Facing the Future: Financing Productive Schools

Shelley De Wys

Over the past quarter century, Ohio-following national trends-has added an average of $760 million per year to K-12 education. In no year has a funding increase been less than $376 million (see here). In ten years, Ohio has seen its average per-pupil expenditure, using inflation-adjusted dollars, rise 25 percent (from $7,500 in 1997 to about $10,000 in 2007, see Graph I below).  In 2007, Ohio spent $16.8 billion on public education-some $1,930 for every adult living in the state.

 

This new spending, however, has not resulted in commensurate levels of student achievement growth. According to the National Assessment of Educational Progress (NAEP), Ohio students have made slight gains over the past fifteen years in math achievement, though these gains do not outpace the national average and still leave well over half of all students below the proficiency bar.  Ohio's progress in reading has been slower, and according to NAEP just 36 percent of Ohio students in fourth and eighth grade are proficient at reading (see here).

Despite this increased spending and static achievement gains, school districts in the Buckeye State face unpredictable funding realities and real fiscal pain. Considering Ohio's troubled economy it is fair to ask if state government and its citizens can maintain the pace of the recent past.

For these reasons, Gov. Ted Strickland's long-awaited school-funding proposal is being anxiously anticipated and it will surely jump-start the school-funding debate when it is released in early 2009.

Fortuitously, on Dec. 1, the Center for Reinventing Public Education at the University of Washington (see here), will weigh in on school finance in America with the strongest data yet-the result of a six-year, $6-million study of school funding. The study examines four states, including Ohio, where it found volatile financing, teacher contracts, and partisan politics blocking actions to improve student performance. The report led to the conclusion that "school finance today works against the focused and efficient use of resources to promote student learning."

The project is the compilation of more than 30 separate research projects. Paul T. Hill, the director of the Center, led the effort. More than 40 economists, policy analysts, school-finance experts, and others worked on the study, and the Bill and Melinda Gates Foundation funded it.

What follows is an essay by Shelley De Wys, a researcher on the project, who outlines early findings and what they portend for Ohio:

 

Ohio students place second to special interests

Ohio's system for financing public schools does not work for all students. This is no secret. Several lawsuits have found Ohio's education finance system to be unconstitutional. But the Ohio legislature has failed to improve it. Meanwhile, Ohio's educators are working hard to raise student performance. Unfortunately, they face many barriers. While many school and district administrators want more money, they also think they could do better with what they have if only they were less dependent on local levies and if decisions were not so heavily influenced by stakeholder demands and politics.

At the end of the day, it's Ohio students who suffer.

These conclusions arise from interviews conducted with 62 state, district, and school administrators as part of an in-depth study of Ohio's school finance system, funded by the Bill & Melinda Gates Foundation. We found that administrators throughout Ohio know they must raise student performance. Some think they know how to do it. Others want to test different ideas to see what works. The trouble is, their efforts are constrained by a volatile finance system, rigid union contracts, and partisan politics.

 

Ohio's tax system requires districts to pass frequent levies just to keep up with inflation. Some taxpayers think districts are just asking for more money, resulting in voter levy fatigue. Meanwhile, districts must pay ever-increasing energy and health care costs. The result is fewer dollars to educate Ohio's children. Many Ohio districts find the state's per-pupil funding to be inadequate and, therefore, levy more than the minimum property tax required by the state.

 

In addition, some districts in Ohio can raise more money than others. Property values in some wealthy districts are approximately six times those in the poorest districts.

That's why some districts with very few needy students have access to as much, and sometimes more, resources than districts with greater numbers of needy students, even when special state funding for needy students is factored in. As one educator told us, "Most [education] funding is based on property taxes, and people in urban areas make the least amount of money... and many times, the property values... are [less] than they are in suburban areas. So, we find ourselves struggling with respect to achieving adequate funding based on the demographics that we have to serve."

This system of funding education has significant and negative repercussions.

Disadvantaged students often do not receive the educational supports they need. In addition, when levies do not pass, cost-cutting measures in poor districts often result in the elimination of programs or classroom staff.

A second major impediment to improving student performance is teacher union contracts. Educators told us contracts prevent changes they believe are necessary to improve performance, such as lengthening school days and implementing new instructional practices. One principal noted, "I have a very lengthy, very detailed contract. And the contract, I think, should be thrown out and started over. It's become so cumbersome that the contract and the union have lost sight of what's best for kids, and it's [focused on] what's best for teachers."

Contract requirements regularly clash with the concept of providing "highly qualified" teachers in every classroom. Seniority provisions allow experienced teachers to avoid working in schools most in need of improving student performance. Such provisions also constrain administrators' efforts to hire, layoff, and fire teachers. A respondent noted that, "[The contract] does not allow us... to put the right people in the right place at the right time. We just don't have the flexibility to do that," while a principal said it is almost impossible to remove an ineffective teacher: "To make a long story short... once you get tenure, short of killing someone, you can't be fired. That's somewhat of an exaggeration, but that's the gist of it."

In addition, union opposition has blocked the adoption of teacher-pay systems based upon performance. The bottom line is that teacher contracts lock in strict working conditions so that innovation is all but impossible, underperforming teachers are protected, and students get short shrift. Ohio policymakers need to figure out how to ensure fair treatment of teachers in a way that also truly serves the needs of students.

Finally Ohio policymakers seemingly can't get beyond partisan politics and special interests to address key education finance issues. Divisions exist on the basis of different district funding profiles and socio-economic demographics, as well as political orientations.

This study spotlights how Ohio's finance system works like a brake pedal, slowing educators' abilities to improve student learning. Without substantial changes to the finance system to better support local improvement efforts, Ohio educators likely won't reach the goal of bringing all students up to standard.

It's a matter of putting the needs of our students, our kids, first.

Shelley De Wys is research coordinator at the University of Washington's Center on Reinventing Public Education.

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