School Finance

A short article published this week in the Columbus Dispatch makes serious reporting mistakes that leave readers with a distorted view of school finance. According to the article, a Columbus citizen millage panel recently discussed a state policy known as the funding “cap.” Briefly speaking, this policy limits the year-to-year growth in state revenue for any particular school district. As we’ve stated in the past, funding caps are poor public policy because they shortchange districts of revenue they ought to receive under their funding formulae. State lawmakers should kill the cap; it circumvents the state’s own formula, it’s unfair to districts on the cap, and it ultimately shortchanges kids.

The article would’ve been right to stop there. Yet somehow charter schools got pulled into the discussion, and that is where the coverage went way off track. The Dispatch writes:

But the formula for one class of school [i.e., Columbus district schools] is now capped, while the other [Columbus charters] isn’t.…But today Columbus charters get $142.4 million from the state to teach 18,000 students, while the district is left with $154.4 million to teach the remaining 52,000 kids, many of whom rank among the poorest in the state. ...

Gary Johnson, the former two-term governor of New Mexico, is the Libertarian Party’s presidential nominee. He’ll face off (with running mate William Weld) in November against Donald Trump and Hillary Clinton. Here are some of his views on education:

  1. School choice: “I think I was more outspoken than any governor in the country regarding school choice—believing that the only way to really reform education was to bring competition to public education. So for six straight years as governor of New Mexico, I proposed a full-blown voucher system that would’ve brought about that competition.” August 2012.
  2. Federal role in education: “I think that the number-one thing that the federal government could do when it comes to the delivery of education would be to abolish itself from the education business….It’s also important to point out that the federal Department of Education was established in 1979. And there is nothing to suggest that, since 1979, that the federal Department of Education has been value-added regarding anything. So just get the federal government out of education.” August 2012.
  3. Common Core: “[Gary Johnson] opposes Common Core and any other attempts to impose national standards and requirements on local schools.” June 2016 (from his campaign website).
  4. Teacher
  5. ...

Earlier this month, eleven scholars, analysts, and advocates participated in our annual Wonkathon. The challenge we put to them was to find provisions in the Every Student Succeeds Act that could be used to expand parental choice.

Our participants did not disappoint; I strongly recommend checking out their ideas on course access, school turnarounds, and charter quality. (All eleven posts are available here.)

But the argument that I found most compelling was one made by wonks Matthew JosephBrian Kisida and Travis Pillow: that the law could catalyze efforts to overhaul state and local school finance systems. That could unleash charters and choice more than anything else.

Indeed, school finance reform is the next front in the school choice war. As Matthew Joseph explained in his post, charter schools are shortchanged, on average, by more than 20 percent; for publicly funded scholarship programs, the deficit is 50 percent or more.

Twenty-odd years ago, some of us naively claimed that schools of choice would be able to deliver better learning at lower costs. That was a mistake. As long as schools are competing with one another for talent, not being able to pay competitive salaries is a major barrier to quality. (That goes for poorly...

On May 5, the Congressional Research Service released a report on proposed U.S. Department of Education spending regulations under the Every Student Succeeds Act. The nonpartisan group concluded that the deparment's regulations could be in violation of ESSA's "supplement, not supplant" edict, which prohibits federal Title I dollars from replacing state and local spending on K–12 education. On May 11, Senator Lamar Alexander addressed the report in this speech on the Senate floor.

I have come across an embarrassing situation. The United States Department of Education has apparently earned an F from the nonpartisan Congressional Research Service in its first attempt to write a regulation under the new law fixing No Child Left Behind that passed this body with 85 votes last year, that passed the House overwhelmingly, and that President Obama signed into law in December, calling it a “Christmas miracle.” Most of us will remember this law. I know the senator from Pennsylvania had a major role in some provisions in it. This was a law to fix a law that everybody wanted fixed. It was eight years overdue.

The law that needed fixing was called No Child Left Behind. Over the last several years, the U.S. Department of...

President Obama signed the new federal education law, the Every Student Succeeds Act (ESSA), in December 2015. Since then, there’s been a flurry of discussion around rule making and the differences between ESSA and NCLB. One new feature is a provision that permits states to award money to districts for direct student services (DSS), an umbrella term that includes a wide range of individualized academic services intended to improve student achievement.

Starting in 2017–18, ESSA permits states to reserve up to 3 percent of their Title I funds to distribute to districts interested in providing direct student services. A recent report from Chiefs for Change estimates that, based on fiscal year 2017 Title I estimates, the funding available for direct student services ranges from just over $1 million in Wyoming to over $54 million in California. There are, of course, a few stipulations: If states opt to reserve these funds, 99 percent of the total must be distributed directly to districts (presumably through a competitive grant program). Districts are empowered to choose whether or not to apply for a grant and how to spend any awarded dollars, though state-created grant applications could allow states to nudge districts in certain directions. States must also prioritize districts...

