School & District Management

Researchers Rank Districts by Finances, Productivity

By Lesli A. Maxwell — August 05, 2014 5 min read
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What do school districts in Chicago; Hamtramck, Mich.; Reading, Pa.; and Sunnyside, Ariz., have in common?

They rank among the most financially strapped school systems in the nation, according to a report that delves into the state and local policies that often are at the root of huge disparities in funding between some districts and others.

The report, written by Bruce D. Baker, a school finance expert and education professor at Rutgers University in New Brunswick, N.J., identifies the most “financially disadvantaged” districts and describes the conditions that give them that unenviable distinction. The Center for American Progress, a Washington think tank, published the report last month, along with two others that examine the “productivity” of American school districts.

Mr. Baker defines financially disadvantaged districts as those that serve student populations with much-greater-than-average needs compared with other districts located in the same regional labor market, and lower-than-average funding when state and local revenues are combined. Very often, the report finds, the districts are serving students with nearly twice the poverty rates of those in surrounding school systems that have more state and local resources to spend. Since the quality of schools depends so heavily on the quality of the employees who work inside them, high-poverty districts, Mr. Baker argues, need more revenue per pupil than better-off districts in the same labor market to be competitive in recruiting and retaining a similar caliber of teachers.

So when U.S. Secretary of Education Arne Duncan announces an initiative for states to craft teacher-distribution plans that ensure that poor and minority students get access to as many great educators as their more-advantaged peers—as he did last month—and there is no parallel discussion about how districts can pay for that step, it’s destined to fail, Mr. Baker contends.

“The idea that somehow you can separate improving teacher quality from the fact that resource disparities are huge is absurd,” Mr. Baker said in an interview. “But it’s the nature of the political beast. Policymakers have been fully sold on the rhetoric that there’s more than enough money in the system already if we just spent it more efficiently.”

‘Egregious’ Examples

Mr. Baker’s new report is an extension of an analysis of school finance that he conducts annually with colleagues at the Newark, N.J.-based Education Law Center, an advocacy group for adequate and equitable school funding. To identify districts with inequitable resources, Mr. Baker drew on U.S. Census data spanning the three years between 2009-2011 to compare local districts’ poverty rates and expenditures to those of other districts in the same labor markets. He considered only districts with 2,000 or more students.

He outlines five major reasons behind the stark funding inequities that occur between neighboring districts, including school aid formulas in states like Illinois and Pennsylvania that fail to make up for the large disparities created by local property-tax revenues. He also highlights how shifting demographics in some systems—often a result of growth in Hispanic immigration—are exacerbating funding inequities.

Mr. Baker said that Chicago and Philadelphia are “persistently the most screwed” districts when it comes to funding inequities, while Reading and Allentown, Pa., have become the “most egregious” examples of districts that have sunk to the bottom of state and local per-pupil spending, despite having some of the neediest students in their state.

In Reading, for example, most students are from low-income families, with more than 81 percent of the city’s K-12 enrollment eligible for free or reduced-priced school meals. The city has relatively high property-tax rates, but in an economically depressed community, those taxes don’t generate revenues on par with the educational needs of students, the report argues.

Compared with some of Pennsylvania’s more affluent districts, which spent as much as $30,000 per student, Reading’s per-pupil spending was at the bottom statewide, averaging between $9,000 and $11,000 per student in the three years spanning 2009-2011.

Aiming for Fairness

Michael Griffith, a school finance analyst for the Denver-based Education Commission of the States, cautioned that funding-equity issues are difficult to address and often end up putting some school districts on the losing end. What tends to happen, he said, are that higher-wealth districts end up losing money that is redirected to lower-wealth districts.

“You might end up with two equitable districts, but you could argue that they are equally poor rather than equally rich,” he said.

But he said that Mr. Baker’s findings on the deep disparities among districts underscore how important it is for states to continually re-examine their school funding formulas."It will always be a struggle to create a state funding formula that attempts to treat everyone equally and fairly,” Mr. Griffith said. “You can never stop working on your formulas.”

Mr. Baker also proposes policy fixes he says would help address the inequities. Among them are:

• Integrating racially and economically isolated districts through changes to housing policy;

• Granting states more authority over local taxation policies and how the resulting resources are distributed to public school systems; and

• Changing state school finance formulas to ensure that districts with the greatest needs receive more of existing aid than affluent school systems do.

The two other reports published with Mr. Baker’s examine the “returns on investment” school districts are getting in student achievement for the money they spend.

Using spending data and results from state math and reading tests from the 2010-11 school year, one report looks at 7,000 districts and measures the academic results those school systems are producing relative to what they spend. That analysis, which was conducted by the Center for American Progress, also adjusts for factors outside a district’s control, such as the number of students living in poverty and the cost of living, and assigns grades to districts based on their resulting productivity.

A version of this article appeared in the August 06, 2014 edition of Education Week as Researchers Rank Districts by Finances, Productivity


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