1. Introduction and Overview
School Finance:
A Policy Perspective, 4e
Chapter 1
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2. What is School Finance? What is School Finance?
“School finance concerns the distribution and use of money for the purpose of providing educational services and producing student achievement.”
Odden and Picus (2004) p. 1
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3. School Finance Focus Equity (most of 20th century)
Variation in per-pupil expenditures
Uneven distribution of property tax base
Productivity (1990s)
Linkage between level and use of funds and student achievement
Adequacy and Accountability
(now and in the future)
Indicate that examples of all of these things will be provided during tonight’s lecture.
Do class introductions at this point
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4. Today The scope of school finance School finance adequacy
Nationally, Regionally, Locally
School finance adequacy
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5. School Finance Simulations
20 district and state simulations available
You must have Excel to run
Download and run
If it does not operate properly, delete and download again
If you have a problem, I can it to you
Special consideration for Mac users
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6. Education and the Fortune 500
*Does not include Federal Revenue
RI State Budget 6.9 Billion
RI State Education Budget 690 Million
RI Education Spending Total 2.5 to 3 Billion
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7. Annual Public School Enrollment: United States—1919 to 2005
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8. Share of Revenue: 1919 to 2000
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9. Pupil/Teacher Ratio: 1955 to 2001
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10. Key School Finance Issues
Until recently, money per pupil, after inflation adjustment, has risen ~ 3.5% annually for 95 years
But this money is distributed very unequally across states, districts, and schools
When it gets to schools, some argue that it is not used as effectively or productively as it can be
This in the context of student performance measures which haven’t been as hoped particularly for kids with special needs
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11. And So THE Challenge:
Accomplish the goals of standards-based education reform, by employing “evidence-based” practice in everything we do
Which means at least to double education performance over the next decade
We must improve the productivity of our actions and boost student performance with the money we have and the limited/ or no additional money we will get
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12. School Finance Background
SF issues have shifted in two ways:
Equity shift:
Old equity problem: low wealth, low spending with high tax rates, versus high wealth, high spending with low tax rates
New equity problem: low wealth, average spending with lower tax rates, versus high wealth, high spending with higher tax rates
Catalyst for Prop 2 ½ and S 3050 (Paiva-Weed) type legislation
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13. (In part why RI has struggled with adopting Education Funding Formula)
New equity problem harder to fix and the fix is different from the fix for the old equity problem
And most individuals—school leaders and policymakers—are still focused on the old equity problems
(In part why RI has struggled with adopting Education Funding Formula)
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14. Second Major Shift
Equity has taken a back seat to adequacy— is there enough or an adequate amount of money to have educators teach students to new high performance standards
If not, what is the adequate expenditure level that is required?
Is there enough money in the system? Critics argue yes, and point
to collective bargaining and teacher compensation as misdirecting
Resources.
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15. What Is Adequacy?
Adequacy requires provision of sufficient fiscal resources to enable all students to perform at high levels
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16. Costing Out Adequacy Defining adequacy
Establishing a system to achieve the educational standard or goal
Measuring costs and expenditures
Concerns and other issues
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17. Four Approaches to Defining Adequacy (chptr 3 pp 77-81)
Cost function (chptr 3 p 79)
Expenditures in districts/schools that meet performance benchmarks (chptr 3 p 78)
Professional judgment (chptr 3 p 78)
Evidence-based approach (chptr 3 p 80)
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18. Implementation How prescriptive should the model be?
Who controls spending decisions?
Simple, transparent, and easily understood
Establish a base “foundation” level
Adjust for:
Student characteristics (eg poverty)
District characteristics (expectations and involvement)
Price differences (“gold coast” Ct)
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19. Funding Adequacy
If we can identify an adequate spending level, how do we fund it?
By taxing the rich, and if so, who are the rich?
By tapping “progressive taxes,” which the tax- paying public does not want
By tapping more “regressive taxes,” like sales taxes, which if more taxes are needed, the tax- paying public will swallow?
And how “regressive” are the so-called regressive taxes? (so in an economic recession like now when spending is less then revenue base is diminished)
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20. What Does This Mean for a State?
School spending
School operations
Tax rates
Other implications?
School finance reform
What would you recommend?
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21. Reform of School Finance
Need for comprehensive reform of the finance system
System must be simple, easy to understand, and transparent
Should it be based on a measure of adequacy? And if so, how would that impact equity?
Recent evidence (Odden, Goetz and Picus, 2007) suggests that relatively little additional money is needed overall to reach adequacy – part of the problem is the distribution across states
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