TCS Daily

How Much is Enough to Spend on Education?

By Joanne Jacobs - April 28, 2004 12:00 AM

How much is enough when it comes to funding better schools? According to studies done for school finance lawsuits, schools are radically underfunded. And opponents of No Child Left Behind (NCLB) claim implementing the law would require spending an additional $85 billion to $150 billion, an increase of 20 to 35 percent.

In the journal "Education Next", an article titled Exploring the Costs of Accountability explains how consultants decide how much funding is "adequate." The authors are James Peyser, who chairs the Massachusetts Board of Education, and Robert Costrell, an economics professor at the University of Massachusetts at Amherst currently working for the state government.

They conclude that the NCLB "spending gap" is more like $8 billion, centered in a few large states, and could be met by giving states more flexibility in spending federal funds.

What amazed me was their description of how experts decide what's "adequate" funding.

In the "professional judgment" model, educators are asked to imagine their ideal school, if money was no object. They need not prove their proposals -- small classes, lots of computers, etc. -- will raise student achievement. The money needed to fund the dream school becomes the measure of adequacy. Which surely is nuts.

Not surprisingly, a Massachusetts study using this model found every major district in the state was underfunded by an average of 66 percent, write Peyser and Costrell. The exception was low-performing, high-spending Cambridge.

In a New York funding equity lawsuit, the judge rejected the first "professional judgment" panel's study, which found New York City schools had enough money to provide the "opportunity of a sound basic education." Then the same consulting group, Management Analysis and Planning, was hired by the plaintiffs to do a second study. This time, the panel was restricted to "administrators, principals and teachers on the city's Department of Education payroll," with no outsiders, writes Sol Stern. "Their report concluded that the city schools needed yet another $3.7 billion per year." Mayor Michael Bloomberg is now demanding an extra $5 billion from the state for city schools.

The "successful schools" model is somewhat saner: Whatever is spent in the highest-performing schools is assumed to be the right amount. The average spending in these districts is redefined as the minimum needed.

But the model ignores a chicken-egg problem, write Peyser and Costrell. Educated, affluent parents tend to raise children who do better than average in school. They also tend to live in wealthier communities that have more property taxes to spend on schools. It's more likely the students' advantages -- not school spending levels -- that lead to high scores. "High-spending schools may be identified as 'successful,' not because they add more educational value, but because they enroll children from high-income families," Peyser and Costrell point out.

They suggest an adequacy model that looks at spending in districts that have demonstrated the greatest measurable improvement over several years. In their analysis, the average per-pupil spending in improving districts in Massachusetts is slightly lower than the statewide spending average.

That's not really a surprise. "Over the range of spending commonly observed among school systems in the United States, the effect on student achievement is often swamped by how wisely the money is spent, by bureaucratic and contract rigidities, and by a host of important policies and decisions that have nothing at all to do with money. The fact is that most research finds, after controlling for demographic factors, no consistent causal relationship between expenditures and achievement over the current range of spending levels."

In New York, which ranks at the top nationwide in school spending, the Commission for Education Reform recommended a 17 to 39 percent increase in spending to settle the funding equity suit. The commission relied on the School Evaluation Services unit of Standard & Poor's, which based its estimate on spending at "successful" schools, with extra money added to serve low-income, disabled and non-English-speaking students. The spending gap was estimated at $2.45 billion to $5.57 billion. Analysts warned that "there is no guarantee that the replication of higher spending . . . will replicate higher achievement . . . across the state."

Simply adding more money to a dysfunctional system produces higher-priced dysfunction.

The classic example is the District of Columbia school system, which ranks with the top states in spending and at the bottom in performance. D.C.'s public system spends about $11,000 per student. Yet, according to the 2003 National Assessment of Educational Progress, only seven percent of D.C. fourth graders are proficient or better in math, 10 percent in reading; 6 percent of eighth graders are proficient in math, 10 percent in reading. A majority of students test below the basic level in reading and math. Money doesn't buy literacy.

Joanne Jacobs is writing a book about a start-up charter high school in San Jose. She blogs at She recently wrote for TCS about Universal Pre-School.


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