The Efficiency Smokescreen, “Cuts Cause no Harm” Argument & The 3 Kansas Judges who Saw Right Through It!

State school finance litigation is a tedious – often annoying –politically charged process.  Often, school finance litigation involves extensive debate over tedious statistical and other details underlying estimates of how much is should cost for states to meet their constitutional obligations. Too often, it seems, these debates over tedious statistical details serve to distract the conversation from broader principles of plainly logical fair treatment for kids.

In these cases, states continue to vigorously defend their right to fund – or not – schools as they see fit… when they see fit…. whether or not they see fit.  A relatively consistent pool of experts continue to advise states on strategies for their defense. These strategies have evolved somewhat over time.  For many years, the central “expert” strategy was simply to argue that there’s no proof that adding more money would matter anyway because there is no systematic relationship between funding and outcomes. Of course, this argument fails to excuse the facial inequity of permitting some children in some districts to have twice or more, the resources of others. But, defense experts have certainly extended the money doesn’t matter argument to support the contention that because money is inconsequential, so too are these inequities.

More nuanced versions of these arguments have emerged in recent years.  Bringing “efficiency” arguments into the debate, defense experts have taken to helping states build their central theory on the argument that all districts have more than enough money, even those with the least, and that if they simply used that money in the most efficient way, we could see that it is more than adequate. The extension of this argument is that therefore, even cutting funding to these schools would not cause harm and does not compromise the adequacy of their funding, if they take advantage of these cuts to improve efficiency.  This argument is then coupled with challenges to any and all attempts to estimate the “cost” of producing adequate outcomes based on existing practices of school districts – because existing practices are inefficient practices.  This is a nuanced and complex argument and one that I’ve addressed previously in academic writing and in this blog.

As I’ve stated previously:

Importantly, cost model estimates are estimates based on the actual production technologies of schooling. They are based on the outcomes schools and/or districts produce under different circumstances, for different children – the actual children they serve, based on the actual assessments given, and based on the real conditions under which children attend school. Some critics of education cost analysis in general, and cost function modeling in particular assert that all local public school districts are simply inefficient, mainly because they pay their personnel based on parameters not associated with improved student outcomes.[1] Therefore, they assert that it is useless to consider the spending practices of current districts when trying to determine how much needs to be spent to achieve desired outcomes. A common version of this argument goes that if schools/districts paid teachers based on test scores they produce and if schools/districts systematically dismissed ineffective teachers, productivity would increase dramatically and spending would decline. Thus, educational adequacy could be achieved at much lower cost, and therefore, estimating costs based on current conditions/practices is a meaningless endeavor.[2],[3]

The most significant problem with this logic is that there exists absolutely no empirical evidence to support it! It is entirely speculative, frequently based on the assertions that teacher workforce quality can be improved with no increase to average wages, simply by firing the bottom 5% each year and paying the rest based on the student test scores they produce.  To return to the car purchasing analogy above, this is like assuming that somewhere out there is a car/truck with all the features of the Escalade, but the price of the F-150 – specifically, a version of the Escalade itself produced by a new, yet to be discovered technology with materials not yet invented that allow that vehicle to be sold at less than 1/2 its original price.

In fact, the logical way to test these very assertions would be to permit or encourage some schools/districts to experiment with alternative compensation strategies, and other “reforms,” and to include these schools and districts among those employing other strategies (production technologies) in a cost function model, and see where they land along the curve. That is, do schools/districts that adopt these strategies land in a different location along the curve? Do they get the same outcomes with the same kids at much lower spending? In fact, some schools and districts do experiment with different strategies and those schools carry their relevant share of weight in any statewide cost model.

Pure speculation that some alternative educational delivery system would produce better outcomes at much lower expense is certainly no basis for making a judicial determination regarding constitutionality of existing funding, and is an unlikely (though not unheard of) basis for informing statewide mandates or legislation.  Cost model estimates, as well as recommendations of professional judgment and expert panels can serve to provide useful, meaningful information to guide the formulation of more rational, more equitable and more adequate state school finance systems.

In a Shawnee County District Court decision released on Friday, a three judge panel thoroughly impressed me with their understanding, and eloquent takedown of the efficiency & funding cuts smokescreen.

As the Kansas 3-Judge Panel Framed It: (p. 188)

If “value” is to be a determinative consideration in the evaluation of the costs of providing suitable education, which we concur it must be, then, nevertheless, we would have to believe the State would have some obligation in this proceeding to advance alternative measures that cost less, but which, at least, produce the same sustained effect in producing the “improvement in performance that reflects high academic standards” which now epitomizes the end measure for a “suitable education.” Here, the record is wholly devoid of such alternative approaches, by cost or otherwise, to that goal. Rather, here, the State has effectively asserted that all Kansas K-12 students have reached their apparent maximum and will continue to do so with less money. Here, it is clearly apparent, and, actually, not arguably subject to dispute, that the state’s assertion of a benign consequence of cutting school funding without a factual basis, either quantitatively or qualitatively , to justify the cuts is, but, at best, only based on an inference derived from defendant’s experts that such costs may possibly not produce the best value that can be achieved from the level of spending provided. This is simply not only a weak and factually tenuous premise, but one that seems likely to produce, if accepted, what could not be otherwise than characterized as sanctioning an unconscionable result within the context of the education system. Simply, school opportunities do not repeat themselves and when the opportunity for a formal education passes, then for most, it is most likely gone. We all know that the struggle for an income very often – too often – overcomes the time needed to prepare intellectually for a better one.

