School Finance

In case you missed it, Terry Ryan wrote a great post yesterday on the potential implications of Ohio's funding crisis for education in the state:

Ohio’s newspapers ran headlines today warning, “Money
crunch pushes Downtown roadwork way back
,” “Local
highway projects face delays
,” and “Last
phase of I-75/I-475 project stalls
.” The financial problems facing Ohio is
scaling back big time infrastructure projects that have been in planning for
years. According to the Columbus Dispatch
the Ohio Department of Transportation “proposes pushing back 34 projects that
had been planned to start by 2017 to dates as far off as 2036.
Jerry Wray, director of the Ohio Department of Transportation,
captured the problem when he told the Cincinnati
"Unfortunately, this
is Ohio’s new reality. For too long, previous administrations have added more
and more to the list of projects knowing that there were more projects than
funds available. Their poor planning has put us in the position of making the
tough decisions and delivering the bad news to many communities throughout the
state that there is simply...

That’s the headline above Paul Peterson’s better-than-nifty
on the Ed Next blog.

Peterson, director of the Program on Education Policy and Governance at
Harvard and Executive Editor of Education
(of which I am a contributing editor), uses the Mac the Knife
reference to suggest that loyalties can be bought “for a pittance.” In this
case, it’s the National Education Association (NEA), which can, Peterson

…collect multi-millions of dollars through a check-off system
that generates revenues directly from teacher paychecks (unless a teacher
specifically objects),” and, a la the
villain of Mac the Knife, “invest in the work of less-advantaged non-profits
that ostensibly have entirely different agendas. Even a little bit of money can
produce a valuable ally somewhere down the line.

It’s a short essay, but is packed with evidence (from the Education Intelligence
) of NEA’s multi-tentacled reach, from a $250,000 grant to the Great
Lakes Center for Education Research and Practice (“which has migrated to the
University of Colorado at Boulder, which received another quarter million in
direct funding,” says Peterson) to $100,000 for Media Matters,...

Last week, Philadelphia’s Blue Ribbon
Commission on Catholic Education made the dispiriting but long-expected
announcement that the Archdiocese will
close or consolidate
nearly 50 schools. Keeping more than 150 schools open
with enrollment down a third over the past decade is creating enormous cost
pressure for the city’s parochial schools, and the Commission saw consolidation
as the best hope for saving the nation’s first diocesan school system, a key
part of Philadelphia’s heritage founded by St. John Neumann.

As we described in our 2008 report, Who
Will Save America’s Urban Catholic Schools?
Catholic schools face
major challenges in the form of declining enrollments, fewer vowed religious
sisters and brothers available to teach students, and shifting population and
demographic patterns. These pressures don’t only impact Catholic Americans,
however. Anything that weakens the nation’s parochial schools means bad news for
education generally, for three reasons:

  • Catholic schools are
    relatively cheap.
    According to data from the National Catholic
    Educational Association
    , the average per pupil cost for Catholic elementary
    schools is just under $5,500, and the cost for high schools is less than
  • ...

Through a set of carefully selected and presented
research findings (he attaches seventy-five endnotes to his eighteen-page
paper), Rutgers University education professor Bruce Baker uses this report to
refute what he calls the reformers’ “mantra”—that increased education spending,
in and of itself, will not lead to higher student achievement. Baker addresses
three related policy questions: Does money matter? Do schooling resources that
cost money (like class-size reduction) make a difference? And should states boost
funding for schools? Backed by his cherry-picked data, he answers yes to all
three. “When schools have more money, they have greater opportunity to spend
productively. When they don’t, they can’t,” his argument goes. Does that sound
to anyone else like a case for a blank check (unsurprising from the Shanker
Institute, a creature of the nation’s second-largest teacher union)? To his
credit, Baker does offer this disclaimer: There may be “better and more
efficient ways to leverage the education dollar toward improved student
outcomes.” In that case, we agree, because that’s the “mantra” most reformers
have actually been reciting.

For more on
this topic, check out Chris Tessone’s new

In this post, guest blogger Bill Tucker, managing director of Education Sector, responds to "The Costs of Online Learning," a paper released today as part of Fordham's Creating Sound Policy for Digital Learning series.

The latest in Fordham’s digital learning policy series
tackles the tricky question of cost. And while the paper cannot offer
definitive answers for policymakers and school leaders, it does provide a
helpful primer on the overall economics of online and blended learning.

