No more “sweetheart deals” for poor schools…

Posted on November 6, 2010

Fordham Institute’s Mike Petrilli is showing his “tough love” for public schools in these tough economic times:

The tough-love message to superintendents and school boards nationwide should be clear: The day of reckoning has arrived; let the de-leveraging begin. The spending bubble is over. No more adding staff at a pace that outstrips student enrollment; no more sweetheart deals on pensions or health insurance; no more whining about “large” class sizes of twenty-five. It’s time to live within our means.

Of course, a major problem with this assertion for anyone who has read… well… much of anything about school funding in the past decade or so, is the underlying assumption that schools nationwide, uniformly and especially poor urban districts have simply been punch drunk on excess funding resources for the past few decades… with dramatic increases for all especially from the 1990s forward.

Now Mike Petrilli is actually better than many on this point, on most occasions.  But the problem with Petrilli’s statement above is that it fails to recognize the incredible variation that persists across states and school districts, and perpetuates the myth of school districts nationally and uniformly being punch drunk on the public dollar – the “bubble” is over. The “bubble” that everyone enjoyed!

Here are two recent sources which show the extent of persistent disparities across states and across districts within states by district poverty rates:

  1. Is School Funding Fair?
  2. Baker, B.D., Welner, K.G. (2010) Premature celebrations: The persistence of inter-district funding disparities. Education Policy Analysis Archives.

In our report on Fair School Funding, we show just how large the funding disparities are across states and also show that in many states, higher poverty districts still receive systematically fewer resources per pupil – and that’s in dollars adjusted for regional wage variation, economies of scale and population density – no fancy weights to reduce spending for poverty differences themselves. Yes, in some, many states, higher poverty districts have far fewer resources than lower poverty ones! Shocking, I know.

Further, the first of these sources explains that much of the deprivation of resources that has occurred in certain states is a function of complete and utter lack of state financial effort – not lack of capacity.

Additionally, in the second article above, Kevin Welner and I show by a similar method that overall, nationally, there remains a positive relationship between school district state and local revenues and resident income levels (across districts within states). Here’s a figure from our report, based on a regression model characterizing the relationship between median household income and state and local revenues per pupil over time.  Even by 2005, that relationship remained positive – and still does through 2008. Some progress was made through 1996, and then leveled off.

Figure 1

Relationship between Median Household Income and State & Local Revenues per Pupil (District Level) Nationally

More interesting, however, is the variation in support for schools generally, across states, and for higher poverty schools within states.

Yes, state budgets oscillate over time. There are good times and there are bad times. But some… if not many states… have chosen consciously to use the argument of “tough economic times” to throw their public education systems under the bus. Heck, many of these states used the good economic times to argue for throwing their education systems under the bus. Wouldn’t want to slow the economy by “overtaxing” and spending too much on schools.

Here are some snapshots of state spending, from a recent post.

Figure 2

Figure 3

For more information on these graphs, see my earlier post on State Ranking Madness. Suffice it to say that not all states have put a lot of funding into their schools and these figures come from 2007-008, the front end of the downturn – or back side of the supposed bubble. Some states like Utah and Tennessee allocate very little to their public education systems. Perhaps those are poor states that simply can’t afford to do more? Perhaps they were “taxed to death” in the good times – during that bubble – and simply can’t sustain that in the bad times!  That’s simply not the case!

Figure 4 shows the relationship between state and local revenue levels and the percent of gross state product spent on schools (from an earlier post). Tennessee, which is near the bottom on state and local revenue is also near bottom on “effort,” along with Louisiana, Colorado and North Carolina. These states are using far less of their capacity to support public education. Their lagging resources are a function of political choices as much if not more than a function of economic conditions.

Figure 4

As it turns out, these states also somehow missed out on that whole bubble thing. Figure 5 shows the ECWI (Education Comparable Wage Adjustment) adjusted current operating expenditures per pupil from 1997 to 2005 (range for which ECWI is available) for states we classify as “highlands” in our fairness report. Adjusted for competitive wage growth (of non-teachers in same labor markets), per pupil spending in Tennessee stayed a) relatively flat and b) below all others in its region. Where’s their bubble? Where’s all of that punch drunk public spending? Well, perhaps if we could take it back to about 1920 or so. Then we’d find the bubble?