If the position advanced here is the State’s full position, it is experimenting with our children which have no recourse from a failure of the experiment.  Here, the legislative experiment with cutting funding has impacted Kansas children’s K-12 opportunity to learn for almost one-third of their k-12 educational experience (2009-10 through 2012-13). Further, given the increased performance results that have accrued after passage of the No Child Left Behind Act and the more focused attention to the increase in standards in the future, the failure to provide full opportunity for learning experiences in our Kansas K-12 school system in the past due to a shortfall in funding is truly sad, however, a continuation of the status quo would only deepen the reflection of opportunities lost. For past students and future students, “all that they can be” was, is currently, and will be, compromised.

See also:

Baker, B. D. (2012). Revisiting the Age-Old Question: Does Money Matter in Education?. Albert Shanker Institute.

Baker, B. D. (2011). Exploring the Sensitivity of Education Costs to Racial Composition of Schools and Race-Neutral Alternative Measures: A Cost Function Application to Missouri. Peabody Journal of Education, 86(1), 58-83.

[1]Hanushek, E. (2005, October). The alchemy of ‘costing out’ and adequate education. Paper presented at the Adequacy Lawsuits: Their Growing Impact on American Education conference, Cambridge, MA. Costrell, R., Hanushek, E., & Loeb, S. (2008). What do cost functions tell us about the cost of an adequate education? Peabody Journal of Education, 83, 198–223.

[2] For elaboration on this argument, see: Costrell, R., Hanushek, E., & Loeb, S. (2008). What do cost functions tell us about the cost of an adequate education? Peabody Journal of Education, 83, 198–223.

[3] An alternative version of this argument is presented by the “efficiency” intervenors in this case. Intervenors’ brief explains: “Therefore, it is literally impossible for the legislature or other current managers of the school system in Texas to take the position, in cost-effective economic terms, that any particular level of funding is necessary for efficiency. Even the question of allocation of funding among districts cannot be determined in an efficient manner without a more substantive and comprehensive system of financial accountability.” (p. 9) This comment would appear to be a backhanded attempt to undermine any use of analysis of existing spending data for addressing either the overall adequacy of funding to Texas school districts or the equitable distribution of that funding. But this argument suffers the same lack of substantiation that there actually exists some hypothetically more efficient system out there somewhere, and that the current system is necessarily so inefficient as to be irrelevant. The only reasonable basis for  the court to determine education costs in Texas, and how they vary across children and settings is to evaluate those costs in the context of policies as they currently exist, given the actual production of outcomes and average efficiency of schools and districts in producing those outcomes.  Reducing regulations may be a rational alternative, and re-estimating costs after such policy change is also reasonable. If costs of desired outcomes go down after such policy change, then great! But one cannot simply assume that regulatory change (or charter expansion as an approach to regulatory reduction – see Section 5.0) will result in dramatic efficiency gains.

Published by schoolfinance101

Bruce Baker is an Professor in the Graduate School of Education at Rutgers, The State University of New Jersey. From 1997 to 2008 he was a professor at the University of Kansas in Lawrence, KS. He is lead author with Preston Green (Penn State University) and Craig Richards (Teachers College, Columbia University) of Financing Education Systems, a graduate level textbook on school finance policy published by Merrill/Prentice-Hall. Professor Baker has written a multitude of peer reviewed research articles on state school finance policy, teacher labor markets, school leadership labor markets and higher education finance and policy. His recent work has focused on measuring cost variations associated with schooling contexts and student population characteristics, including ways to better design state school finance policies and local district allocation formulas (including Weighted Student Funding) for better meeting the needs of students. Baker, along with Preston Green of Penn State University are co-authors of the chapter on Conceptions of Equity in the recently released Handbook of Research Education Finance and Policy, and co-authors of the chapter on the Politics of Education Finance in the Handbook of Education Politics and Policy and co-authors of the chapter on School Finance in the Handbook of Education Policy of the American Educational Research Association. Professor Baker has also consulted for state legislatures, boards of education and other organizations on education policy and school finance issues and has testified in state school finance litigation in Kansas, Missouri and Arizona. He is a member of the Think Tank Review Panel, a group of academic researchers who conduct technical reviews of publicly released think tank reports on education policy issues.

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