The Linkage of Research and School Finance Policy Eric Hanushek Alfred Lindseth

Overview of Issues Increased demands for linking policy to rigorous research  NCLB  IES and this conference Range of policies  Specific, programmatic policies Reading First, class size reduction, after school programs  General institutional policies Funding, certification, salary policies, accountability

Institutional policies Assertion: More leverage in institutional than programmatic policies Much less knowledge about institutional  Limited analysis of past policies  Missing information on key “design” parameters Requires different approaches

Discussion Plan Use finance issues to illustrate concerns Evaluate major court-ordered “equity” and “adequacy” financing changes Link performance-based funding to research  Schoolhouses, Courthouses, and Statehouses

Existing Institutional Research: Equity Analysis Court cases flowing from Seranno v. Priest Individual state:  Downes (1992) [California]; Flanagan and Murray (2004) [Kentucky]; Downes (2004) [Vermont]; Cullen and Loeb (2004) [Michigan]; Duncombe and Johnston (2004) [Kansas] National:  Hanushek and Somers (2001); Greene and Trivitt (2008)

Existing Institutional Research: Adequacy Analysis

Kentucky and National NAEP Trends for White Students, 1992 to 2007

Kentucky and National NAEP Trends for Black Students, 1992 to 2007

New Jersey and National NAEP Trends for Black Students, 1992 to 2007

New Jersey and National NAEP Trends for Black Students, 4 th grade reading, 1992 to 2007

New Jersey and National NAEP Trends for Hispanic Students, 1992 to 2007

Wyoming and National NAEP Trends for White Students, 1992 to 2007

Wyoming and National NAEP Trends for Hispanic Students, 1992 to 2007

Massachusetts and National NAEP Trends for White Students, 1992 to 2007

Massachusetts and National NAEP Trends for Black Students, 1992 to 2007

Performance-Based Funding Cannot separate financing from policy Must get incentives right Cannot do piecemeal policies

Performance-Based Funding 1. Standards, Assessment, and Accountability 2. Empower Local Decision Making 3. Direct Rewards and Incentives 4. Information, Evaluation, and Continuous Improvement 5. Rational and Equitable Funding

1. Standards, Assessment, and Accountability Available research On-going research Policy usefulness Good standards ++ Reliable assessments +++ Value-added focus ++ Strong accountability ++

2. Empower Local Decision Making Available research On-going research Policy usefulness Local autonomy + Local funding options +++ Parental choice ++ + Categorical funding

3. Direct Rewards and Incentives Available research On-going research Policy usefulness Performance based rewards – teachers +++ Performance based rewards – administrators Specialties Hard-to-staff schools +++

4. Information, Evaluation, and Continuous Improvement Available research On-going research Policy usefulness Technology of information +++ Data-based Decisionmaking ++ Program evaluation ++ Local evaluation

5. Rational and Equitable Funding Available research On-going research Policy usefulness Needs-adjusted base funding ++ Distortions +++ Fiscal responsibility +++

Performance-Based Funding 1. Standards, Assessment, and Accountability 2. Empower Local Decision Making 3. Direct Rewards and Incentives 4. Information, Evaluation, and Continuous Improvement 5. Rational and Equitable Funding

Performance-Based Funding 1. Standards, Assessment, and Accountability 2. Empower Local Decision Making 3. Direct Rewards and Incentives 4. Information, Evaluation, and Continuous Improvement 5. Rational and Equitable Funding