The top-line findings, that blended learning models cost an
estimated $8,900 per pupil (+/- 15%) and fully online schools cost $6,400 (+/-
20%), will surely be repeated in statehouse policy battles throughout the
country. But, those who actually read the short brief will quickly realize that
the authors have bent over backwards to caveat their findings in multiple ways.
The most important of these caveats? The author’s cost figures reflect
estimates of what online and blended schools are currently spending, rather
than what they should be spending. In other words, since we have little
understanding of how spending relates to...

month, the District of Columbia’s
CFO discovered
a nice chunk of unexpected revenue
, some $42 million, had come the city’s
way. The mayor promptly called for half of the money to go to the District’s
public schools. In apparent disregard of the law, however, the mayor wants to
give the whole $21M windfall to DCPS, bailing them out for a loss of federal funding
and mismanagement of the district’s food service and merit pay programs. See
Bill Turque’s characterization of the budget holes this bailout will fill:

DCPS said the extra $21.4 million budgeted by Gray is needed to address
several issues: Congressional cuts in federal payments ($4.5 million); overruns
in food service caused by higher labor and food costs and lower federal
reimbursements ($10.7 million); mandated merit-based salary increases for
teachers ($2.8 million); and the rising cost of excessed non-instructional
employees who were removed from school budgets but are being carried on the
central office books.
Privately, senior Gray administration officials said DCPS finances have
historically been plagued by cost overruns, attributable to persistent
overspending by school...

Money talk can put people off, especially in education, where the mantra for decades has been, "Just spend more!" In the "new normal" of flat education budgets, however, more money is not easy for school boards and administrators to find.

In many places, this has meant across the board layoffs and a reduction in services provided to kids. This new era presents a tough challenge for superintendents and school budget officers charged with balancing the budget and doing right by the youngsters in their charge. Schools must be empowered (and incentivized) to deliver instruction more effectively, improving both quality and cost-efficiency. Fordham works to provide resources for school leaders to do just that, as well as provide analysis and advice to policymakers hoping to make the jobs of K-12 leaders easier. (Check out our policy brief from last year for a few ideas for state policy.)

On this blog, I'll examine a broad range of topics related to school finance: state funding formulas, healthcare and retirement benefits for teachers, parent access to financial data, and more. I'll be joined from time to time by other experts from the non-profit and public sectors as well.


The New York Times has a somber editorial today, lamenting the increase in the number of children receiving free and reduced-price lunches, The School Lunch Barometer.

But there is another story here, that, in many ways, is equally distressing: the amount of food that goes to waste. As a recent Chicago Tribune story began,

On visits to lunchrooms in Chicago public schools, the Tribune watched as vast quantities of unpeeled fruit, vegetables, milk cartons and other items got pitched into the garbage.

And, of course, “The district doesn't track how much food gets thrown away.”

The Minnesota Pollution Control Agency did look and in a 2010 study, called Digging Deep Through School Trash, discovered that “[t]he most prominent single material generated by schools was food waste, which was 23.9% of the total waste generated.”

This kind of profligate spending should inspire outrage; instead, indifference. According to Ron Haskins in a 2005 report for Education Next, the lunch and breakfast program costs us $10 billion a year. Though I am sure that some children benefit, the program is not so much a food program as it is a poster child for...

The Denver Post recently analyzed the cost of taxpayer subsidies to teacher unions
in the 20 largest districts in Colorado and found they added up to more
than $1M per year. In many places across the country, school districts
pay some or all of the salary and benefits of union presidents and other
functionaries who don’t teach for a single hour. The fact that the
practice is common doesn’t make it impossible to change, however:

Douglas County Superintendent Elizabeth Celania-Fagen,
who started in June 2010, said she cut the district’s payments to union
members nearly in half last spring and will end the extra spending
altogether in January.

“I’d rather not make comments on the past,” Celania-Fagen said.
“Going forward, my responsibility is to do what’s right for our students
in these economic circumstances and to be accountable for taxpayer

It’s difficult to make an argument that taxpayers should be directly
subsidizing union leaders. Organized labor already extracts indirect
subsidies by skimming dues from teachers’ paychecks, sometimes against
the desires of teachers. Kudos to the Post for shining some
light on this....

Which of the five states competing to be America's next Education Reform Idol did the most to collective bargaining and benefits during the 2011 legislative session? Consider our analysis below, and attend our event Thursday morning (8:30-10:00AM) to see key players in all five states defend their records in front of a panel of ed-reform celebrity judges?Jeanne Allen, Richard Lee Colvin, and Bruno Manno. And click here to cast your vote for Education Reform Idol.


This year, Florida required public employees to start contributing to their retirement plans. Workers are only asked to kick in 3 percent, but it's a start. (This was enough to spur a lawsuit nonetheless.) The state also increased the retirement age and applied other technical fixes to reduce its liabilities. Overall, the plan is expected to save the state nearly a billion dollars. Collective bargaining was not on the table in 2011, and likely won't be anytime soon. The right to bargain is?enshrined in the Sunshine State's constitution. (That being said, Florida's constitution also frames the state as right-to-work. For teachers, this means that they cannot be required to...