Education Funding

Debate Grows on True Costs Of School Law

By David J. Hoff — February 04, 2004 10 min read
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Depending on who’s talking, the Bush administration’s signature education law either imposes an onerous financial burden on schools or provides enough aid for states and schools to administer it.

The Ohio Department of Education, for example, released a study last month estimating that the state will spend about $1.5 billion a year—more than twice as much as it now gets from the federal government under Mr. Bush’s K-12 initiative—to meet the administrative costs and achievement goals of the No Child Left Behind Act.

And while Virginia’s Republican-led House of Delegates didn’t have such a study to cite, it nearly unanimously passed a resolution Jan. 23 declaring that “the law will cost literally millions of dollars that Virginia does not have” just to cover administration.

“It is significantly underfunded,” argued Delegate James H. Dillard II, the Republican chairman of the chamber’s education committee. “The problem now is that states are now just beginning to get an understanding of how much it’s going to cost,” said Mr. Dillard, who is also vice chairman of the National Conference of State Legislatures’ education committee.

But officials of the Bush administration, along with some school finance experts, say that the Ohio report and other estimates like it overlook a pertinent fact: States themselves had committed to raising student achievement—the costliest task under the federal law—even before President Bush signed the measure two years ago.

The Ohio study “is overstated a good deal,” Secretary of Education Rod Paige said at a news conference in Washington. “Much of [the costs] is going to be offset by other parts of No Child Left Behind,” added Mr. Paige.

For example, the Department of Education’s effort to define effective practices, he said, “is going to produce a good deal more precision in the instructional process” and lessen the need for remedial education—the biggest costs listed in the Ohio report.

Bipartisan Complaints

Buckeye State Estimate

The Ohio Department of Education asked school finance experts to respond to a study that concluded Ohio would need to spend $1.5 billion annually for the next 10 years to comply with the federal No Child Left Behind Act. Following are excerpts from the varied opinions.

Neil Theobald, a professor of educational finance at Indiana University:
“I believe the estimate ... is reasonably accurate and is superior to any other report that has come across my desk.”

James W. Guthrie, a professor of public policy and education at Vanderbilt University:
“One assumption [in the report] is that existing ... Title I funding must continue to flow in its current path in order to sustain today’s levels of Ohio student academic achievement. ... I believe that some members of Congress and the Bush administration assumed the opposite, that the existing Title I funding stream could be reshaped to support [the No Child Left Behind Act]. I am predisposed to believe that, at least in part, this is possible.”

Meave O’Marah, a consultant, and Theodor Rebarber, the president of Accountability-
Works, a Washington nonprofit group advising policymakers on accountability systems:
“We believe that major increases in spending without improvement in the way expenditures are currently being implemented may not achieve the results suggested in this report. In any case, a more prudent approach to spending taxpayers’ money would be to see what is first attainable with the significant new federal dollars, with expected new state dollars, and with reforms that restructure current expenditures and programs, before assuming the need for pricey new initiatives.”

SOURCE: Ohio Department of Education

The Bush administration says it has done its part to help states. Its officials point out that annual federal funding for K-12 education has increased more than 40 percent since President Bush took office. Spending on Title I—the biggest program under the No Child Left Behind law—rose from $7.9 billion in fiscal 2000 to $12.3 billion in fiscal 2004, the current budget year.

But critics say that those levels are woefully short of supporting schools as they implement the law.

The National Education Association issued a report last month saying that in the previous fiscal year, states and schools received only $18.6 billion of the $26.8 billion in federal money authorized under the law. Moreover, the states and schools really need $41.8 billion this year to reach all children eligible for services under the law, the 2.7 million-member union said.

The debate over funding for the No Child Left Behind law—one of Mr. Bush’s top domestic accomplishments—is heating up as states tally the costs of expanding their testing and reporting systems, and schools wrestle with requirements for providing highly qualified teachers and helping all students reach ambitious learning goals.

The questions of costs will intensify now that state legislatures are convening and addressing tight budgets for the fourth straight year—and as the 2004 presidential race moves into high gear.

In addition to Ohio and Virginia, legislatures in North Dakota, Utah, and Vermont are considering efforts to speak out against what state officials call the No Child Left Behind Act’s unfunded mandates—a term meaning the law requires states to do things that the federal government doesn’t pay for.

And while it may not come as a surprise that the NEA, a staunch ally of the Democratic Party, faults the Bush administration on the issue, the intriguing turn in recent weeks is the bipartisan nature of the complaints about the law’s costs.

Republicans hold 61 of the 100 seats in the Virginia House, and Mr. Bush carried that state in 2000. Hence, the recent 98-1 vote by the Virginia lawmakers to decry the law’s mandates and expense demonstrates a notable level of frustration.

The Virginia lawmakers not only voiced worries about paying to carry out the requirements, but also pointed out that their state has its own demanding Standards of Learning program that predates the federal law’s student-achievement goals.

Despite lower-than-expected costs in some areas, state education department officials project it will still cost an additional $3.2 million in state money to expand data tracking and student testing to meet the law’s requirements.

“We’re not opposing the concept” of raising student achievement, Mr. Dillard said, “but we’re saying the bill itself is unworkable, and if changes are not make, it will implode.”

