Well-Intentioned Ohio School Finance Plan Must Be Revised to Eliminate Savage Inequalities

After a decade of tax cuts brought by Governor John Kasich and a supermajority Republican Ohio Legislature,  Ohio—still dominated in the House, Senate and Governor’s mansion by Republicans—is considering a new school funding formula intended to address what have been glaring problems for the state’s public schools. The new plan is bipartisan. We all owe enormous thanks to Representatives Robert Cupp and John Patterson for their leadership.

Currently, only 107 (18 percent) of the state’s 610 school districts are receiving their calculated formula level of school funding from the state—an amount that supposedly represents what the state should contribute based on each school district’s capacity to raise local revenue. All the rest—503 school districts—are operating on guaranteed or capped funding.  We have reached a point—years and years after the last funding formula adjustment, where nobody can really explain how the state is dividing up its contribution through the formula.

The proposed Fair School Funding Plan is designed to consider each school district’s capacity to raise local revenue—with factors reflecting the district’s property tax base and the aggregate income of the residents.  And, we’ve been told, the new formula will distribute school funding based on the cost of what it takes to educate children—what experts identify as the cost of teachers, support staff, school operations, and school administration.

It is not yet possible to see how all this has been figured out, because the calculations and the numbers that were plugged into the calculations haven’t yet been released.  The new funding plan does get more school districts back inside a formula designed to address the number of children who live in the district, however, and supposedly to address the needs of those children. Of the state’s 610 school districts, only 100 will remain on a guarantee; 510 school districts will be back on the formula.

Conceptually all this seems positive. Except that when the computer runs of the funding for all of the state’s 610 school districts were released, something outrageous showed up.  Among those 100 Guarantee districts, which will receive the same state funding as they are receiving this year, are the state’s very poorest urban school districts, including Youngstown, Lorain, East Cleveland (said to be the nation’s fourth-poorest community), Dayton, Toledo, Lima, and Cleveland.

The Columbus Dispatch‘s Jim Siegel highlights the evidence that Ohio’s proposed plan fails to address a key element in any state state school funding formula—equity: “The 52 districts with student poverty rates of at least 60% would get an average funding increase of $280 per pupil over two years…. Meanwhile, the 61 districts with poverty rates of less than 15 percent would get an average $392 per pupil… (T)he formula sends 15% of new funding to the wealthiest suburban districts, compared to 5% to major urban districts and 9% to the poorest rural districts.”

In a follow-up report, Siegel describes Jennifer Hogue of the Ohio School Boards Association explaining the new plan’s implications for the schools in Ohio’s racially segregated communities: “Hogue noted that of the 71 districts getting no new money next year, 19 are among the poorest in the state, and nearly 70 percent of the students in these districts are minorities.” Hogue adds: “We have very real concerns about how this proposal will impact students in poverty particularly those attending urban districts across the state.”

Currently, Youngstown, Lorain and East Cleveland are identified by the state as in “Academic Distress,” a category that has put them under state takeover. Dayton is expected to join them next year. Cleveland is also under another form of state takeover based on its test scores.  At the same time as Ohio has been allowing its school funding formula to fade into dysfunction, the state has aggressively pursued punitive, high-stakes, test-based accountability.  Ohio grades its school districts (A–F) on a state report card and publishes the results. The branding has exacerbated suburban out-migration in the state’s metropolitan areas—encouraging more affluent families to choose A-rated exurbs and adding to economic segregation. Ohio awards EdChoice vouchers for private and religious school tuition to students in its F-rated schools, and it enables charter schools to open in those same school districts. And, finally, Ohio takes over the governance of the so-called “failing” school districts. In Youngstown and Lorain, both under state takeover for three years, the state appointed governance has not made a difference in test scores.

As one considers what the new formula’s numbers mean by visualizing what’s been happening in the state, one should consider that the state report cards and all the punishments have negatively branded urban districts and inner ring suburbs and encouraged families with means to move to growing exurbs around the state’s several big cities. The new formula awards funding based on a per-pupil count of students in any district, and it is the outer suburbs of Ohio’s cities which are growing.  The Dispatch‘s Siegel explains how all this is reflected in the proposed new school funding formula: “The top 10% of districts in enrollment growth over the past three years are getting about $300 more new money per pupil than the bottom 10%.”

The situation is very difficult in school districts like East Cleveland and Youngstown and sections of Cleveland and Dayton.  Here, parts of entire neighborhoods were devastated by the foreclosure crisis a decade ago. But the families who were forced to move out or double up did not methodically abandon entire sections of the city to make it easy for school districts to close schools and save costs. The children who remain in those neighborhoods have enormous needs, and these school districts must cope with the additional challenges of concentrated economic segregation and deepening poverty. The proposed school funding planners clearly have not grasped the economic devastation across Ohio’s cities.

