Education Funding Reporter's Notebook

Lawmakers Grapple With Nuts and Bolts of School Financing

By Michele McNeil — February 27, 2007 4 min read

The session was titled “School Finance 101,” and for many of those attending, it could hardly have been more timely.

With education groups and advocacy organizations suing states over K-12 funding formulas, the state lawmakers, researchers, lawyers, and education officials who packed the National Conference of State Legislatures’ school funding summit Feb. 16-18 are among those scrambling to understand the complexities of local school financing.

So those who opted for a primer on school finance here paid close attention as consultants John Augenblick and John Myers outlined the 10 characteristics of a “good” school finance system—and said that following those steps might help short-circuit any legal entanglements.

It’s a message born of experience.

The Denver-based consulting firm Augenblick, Palaich and Associates has participated in studies of school finance adequacy in 18 states and helped in the design of education finance systems in six states.

Mr. Augenblick, who is the president of the firm of which Mr. Myers also is a member, warned that legislators and policymakers need to scrutinize requests for more funding that are made in the name of “equity,” a general term that he said is used “to justify just about anything.”

“We don’t push people to define what they mean,” Mr. Augenblick added. “What does it mean to be ‘equitable’?”

As for those 10 characteristics of a “good” finance system, they may be more difficult to achieve than to list. In the view of Mr. Augenblick and Mr. Myers, such a system will:

• Allocate state aid based on the needs of school districts;

• Adjust such aid to account for local funding;

• Share the burden for paying for schools equitably among homeowners and businesses, with some assistance for low-income taxpayers;

• Make sure that any spending variations between districts can be explained by differences in their needs and their tax rates;

• Give local school districts a reasonable amount of flexibility to determine how much money they want to spend, and where they spend the money;

• Demand accountability for results from the spending;

• Require districts to develop rational procedures for how they distribute money to individual schools;

• Consider all types of expenses in its system, including operating, capital, and personnel benefits;

• Limit funding, such as incentive money, that is not based on wealth or need; and

• Establish a system to measure adequacy and equity in the finance system.

Increasingly, state leaders are proposing to boost precollegiate spending for programs aimed at better preparing students to compete in the global economy, such as additional science and math classes. And if state education officials want a relatively easy way to see how their students stack up with their peers in other countries, they need look no farther than PISA, the Program for International Student Assessment.

Developed by the Paris-based Organization for Economic Cooperation and Development, or OCED, the internationally standardized test for 15-year-olds is used to compare countries’ student achievement and will next be administered in 62 countries in 2009.

States are being encouraged to have their 8th graders take part in the 2009 round, said Alan Wagner, a professor and the chairman of the department of educational administration and policy studies at the State University of New York at Albany.

Mr. Wagner, who worked at the OECD for 14 years, said that given the diversity of the United States, comparing individual states with other countries may give a truer picture of how well their students compete. Worldwide, he said, there is an effort to bring assessments down to the “subnational” level. For example, France, Germany, and Switzerland, which share borders, are working on education measures that could improve their region.

“That interest is being driven by the economic and social-development issues,” Mr. Wagner said.

One of the most popular—and controversial—initiatives by legislators and other state policymakers is pay-for-performance, or basing a part of a teacher’s pay on student achievement.

And the Denver public school system here is a nationally watched laboratory for such an experiment.

The Denver effort, called “ProComp,” began as a four-year pilot program in 16 schools before growing districtwide as part of a nine-year agreement between the district and the Denver Classroom Teachers Association. Teachers receive increased pay for professional development, professional evaluations, academic growth of their students, and market-based factors. (“Denver Voters Pave Way for Incentive Pay,” Nov. 9, 2005.)

But Jeff Buck, a math and science teacher on special assignment in the district’s human-resources office who has helped administer the program for three years, cautioned that policymakers in other states should move slowly.

Pay-for-performance systems, he said, need to be tailored to local communities, and must be studied for months, or years, before implementation.

“It would be a serious, serious mistake to take this and implement it into another school system,” he said of Denver’s program. “There’s a real urgency to get something done, but sometimes you have to go slow.”

A version of this article appeared in the February 28, 2007 edition of Education Week

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