School Finance

A school district should never go broke. But unfortunately, they can, and do. Take Pennsylvania’s beleaguered Chester Upland School District. Teachers will once again work for free as the district faces a $22 million deficit, which the Washington Post reports could grow to $46 million. The district of approximately three thousand students was first tagged as “financially distressed” in 1994, and since then, its enrollment has declined by nearly 60 percent even as special education costs have risen substantially. Neither of these developments came as a surprise. Yet the district still overspent its coffers by $45 million between 2003 and 2012, despite millions in few-strings-attached bailouts by the state over the same period. In 2012, Chester Upland ran out of money completely and the teachers agreed to work without pay; that same year, the state finally enacted legislation to do something other than hand out more cash. Under Act 141, the state could declare small districts in financial distress, allow them to apply for loans, and appoint a chief recovery officer (CRO) to oversee finances.

Since 2010, Chester Upland has received $75 million (an enormous sum, considering that its yearly budget is...

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One of the most hotly debated issues in American education today revolves around low-performing schools and districts: how to define “low-performing,” what to do about them, and who gets to decide. That’s at the heart of the deliberations—and arguments—over the No Child Left Behind reauthorization now moving through Congress.

But there’s another species of “failing” schools and districts that doesn’t attract the same controversy, even though it should: institutions that are financially insolvent, or headed toward that status. For example, as of the 2014–15 school year, the School District of Philadelphia had massive deficits—to the tune of $320 million. In Michigan, nearly 7 percent of all traditional school districts and charter school districts (57 of 843) were operating at a deficit at the end of the 2013–14 fiscal year. Over 25 percent of New Mexico districts (23 of 89) required emergency state aid in 2013–14. And there are similar problems in Cleveland, Chicago, Detroit, and elsewhere.

Districts go insolvent primarily because there are insufficient counter-pressures on their leaders to stay fiscally solvent. Existing leaders are often rewarded—through elections, appointments, or re-appointments—when they make promises that...

A new study by Bellwether Education Partners examines the changes to teacher pension systems over the last thirty years. The report uses an historical data set from the Wisconsin Retirement Research Committee (RRC) and the state legislature that includes data from public employee pension plans in eighty-seven retirement systems across all fifty states. The data span from 1982 to 2012 and are based on annual reports, employee handbooks, statutes, and actuarial reports. Analysts examine defined benefit plans only—and, to facilitate comparisons, only the plans offered to hypothetical newly hired, twenty-five-year-old teachers who remain in those plans in each state. Analysts note several trends that have developed over the last thirty years, including:

  1. The median state offers a much lower vesting period compared to several decades ago, dropping from ten years to five years.
  2. States began lowering the normal retirement age in the 1990s and continued into the 2000s. But in recent years, states have increased the retirement age, which decreases retirement benefits and results in fewer years collecting a pension. In 2012 alone, nineteen plans increased their normal retirement age for new teachers, pushing the average retirement from age fifty-five to fifty-eight.
  3. Average employee contribution rates remained relatively constant throughout
  4. ...
Rebecca Sibilia

I’ve always appreciated Andy Smarick’s efforts to create a new vision for urban school districts, but his recent piece about the importance of data in education strikes an especially resonant chord. Understanding the context where we preach our policy “scripture” is pivotal if our ultimate goal is to improve children’s opportunities. EdBuild is very much rooted in the notion that student lives play out in this context, not in theory. 

That said, statistics can be dangerous. All of Andy’s examples are relevant, on-target, and interesting. The percentage of school spending on salaries and benefits, the gap between men and women receiving college degrees, and the demographic changes sweeping across our nation’s schools are all critical information for policymakers and advocates alike. But stopping at an average can often lead to overgeneralization. For instance, using numbers from the Department of Education, he states, “State and local governments provide the same amount of funding for schools—gone are the days when local districts were on their own financially. Today, property taxes produce a majority of funding in only a few states…”

While this is true at the aggregate level, it’s misleading. Without further context, the statement distorts a very stark picture of what’s...

A recent study from the Education Trust called Funding Gaps 2015 illuminates the per-student funding disparities between affluent and poor districts. Findings show that, on average, more state and local tax dollars find their way to wealthier districts. For many, this overall trend is hardly surprising, but perhaps more interesting is where the trend is actually being reversed.

Authors Natasha Ushomirsky and David Williams examined the Census Bureau’s finance data, specifically focusing on each state’s state and local funding (excluding federal dollars). Nationally, the report concluded that districts with the highest poverty receive about 10 percent less in state and local funding (or about $1,200 less per student) than the wealthiest districts. Seventeen states, however, defied the national trend: Their highest-poverty districts receive at least 5 percent more than the lowest-poverty districts. According to the Education Trust’s analysis, Ohio was the national leader, boasting 22 percent more funding for its highest-poverty districts.

