed funds in almost every community and state.” We backed that statement with funding data from seventeen states and twenty-seven districts. A 2010 report, tracking 2006–07 data, agreed. In the years since, some jurisdictions have moved to provide more equal funding levels to district and charter schools, yet large disparities remain. This paper—which will be published in the Journal of School Choice in September—examines the extent of those inequalities. Larry Maloney and colleagues tallied local, state, federal, and non-public revenue from 2007 to 2011 in Denver, Newark, Los Angeles, Washington, D.C., and Milwaukee. The upshot: On average in 2011, charters received $4,000 less per pupil, per year, across all five studied locales, with gaps ranging from $2,700 in Denver to nearly $13,000 in D.C.—though jurisdictions with the largest spending gaps (Newark and D.C., specifically) actually narrowed the gap between district and charter funding during the study period while those that started out closer to equal funding widened the gap. The authors also noted that charter schools—which receive a higher percentage of their operating budget from nonpublic revenue, such as foundation grants—were hit harder by the economic recession than their district counterparts: While states seemed to find funds (sometimes federal bailout dollars)...

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When Ohio Governor John Kasich released his “Achievement Everywhere” school funding plan in late February it was widely criticized for “stealing from the poor and giving to the rich.” Opponents of the governor’s plan noted “rich” suburban districts would see more state funding than poorer rural and urban districts. People wondered why the Cleveland Metropolitan School District, with a long history of poverty, would see no increase in state funding while Cleveland suburban districts like Euclid City would see a 21 percent increase in funding.

It didn’t seem to make sense, despite the arguments of the governor’s staff that Ohio’s demographics had changed considerably over the last decade (consider Cleveland had lost 30,000 students), and poverty was far more widely dispersed than most people thought. In response to the cries that the governor’s plan was unfair to rural and urban districts while a money grab for suburban districts the House rewrote the Kasich school funding plan to fund both rural and urban schools at higher amounts. This, it was argued, would be a fairer funding formula than what the Governor proposed and spreadsheets of the House plan did indeed show more rural and urban district benefiting from their plan than the governor's.

It is yet to be seen what the Senate is going to do per school funding, but one hopes that Senators are reading the new book from the Brookings Institution that reports “the suburban poverty rate in America has climbed by 64 percent over the...

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GadflyOur Gadfly readers won’t be surprised that in India, where a quarter or more public school teachers are absent at any given time, the demand for quality education among the poor has created a thriving market of private schools. Some think tanks, such as the Economist-profiled Centre for Civil Society, and provincial governments are running voucher experiments—with encouraging results. But as the Economist points out, the Indian government, which has proven to be innovative in some areas like health care, remains mulish in its opposition to private schools, designing rules apparently aimed at their eradication. For the sake of their nation’s children, we urge them to reevaluate.

A new NCTQ study finds that during the Great Recession, forty of the fifty largest school districts froze or cut teacher pay at least once between 2007 and 2012. Still and all, teacher pay did rise, if only slightly, over that five year period. The trends were “on par with almost all of the comparable professions” they assessed. Fascinatingly, Chicago clocked in with the highest pay raises (6.5 percent).

Christine Quinn, a front-runner for mayor of the Big Apple, has proposed addressing inequities in that city’s excellent but far too small gifted-and-talented program by creating 8,700 new spots over nine years. Additionally, she suggested allowing students from disadvantaged backgrounds to seek admission by way of teacher recommendations, rather than...

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GadflySnaps to Gov. Jerry Brown for his fierce defense of a weighted-student-funding plan for California’s schools, one that would reform the state’s questionable financing system by directing more—and much more flexible—funds to districts with high numbers of English learners and low-income families. We only hope that, behind the bluster, he’s willing to talk shop with his state Senate; the kids of California need a win.

A new report out of Rutgers University’s National Institute for Early Education Research heralded an uproar over pre-K financing: We spend $1,100 less per student than we did 2001, blared the headlines. But before you go building an ark and gathering all your pets onto it, note that preschool enrollment increased from 14 percent of four-year-olds to 28 percent during this period. The money increased, too, just not as fast as the headcount, meaning that per pupil funding edged downward even as total pre-school spending rose. What we’re seeing here is dubious policy, not disappearing dollars: Schools should be targeting these dollars at the neediest kids.

The Florida Senate killed a proposed parent trigger for the state just the way it did last year—in a 20–20 vote, this time with six Republicans joining all Democrats in opposition. The bill had been diluted during the legislative session to give school boards the final...

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Everyone from President Barack Obama to U.S. Representative Paul Ryan to Bill Gates seems to have a plan for improving the Federal Pell Grant Program for higher education.

A huge proportion Pell investment goes to unprepared students
Less than 10 percent of students who start in remedial education graduate from community college within three years
Image by MyTudut.

Worthy though some of these efforts may be, none get to the crux of the problem: A huge proportion of this $40 billion annual federal investment is flowing to people who simply aren’t prepared to do college-level work. And this is perverting higher education’s mission, suppressing completion rates, and warping the country’s K–12 system.

