Education Funding

Gates Grant Will Fund Four-Year Study of School Finance

By David J. Hoff — October 22, 2003 3 min read
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The richest man in the world is trying to help schools spend money more effectively.

The Bill & Melinda Gates Foundation, the $24 billion philanthropy of the Microsoft Corp. founder and his wife, is funding a four-year, $5.2 million effort to study how schools can spend dollars to raise student achievement.

“With all of these new performance standards,” said Jacob E. Adams Jr., the lead researcher on the project and a research associate professor at the University of Washington in Seattle, “one of the biggest questions in American education is how do we help schools achieve these results.”

Traditional models of school finance have focused on divvying up money equally among schools and districts, or on raising the amount of money currently spent, Mr. Adams said. But neither model has found ways to invest education dollars in ways that will yield the biggest return, he said.

“If you really want to find out how much money is needed in the system,” he said, “you have to look at how it’s allocated and used.”

The project aims to do just that in North Carolina, Ohio, Texas, and Washington state. Policymakers in each of those states are grappling with redesigning their school finance systems and want to tie them in some way to school performance, Mr. Adams said.

In addition, the project will survey the rest of the states to determine how they link school finance decisions to student performance.

New Approach

Over the past 50 years, the school finance debate has focused on equity and adequacy. In the wake of the 1954 Brown v. Board of Education decision striking down racial segregation in K-12 public education, school finance lawsuits sought to ensure that states distributed their resources fairly to all schools.

In the past decade, lawsuits have started to turn on whether states provide enough money for schools. The remedy has often included per-pupil expenditures that are weighted depending on students’ family incomes, disabilities, and other factors that usually predict the cost to educate students.

The Gates Foundation decided to pay for Mr. Adams’ research because it wanted “fresh thinking on the subject,” said David J. Ferrero, the director of evaluation, research, and policy for the philanthropy’s education division.

The new project will investigate policies that help states or districts solve problems using research-based approaches, such as luring high-quality teachers to schools with high numbers of low-achieving students, Mr. Adams said. It also will analyze the latest research on cognitive learning and estimate the costs associated with applying its findings in schools.

In the end, he said, the project will produce “implementation tools” so policymakers “can have some ability to play around with these school finance options and help them solve their problems.”

Political Minefields

While researchers already know a lot of the policies that help raise student achievement, attempts to put those policies into place often run into significant political hurdles.

“We know how to spend money more efficiently,” said James W. Guthrie, a professor of public policy and education at Vanderbilt University, who is not working on the project. “The problems around efficient use of resources are principally political, not technical.”

Even though research suggests that the quality of a teacher is one of the best predictors of student performance, Mr. Guthrie said, union contracts often give the most experienced teachers the ability to transfer to schools of their choice, leaving less experienced and possibly less qualified teachers working with students most in need.

The political complications, he added, are compounded by the various levels of education policymaking, from school-based councils to district school boards to state legislatures. “That’s a pretty daunting gauntlet you have to run,” he said.

The Seattle-based Gates Foundation is aware of the political reality that may pose problems for future finance formulas, Mr. Ferrero said.

“Mapping the political landscape and getting a real grip on what actually is possible is one of the final things to get done” in the four-year project, he said.

The project will include researchers from Vanderbilt, in Nashville, Tenn.; the University of Wisconsin-Madison; the University of Southern California, in Los Angeles; and the RAND Corp., a Santa Monica, Calif.-based think tank.

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