1. Toward a New, Old School Finance!

2. 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

3. 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

4. 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?

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

9. THE GRAPH!

12. https://www. educationnext

13. International Comparisons?

16. 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.
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)

17. 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.
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)

21. ACTUAL Long Term National Trends & Cycles

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

23. 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, Population Estimates, US Census Bureau, and State and Local Government Finances, US Census Bureau, National Income and Product Accounts Tables, Bureau of Economic Analysis, US Department of Commerce,

24. 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.

25. 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).

27. 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, US Census Bureau, Annual Survey of State and Local Government Finances, Government Finances, Vol. 4, and Census of Governments (1990–2014)

28. Interstate Variation

31. 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

32. 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.

33. 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

34. 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

35. Districts (and kids) that never got a chance!

40. National Education Cost Model

41. 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

42. 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

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

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

50. 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

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

52. 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?

53. 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!