About two-thirds of low-income community-college students—and one-third of poor students at four-year colleges—need remedial (a.k.a. “developmental”) education, according to Complete College America, a nonprofit group. But it’s not working: Less than 10 percent of low-income students who start in remedial education graduate from community college within three years, and just 35 percent of such students earn a four-year degree within six years.

What if the government decreed that, starting three years hence, students would only be eligible for Pell aid if enrolled in credit-bearing college courses, thus disqualifying remedial education for support?

One could foresee various possible outcomes. Let’s start with the positive. Ambitious, low-income high school...

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Pre-Kindergarten
We've argued that states should target scare resources at the neediest kids—but clearly the states haven't listened.
Photo by Pink Sherbet Photography

The National Institute for Early Education Research, which is as much an advocacy group as it is a think tank, is out with its annual yearbook on state-funded preschool programs. And its (desired) headline is that “per pupil funding” is down dramatically.

That headline shows up in several press accounts (like here and here), but it’s incredibly misleading. Let me quote the report’s executive summary:

  • Total spending by states [from 2002-2012] has risen from $3.47 billion to $5.12 billion. Adjusting for inflation, this is a real increase of $1.65 billion in current dollars or 48 percent. In allocating these increases states have tended to favor expansion of enrollment over adequate funding for quality.
  • By 2011-2012, per-child spending had fallen below $4,000, the lowest in a decade. This reflects a drop of more than $1,000, adjusting for inflation, since 2001-2002 year, and is a 23 percent decline.

In his 2009 book Reroute the Preschool Juggernaut, Fordham’s Checker Finn argued that states should target scarce resources at the neediest kids, rather than spreading the money around. Clearly the states haven’t listened. They’ve boosted funding—but boosted the number of children...

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Since 1986, over 557 school districts throughout Ohio have taken advantage of a very generous program, courtesy of taxpayers, that allows school districts to pay for capital improvements done to their facilities.  According to the Ohio School Facilities Commission, this program has funded over 952 projects, involving over 6,089 buildings, at a cost of over $1.25 billion, while saving taxpayers over $115 million.  However, this privilege is open to district schools and their buildings only, and denied to charter schools. 

The program, formally known as the Ohio School Facilities Commission Energy Conservation Program or the House Bill 264 Program, enables school districts to make energy-related improvements to district buildings that in theory would generate enough energy savings to eventually pay off the improvement bond from which the capital originated from its issuance, along with the cost of financing.  The cost savings over 15 years for energy, operational, and maintenance must equal or exceed the cost of implementing the measures.  The program allows energy-related improvements, as opposed to merely repairs.  This may seem like semantics until the discussion turns on how exactly projects are paid for. 

In Ohio, tax levies are typically raised in order to fund capital projects, including improvements to school buildings.  Ohio law requires that such levies must be submitted to the voters of the school district for approval.  Under HB 264, however, school districts can bypass this process of accountability by invoking the desired project as a qualified, energy-related, permanent improvement.

Once could argue that HB...

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This sixth paper in the Digital Learning Now! “Smart Series” details how archaic education-financing structures represent a fundamental barrier to innovation (whether that be digital learning or faithful implementation of rigorous standards) in today’s K–12 sector—and sets forth four “design principles” for a modern funding structure. None of these recommendations for restructuring school funding is new (indeed, they’re largely built off work Fordham produced in 2006), but they’re worthy all the same: To allow innovation to take hold, funding must be weighted, flexible, and portable. It also must be based on performance, the authors argue. (A good idea—though one challenging to implement.) This paper provides a solid primer on all four—including tangible examples of states and districts that have made these changes. San Francisco, for example, rolled out a weighted-student funding system in 2002 that provides dollars to schools based on student grade level, socioeconomic status, special needs, and English language proficiency. Each school is then responsible for creating a budget tailored to its specific needs, with the central office in charge of training and monitoring schools. Yet another helpful DLN paper, chockablock with smart, actionable policy recommendations.

SOURCE: John Bailey, Carrie Schneider, and Tom Vander Ark, Funding Students, Options, and Achievement (Tallahassee, FL: Foundation for Excellence in Education, April 2013)....

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The Columbus Dispatch is reporting today that Gahanna-Jefferson Public Schools will be discontinuing their experiment with charter school creation at the end of this school year. The school of 110 students in grades 9-12 will be absorbed into the district. The main reason cited: once start-up funds ran out ($450,000 from the federal government’s Public Charter School Program), Gahanna Community School’s board and staff were unable to maintain operations with the fractional per-pupil funding provided monthly by the state to all charter schools. Upper Arlington closed a charter school for similar reasons last year.

While it is tempting for me to snark about “unscrupulous charter operators” (believe me, I wrote that blog post and it was really funny) and to rage that the federal government should get its start-up money back from Gahanna-Jefferson and Upper Arlington too, I think it is more important to talk about the object lesson that this situation presents.

The fiscal picture painted by the board and staff of GSC is the daily reality of almost all charter schools across the state: once the start-up funds are spent, the per pupil funding provided for school operations by the state – with no local funds and no facility dollars – is at least a third less than what is available to even the poorest of public districts in Ohio. Gahanna cites the savings that will be had by not having to pay $85,000 for filing separate state data and paying for separate financial...

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