Moving Target

The No Child Left Behind Act requires states to test students in reading and mathematics annually in grades 3-8 and once in high school. It sets a goal that all students will reach the proficient level on their states’ respective standards by the end of the 2013-14 school year. The law, which passed with big bipartisan majorities in late 2001, reauthorized the Title I program for disadvantaged student and other programs in the Elementary and Secondary Education Act.

While Congress appropriated funding increases to Title I and $1.1 billion over three years to help states upgrade their testing systems, state leaders and educators have been complaining that the law creates an unfunded mandate.

A 2003 report by the General Accounting Office, Congress’ investigative arm, shed some light on why state and federal officials differ on the cost estimates. The report concluded that the cost for states to develop and implement tests required by the law could range from $1.9 billion to $3.9 billion by 2008, depending on the types of tests states use. (“GAO Says Costs for State Tests All in How Questions Asked,” May 21, 2003.)

Estimating just how much the federal law adds to schools’ financial burdens is difficult, according to John G. Augenblick, the president of Augenblick, Palaich and Associates, a Denver firm that analyzes school finance systems.

States and schools would have incurred many of the costs often associated with the law “even if No Child Left Behind had never happened,” said Mr. Augenblick, a respected analyst who has consulted with many states about their school financing.

Eric A. Hanushek, a senior scholar at the Hoover Institution of Stanford University and a critic of excessive school spending said, “The question is: How do you separate out the added cost of No Child Left Behind from what they’d be doing anyway?”

Mr. Hanushek added that legislators and educators often take the attitude of “how many costs can we put into this category and use that as an argument to try to get somebody else to pay what we otherwise would be doing?”

Scrutiny in Ohio

While many states and some advocacy groups have produced quick estimates of the law’s costs, Ohio’s report is the most thorough analysis to date.

Ordered by the state legislature, the report estimated the price tag of compliance with the law at $1.5 billion a year in current dollars until 2014—the year all students must reach proficiency under the No Child Left Behind law. Before the enactment of the federal law, the state was aiming to have 75 percent of its students be proficient. The added $1.5 billion a year would help the remaining 25 percent reach that level.

If Ohio paid that extra amount in the current fiscal year, total K-12 spending in the state would jump 11 percent, from $13.3 billion to $14.8 billion.

The greatest expense is the “intervention costs” that target student achievement, such as summer school and longer school days.

Republican leaders in the Ohio legislature say they will lobby Congress to pay for some of the costs related to the No Child Left Behind law.

“I think it costs more than the federal government has given us. There’s no question about that,” said state Sen. Robert A. Gardner, the Republican chairman of the Senate education committee. The report, he said, “gives us ammunition to go back to Washington and say: ‘Listen, you’re underfunding this.’ ”

While Mr. Gardner said the state would be pushing for increased funding, he did not endorse the $1.5 billion estimate produced by William Driscoll and Howard Fleeter, Columbus, Ohio-based consultants hired by the state education department to produce the study.

But critics say studies such as Ohio’s fail to consider ways that schools might be able to rearrange their current funding to make it more effective.

“Does that mean everything you’re doing is valuable, and you shouldn’t stop doing it?” said James W. Guthrie, a professor of public policy and education at Vanderbilt University in Nashville, Tenn., and one of 10 policy experts the Ohio department asked to comment on the report. “I don’t know. I wonder.”

And even the bill for expanding testing programs and creating new data-analysis tools, although expensive, may eventually be cost-effective, Mr. Hanushek of the Hoover Institution said.

“They could do what they’re doing today cheaper,” he argued, “if they know where they’re wasting money.”

State or Federal Standards?

Of the $1.5 billion estimate in Ohio, all but $105 million would be spent on raising student achievement. The balance would cover teacher professional development, testing expenses, and other administrative costs associated with the federal law.

While experts disagree on what expenditures should be directly attributed to the law, all agree that raising student achievement will probably be the most expensive aspect of any school improvement program—and the hardest one to put a price on.

When school finance expert Andrew Reschovsky analyzed student-achievement data and district spending in Texas, he estimated that the state would need to double its current funding to boost student learning in the worst-performing districts. “The results ... seem to be pretty consistent in showing that high concentrations of poverty matter a lot, and substantially more resources will be needed to achieve whatever the standard in the state is,” Mr. Reschovsky, a professor of applied economics and public affairs at the University of Wisconsin-Madison, said in an interview.

While other school finance analysts don’t dispute Mr. Rechovsky’s study, they say that all the costs of raising student achievement aren’t caused directly by the No Child Left Behind Act.

Most states committed to raising student test scores through standards- based initiatives in the 1990s. If those states backed away from the funding needed to raise achievement, according to one leading school finance expert, many would end up in adequacy lawsuits, which assert that a state is failing to adequately fund their promises to help students reach their standards.

“The adequacy lawsuits came about because of the marriage of taking school finance lawsuits to the next level and linking them to standards- based education reform,” said Allan Odden, a professor of educational leadership and policy analysis at the University of Wisconsin-Madison, who also reviewed the Ohio report.

Staff Writer Alan Richard contributed to this report.


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