The best description I can find of today’s challenge for Ohio is part of a book published in 2010 by the University of Chicago Consortium on School Research: Organizing Schools for Improvement.  In this book Anthony Bryk, a sociologist, confirms what many people continue to deny: deep and concentrated neighborhood poverty makes it hard for children to thrive at school.  Bryk and his colleagues studied schools in the city of Chicago and identified a group of schools they identify as “truly disadvantaged”: “In Chicago, extreme poverty combines with racial isolation.”  In the 46 truly disadvantaged schools they identify: 100 percent of the students are African American; 96 percent of the children are low income; male unemployment is 64 percent, and median family income is $9,480.  “Specifically, one-fourth of children in foster care in Chicago were concentrated within 27 elementary schools, which represent only 5 percent of the system.” Bryk and his colleagues conclude: “At both the classroom and the school level, the good efforts of even the best of educators are likely to be seriously taxed when confronted with a high density of students who are in foster care, homeless, neglected, abused, and so on.  Classroom activity can understandably get diverted toward responding to these manifest personal needs.” (Organizing Schools for Improvement, pp. 164-173)

While no school funding plan is perfect and while the success of any plan depends on the continued commitment of a legislature to fund it adequately over time, one strategy that has been successful has been targeting of funding to the school districts with the most overwhelming needs.  In New Jersey, for example, the remedy in the school funding case of Abbott v. Burke targeted additional funding to thirty-one of the state’s poorest school districts.  These “Abbott” districts received extra funding, guaranteed pre-Kindergarten for all students, and social services.

In Ohio, on the other hand, politics seems to dictate that any added services be spread—at least to some degree—to all school districts.  For example, a month ago—wanting to support schools with what research shows are needed services by many families, Ohio’s new Governor Mike DeWine proposed a biennial budget that—on top of the new, proposed school funding formula—includes money to help schools provide wraparound social and medical services.  In his personal blog, former legislator Steve Dyer, explains:  “(I)n the 2019-2020 school year, DeWine provides $250 million more for poverty based aid in the form of wraparound services.  Then in the 2020-2021 budget, he adds another $50 million.  So at the end of the day, districts will have an additional $300 million two years from now to spend n these wraparound services.”

In Ohio, however, unlike New Jersey, politics ensures that everybody gets a little of the funding pie, even if that makes the pieces smaller for the school districts that more desperately need the funding.  As as Rich Exner explains for the Plain Dealer, Governor DeWine’s proposed program for wraparound social and medical services would include some funding for all 610 school districts: “(E)ach Ohio school district would receive a minimum of $25,000 the first year and $30,000 in year two… (M)oney would be distributed on a sliding scale, based on the percentage of children in poverty in each district.”  One wonders whether wealthy outer suburbs like Dublin, Hudson, and Solon really need to have dentists and physicians visit their schools regularly to provide services for the children.

It is difficult to know what will happen politically to Ohio’s recently proposed Cupp-Patterson school funding formula. The biggest problem, as the Dispatch‘s Siegel points out, may be the overall price tag: “Lawmakers would need an extra $1.1 billion over two years to fund the plan, which would be phased in over four years.”

Another challenge will be political biases that blame the state’s poorest Black and Brown communities for the economic problems which have derived from the collapse of manufacturing and the foreclosure crisis among other serious structural problems that have afflicted the state. In the Dispatch, Siegel quotes Jim Betts commenting on the fact that the new funding proposal awards nothing to the state’s school districts that have been taken over by the state for their so-called “academic distress.”  Betts, who led Ohio’s rich districts’ school funding advocacy coalition, the Alliance for Adequate School Funding, during the period of the DeRolph litigation, falls back on the old argument from Hoover Institution economist Eric Hanushek: that money really doesn’t matter in school funding.  Betts’ comment also reflects a racist bias that is widespread across Ohio and across the nation: “Just because a district is poor does not necessarily mean that it needs more money, because that (raises) the question: How much is enough? Is another $2,000 (per pupil) going to help East Cleveland? Probably not.”

In a 2013 blog post, Rutgers University school finance expert Bruce Baker confronted Betts’ idea that money doesn’t matter: “I too often hear pundits spew the vacuous mantra – it doesn’t matter how much money  you have – it matters more how you spend it. But if you don’t have it, you can’t spend it. And, if everyone around you has far more than you, their spending behavior may just price you out of the market for the goods and services you need to provide (quality teachers being critically important, and locally competitive wages being necessary to recruit and retain quality teachers). How much money you have matters. How much money you have relative to others matters in the fluid, dynamic and very much relative world of school finance (and economics more broadly). Equitable and adequate funding matters.”