A sixth grader in Mountain Brook, Alabama, can be considered one of the luckiest in the country, enrolled in a district where he and his classmates read and do math three grade levels above the average American student. But a child of similar age in Birmingham, just five miles north on Route 280, would be in considerably worse shape; there, kids perform 1.8 grade levels below average. So how could a ten-minute drive transport students to a different educational galaxy? Well, look at some numbers compiled by a team of Stanford researchers: Mountain Brook is 98 percent white, with a median household income of $170,000. Birmingham is 96 percent black, with a median household income of $30,000. Sometimes the figures speak for themselves.

John Bel Edwards, the recently elected Democratic governor of Louisiana, has had an eventful few months. After being inaugurated in January, he’s wrangled with state lawmakers over their leadership selection process and hustled to patch a huge crater in the budget. But his education agenda, largely aimed at curbing the growth of the state’s charter sector and cutting funding for voucher students, has run aground over the last few weeks. After the state’s newly...

The whole point of the Every Student Succeeds Act was to revert financial and regulatory authority back to states after No Child Left Behind’s era of federal supremacy. In addition to rolling back the Education Department’s manifold oversight powers, though, the law also takes affirmative steps to grant states more flexibility to achieve their desired educational ends. Case in point: The good folks over at Chiefs for Change have released a paper zeroing in on an unsung ESSA wrinkle that allows states to set aside up to 3 percent of their federal Title I funding for so-called “Direct Student Services.” These funds, which must be earmarked for districts with large percentages of underperforming schools, can include online course access, tutoring, school choice programs, and the like. If every state availed itself of this perk, it could free up $425 million per year. That buys an awful lot of state autonomy.

Last week, we told you about “School Money,” NPR’s ongoing examination of educational finance in districts across the country. In addition to long, national entries, the organization has also filed evocative dispatches from its affiliate stations in different states. Boston’s WGBH featured a gloating segment on how Massachusetts...

The cause of school choice took a major step forward in Florida last week when Governor Rick Scott signed a bill codifying open enrollment and increasing funding for charter schools. The new law directs $75 million toward capital projects for the state’s 650 charter schools, weighted especially toward those that serve disabled students or those from low-income families. (In addition to the funding carrot, legislators introduced an accountability stick: Charters will now submit compulsory financial statements on a monthly or quarterly basis, and those that receive F ratings for two consecutive years will be automatically shuttered.) But the headline result is undoubtedly the introduction of open enrollment, which will allow students—with particular preference given to highly mobile kids in military families and foster care—to attend any public school in the state with slots open.

Scant weeks after their narrow victory in the Supreme Court’s Friedrichs case, teachers’ unions have won another critical battle—this time at the state level—with a friendly ruling in Vergara v. California. A three-judge appeals court panel overturned the original ruling from Judge Rolf Treu, which invalidated state laws around teacher tenure and due process rights. The case, which hinges on guarantees of equitable education...

Over the weekend, I attended a performance of the Tony-winning show All the Way, whose title political junkies (or readers of a certain age) will know refers to Lyndon Johnson and his 1964 presidential campaign. The play was entertaining and enlightening, depicting President Johnson as a funnier, more likable Frank Underwood—with the salty language and some of the paranoid tendencies of Richard Nixon.

What I found most fascinating, though, was its treatment of detractors of the 1964 Civil Rights Act—most notably Johnson’s mentor turned political opponent, arch-segregationist Senator Richard Brevard Russell of Georgia. The wise and amiable “Uncle Dick” knew that he and his fellow southern Democrats couldn’t attack civil rights head on. In one scene, he tells a handful of his compatriots that, instead of playing to type as rednecks and defenders of brutal racism, they have to make their argument on Constitutional grounds. The refrain of his speeches became, “This bill is an assault on the states and on our Constitution.”

That came to mind on Monday when I had the chance to ask former Secretary of Education Arne Duncan about the mounting controversy over implementation of the Every Student Succeeds Act (ESSA)—a sixth- or seventh-generation descendant of L.B.J.’s...

Social Impact Bonds (SIB), also known as “pay for success” loans, are a novel form of financing social service interventions, including education initiatives. First piloted six years ago in the United Kingdom and now making their way to the United States, SIBs aim to leverage private funding to start new programs or scale proven ones. Broadly speaking, the instrument works like this: Private lenders and philanthropists deliver dollars—the bond—to a nonprofit provider that, in turn, implements the intervention. A government agency pays back the bond principal with interest, but only if the program achieves pre-specified results.

In its ideal form, an SIB has the potential to be a triple win: Governments receive risk-free funding to test or expand social programs that could help them save money; investors reap a financial return if the program works; and providers gain access to new sources of funding. To ensure that the deal will benefit all parties, due diligence occurs on the front end, including selecting a program provider, estimating government savings, and developing an evaluation method. 

To date, the discussion on SIBs has been largely conceptual, engaging both supporters and skeptics alike. But a fascinating new report written by MDRC President Gordon Berlin provides a first-hand...

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