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Panel Criticizes School-Finance Study For Reaching 'Unsound' Conclusions

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Washington--A federal advisory panel has concluded that the main section of a Congressionally mandated study on the financing of elementary and secondary education contains unsound and unsupported conclusions.

Nevertheless, the panel, whose members were appointed by President Reagan, stated in a report released here last week that the two remaining parts of the study lend evidence to support its call for tuition tax credits, education vouchers, and a diminished federal role in education.

"It failed," said members of the Advisory Panel on Financing Elementary and Secondary Education of the first volume of the Education Department's School Finance Study, which examined the prospects for public-education funding in the 50 states over the next 15 years.

Although it was "extremely ambitious ... [and] did uncover some interesting trends, it failed to develop sound conclusions," they said. ''To some extent the problem was missing data, but most of all it was a misconception of the research problem."

Report Mandated By Law

The 1978 law that created the panel and mandated the school-finance study required the group to register its comments on the report within 60 days of its final release.

The third and final volume of the study, which examined the effects of federal programs on state and local education agencies, was officially submitted to the Secretary of Education on Feb. 29. Volume I, on state prospects for financing public schools, was submitted in December 1982, and volume II, on the financing of private schools, was submitted in June 1983. (See Education Week, Jan. 12, 1983, July 27, 1983, and Jan. 11, 1984.)

In December 1982, the 14-member advisory group issued a report of its own on school-finance reform recommending the adoption of tax credits, vouchers, and a number of other elements in the Reagan's Administration education agenda. (See Education Week, Jan. 12, 1983.)

"I think this is something that Congress should read carefully," said the panel's chairman, Connaught C. Marshner, last week. "What we're talking about is the federal role in education."

Conclusions Criticized

The panel's report was critical of the study's conclusion that there is "no impending crisis in the ability of the states to finance their schools, and therefore no pressing need to develop a new program of general aid to education."

In fact, it continued, the evidence generated by the study indicates the need for the abolition of most federal education programs and the devel-opment "of a kind of basic aid by the assignment to the states and their local schools of a stream of federal revenues equal to current federal education programs."

Specifically, the panel said the first volume of the study:

Failed to examine in detail the components of school costs. "It simply assumed that today's per-pupil cost will be tomorrow's cost ... [and] does not predict cost increases that may result from other factors,'' such as staffing trends, interest rates, and pensions, the panel said.

Ignored problems at the school-district level. The panel said that although the study predicted that certain states would have to spend more on education because of higher birth rates and immigration, it failed to examine the consequences of such variations at the school-district level.

Erroneously assumed that high-spending states have high-quality educational programs and low-spending states have low-quality programs. "The study performed no tests to show that the higher-spending states had more productive educational programs," the panel said.

Treated federal education aid to states as if it were general aid. "Federal funds do not reach all districts, nor all students in the districts," the panel noted.

Erroneously predicted the likelihood of increases in state aid to public education. "The assumptions underlying these projections are perhaps the weakest in the report," the panel said. The study's assumption that public education is "in a zero-sum game with other public services and private schools ... [is] without empirical foundation [and] represent[s] an extraordinarily simplistic view of how citizens formulate their positions on public issues."

Failed to take into account "indirect" federal assistance to education in the form of federal revenue losses attributable to the tax deduction that citizens are given for payments of state and local taxes, which are the main sources of support for public schools.

Other Results Commended

Despite this criticism, the panel said the remaining two parts of the study have yielded results that substantiate its "concern about the direction of federal policy."

In particular, the panel cited the study's finding that federal officials are not ensuring equitable participation of private-school students in federally funded programs. It also noted the study's finding that a substantial number of black and Hispanic parents with annual incomes of under $15,000 would be very likely to send their children to private schools if provided with a $250 tax credit for each child.

"There are a lot of technical points on which I could agree or disagree with them," said Joel D. Sherman, the former National Institute of Education official who headed the team that conducted the school-finance study.

He said his main disagreement is with the panel's conclusion that the study found no impending crisis in the states' ability to finance public education.

"What we found was a differential problem in finance, that in at least one-third of the states funding prospects are not good,' Mr. Sherman said. "They fail to recognize this."

"And I'm not sure I agree with them on their conclusions regarding the question of a compelling reason for federal intervention," he continued. "I think the opposite conclusion can easily be drawn."

Mr. Sherman also said it was unfair of the panel to criticize the study for failing to take into account finance prospects among school districts within each state because the study team had included such an analysis in its original plan but was never given the funds to carry it out.

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