It has been a long time since I heard someone consider school funding from the point of view of Jonathan Kozol, whose words—in Trump’s America—seem even farther from our political realities today than they did in 1991 when, as he stared at the Ohio River in Cincinnati, Kozol wrote the concluding words in Savage Inequalities: “Standing here by the Ohio River, watching it drift west into the edge of the horizon, picturing it as it flows onward to the place three hundred miles from here where it will pour into the Mississippi, one is struck by the sheer beauty of this country, of its goodness and unrealized goodness, of the limitless potential that it holds to render life rewarding and the spirit clean.  Surely there is enough for everyone within this country.  It is a tragedy that these good things are not more widely shared. All our children ought to be allowed a stake in the enormous richness of America.  Whether they were born to poor white Appalachians or to wealthy Texans, to poor black people in the Bronx or to rich people in Manhasset or Winnetka, they are all quite wonderful and innocent when they are small. We soil them needlessly. (Savage Inequalities, p. 233)

Meryl Johnson, who represents District 11 on the Ohio State Board of Education, will interview Diane Ravitch on Johnson’s weekly radio show, It’s About Justice (WRUW 91.1 FM) next Saturday, April 13, 2019 at from 1:00 PM until 2:00 PM.  The program will be live-streamed at  https://wruw.org/.
Advertisements

Ohio Charter Schools Ruin District Finances: Steal State and Local Taxes, Leave Behind Stranded Costs

When we evaluate charter schools, I wonder why we rarely consider their fiscal impact on the public schools among which they are nested? I have never heard anybody in Ohio consider the overall impact of charter school expansion on access to education for the entire population of students across a particular community or across the state. Today in Ohio, people are talking about the value of charter schools because charter operators and sponsors—claiming the schools are broke—are asking for an extra $2,000 per pupil.

Usually arguments about the quality of public investment in charters are about whether charters do a good job as measured by test scores.  Proponents of charter schools typically want the public to evaluate charter schools and traditional public schools by comparing their test scores—despite considerable research over the years demonstrating that the results are, at best, relatively comparable.  Steve Dyer uses the test score yardstick in a recent blog post: “Not only have Ohio charter schools not gotten appreciably better on the report card since… 2015, but since the 2012-2013 school year, charter schools overall have received more Fs than all other grades combined on state report cards.” Dyer doesn’t think these schools are performing well enough to deserve additional tax support.

Then there are the arguments about about whether charters mismanage the tax dollars they receive.  In a recent article about Ohio charter schools, three prominent professors of education policy and law examine self-dealing by charter management companies which lease buildings owned by the very same companies back to the Ohio charter schools they are hired to manage—at exorbitant, above-market rents.  The authors of this critique report that, “just a few weeks ago, the National Alliance for Charter Schools was back in Ohio asking the state to increase funding for charter school facilities.”

Here is an example—this time from Sunday’s Cleveland Plain Dealer—of how reporting on charter school accountability and funding often goes.   As he describes the request for more money from the legislature, reporter Patrick O’Donnell considers the academic record of Ohio charter schools and whether state regulation has improved enough.  O’Donnell begins: “Charter schools in Ohio have long wanted more money from the state, but a history of well-publicized scandals, mismanagement and poor report card grades have made it hard to justify giving them any more tax dollars.  Have they cleaned up their act enough now?”

Charter schools in Ohio actually want a lot more money per-pupil in the next state budget. O’Donnell reports: “Some charter officials are pressing the state for another $2,000 per student a year for most charter schools in the upcoming state budget. Leading the charge are the Breakthrough Schools, the Cleveland based chain that has the strongest results out of all charters in Ohio. Joining them are the growing Accel Schools chain, which has grown to 40 schools in the state over the last three years.”  Accel Schools is the charter network run by former K-12 Inc., CEO Ron Packard, who expanded his Accel network by buying up Cleveland’s I Can charters along with many of the schools formerly operated by David Brennan, who died last autumn.

How should Ohio’s policy makers evaluate whether spending tax dollars on charter schools is a good investment?  And particularly in these times when charter schools are asking for a huge bump of $2,000 extra per-pupil? Measured by test scores, and evaluated by their record of conflicts of interest, fraud. and outlandish financial mismanagement, Ohio should not increase public funding for its charter school sector.  But I believe there is a more important—and usually ignored—reason for denying more funding to the privatized charter school sector in our state. Policy makers must begin examining charter schools’ enormous, persistent drain on local school district budgets.

In Ohio, California, and many other states, charter schools get their funding through a “school district deduction.” Here is how the Ohio Department of Education describes the process of funding (When you read the following language, remember that charter schools in Ohio are formally called “community schools” instead of charter schools.): “Payments to community schools take the form of deductions from the state foundation funding of the school districts in which the community school students are entitled to attend school. Community schools students are counted as part of the enrollment base of the resident school district to generate funding.” The amount taken from the school district budget by every Ohio student who leaves for a charter school is $6,020.  This is known as a “district deduction” system of funding.

