What Is ESSA's New School-Spending Transparency Requirement, and How Will It Work?

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When it comes to educating a child, the role of money —how much and how it gets spent—has long mystified policymakers and educators.

This school year, an often-overlooked provision in the Every Student Succeeds Act will offer some deeper information when states start reporting to the public school-by-school spending.

Actual school spending—rather than average district per-pupil spending—can reveal where the most experienced teachers are working, whether racial minorities and districts’ neediest children are receiving their fair (and necessary) share of tax dollars, and if schools that get the same amount of money are getting the same academic results.

ESSA for the first time requires the public reporting of that data, starting in the 2018-19 school year. But how to collect and report this data, a technically challenging and politically thorny process, has roiled the school finance community.

State legislatures, many of which are in the throes of overhauling their decades-old school funding formulas, are eager to see how much money actually is spent in the classroom and whether or not that money is being spent effectively. New York, in fact, went so far this past spring as to pass a law that requires its budget office to evaluate and approve school-by-school spending numbers.

District administrators nationwide, meanwhile, are bracing for major political fallout within their own communities. Many fear that once the data is released, it can pit principals, parents, and board members against one another and lead some members of their communities to draw faulty conclusions.

But many advocates and district officials who have previously seen and used school-spending data anticipate the new federal requirement will provide parents and advocates a sharp tool to scrutinize how the $649 billion that’s spend on K-12 education each year gets split up.

So what is ESSA’s new school-by-school spending transparency requirement, and how will it work?

What does ESSA require?

The Every Student Succeeds Act requires states by this December to report to the public each school’s annual per-pupil spending amount.

How is this different than how we’ve seen K-12 spending in the past?

In the past, states only broke out for the public average district per-pupil spending. In order to come up with that number, states took the total amount of money districts received and divided it by the number of students they had.

States will now have to report how districts then divvy up that money between schools, a level of detail unknown to most superintendents. The task is so complex for some states that U.S. Secretary Betsy DeVos in 2017 gave states an extra year to comply with the provision.

Why is figuring out how much a school spent last year so complicated for states?

Most district administrators don’t take their pot of money and then divide it up between schools in such a straightforward way. Instead, administrators annually bring to their school board a budget that proposes to spend a certain amount of money on curriculum, school supplies, teachers, and so forth. How those resources are divided between schools is a far-less-transparent process and can depend on factors like how much influence principals, parent groups, and others have in a district.

In order to figure out school-by-school spending, state education departments first had to figure out what they wanted to define as school-based costs and then determine what they wanted to define as overhead or administrative costs.

While the salaries of the principal, vice principal, and the rest of a school’s full-time reading, math, and science teachers obviously should be categorized as school costs, it can get super-fuzzy from there.

For example, how should you treat the salary of a bus driver and the price of the tank of gas she’s using if she stops at three schools along her 50-mile route?

Or the salary of a special education teacher who works at four schools with more than 30 different children, all with varying needs?

Figuring this out can be politically fraught, and some state departments corralled large task forces made up of advocates, district officials, and politicians in order to help them decide.

Once the definition of a school-based cost is determined, states then must figure out a way to collect that information.

In many states, districts use a wide variety of finance software in order to analyze their spending. States have worked this summer to retrofit districts’ data-collection systems to figure out school spending, an expensive and cumbersome process that requires lots of professional development for the scores of administrators who collect data. Some states, such as South Carolina and Illinois, are spending close to $1 million on purchasing new data collection systems.

How wide could spending disparities between schools get?

Pretty big. An Education Week analysis of school spending in Rhode Island showed that although average per-pupil spending in the state hovered around $16,000 last year, Block Island Elementary School, which is on an offshore island, spent $40,000 on each of its 112 students and Bernon Heights Elementary School, in Woonsocket, spent just $9,000 on each of its 449 students.

These sorts of disparities will likely alarm parents, teachers, principals, and school board members. But administrators caution that school spending depends on a variety of factors and that if the numbers are placed in the improper context, the public can draw the wrong conclusions.

So what determines school spending amounts?

The biggest predictor of school spending is teachers’ salaries. That can gobble up to around 80 percent of a school’s budget, experts say.

But there are other factors, too, including special education costs, which can vary depending on how many students a school has with special needs and how severe those needs are; maintenance costs, which depend on a building’s size and age; and the sorts of technology a school offers.

Schools also get extra money for educating impoverished students, and some schools get special grants from outside organizations.

And one of the more controversial decisions states are having to make is whether or not to publicly report parents’ donations. These donations are sometimes so large that schools use them to pay for an extra teacher or a new football stadium. The feds have given no specific guidance on this issue.

How will states display school spending amounts?

Most states are still in the process of designing their ESSA-required school report cards to be released next spring. Advocates and district and state officials are split over how much context to provide report card users. Too much context can be overwhelming for parents, some argue, while others say too little context can result in users drawing the wrong conclusions about fairness and equity.

What can people conclude by knowing school spending numbers?

Because teacher salaries in most instances are dictated by tenure, many advocates predict that school spending amounts will reveal to the public where districts’ most-experienced (and highest-paid) teachers are clustered.

And, because school costs will now be separated from administrative costs, many predict the data will put to rest or inflame debates over whether or not districts spend enough money on the classroom.

Finally, many researchers say if the data is clean and comparable, analysts and the public could use it to figure out whether more money means better outcomes.

A superintendent, for example, could ask a principal why their results are lagging even though they’re getting the same amount of money a principal down the street is getting.

Vol. 38, Issue 02, Page 18

Published in Print: August 9, 2018, as ESSA Now Requires More Details On School Spending
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