It's no secret that public education contains vast funding inequities: between districts, within districts, and between district and charter schools, to name just a few. There are lots of potential solutions, too, but when money is at stake, reform is never simple.

In New York City, Chancellor Joel Klein is rolling out a somewhat emaciated version of weighted student funding, aka "Fair Student Funding," to distribute education dollars more equitably across the Big Apple. This is no small challenge in a district with a million students, a powerful teacher union, and plenty of middle-class schools accustomed to generous budgets. Those fat budgets occur not because their students' families pay more in taxes (though they may), or because public policy intends for their schools to receive a greater share of resources (which it probably doesn't). No, affluent families in many New York City neighborhoods enjoy schools with more resources because their schools employ more experienced teachers with bigger salaries. Across town, run-down classrooms are led by less-experienced teachers, and less-experienced teachers make less money--which means that kids in needy schools are actually being shortchanged.

Klein's plan would go a considerable distance toward setting this right, within the limits of the budgetary share controlled by City Hall (as opposed to Albany or Washington). It proposed a system in which the city would allocate dollars rather than teaching positions to its schools. Not surprisingly, that plan engendered much opposition. First came the United Federation of Teachers and wealthy parents, fearful that today's relatively generous budgets in affluent communities would suffer and the plum jobs of better-paid teachers would become unsettled. Klein struck a deal on this key element of weighted student funding--letting wealthier schools keep their larger budgets for at least a year--and thereby put off part of the solution for another day.

Now comes a thoroughly misguided new critique, courtesy of Andrew Wolf and the New York Sun. Wolf contends that wealthy families in well-off schools do, in fact, deserve to have more spent on their children, but he also alleges that Klein is naïve to believe that money even matters in education.

Wolf also laments New York's history of fiscal waste, with "skyrocketing" expenditures accompanied by no comparable rise in student achievement. That part would be fair except that he attacks the very solution to this inefficiency and mismanagement: funding schools based on the needs of individual students rather than "based on the cost of providing services." Ironic. Until now, districts such as New York City's haven't put principals in charge of their schools' budgets and thus have encouraged the very waste Wolf decries. Centrally managed organizations have fallen out of use in other industries, replaced by dispersed decision-making in which the authority of a manager is commensurate with his responsibility. It's an innovation heralded by management scholars, and Klein--who has been wrong on a number of curricular issues--is right in his attempt to bring the principle to bear on schools.

On Capitol Hill, meanwhile, battles over education funding inequities also loom, as Congress and its orbiting policy wonks contemplate changes to NCLB. Much of the conversation has focused on the law's accountability mechanisms. Yet we mustn't forget that NCLB is, via Title I, a massive funding program, and that it distributes billions of dollars. And while one might assume that Uncle Sam is better suited to pass out money than to judge school quality, it falls short there, too.

Title I should help alleviate, rather than exacerbate, funding inequities between wealthy and poor schools. And ever since its enactment forty long years ago, districts have been responsible for ensuring that Title I schools receive "comparable" resources before the federal dollars are added on top. Yet NCLB's fine print about how to determine "comparability" requires districts to use the same budget smokescreens New York City is trying to clear by ignoring the salary advantages of teachers among various schools. Federal policy is exacerbating the problem that Klein is trying to solve. (You can see for yourself, in Section 1120A(c)(2)(B): "in the determination of expenditures... staff salary differentials for years of employment shall not be included.")

Given that teacher salaries make up the bulk of school budgets, this is a bit like holding students accountable for only 30 percent of their answers on a final exam. And given that Title I comprises $13.9 billion of the $24.5 billion that the president has requested for NCLB in Fiscal 2008 (see here), it's a sizable problem. That's why the Education Trust's recent suggestions for "Comparability and Funding Equity" in NCLB (see here) are worth taking seriously. To make sure that Title I actually benefits poor students, districts would be required to demonstrate comparable spending across schools, and they'd be required to include actual teacher salaries in doing so.

It's a common sense proposal that builds on the NCLB Commission's own recommendation on comparability. (The Ed Trust proposal is actually a slight improvement, as the commission would have required comparable teacher salaries. Ed Trust merely requires comparable school spending, including actual salaries, which leaves some sensible flexibility to buttress lower salaries with increased expenditures in other areas. In either case, the biggest potential concern is burdening districts with paperwork, which will depend on the particular regulations the Education Department ultimately drafts.)

Anything that makes this much sense is sure to face opposition. Unions will be quick to recognize, as the UFT did, the dangers of sunlight on actual teacher salaries. Besides unfounded criticism from the usual suspects, however, there are also legitimate reasons to consider the impact of such changes to education funding. After all, as Marguerite Roza and Christopher Cross note in their fascinating analysis, How the Federal Government Shapes and Distorts the Financing of K-12 Schools, when it comes to Title I, "virtually any action will have unintended consequences." For example, as the National Council on Teacher Quality's Kate Walsh points out, an ill-conceived plan could encourage districts to transfer pricey but poorly-performing veteran teachers to high-poverty schools in order to meet the "comparability" threshold. Heading off that sort of "dance of the lemons" is essential, too, then. The NCLB Commission does that, but Ed Trust doesn't.

Still, as in New York City, the potential benefits outweigh the risks. Title I is intended to allocate dollars to the neediest students, and steps that return to that original vision (without adding layers of complexity) are moves in the right direction. If such changes do spawn new budgetary shenanigans by districts, those should be fixed at their root--by creating rational state and local funding mechanisms in which dollars are allocated by need, formulas are simple and transparent, and principals control their budgets and staff. New York City has pushed the right ideas in these respects. Such principles should also extend to the nation's capital.

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