In a paywalled, September 14, 2018, On The Money report, a legislative update from the Hannah News Service, the Ohio Education Policy Institute school finance expert, Howard Fleeter explains a huge problem with the “district deduction” system of funding school privatization: “The deduction system means that the… student is counted in the district of residence’s Formula ADM (Average Daily Membership) and then the (deduction) is paid for… from the district’s state aid. This can often result in a district seeing a deduction… greater than the state aid that was received for that student….”  School districts across Ohio must raise local dollars by voting to pass  property tax levies.  In any school district whose state formula aid is less than $6,020, a student leaving for a charter school carries away that student’s state per-pupil amount plus money (to make up $6,020) from the locally voted levy—often very hard to pass— from the public school district.

Imagine the impact on Ohio’s local school district budgets if the state were to increase the charter school allocation to meet charter operators’ request for another $2,000—from $6,020 to $8,020—for each student who were to choose a charter school.  Would the state also add $2,000 to its public school foundation per-pupil allocation? What about the districts that already add local dollars to raise a much lower state formula per-pupil allocation up to the required the $6,020 district deduction? It is likely that an increase in charter school funding by the Legislature would increase the flow of local levy dollars down the charter school drain.

Even beyond the persistent economic drain posed by Ohio’s “district deduction system,” charter schools pose further challenges for the public school districts in which they are located.  This happens merely because of the way school choice works. A public school district must maintain expensive services that cannot be shed when students leave for charter schools.  In a report published in May 2018, the political economist Gordon Lafer examines the stranded costs that cannot be managed by public school districts when students leave for charter schools:  “To the casual observer, it may not be obvious why charter schools should create any net costs at all for their home districts. To grasp why they do, it is necessary to understand the structural differences between the challenge of operating a single school—or even a local chain of schools—and that of a district-wide system operating tens or hundreds of schools and charged with the legal responsibility to serve all students in the community.  When a new charter school opens, it typically fills its classrooms by drawing students away from existing schools in the district…  If, for instance, a given school loses five percent of its student body—and that loss is spread across multiple grade levels, the school may be unable to lay off even a single teacher… Plus, the costs of maintaining school buildings cannot be reduced…. Unless the enrollment falloff is so steep as to force school closures, the expense of heating and cooling schools, running cafeterias, maintaining digital and wireless technologies, and paving parking lots—all of this is unchanged by modest declines in enrollment. In addition, both individual schools and school districts bear significant administrative responsibilities that cannot be cut in response to falling enrollment. These include planning bus routes and operating transportation systems; developing and auditing budgets; managing teacher training and employee benefits; applying for grants and certifying compliance with federal and state regulations; and the everyday work of principals, librarians and guidance counselors.” “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 his new book, Educational Inequality and School Finance, Rutgers University school finance expert, Bruce Baker explains that inequity is also baked into a system embodying privatized school choice. The hybrid—combining traditional public and charter schools—now involves competition and entrepreneurship: “The incentive for school operators is to pursue whatever means necessary to be the preferred school of choice (for the preferred students)—not to spend only what is needed to provide equal opportunity to achieve common outcomes… Much of the expansion of charter schooling occurred during the recession.  States added schools while reducing overall funding, making inequitable choices on top of already unequal and inadequate systems.  Expanded charter schooling was a centerpiece of the Duncan/Obama education reform platform that coincided with the recession and new normal era. Cursory descriptive analyses, as well as more complex longitudinal models, suggests that states which most expanded their charter sectors are also the states which most reduced their overall effort toward financing public education. This is a disturbing finding in part because charter schools also rely on public funding.” (Educational Inequality and School Finance, pp. 157-158)

In a 2016 report for the Economic Policy Institute, Baker describes a kind of policy blindness that has been the foundation of marketplace school choice:  “If we consider a specific geographic space, like a major urban center, operating under the reality of finite available resources (local, state, and federal revenues), the goal is to provide the best possible system for all children citywide…  Chartering, school choice, or market competition are not policy objectives in-and-of-themselves. They are merely policy alternatives—courses of policy action—toward achieving these broader goals and must be evaluated in this light. To the extent that charter expansion or any policy alternative increases inequity, introduces inefficiencies and redundancies, compromises financial stability, or introduces other objectionable distortions to the system, those costs must be weighed against expected benefits.”

McMaster University professor Henry Giroux warns that school privatization threatens an essential public good: “Public schools are at the center of the manufactured breakdown of the fabric of everyday life. They are under attack not because they are failing, but because they are public… Moreover, they symbolize the centrality of education as a right and public good…”

Alliance to Reclaim Our Schools Tells New Congress: Fully Fund Title I and IDEA

In his new book, Educational Inequality and School Finance, the Rutgers University school finance expert Bruce Baker carefully refutes some long-running and persistent myths about the funding of public education—Eric Hanushek’s claim that money doesn’t really make any difference when it comes to raising student achievement, for example, and the contention that public schools’ expenditures have skyrocketed over the decades while achievement as measured by test scores has remained flat.

