How states can stretch the school dollar

If you’re a
governor, legislator, budget director, or other state official, you
don’t need to be told that education spending cuts are coming. After years of
non-stop increases—national K-12 per-pupil spending is up by one-third
in inflation-adjusted dollars since 1995—our schools now face near-certain
repeated annual budget cuts for the first time since the Great Depression. In
some states and districts, reductions will be dramatic—10 percent or even
higher. And these new revenue-trend levels are likely to be semi-permanent,
what with increased pressure on the public purse from the retirement of Baby
Boomers, Medicaid and Medicare costs, debt payments, and other demands.

The challenge for education policymakers is not only to cut
carefully so as not to harm student learning, but better yet, to transform
these fiscal woes into reform opportunities: to cut smart and thereby help our
schools and students emerge stronger than ever. Today we’re releasing
a new policy brief
to help state lawmakers do exactly that.

The first step for state
officials is to recognize that they don’t actually control the bulk of school
budgets; districts do. It will be local school boards, superintendents
and their staffs, as well as charter schools, intermediate agencies, and other
sub-state consumers of education dollars that will decide, at the end of the
day, what gets axed or repurposed.

worst case scenario is for states to make across-the-board cuts to
their education formulae while leaving all manner of harmful laws,
regulations, mandates, obsolete programs, and practices in place.

Do they simply lay off all the newest teachers? Get rid of art and
music classes? Charge fees for extra-curricular activities, or
out-of-zone busing? Or do they think big and restructure teacher
compensation, rethink personnel assignments, exit ineffective staff,
embrace more efficient delivery systems, push for union concessions
around health care-benefits and
pensions, and apply innovation to reduce reliance on some personnel?

Local leaders will decide. Yet state lawmakers are far from
powerless. They create the frameworks within which these choices get
Funding formulas and myriad state laws and regulations have enormous
impact on
the spending decisions of districts and schools. In some states, for
policies are on the books that require extra pay for teachers who earn a
master’s degree. Other states mandate the number of sick days districts
offer their employees, tying the hands of local leaders and driving up
The worst case scenario is for states to make across-the-board cuts to
their education
formulae while leaving all manner of harmful laws, regulations,
obsolete programs, and practices in place.

For instance:

If reformers want local districts to consider
new approaches to teacher pay—e.g., approaches that don’t rely on seniority and
raises tied to mostly meaningless master’s degrees—they probably have to make
changes at the state level. In Ohio and sixteen other states, the law requires
districts to adopt salary schedules with “steps and lanes” based predominantly
on years of service and college-credit-based credentials.

If reformers want districts to stop the
nonsensical practice of “last hired, first fired,” which peels off the newest
and most energized (and least expensive) teachers and other staff, they’d
better make sure that their own states don’t mandate it.

If policymakers think that strategic increases
in class size—and some new approaches to instructional delivery, such as adroit
use of online learning—make both budgetary and educational sense, they have to
ensure that state barriers don’t preclude this.

It was no accident, of course, that such restrictions made
it into the state books. For each policy that affects resource allocation,
there is a stakeholder group ready to defend it. State policymakers have their
work cut out for them. But if they are ready for a rumble, here are fifteen ways
they can stretch the school dollar—and knock some counter-productive policies
off the books at the same time:

  1. End “last hired, first fired” practices.
  2. Remove class size mandates.
  3. Eliminate mandatory salary schedules.
  4. Eliminate state mandates regarding work rules and
    terms of employment.
  5. Remove “seat time” requirements.
  6. Merge categorical programs and ease onerous
    reporting requirements.
  7. Create a rigorous teacher evaluation system.
  8. Pool health-care benefits.
  9. Tackle the fiscal viability of teacher pensions.
  10. Move toward weighted student funding.
  11. Eliminate excess spending on small schools and
    small districts.
  12. Allocate spending for learning-disabled students
    as a percent of population.
  13. Limit the length of time that students can be identified
    as English Language Learners.     
  14. Offer waivers of non-productive state
  15. Create bankruptcy-like loan provisions.

This is an ambitious, politically perilous agenda, to be
sure. But it’s also the one approach with the potential of not only protecting
the existing quality of schools, but also setting the stage for the kinds of
reforms not possible in previous years. In this far-reaching scenario, closing
budget gaps also has the effect of unlocking commitments, policies, practices,
and habits such that available education dollars can be used differently to
better serve students.

Are we up to the challenge?

Michael J. Petrilli
Michael J. Petrilli is the President of the Thomas B. Fordham Institute.