Public School Funding: In Too Many States, It’s All about Subtracting and More Subtracting

Let’s review the importance of school finance. It you think this topic is too arcane to think about, consider who has been teaching us about the importance of school funding for two years now, and you’ll realize it’s not abstract or complicated at all. Really it is just an elementary school story problem: If you have a public school budget made up of local, state, and federal tax revenue, and you take away some money by cutting taxes after a recession, and then you take away some more money for charter schools, and then you take away some more money for vouchers, how much will you have left?

For two years now, striking schoolteachers have forced us all to examine what little funding will remain.  They have shown us in the most concrete way the implications of school policy emphasizing test-and-punish school accountability and increased school privatization—all overlaid upon an institution whose revenue base has fallen.  Public school teachers on strike in West Virginia, Kentucky, Oklahoma, Arizona, Colorado, Los Angeles, Oakland, and most recently Chicago have demonstrated the untenable conditions in their schools created by collapsing revenue—children struggling in classes of 40 students, teachers pushed out of the profession when their salaries fall so low they cannot afford to rent an apartment, and schools lacking counselors, social workers, librarians, and school nurses. From state to state, teachers have repeated and reinforced the primary causes of this problem in a way that ought to help us remember: States have failed to raise enough revenue to support the public schools and then state legislatures have driven a lot of taxpayer dollars away from public schools and into privatized charter schools and vouchers for students to pay private school tuition.

In the ways they have persistently underfunded public schools and the degree to which they have created policies to drain public funds out of the public schools and into privatized charter schools and vouchers, state legislators have demonstrated their lack of commitment to the principles of adequate school funding and its equitable distribution. Most of the state constitutions enshrine a commitment to adequacy and equity of funding, but only a few states have demonstrated a commitment to these principles in 2020.

First, there is the matter of whether state legislatures have been raising enough money in general to pay for K-12 education. After tax revenues collapsed in the 2008 recession, many states made the problem worse by continuing to cut taxes. Last March, the Center on Budget and Policy Priorities reported that in 24 of the 50 states, combined state-local, basic-aid school funding (adjusted for inflation) had not, by 2016, risen back to pre-2008 levels.

We need to celebrate one state: In late November, Massachusetts enacted a plan to address this problem. For Bloomberg News, Andrea Gabor reports: “School wars are over in Massachusetts. Everybody won… Governor Charlie Baker signed a school-funding bill that is almost as historic as the 1993 law that made the state the gold standard for public education for at least a decade. The rest of the country should pay attention. The law will add $1.5 billion in state financing of K-12 education over seven years, most of it for poor districts and for children with the greatest needs. The 2019 law, which passed both houses of the Democrat-controlled state legislature unanimously and was signed by a Republican governor, doesn’t just increase school aid; it fixes the school-funding formula that saw poor districts like Brockton spending just $14,491 per pupil in 2018, while affluent towns like Weston spent $25,367 per pupil.  It also makes it easier to count undocumented-immigrant children who were often excluded under the old funding formula… Indeed, while the testing requirements remain, the new law signals a backlash against additional carrot-and-stick measures that are seen as coming at the expense of the poorest children and districts.”

The carrot and stick measures Gabor describes are the test-based accountability policies that sanction districts whose scores are low.  And the most damaging of the punishments for low scoring districts are the privatized education schemes which only further undermine adequate and equitable public school funding.  Legislators say they are providing escapes for kids trapped in so-called “failing” schools, but that isn’t really how it works.

The first of these privatization schemes involves uncontrolled expansion of charter schools. Larry Scott is an at-large member of the board of education in Buffalo, New York. In a commentary last week for the Buffalo News, Scott details the drain on the Buffalo public schools’ budget which has resulted from test-and-punish accountability imposed by the legislature in Albany: “It is unconscionable that the Buffalo School Board doesn’t have a meaningful say or veto power over the decision to add new charter schools to this oversaturated market, where more than 20% of Buffalo students attend charter schools.” “The State’s established process for funding charters is problematic. Using the District as a pass-through, the state mandates a formula to determine charter tuition using the District’s approved operating expenses. This method penalizes the District for its more costly services, such as those incurred by special education and English Language Learners….”  “Charter schools should no longer be funded at the expense of Buffalo Public Schools’ students and their needs… With 90% of our Buffalo students exhibiting extraordinary needs, they encounter incredible inequities in programming, opportunities and supports compared to our suburban students. They deserve equitable access to art, music, librarians, advanced placement and accelerated courses, mental health professionals, and specialists in reading and math. Making the above changes and reforming how charters are authorized, funded and governed will allow the Buffalo Board of Education to advance its commitment to improve access, equity, opportunity and quality for all of our students.”