Assessing the overall impact of public investment in education, Baker concludes: “Rigorous, well-designed, and policy relevant empirical research finds that: Money matters for schools and in determining school quality and student outcomes. More specifically, substantive sustained, and targeted state school finance reforms can significantly boost short-term and long-run student outcomes and reduce gaps among low-income students and their more advantaged peers. Money matters in common sense ways. Increased funding provides for additional staff, including reduced class sizes, longer school days and years, and more competitive compensation. Cuts do cause harm. The equity of student outcomes is eroded by reducing the equity of real resources across children of varied economic backgrounds. (Educational Inequality and School Finance p. 101, emphasis in the original)

Early in the fall, in hopes that the 2018 midterm election might bring a more hopeful climate for adequately funding public education, the Alliance to Reclaim Our Schools (AROS) published a major report, Confronting the Education Debt to define its members’ priorities for addressing decades of failure adequately to fund schools serving concentrations of poor children and children of color.  At the federal level full funding is an important goal for two long-underfunded programs:

  • AROS’s report traces the history of Title I: “The 1965 Elementary and Secondary Education Act (ESEA) was a core component of then-President Johnson’s War on Poverty.  Title I of the ESEA targets federal dollars to schools with high concentrations of students living in poverty.  The authorization embedded in Title I—then and still today—allows Congress to provide an additional 40 percent above each state’s per pupil spending base, for each Title I-eligible child, to allow their schools to provide supplemental supports such as extra reading assistants and parent engagement specialists.  Having set that 40 percent authorization in the law, Congress immediately failed to fully fund it, not only in 1965 but in every year since.”  (emphasis in the original)
  • AROS also addresses the second primary federal funding stream for public schools: “In 1975, a decade after passing the ESEA, Congress sought to address the educational needs of students with disabilities.  The individuals with Disabilities Education Act (IDEA) requires school districts to identify students with disabilities and to provide them the supports and services necessary to achieve academically.  In the law, Congress pledged that the federal government would pay up to 40 percent of that additional cost, with local and state funds covering the remaining amount.  Once again, having established the formula, Congress failed to invest in it.  Federal funding of IDEA has never approached the promised 40 percent mark.”

In Confronting the Education Debt, AROS tallies the difference in the 12 year period between 2005 and 2017—the length of time it takes for a student to move through 12 grades of primary and secondary education—between what Congress established as the 40 percent funding levels for Title I and IDEA and what Congress appropriated: a gap of $347 billion for Title I and $233 billion for IDEA.

The Alliance to Reclaim Our schools is clearly adopting an aggressive strategy to press the new Congress to address its priorities. Writing last week in The Hill, AROS co-directors Keron Blair and Jay Travis challenge Congress to address its long failure fully to fund Title I and the IDEA: “As the dust settles from last month’s midterm elections, parents, students, community members and educators of America are… preparing for the long fight ahead for the public schools that our students deserve.  We are working to remedy decades of fiscal austerity in our public schools.  Between 2005 and 2017, public schools in the US. were underfunded by $580 billion in federal dollars alone—money that was specifically targeted to support some of our most vulnerable students.  Recouping all those funds won’t be easy.  However, with new voices in Congress joining forces with longtime education champions like Rep. Bobby Scott (D-VA)—the incoming chairman of the House Committee on Education and the Workforce—and Rep. Rosa De Lauro (D-Conn.)—the incoming chairwoman of the House Appropriations subcommittee that writes the education budget—a lot can get done for America’s students and their public schools.  When it comes to public education, voters don’t want disinvestment and less regulation. They want more investment, smaller class-sizes, greater accountability for privately-operated charter schools, and school climates that are respectful and safe for students and staff.  Those demands were at the forefront when educators took to the streets… last spring.”

In addition to fully funding Title I and the IDEA, Blair and Travis name three other AROS priorities: invest in school infrastructure and technology, establish 25,000 Sustainable Community Schools by 2025 to support families coping with poverty, and end the teacher shortage by increasing wages for educators.

Clearly AROS’s priorities have already gained some traction among Democrats in Congress.  On December 4, Maryland Senator Chris Van Hollen introduced a Keep Our Promise Act to “put Congress on a fiscally responsible path to fully fund Title I and the Individuals with Disabilities Education Act (IDEA) on a mandatory basis.”

