Published Online: October 27, 2008
Published in Print: November 5, 2008, as Overhaul School Finance Systems, Researchers Urge

Overhaul School Finance Systems, Researchers Urge

Link Funds to Outcomes, Carefully Track Spending to Improve Achievement

Policymakers need to turn the nation’s school finance systems on their heads by connecting education dollars to student-achievement goals and outcomes, giving better information about how money is spent, and funding research that’s more closely aligned with the classroom, according to a study by top education researchers released last week.

The 39-page "Funding Student Learning" is the product of five years of work and a $6 million grant from the Bill & Melinda Gates Foundation. It was researched and compiled by the 11-member National Working Group on Funding Student Learning, a team that included nine university professors, an official with a venture philanthropy that focuses on schools, and a former assistant secretary of education under the first President Bush.

“We have been faced with this daunting challenge,” said James W. Guthrie, a public policy and education professor at Vanderbilt University, referring to the increased expectations under state and federal standards-and-accountability laws. “How [do we] educate virtually every child to high standards? That’s new.”

The group’s members also included Christopher Edley Jr., the dean of the law school at the University of California, Berkeley; Susanna Loeb, an associate professor of education at Stanford University; Christopher T. Cross, a former assistant secretary of education under President George H.W. Bush; and Joanne Weiss, the chief operating officer of the San Francisco-based New Schools Venture Fund.

The Gates Foundation also provides support for Education Week’s Diplomas Count report.

Structural Rethinking Urged

The study, released Oct. 27 at the National Press Club in Washington, doesn’t attempt to tackle how much money is needed to adequately fund public schools, which has been the focus of school-finance lawsuits in many states over the years. Instead, it examines how those funding systems should be structured.

Paul T. Hill, the director of the Center on Reinventing Public Education at the University of Washington-Bothell, in Seattle, described the group’s work as an “unprecedented look at how money is used.”

The researchers stressed that their recommendations would not necessarily require increased funding—a selling point at a time when national economic woes have worsened state budget deficits and forced education program cuts in more than a dozen states.

“This agenda works whether funding is going up, going down, or staying the same,” said Jacob E. Adams Jr., a professor at the Claremont Graduate University in Claremont, Calif., and the chairman of the working group. “It’s not about the amount of money, but how we use the money.”

Search For New Approaches

Nor does the report suggest that there are easy fixes, such as investing more money in certain programs over others.

Instead, researchers propose a rethinking of how states and local districts pay for schools—recommendations that are the product of empirical studies, background papers, and interviews in 70 schools in 18 districts representing four states (North Carolina, Ohio, Texas, and Washington).

One big goal, according to the report: Align money and resources with student-learning goals and outcomes, rather than determining funding levels and spending by individual school or by district. That shift could be accomplished by analyzing student data, setting goals, spending money according to those new performance targets, and then coming back to review, the study suggests.

In addition, funding for categorical programs—often the result of special-interest groups arguing for more money for specific programs, such as gifted and talented programs or after-school classes—needs to be collapsed and redistributed.

The goal should not be to use school dollars to fund teacher salary structures, buildings, and programs, the researchers say, but to fund each child and to adjust funding for students’ particular needs. That could include, for example, students with disabilities or those from low-income homes.

Embedded within that goal is an attempt to reduce inequities among schools within the same districts.

“The answer isn’t always a new program for every problem,” Mr. Adams said.

In fact, the current funding structure may actually impede academic progress, the report maintains, by encouraging schools to overidentify certain groups (such as those in need of special education) that generate more money—although this could still pose a problem for per-student adjustments under the new recommendations, to a lesser degree.

The report also recommends ditching a one-size-fits-all approach to collective bargaining, in which teachers are paid on a single salary schedule based on seniority, in favor of contracts that allow differentiated teaching roles and compensation. But it stops short of endorsing merit pay for teachers based on student test scores.

“Keep collective bargaining protections,” Mr. Adams said, “but tie these contracts to reform.”

Although the report doesn’t outline any specifics, the issue of student incentives should be explored more, it states.

What’s more, school funding streams and budgeting need to be more transparent, with clearer ways to follow the money to the students, the researchers say. The study also recommends increased school funding to better link research to practice in “lab schools” within a district to try out new techniques.

Common Themes

The recommendations follow similar themes that emerged from school reform reports unveiled last year in California by the Committee on Education Excellence, which recommended reducing piecemeal categorical programs, moving more funding decisionmaking to the school level, and making school funding more transparent. ("Ideas for Revamping Calif. Schools Emerge From Study," Oct. 31, 2007.)

While last week’s report doesn’t cite examples of states or districts that offer a complete model of how to revamp school financing, researchers pointed to areas where some elements are working.

The 139,000-student Montgomery County, Md., school district has successfully implemented “reform oriented” collective bargaining, also called “interest based” bargaining, that ties specific goals for student achievement to elements of teachers’ contracts.

Florida has developed an extensive data system that will be a key to more closely aligning resources with student achievement. Washington state embarked on a major study to revamp its school finance system with the goal of tying resources to achievement goals, but ended up in 2004 recommending only marginal changes.

The researchers say their goals are lofty, and will face political resistance. In fact, they intend to take their plan on the road, to present to legislators, governors and their staffs, and top business officials.

Pennsylvania State University education professor David H. Monk, a member of the panel, summed up their challenge this way: “The existing system is resistant to change.”

Vol. 28, Issue 11, Page 10

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