Toward a New, Old School Finance!

Themes Money matters! Money translates primarily to human resources Trade-off between quantity and wage There are no magical substitutes Tech-based solutions? Pubic district, charter and private schools allocate resources largely the same! Running multiple systems in a common space induces inefficiency School spending has not grown out of control for decades! During bad times, school spending stagnates or even declines But during good times, at least in recent cycles, spending doesn’t rebound School spending varies substantially across states! For a variety of reasons Some states have really thrown public schooling under the bus

Money matters myths! Clouds of doubt The Long Term Trend Weak correlation between spending and outcomes? More thorough statistical analysis finds otherwise! The Long Term Trend Spending has doubled and performance is flat? But a) spending hasn’t doubled and b) performance isn’t flat! AND, more thorough statistical analysis finds otherwise! International Comparisons We spend more than any other nation (in the world, ever!) and get little, by comparison, in return? Just no! Spending figures most frequently cited simply not comparable (do not cover comparable range of costs/services) Numerous other relevant factors invariably left out of comparisons. How money is spent matters more than how much? But, if you don’t have it, you can’t spend it! (assumes flexibility in trade-offs between staffing quality/quantity) LAUSD Class Size / Teacher Wage problem

2-Dimensional Social Science? Clouds of Doubt! BS BS BS BS BS BS BS BS Test Scores BS BS BS BS BS BS BS BS Money 2-Dimensional Social Science?

The “Long Term Trend” The specious claim that school spending has risen dramatically over time coinciding with virtually no change in student outcomes

THE GRAPH!

https://www. educationnext https://www.educationnext.org/could-disappointing-2017-naep-scores-due-to-great-recession/

International Comparisons? https://t.co/p4dgJR48zC

Low Wage/Large Class High Wage/Large Class High Wage/Small Class Low Wage/Small Class High Wage/Small Class OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing. http://dx.doi.org/10.1787/eag-2014-en Table D2.1. Average class size, by type of institution and level of education (2012) & Table D3.2. Teachers' salaries relative to earnings for full-time, full-year workers with tertiary education (2012)

Low Wage/Large Class High Wage/Large Class Low Wage/Small Class High Wage/Small Class OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing. http://dx.doi.org/10.1787/eag-2014-en Table D2.1. Average class size, by type of institution and level of education (2012) & Table D3.2. Teachers' salaries relative to earnings for full-time, full-year workers with tertiary education (2012)

ACTUAL Long Term National Trends & Cycles

Note:. Education Comparable Wage Index (http://bush. tamu Source: Baker et al., School Funding Fairness Data System.

Recession (but housing/ property values continue to grow) Tech Boom Recovery? Recession (but housing/ property values continue to grow) Tech Boom Recession Sources: Current Population Survey: Income, US Census Bureau, http://www.census.gov/hhes/www/income/data/historical/families/; Population Estimates, US Census Bureau, http://www.census.gov/popest/data/historical/2010s/vintage_2013/national.html and http://www.census.gov/popest/data/national/asrh/2014/index.html; State and Local Government Finances, US Census Bureau, http://www.census.gov/govs/local/; National Income and Product Accounts Tables, Bureau of Economic Analysis, US Department of Commerce, http://www.bea.gov/iTable/index_nipa.cfm.

Source: Baker et al., School Funding Fairness Data System. Recession Recovery? Recession (but housing/ property values continue to grow) Tech Boom Source: Baker et al., School Funding Fairness Data System.

Recession (but housing/ property values continue to grow) Recovery? Tech Boom Recession Notes: "College graduates" excludes public school teachers, and "all workers" includes everyone (including public school teachers and college graduates). Wages are adjusted to 2015 dollars using the CPI-U-RS. Data are for workers aged 18–64 with positive wages (excluding self-employed workers). Nonimputed data are not available for 1994 and 1995; data points for these years have been extrapolated and are represented by dotted lines (see Appendix A for more detail).

Tech Boom Recession (but housing/ property values continue to grow) Recession Recovery? Sources: State and Local Government Finance Data Query System, The Urban Institute–Brookings Institution Tax Policy Center, http://www.taxpolicycenter.org/slf-dqs/pages.cfm; US Census Bureau, Annual Survey of State and Local Government Finances, Government Finances, Vol. 4, and Census of Governments (1990–2014)

Interstate Variation

Note: *Per-pupil revenue projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. Source: Baker et al., School Funding Fairness Data System

Note: *Per-pupil revenue projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty.

Notes: *Current spending per pupil projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. **Teachers per 100 pupils projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. Source: Baker et al., School Funding Fairness Data System

Notes: *Teacher wage as % of non-teacher wage at same age, degree level, hours per week & weeks per year Source: Baker et al., School Funding Fairness Data System

Districts (and kids) that never got a chance!

National Education Cost Model

Geographic Constraints Input Prices Student Population Structural/ Geographic Constraints Measured Student Outcomes Inefficiency Spending Cost <FN>Figure 9.1 <FT>Factors affecting education costs and efficiency Efficiency Controls: Fiscal capacity, competition, & public monitoring

Outcomes Resources Current Average Resources Adequacy Target Exceeds Current Average Actual Distribution Current Average Outcomes Outcomes <FN>Figure 1Linking Resources, Outcomes and Adequacy Targets 0.1 <FT>Linking resources, outcomes, and adequacy targets Equal Opportunity Intercept Adequacy Cost Exceeds Current Average Resources

Current spending (2013-2015) as % of “cost” of achieving national average outcomes (red = lower, green = higher) Current outcomes (2013-2015) with respect to national average outcomes (red = lower, blue = higher)

Source: Data from Baker et al., The Real Shame of the Nation

Large Districts >75k - . 1 5 .5 1.5 2 Lee Polk Albuquerque Public Schools Hillsborough Pinellas Duval Orange Dade Jefferson County Davidson County Sd Broward Palm Beach Northside Isd Milwaukee School District Wake County Schools Jefferson County School District No. R-1 School District No. 1 In The County Of Denver And State Of C Fort Worth Isd Charlotte-Mecklenburg Schools Austin Isd Dekalb County Fulton County Gwinnett County Cobb County Clark County School District San Diego Unified Baltimore City Public Schools Baltimore County Public Schools Anne Arundel County Public Schools Philadelphia City Sd City Of Chicago Sd 299 Dallas Isd Los Angeles Unified Long Beach Unified Houston Isd Cypress-Fairbanks Isd Montgomery County Public Schools New York City Public Schools Prince George'S County Public Schools Fairfax Co Pblc Schs Prince Wm Co Pblc Schs - . 1 5 .5 1.5 2 Current Spending as % of Cost of Avg. Outcomes Gap between Current Outcomes & National Mean Fitted values Large Districts >75k

Source: Data from Baker et al., The Real Shame of the Nation

The Road Ahead Redefined Federal Role? Funding Pool all federal aid – allocate through a national foundation aid formula using “cost to average outcomes” as target Required minimum state effort Regulation? Feds should focus on oversight, guidance (regs) and enforcement where necessary, pursuant to federal statutory protections Research Advancement/Technical Support Federal data collections (and research access to them!) Renewed role in federal research support! And reporting! State Role Funding! SEAs?

Additional Guidance Use economic good times to catch up! Maintain balanced portfolio of revenue sources Traditional investments matter! It really does still come down to staffing quantity and quality… that is… having enough, competitively compensated staff (teachers, administrators, etc.) to get the job done!