The Alliance to Reclaim Our Schools is a coalition of 10 national organizations which support urgently needed investment in the schools of our nation’s poorest communities: Advancement Project, the Alliance for Educational Justice, the American Federation of Teachers, Center for Popular Democracy, Gamaliel Network, Journey 4 Justice Alliance, New York University Metropolitan Center for Research on Equity and the Transformation of Schools, the National Education Association, the National Opportunity to Learn Network, and the Service Employees International Union.

Bruce Baker’s New Book on School Finance Develops a Scathing Critique of Charter School Expansion

Rutgers University school finance professor, Bruce Baker’s new book, Educational Inequality and School Finance: Why Money Matters for America’s Students, covers the basics—how school finance formulas are supposed to work to ensure that funding for schools is adequate, equitable, and stable.

Baker also carefully refutes some persistent myths—Eric Hanushek’s claim that money doesn’t really make a difference when it comes to raising student achievement, for example, and the contention that public schools’ expenditures have skyrocketed over the decades while achievement as measured by test scores has remained flat.

Baker does an excellent job of demonstrating that far more will be needed for our society appropriately to support school districts segregated not only by race, but also by poverty. The final sections of the book are a little technical. They explain the construction of a more equitable system that would drive enough funding to come closer to what is really needed in school districts serving concentrations of children in poverty.

Baker’s book is especially important for updating a discussion of basic school finance theory to account for today’s realities.  He shows, for example, how the Great Recession undermined adequate and equitable funding of public schools despite that states had formulas in place that were supposed to have protected children and their teachers: “The sharp economic downturn following the collapse of the housing market in 2007-08, and persisting through about 2011, provided state and federal elected officials a pulpit from which to argue that our public school systems must learn how to do more with less… Meanwhile, governors on both sides of the aisle, facing tight budgets and the end of federal aid that had been distributed to temporarily plug state budget holes, ramped up their rhetoric for even deeper cuts to education spending… Notably, the attack on public school funding was driven largely by preferences for conservative tax policies at a time when state budgets experienced unprecedented drops in income and sales tax revenue.” (p. 4)

And for the first time in a school finance book, Baker explores the impact of two decades of charter school expansion on the funding of public schools. Although the conventional wisdom promoted by the corporate reformers has said that competition from independent charter school operators would introduce innovation and thereby stimulate academic improvement in public schools, not enough people have seriously considered the fiscal implications of slicing a fixed school funding pie into more pieces.  Baker examines these fiscal implications of charter school expansion from many perspectives.

Charters are, first, one of those “false promises of cost-free solutions”: “The theory of action guiding these remedies and elixirs is that public, government-run schooling can be forced to operate more productively and efficiently if it can be reshaped and reformed to operate more like privately run, profit-driven corporations/businesses… Broadly, popular reforms have been built on the beliefs that the private sector is necessarily more efficient; that competition spurs innovation (and that there may be technological solutions to human capital costs); that data driven human capital policies can increase efficiency/productivity by improving the overall quality of the teacher workforce. One core element of such reform posits that US schools need market competition to spur innovation and that market competition should include government-operated schools, government-sanctioned (charter) privately operated schools, and private schools…. (T)here is little reason to believe that these magic elixirs will significantly change the productivity/efficiency equation or address issues of equity, adequacy, and equal opportunity.” (pp. 6-7)

Baker also speaks to the philosophical justification frequently offered to justify the rapid expansion of school choice—that justice can be defined by offering more choices for those who have few: “Liberty and equality are desirable policy outcomes. Thus, it would be convenient if policies simultaneously advanced both.  But it’s never that simple.  A large body of literature on political theory explains that liberty and equality are preferences that most often operate in tension with one another. While not mutually exclusive, they are certainly not one and the same. Preferences for and expansion of liberties often lead to greater inequality and division among members of society, whereas preferences for equality moderate those divisions. The only way expanded liberty can lead to greater equality is if available choices are substantively equal, conforming to a common set of societal standards. But if available choices are substantively equal, then why choose one over another.  Systems of choice and competition rely on differentiation, inequality, and both winners and losers.” (p. 28)

Baker addresses Betsy DeVos’s contention that, “Choice in education is good politics because it’s good policy. It’s good policy because it comes from good parents who want better for their children. Families are on the front lines of this fight; let’s stand with them…This isn’t about school ‘systems.’  This is about individual students, parents, and families. Schools are at the service of students. Not the other way around.”  Here is Baker’s answer: “The ‘money belongs to the child’ claim also falsely assumes that the only expenses associated with each individual’s education choices are the current annual expenses of educating that individual…. It ignores entirely marginal costs and economies of scale, foundational elements of origins of public institutions.  We collect tax dollars and provide public goods and services because it allows us to do so at an efficient scale of operations… Public spending does not matter only to those using it here and now. These dollars don’t just belong to parents of children presently attending the schools, and the assets acquired with public funding… do not belong exclusively to those parents.” (p. 30)

