Marguerite Roza. The Urban Institute. 2010.

SUMMARY

Over the past thirty years, per-pupil spending in the United States has nearly doubled, yet this massive increase in spending has not led to significant improvements in student performance. In Educational Economics, Marguerite Roza examines this surprising phenomenon by tracing how dollars are allocated to and spent at the school level. One issue is that current financial reporting practices make it difficult to understand how funds are spent at the school level. For example, teacher salaries at a given school are often reported using the district average salary, but at a school with a young teaching staff, the real amount spent on salaries would be much lower. In addition, it is often unclear whether and to what extent a school’s or district’s spending on programs is aligned with priorities and student needs. For instance, the author shows that districts frequently spend more per pupil on elective courses than on core subjects. Some spending mismatches are created by the way funds are distributed to schools and districts. Disparate state and federal funding streams in the forms of grants or programs targeted at particular student groups or communities typically come with “strings attached” that force schools or districts to spend in ways that are ineffective for students. Spending at the local level is further constrained by provisions in teacher contracts that cover requirements such as increased pay based only on experience, high numbers of sick days, or class size limits. Roza argues that if these funds were used to offer higher base salaries or reward the most effective teachers, many schools could improve the quality of teachers in their classrooms. Simply allocating more dollars or centralizing spending decisions are only piecemeal approaches that will not truly help schools spend dollars more effectively. Instead, the author recommends that systems be redesigned to let schools better align spending decisions according to student needs. Such a system would be driven by actual student attendance numbers, would weight for different student needs, and would allow flexibility to adjust costs to best improve student achievement.

CT CONTEXT

The problems with school finance that Roza describes ring close to home here in Connecticut. Despite outspending almost every other state in the country on education, the way that Connecticut distributes over $7 billion a year in public education funding is inefficient, ineffective, and incomprehensible. The result: lagging student performance and the largest achievement gap in the nation. It is time to implement a new, smarter system of funding for all of our public schools that places students at the center of funding decisions and creates powerful incentives that induce districts and schools to educate all students to high standards. A student-based funding formula would create a coherent, transparent state policy that consistently funds student needs in all Connecticut public schools. Such a system would create parity in funding for districts with similar wealth, eliminate inefficiencies, incentivize innovation, and progressively direct a greater share of state funding to districts with the greatest need.

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