Education Funding

Quality Counts 2005 Examines Changes in School Finance

By Lynn Olson — January 04, 2005 2 min read
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With 31 states considering major changes in how they pay for public education, the nation’s school finance systems are in transition, an Education Week report set for release this week concludes.

Quality Counts 2005: No Small Change, Targeting Money Toward Student Performance examines what the 50 states and the District of Columbia are doing to pay for public education and to focus those dollars more squarely on student achievement.

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Quality Counts 2005 will be available online on Jan. 5, 2005. Subscribers will receive their copies of the report, dated Jan. 6, by mail.

The newspaper’s ninth annual state-by-state report card on public education also found that 37 states and the District of Columbia identified a lack of resources or unpredictable funding levels as the most pressing school finance issue, particularly given tight state budgets.

Historically, states have focused on how to distribute money equitably across districts, while paying far less attention to how those dollars are spent or the results they produce. Now that states have set ambitious performance goals for students—and the federal No Child Left Behind Act requires states to meet those targets in reading and mathematics by 2013-14—the push is on to link money to student performance.

“America’s system for financing education is at a crossroads,” said Virginia B. Edwards, the editor of Quality Counts 2005 and Education Week. “Increasingly, legislators want to know what their state education outlays are buying. They’re asking what it would actually cost to enable all students to meet state standards, and how to raise the revenues called for by those calculations.”

The report notes that only 22 states and the District of Columbia collect at least some school-level financial data, and the quality and use of those that data vary widely.

Focus on Adequacy

One of the most notable changes is in how policymakers talk about school finance, as legislatures and the courts shift their focus from questions of “equity” to “adequacy,” or what it would cost to meet the education goals spelled out in state constitutions.

The report, supported by the Philadelphia-based Pew Charitable Trusts, found that 30 states have had adequacy studies conducted; in six of those states, the studies were still under way late last fall. Fourteen states have conducted studies to determine the costs of meeting the NCLB requirements. In nine of those states, the studies were still under way in late 2004.

For Quality Counts 2005, Education Week commissioned Bruce D. Baker, a finance expert at the University of Kansas, to review adequacy studies across the states. The Education Week Research Center also conducted a detailed analysis of adequacy studies in three states—Kentucky, Maryland, and New York—to examine why experts arrived at such different cost estimates.

In addition, Education Week’s annual policy survey of the 50 states and the District of Columbia explored how states raise revenues for public education, distribute those dollars across districts, and track school-level expenditures. The report includes a finance snapshot for each state.

The report also updates Education Week’s annual report cards on education in the states and the District of Columbia. It grades states in four areas: standards and accountability, efforts to improve teacher quality, school climate, and the equity of resources.

A version of this article appeared in the January 05, 2005 edition of Education Week as Quality Counts 2005 Examines Changes in School Finance

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