Are charter schools more efficient at improving school achievement measured by test scores and are they fiscally efficient?  “(A) close look at high-profile charters in New York City indicates that their success reflects their access to additional resources and a fairly traditional approach to leveraging them… For each of these major operators… the share of low-income (those who qualified for free or reduced-price lunch ), English language learners, and children with disabilities is lower than for district schools, in some cases quite substantially.  On average, these schools are serving far less needy and thus less costly student populations than are the district schools.”  Baker provides details of major New York City charter networks’ expenditure patterns; what he finds is that the best-funded allocate their instructional expenses in a similar way to traditional public schools: “Collectively, these figures tell a story of high-profile, well-funded CMOs in New York City leveraging their additional resources in three logical and rather traditional ways by hiring more staff per pupil… by paying their teachers more at any given level of experience and degree; and… by paying them more to work longer school hours, days, and years.  In other words, they pay more people for more time.” He concludes: “Researchers, policy makers, pundits, pontificators, and even self-proclaimed thought leaders have yet to conjure some new ‘secret sauce’ or technological innovation that will greatly improve equity, adequacy, and efficiency.  Human resources matter, and equitable and adequate financial resources are necessary for hiring and retaining the teachers and other school staff necessary to achieve equal educational opportunity for all children.”  (pp. 68-79)

Charter schools were originally promised as an incubator for innovation. Are they really innovative?  “While modern charter schooling was conceived by some as a way to spur innovation—try new things, evaluate them, and inform the larger system—studies of the structures and practices of charter schooling find the sector as a whole not to be particularly ‘innovative.’  Analyses by charter advocates at the American Enterprise Institute have found that the dominant form of specialized charter school is the ‘no-excuses model,’ which combines traditional curriculum and direct instruction with strict disciplinary policies and school uniforms, and in some cases extended school days and years.” (p. 68)

Expansion of charter schools undermines equity in a school district: “Expanding the mix of providers and provider types in a common space is more likely to result in increased variations in quality and spending than in convergence toward equity. Private providers have widely varied access to outside resources and thus highly unequal opportunities for ‘revenue enhancement.’ The incentive for school operators is to pursue whatever means necessary to be the preferred school of choice (for the preferred students)—not to spend only what is needed to provide equal opportunity to achieve common outcomes… Much of the expansion of charter schooling occurred during the recession. States added schools while reducing overall funding, making inequitable choices on top of already unequal and inadequate systems… Cursory descriptive analyses, as well as more complex longitudinal models, suggest that states which most expanded their charter sectors are also the states which most reduced their overall effort toward financing public education. This is a disturbing finding in part because charter schools also rely on public financing. So reducing public financing affects negatively both district and charter schools. Also increasing the number of schools, holding enrollment constant, or shifting students from one sector to another creates additional costs….” (pp 157-158) (emphasis in the original)

How has the expansion of school choice undermined traditional public schooling? Here is the myth: “Everyone receives adequate schooling equitably by way of access to great choices,” writes Baker. “But it doesn’t work that way. The ‘best’ choices are often those that can garner additional resources. And the ‘best’ choices will always have limited availability due to numerous constraints on scaling up, including access to supplemental resources. Yet the myth that it might work has arguably fueled even greater systemwide resource deprivation in states that have most expanded choice.  The creation of dual systems of education serving common geographic spaces is further eroding equity and, to an extent, efficiency. Specifically, charter school expansion and citywide choice models, lacking advanced planning and sufficient regulation, complicate equitable resource distribution across schools and children, including access to space and transportation.  Managing equity in a competitive system using alternative models of governance and operations for both day-to-day activities of schooling and for access to and maintenance of capital assets (land, buildings, equipment) is complex, to say the least. Policy makers have managed those complexities poorly and have allowed the dual systems to exacerbate rather than ameliorate inequality.” (p. 136)

Bruce Baker’s critique of the expansion of publicly funded but privately managed charter schools deserves attention from policy makers. Advocates need to study and internalize the details of the argument Baker develops against marketplace school choice in Educational Inequality and School Finance: Why Money Matters for America’s Students.

How Can School Choice Destroy the Public Schools in Your Community?

In his column last week for the Education Opportunity Network, Jeff Bryant examines a scary question: Can school choice create the conditions that entirely shut down a community’s public school system?  Bryant reports on Michigan where school choice laws permitting inter-district open enrollment and unregulated expansion of charter schools conspire with the state’s school finance system to undermine the stability of the state’s public school districts.

“In Michigan, the intense competition for students is taking bigger bites out of student enrollments in some of the state’s largest districts.  In Flint, where there are 14,325 public-school students living in the district, 39 percent attend charters and 32 percent are enrolled in another district—meaning the district loses 71 percent of its students.  In Pontiac, with 10,985 public-school students living in the district, 36 percent attend charters and 29 percent travel to other districts, leaving local schools with only 35 percent of the community’s students.  In Detroit, the state’s largest school district with nearly 104,000 students, 58 percent of them leave the district schools to attend charters (48 percent) or cross district borders (10 percent) to attend schools elsewhere.  How low can student enrollments go before a school district becomes financially unsustainable?”