But when the authors accounted for the estimated 40 percent more funding needed to educate students in the highest-poverty districts—an estimate pulled from the Title I formula—the gap widens. When this is accounted for, the highest-poverty districts receive about $2,200 (or 18 percent) less per student than...

Trailing only Medicaid, school spending is the second-largest public expenditure in Ohio’s $65 billion annual budget. Over the next biennium, the state is slated to spend $12 billion per year on education (including $2 billion per year in federal funds administered by the state), on top of $8 billion per year raised via local property taxes. Altogether, annual education expenditures will clock in at around $11,000 per student.

The bulk of state education spending—$7.4 billion in fiscal year 2016 (FY 16) and $7.7 billion in fiscal year 2017 (FY 17)—is sent to districts via block grants, meaning that districts can allocate funds as they choose. The value of the block grant is determined by a funding formula. FY 16’s formula aid represents an increase of 4.9 percent relative to FY 15, and the amount in FY 17 adds another 4.2 percent on top of that. These are generous increases, especially since statewide enrollment is slightly declining; they also exceed the recent rate of inflation.

Without a doubt, Ohio taxpayers are making big financial contributions to education. But one of the perennial (and perplexing) questions is whether taxpayer dollars are being properly allocated. Oftentimes—and this spring was...

  • Teachers at “no-excuses” charter schools are widely thought to fit in a single, aggrieved category: twenty-two years old, working twenty-two hours a day, and earning $22,000 per year. It’s assumed that the exhausting daily schedule and prolonged school year, so crucial to the mission of lifting disadvantaged kids out of poverty, also ends up churning many depleted young educators out of the profession. But according to a new analysis from Education Week, that phenomenon may be overstated. The item, which builds on a more in-depth look published in the same outlet last month, points to Education Department data showing that charter teacher turnover dropped by 5.3 percent between the 2008–09 and 2012–13 school years—even while it ticked up slightly in traditional district schools. Imperfect collection methods and the sector’s rapid recent expansion make the signs hard to read, but this development certainly doesn’t qualify as bad news.
  • And it’s not the only upbeat story this week. In an American nerd triumph worthy of the great Rick Moranis, Team American took gold in last week’s International Mathematical Olympiad for the first time since 1994. The scrappy team of adolescents who will someday employ us all edged out
  • ...

John Kasich announced today that he’s running for president. The current governor of Ohio is the sixteenth Republican to join the crowded GOP primary, dwarfing the five-person field on the other side of the aisle. He’s also the twenty-first subject of our Eduwatch 2016 series chronicling presidential candidates’ stances on education issues.

Kasich entered politics in the late 1970s, when he was elected to the Ohio Senate. He moved on to the House of Representatives in 1983, representing the state’s Twelfth Congressional District until 2001. After taking a break from public life, he returned to take Ohio’s helm in 2011. During his time as the state’s sixty-ninth governor, Kasich has made education a priority, and his efforts have produced some positive results. Here’s a sampling of his views:

1. Common Core: “[The idea behind the standards was for] students in every state to be given the opportunity to compete with every other student….I want kids to jump higher….I’m going to make sure, at least in my state, that standards are high and local control is maintained….Now, some may call that Common Core. I don’t really know, but I’m telling you the way it is in my...

I had an economics professor in grad school who told us that every civilized household should use the most recent edition of the “Statistical Abstract of the United States” as a coffee table book.

For one hundred thirty years, the “Stat Ab” has been was an annual federal publication packed to the rafters with data: page after page of data tables on every imaginable aspect of our lives—demographics, jobs, transportation, health, agriculture, the military, and more.

When our class laughed at the idea of replacing a book of Ansel Adams’s photos with one that included “Table 925. Energy Supply and Disposition by Type of Fuel,” our professor excitedly (and without irony) replied, “But there’s just so much you can learn from these numbers!”

The same could be said of the “2015 Condition of Education” recently published by the National Center for Education Statistics. For years, Congress has required this federal agency to annually produce a report on the state of U.S. schools. If it were up to me, it would be mandatory professional development for everyone working in K–12 to spend ninety minutes with this report.

We should all stay up to speed with the...

I have been and continue to be a strong supporter of parental choice. I joined this fight over twenty-five years ago because I believe it can help address the systemic inequities so many poor students face. In my mind, the primary purpose of parental choice is to provide those who do not currently have high-quality educational options with access to those options. So while I believe that every student deserves an excellent education in the school that best meets his needs, I also believe that parental choice should be used principally as a tool to empower communities that face systemic barriers to greater educational and economic opportunities. I did not join this movement to subsidize families like mine—which may not be rich, but which have resources and options. I joined the late Polly Williams in 1989 in her courageous fight to make sure that poor families were afforded some opportunity to choose schools in the private sector for their children.

Since then, I have fought alongside many others for parental choice for low-income and working class families throughout the nation. From the beginning, some critics of the parental choice movement have claimed that Republican lawmakers and other conservatives who have...

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