Teaching Profession

As Budgets Swell, Spending Choices Get New Scrutiny

By Michele McNeil — March 23, 2007 7 min read
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When lawmakers in Arkansas increased school funding by more than $700 million over the past three years to improve student achievement, they wanted the money to be spent on instructional coaches for teachers, tutors for struggling students, and smaller class sizes in reading, math, and science.

But—in what could prove a cautionary tale for policymakers in other states—that’s not mainly how it was used.

School districts spent most of their newfound money to raise teachers’ salaries and, in some cases, to add electives in high school, including courses in football, basketball, and baseball. Overall, Arkansas schools that were surveyed last year had hired just 12 percent of the recommended number of tutors, according to a preliminary analysis by education consultants hired by the state.

As legislators in many states consider pouring billions of additional dollars into their K-12 systems, they are grappling with evidence that money alone won’t improve student achievement—in part because districts may not be using the dollars where they’re needed most.

What’s more, most states don’t have data systems in place even to measure whether more money equals higher student performance.

In California, for example, a sweeping research project that examined how to fix the state’s school finance system urged in reports this month a top-to-bottom overhaul of school governance and data systems so money could be better targeted, spent, and tracked. (“California’s Schooling Is ‘Broken’,” March 21, 2007.)

“It seemed for a while that people were moving past the argument over whether money matters,” said Molly A. Hunter, the managing director of the New York City-based National Access Network, which tracks school finance lawsuits across the country. “But I think most agree that it certainly is important to spend the money in the ways that matter most.”

Hefty Amounts

The question of how education money is spent becomes more crucial as states take steps this year to boost funding by substantial amounts, in contrast to the belt-tightening during the economic slowdown earlier in the decade.

During the 2006-07 budget year, states are expected to spend nearly 8 percent more on K-12 education than the year before, with 12 states budgeting for double-digit increases, according to the Denver-based National Conference of State Legislatures. And that’s on top of the 7 percent increase states gave schools last budget year.

In some cases, spending proposals being considered this year are coming because judges are looking over legislators’ shoulders—23 states are tangled in finance lawsuits in which groups are suing for more education aid, according to the National Access Network.

But the amount of guidance that states plan to give districts on spending varies widely.

Tracking Arkansas' Spending

Arkansas has added more than $700 million to its K-12 operating budget since 2003, using a model that voluntarily calls for more tutors, smaller class sizes, and fewer assistant principals. School finance consultants last year came up with a number of findings about how that $700 million was spent, based on a random sample of 107 schools.

TEACHER SALARIES: Average teacher salaries increased to $41,489 in 2004 from $39,409 in 2003.

REDUCING CLASS SIZES: Although class sizes were kept low, at an average of 20 students in elementary schools and 25 in middle schools, the high school average was 29, higher than the recommended 25. Some high school classes had as many as 41 students.

ADMINISTRATION: While the funding model called for no assistant principals to be funded with new state money, the schools surveyed reported a total of 63.

ELECTIVES: Schools added many electives to the high school curriculum, including football, basketball, and baseball, which were offered in addition to traditional physical education classes.

TUTORS: The finance model called for 288 tutors to help struggling students in those 107 schools, but just 34 had been hired.

SOURCE: Larry Picus and Associates

New York Gov. Eliot Spitzer, a Democrat elected last year, wants to pour an additional $7 billion a year into his school districts by 2010, focusing on the schools with the lowest achievement. The proposal is partly to answer an order from the state’s highest court that at least $2 billion more is needed for New York City schools alone to meet constitutional requirements for a “sound, basic education.”

Gov. Spitzer would keep a tight rein on funding increases by requiring that the money be used only on an “approved menu” of options, such as a longer school day. He is insisting that districts prove that the money is tied to increases in student achievement.

Targeted spending also is the focus of a proposed school funding increase in Florida, where the capstone of freshman Republican Gov. Charlie Crist’s school agenda is an additional $300 million for performance pay for teachers.

But other states are contemplating big increases with few strings attached. In Illinois, Gov. Rod R. Blagojevich, a second-term Democrat, is proposing an additional $10 billion in K-12 funding over four years, mostly to increase the foundation award that goes to each district for operating expenses.