Scott describes a widespread problem.  Across the nation in California, political economist Gordon Lafer explains that state law permits charter schools in Oakland to suck $57.3 million annually out of the Oakland Unified School District: “If a school district anywhere in the country—in the absence of charter schools—announced that it wanted to create a second system-within-a-system, with a new set of schools whose number, size, specialization, budget, and geographic locations would not be coordinated with the existing school system, we would regard this as the poster child of government inefficiency and a waste of tax dollars. But this is indeed how the charter school system functions.”

In the same way, expansion of vouchers to pay for private school education at public expense threatens the funding of public education. The growing cost to public schools of vouchers is causing alarm in Wisconsin. Earlier this month, Eau Claire’s Up North News reporter, Julian Emerson quotes Heather Dubois Bourenane, executive director of the Wisconsin Public Education Network: “The expansion of voucher schools across Wisconsin is definitely becoming a bigger topic of concern… It impacts all of us.” Emerson explains: “(T)he cost of private voucher schools to taxpayers does not show up as a separate item on property tax bills in most communities because legislators lumped it into the levy for public school districts, making it appear that the public school district alone is responsible for tax dollars, even the money that the public school district never receives…  According to the Department of Public Instruction, 82 percent of students receiving voucher payments this year attended private schools last year.” Bourenane explains: “In much of the state, parents are not choosing to opt from public to private schools… Most of this money is going to kids who can already afford to go to private schools.”

In a column in last week’s Cleveland Plain Dealer, Susie Kaeser exposes the disastrous consequences in Ohio of the vast expansion—secretly added by the state budget conference committee last summer—of the EdChoice voucher program.  EdChoice works much like Wisconsin’s statewide vouchers—deducting private school vouchers from the budgets of local school districts without any public accounting of the amount being deducted and sent to private schools. In one school district, Cleveland Heights-University Heights, an Ohio public school funding expert, the Ohio Education Policy Institute’s Howard Fleeter did calculate the rate of growth of voucher usage just this year: 478 percent.  This blog recently covered (herehere, here, and here) the crisis caused by the radical expansion of Ohio’s EdChoice vouchers.

Kaeser explains what this means for the future fiscal health of Ohio’s public school districts: “The legislature, the guardian of the public school system, has forsaken its responsibility for the common good. Vouchers are funded by the deduction method, which means part of the cost is picked up by local school districts. Until voucher costs show up on the expense column of a school district’s budget, it may be hard to see that they threaten education quality and the viability of a community.  But that is what is at stake. Voucher access is now on a scale that, if not reined in, will permanently damage public education as a resource for the children of our state. Ohio’s school funding system is broken. It is underfunded, allows for vast differences in opportunity from district to district, and relies much too heavily on local property taxes. Vouchers exacerbate every weakness of the current system. Diverting public funds from more public school students to pay for private school education will make it nearly impossible to create an affordable funding policy for Ohio’s public schools. It will cost too much to fill the growing holes in local budgets… Districts everywhere operate on tight budgets.  Every dollar counts. Now that EdChoice will undermine public school budgets statewide, will the legislature stand up for public schools?”

Although the financial mechanisms may operate somewhat differently from state to state, here is how simple arithmetic explains what is happening in New York, California, Wisconsin, and Ohio: If you don’t add enough money into the education system, and you subtract lots of the money you do put in and divert it to private charter schools and vouchers for private school tuition, you will surely  undermine the public schools. You will also very likely exacerbate inequity, because the poorest school districts, whose aggregate test scores are likely to be lower, are punished the most by privatization which is central to sanctions-based accountability schemes.

Massachusetts just defined itself as a model, if only everyone would pay attention.


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