Figure 5

Utah is my new favorite standout these days, and is shown in this figure.Yeah… you have to look carefully to find Utah per pupil spending down their blending in with the horizontal axis of the graph. Utah per pupil spending is a) absurdly lower than all others around it and b) really, really, flat over time. Hey, where’s that bubble? Where’s all that punch drunk public expenditure? In fact, the only state with a really steady climb in spending here is Wyoming (perhaps Montana also).

Figure 6

Oh, and back to that issue of how all of these states have taxed themselves to oblivion to support that punch drunk spending binge. This figure shows the cumulative taxes as a percent of income with a handful of states including Utah and Tennessee identified.  Note that for most states, these trends change little even if we take the graph back to 1980. While the above “effort” figure focuses only on public K-12 funding as a share of gross state product, this graph focuses on all tax revenues as a share of income. Yeah… Tennessee and Utah really taxed themselves to death to support their massive spending bubble (albeit my time line is slightly different… but heck… there wasn’t a bubble anyway). We really need to bring their taxes and spending back into line. Really!

Figure 7

I’d find it pretty hard to argue that schools – and the adult interests who run schools – in states like Louisiana, Utah, Colorado and Tennessee have been punch drunk  for decades and need to get with the program and learn how to live within their means! MAKING BROAD NATIONAL STATEMENTS TO THIS EFFECT IS DOWNRIGHT ABSURD, GIVEN THAT PUBLIC SCHOOL FINANCE REMAINS PRIMARILY A STATE AND LOCAL FUNCTION!

Just as spending levels vary across states, so do funding levels vary across children, schools and districts within states. That is the central concern in Is School Funding Fair? Funding fairness, like overall funding levels, varies widely across states, even within regions. Figure 8 shows that among the mid-atlantic states, only New Jersey reversed the relationship between household income and school district revenues. Even then, many affluent suburban New Jersey districts continue to outpace spending of their poorer urban neighbors. New York State remains among the most regressively funded states in the nation, with affluent districts continuing to far outspend New York City schools and schools in other poorer mid-size and small cities around the state.

Figure 8

Trends in Income-Revenue Relationships in Mid-Atlantic States

Figure 9 shows the same trends for North Central states, where Illinois is the standout of not only maintaining a regressive distribution of resources but actually increasing in regressiveness of funding from 1998 to 2005. Over time, affluent suburban Chicago school districts have continually outpaced state and local revenues of poorer urban, minority districts.

Figure 9

Trends in Income-Revenue Relationships in North Central States

Figure 10 compares the within state fairness measure with the measure of overall support for public education. Some states like Florida and North Carolina simply spend little, while having reasonable capacity to spend more, and distribute what they have inequitably. Tennessee spends little – distributing those shares of near nothing relatively equitably – a strange variation on fairness.

Figure 10

Relationship between Fairness and Overall Support for Public Schooling

This argument that it’s time to accept reality, tighten our belts, etc. etc. etc. is essentially an argument that we should simply let class sizes climb back over 25 or 30 per classroom in poor urban districts and that we have no choice in the matter because there just isn’t enough money to do otherwise. There’s just no more money… in New Jersey, in Tennessee, in Louisiana, in Colorado, in Utah… you name it. They’ve all tried their hardest and spent themselves into oblivion while teachers, administrators and public education bureaucrats have been throwing extravagant parties on the public dime! That’s just how it is???????

I’m not buying it.  I assure you that within states, affluent suburban districts will be among the last to increase class sizes (as I discuss in When Schools Have Money) , unless state imposed spending limits force them to.  And I assure you that some states that already put up the least effort to support their public schools will proclaim most loudly the need to do even less – raising class sizes from 35 toward 40 (or cutting corners elsewhere).  The level of financial support provided to public education systems may, on average, be tied to general economic conditions. But the extent to which that support varies so widely across states and the extent to which states allocate those resources fairly across wealthier and poorer communities, is significantly if not predominantly in the control of states.

I close this with a favorite video clip – A Utah/Tennessee (and others) perspective on education funding!

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