And in Arkansas, where the K-12 budget for 2006-07 is about $2.5 billion, legislators this year approved another $122 million for general school operations, including expanded preschool programs, for the coming school year. That doesn’t include $456 million in one-time money that will likely be set aside for school construction projects, a proposal still pending in the legislature.

“I’m asking my constituents to pay more and more, but I also think we’re obligated to get as big a return as is possible,” said Arkansas state Sen. Jim Argue, a Democrat and the chairman of the upper chamber’s education committee. He was one of the architects of Arkansas’ school finance reforms, which provided more money for schools.

Model Ignored

Arkansas lawmakers were prompted to act by a state supreme court decision in 2002 declaring Arkansas’ school funding inadequate and inequitable, although no specific price tag was attached to the decision.

Legislators in Arkansas in 2004 determined how much to increase spending on their school system by following a model built by Larry O. Picus, a school finance consultant and a professor at the University of Southern California’s school of education, and Allan Odden, a professor at the University of Wisconsin-Madison and a co-director of the Consortium for Policy Research in Education, or CPRE.

The model recommended paying for more instructional coaches for teachers, smaller class sizes, and tutors for students at risk of failing based on a formula, leaving it to lawmakers to set funding levels.

But legislators didn’t require that districts spend their money according to the model, so most schools didn’t, according to a preliminary analysis of 107 of the state’s 1,100 schools by researchers from the University of Southern California and CPRE. The analysis was presented at a CPRE conference in Chicago last month.

In high schools, especially, the trend was clear: new money was used to add elective classes rather than to bolster core classes in reading, math, and science. And although it wasn’t widespread, in some schools, the most egregious examples included adding electives that were sports-oriented, rather than academic-oriented, Mr. Picus said.

When the legislature saw the follow-up analysis late last year, showing that money went to high school electives such as sports, “I was frustrated by it, ” Sen. Argue said. He said legislators likely would attach more strings to funding increases in the future.

Now, the onus is on districts to perform, said Arkansas Commissioner of Education T. Kenneth James, who served as a district superintendent for 11 years. He said his department is working with local districts to improve accounting and data collection.

“At the end of the day, I tell my superintendents that we have to be able to demonstrate that we are improving,” Mr. James said. “If we can’t say this, it’s going to be tough to go back to taxpayers when we need more money.”

There are already signs of progress in Arkansas. The proportion of 4th graders rated proficient in mathematics on the National Assessment of Educational Progress grew to 34 percent in 2005 from 14 percent in 2000.

Mr. James said that while the additional funding probably is at least partly responsible, increased standards and accountability are factors as well.

And Sen. Argue said that if the additional funding had been used for tutors, rather than for basketball classes, “How do we know we couldn’t be doing better?”

Scarce Data

Arkansas is one of the few states where detailed data exist on how districts and schools allocate new revenue, although the researchers who did the Arkansas analysis are completing a more comprehensive study in Wyoming.

“We’re never going to get answers until we get into the schools,” Mr. Picus said.

The lack of data frustrates those, such as economist Eric A. Hanushek, who believe spending significant amounts of money in the same way won’t improve student achievement.

Mr. Hanushek, a senior fellow at the Stanford University-based Hoover Institution, cited California as an example. The state has spent $200 million a year to reduce class sizes. “But we have no idea whether that money is helping kids achieve or not,” said Mr. Hanushek.

That may be changing.

In California, improved data collection is a key to reforming school finance, according to the recent research project there.

The New York State Education Department is working to beef up its data system so it can track each student’s growth in academic achievement, said department spokesman Jonathan Burman.

Even those who have fought for more K-12 aid agree that tracking spending is crucial and that dollars alone aren’t the answer.

“The resources alone are not sufficient,” said Geri D. Palast, a lawyer and the executive director of the New York City-based Campaign for Fiscal Equity, which successfully fought a legal battle to secure more money for that city’s schools. “It’s going to be absolutely crucial that we ask: Is the money being used in the right way?”

A version of this article appeared in the March 28, 2007 edition of Education Week as As Budgets Swell, Spending Choices Get New Scrutiny


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