Opinion
Education Funding Opinion

Where’s the Smart Money in a Great Recession?

By Jacob E. Adams Jr. — September 10, 2010 5 min read
BRIC ARCHIVE
  • Save to favorites
  • Print

Let’s face it, America’s schools are getting hammered by the Great Recession. Declining budgets have pushed district leaders to lay off teachers, shorten school years, and cancel summer programs. Their cost-cutting gymnastics have increased K-3 class sizes, closed libraries, and deferred maintenance. And while a leaky roof might not affect student performance overall, curricular and instructional losses cut at the heart of the educational enterprise.

The source of all this trouble is no mystery. With recession-driven sales- and income-tax revenues down, states have been hard pressed to meet their obligations. The National Governors Association and the National Association of State Budget Officers recently reported an approximate 7 percent drop in fiscal 2010 state expenditures nationwide. In the last budget cycle, 40 states made midyear cuts totaling $22 billion. Coming on the heels of nominal decreases the preceding year, these declines led the governors and budget officers to describe the situation as unprecedented.

Relief may be farther away than one hopes. With the economy rebounding slowly and American Recovery and Reinvestment Act funds drying up, state expenditures are expected to drop again in fiscal 2011. Thirty-four states have announced new education cuts for the coming year. Plans are afoot to postpone state payments to school districts, or simply to shift those funding responsibilities to the local level. Some districts already are borrowing—hitting one part of the budget to cover another, tapping county treasuries, issuing tax and revenue anticipation notes. But these tactics will play out. More and more, districts that depend heavily on state funding are signaling that they soon may not be able to meet their obligations.

Decisionmakers can’t defer student learning the way they can building maintenance.

While keeping the lights on is problem enough, it’s only the backdrop for the real challenge: boosting student learning. No resource shortage absolves schools of their responsibility to educate students. Decisionmakers can’t defer student learning the way they can building maintenance. There’s too much at stake for students and families, the economy, and civil society. Thus, regardless of the recession, policymakers and educators have to be asking: How can we invest available resources in ways that maximize student learning?

The truth is, states are unlikely to accomplish ambitious learning goals until they fix the finance systems that support the nation’s schools. These systems were never designed to support ambitious learning goals, and they certainly weren’t designed to manage student learning during fiscal crises. Instead, they set funding levels based on conventions and bargains rather than need, address equity in one place but ignore it in others, spend resources with little regard for results, and focus on compliance rather than student learning. Such practices miss the connection between resources and student learning. They are part of the reason learning lags expectations.

Regardless of how familiar or novel these problems seem, today’s challenge is to do something about them: to redesign resource systems explicitly to support student learning.

It may sound nuts to talk about fixing school finance systems when districts are struggling to make payroll, but actually, a tough recession may be the only opportunity to do it. As state legislators from different regions told researchers in a recent study, it takes a crisis to shake up the equilibrium of policy decisions, budgetary commitments, and interest-group politics that supports education’s business as usual. It takes a crisis, that is, to open the door to new thinking and new opportunities. The Great Recession certainly qualifies.

New thinking begins by judging budgets, collective bargaining, and other forms of resource allocation against a simple, powerful principle: using student learning as the touchstone for resource decisionmaking, top to bottom. This principle alone would help states better figure out how much to spend, who gets what, how resources should be used, and what outcomes to track. It certainly would challenge the conflicting claims, compliance orientation, formula-driven allocations, and compartmentalized responsibilities that typify education finance.

How could states put this principle to work? How could they retool funding systems to make better connections between resources and student learning, and to make better decisions in the face of declining budgets? My colleagues at the National Working Group on Funding Student Learning and I wrestle with these challenges in a recent book, Smart Money: Using Educational Resources to Accomplish Ambitious Learning Goals (Harvard Education Press, 2010).

In brief, we argue that, for educators, a smart-money approach means adopting continuous improvement—the cycle of goal-setting, resource allocation, instruction, assessment, and analysis that tailors resources to school and classroom needs—as a core resource strategy for schools and districts, then making trade-offs that move resources from less-effective to more-effective uses.

For policymakers, a smart-money approach means, first, delivering resources to schools transparently and flexibly, while maintaining the connection between dollars and students. Converting most general and categorical dollars into student-based funding, then depositing these student-based dollars in school-based accounts, would do the job.

Second, focus and enable educators’ work. How? By reconfiguring funding incentives; providing educators with better data that link student learning, finance, human resources, and family information; bolstering teachers’ and principals’ capacities to make good resource decisions; and rethinking the structure of collective bargaining, which alone controls the bulk of local education funds.

Third, invest in resource-oriented R&D, so that the field can expand knowledge of effective resource practices while experimenting with new methods.

Finally, redesign resource accounting and accountability to signal forcefully that student learning matters most.

Tying resource decisions to student learning and effective resource use surely will call into question across-the-board funding cuts, layoffs based on seniority, and other conventions that drive budget-cutting today. In other words, smart-money investments will shake things up. They won’t protect schools from revenue losses or budget cuts, but they can allow those cuts to be made more strategically. They can make smaller budgets more productive, and they can refocus funding decisions on the heart of the enterprise: student learning. And that focus makes sense whether school budgets are going up, going down, or holding even.

Related Tags:

A version of this article appeared in the September 15, 2010 edition of Education Week as Where’s the Smart Money in a Great Recession?

Events

Budget & Finance Webinar Staffing Schools After ESSER: What School and District Leaders Need to Know
Join our newsroom for insights on investing in critical student support positions as pandemic funds expire.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Achievement Webinar
How can districts build sustainable tutoring models before the money runs out?
District leaders, low on funds, must decide: broad support for all or deep interventions for few? Let's discuss maximizing tutoring resources.
Content provided by Varsity Tutors for Schools
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
College & Workforce Readiness Webinar
Roundtable Webinar: Why We Created a Portrait of a Graduate
Hear from three K-12 leaders for insights into their school’s Portrait of a Graduate and learn how to create your own.
Content provided by Otus

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding When There's More Money for Schools, Is There an 'Objective' Way to Hand It Out?
A fight over the school funding formula in Mississippi is kicking up old debates over how to best target aid.
7 min read
Illustration of many roads and road signs going in different directions with falling money all around.
iStock/Getty
Education Funding Explainer How Can Districts Get More Time to Spend ESSER Dollars? An Explainer
Districts can get up to 14 additional months to spend ESSER dollars on contracts—if their state and the federal government both approve.
4 min read
Illustration of woman turning back hands on clock.
Education Week + iStock / Getty Images Plus Week
Education Funding Education Dept. Sees Small Cut in Funding Package That Averted Government Shutdown
The Education Department will see a reduction even as the funding package provides for small increases to key K-12 programs.
3 min read
President Joe Biden delivers a speech about healthcare at an event in Raleigh, N.C., on March 26, 2024.
President Joe Biden delivers a speech about health care at an event in Raleigh, N.C., on March 26. Biden signed a funding package into law over the weekend that keeps the federal government open through September but includes a slight decrease in the Education Department's budget.
Matt Kelley/AP
Education Funding Biden's Budget Proposes Smaller Bump to Education Spending
The president requested increases to Title I and IDEA, and funding to expand preschool access in his 2025 budget proposal.
7 min read
President Joe Biden delivers remarks on lowering prices for American families during an event at the YMCA Allard Center on March 11, 2024, in Goffstown, N.H.
President Joe Biden delivers remarks on lowering prices for American families during an event at the YMCA Allard Center on March 11, 2024, in Goffstown, N.H. Biden's administration released its 2025 budget proposal, which includes a modest spending increase for the Education Department.
Evan Vucci/AP