Bryant explains the thinking of school choice promoters: “The thinking behind a market-based approach to education is that when the funding follows the student, school districts vying across district lines to get their enrollments high for ‘count day,’ feel more intense pressure to provide services with greater financial efficiency.  Adding charter schools, which in Michigan are allowed to start up wherever they want, without regard to the financial impact on district schools, brings into the mix an unregulated agent that can introduce even more financial efficiency into the system, the theory goes.” (Emphasis is mine.)  Then Bryant interviews experts to show why the theory doesn’t work as intended.

Bryant quotes Michigan State University’s David Arnsen on the damage wrought when charter schools reach the point of enrolling 20 percent of a district’s students: “(O)verwhelmingly, the biggest financial impact on school districts was the result of declining enrollment and revenue loss, especially where school choice and charters are most prevalent.”

Bryant also quotes the Rutgers University school finance expert, Bruce Baker, who explains the factors that contribute to making school choice unsustainable for a school district—“insufficient total revenue, the increased costs of serving special needs children left behind, the mounting health and retirement benefits of teachers, the increased costs of operating and maintaining old, inefficient buildings, and of course rapidly declining enrollment which creates additional financial pressure.”

A growing number of academic research studies in recent years has raised the alarm about the problem Bryant believes is reaching crisis levels in many of Michigan’s school districts. The evidence grows that a rapidly expanding charter school sector is likely to function as a parasite killing the host school district.

In a May 2018, report for In the Public Interest, Breaking Point: The Cost of Charter Schools for Public School Districts, political economist Gordon Lafer explains how charter school expansion has been undermining several California local school districts: “To the casual observer, it may not be obvious why charter schools should create any net costs at all for their home districts. To grasp why they do, it is necessary to understand the structural differences between the challenge of operating a single school—or even a local chain of schools—and that of a district-wide system operating tens or hundreds of schools and charged with the legal responsibility to serve all students in the community. When a new charter school opens, it typically fills its classrooms by drawing students away from existing schools in the district. By California state law, school funding is based on student attendance; when a student moves from a traditional public school to a charter school, her pro-rated share of school funding follows her to the new school. Thus, the expansion of charter schools necessarily entails lost funding for traditional public schools and school districts. If schools and district offices could simply reduce their own expenses in proportion to the lost revenue, there would be no fiscal shortfall. Unfortunately this is not the case… If, for instance, a given school loses five percent of its student body—and that loss is spread across multiple grade levels, the school may be unable to lay off even a single teacher… Plus, the costs of maintaining school buildings cannot be reduced…. Unless the enrollment falloff is so steep as to force school closures, the expense of heating and cooling schools, running cafeterias, maintaining digital and wireless technologies, and paving parking lots—all of this is unchanged by modest declines in enrollment. In addition, both individual schools and school districts bear significant administrative responsibilities that cannot be cut in response to falling enrollment. These include planning bus routes and operating transportation systems; developing and auditing budgets; managing teacher training and employee benefits; applying for grants and certifying compliance with federal and state regulations; and the everyday work of principals, librarians and guidance counselors.”

In a May, 2017, report, Closed by Choice: The Spatial Relationship Between Charter School Expansion, School Closures, and Fiscal Stress in Chicago Public Schools, a group of Roosevelt University researchers describes what has happened to the public schools on Chicago’s South and West Sides due to the rapid expansion of school choice in areas already losing population: “Chicago Public Schools’ approach to saturating neighborhoods with declining school-age population with new charter schools is stripping all middle-class, working-class and lower-income children, families, and communities of education security, where schools are rendered insecure by budgetary cuts, deprivation, or closure. Education insecurity is the product of the school reform agenda focused on cannibalizing the neighborhood public schools in order to convert CPS into a privatized ‘choice’ school system.  While new charter schools continue to proliferate in low demand neighborhoods, all CPS neighborhood public schools experience debilitating budget cuts that lead to the elimination of teaching professionals and enriching curriculum. The most vulnerable communities are stripped of their public schools, or their remaining neighborhood public school is rendered unstable by the proximity of new charter schools… The cuts and deprivation across CPS neighborhood public schools underscore the problem of opening too many new schools in a system caught in the vice grip of austerity—there are not enough funds to provide all schools with the resources needed to succeed.”

And in the 2015 Michigan State University report quoted by Jeff Bryant, Which Districts Get Into Financial Trouble and Why? Michigan’s Story, David Arnsen warns that Michigan law seems especially designed to destroy public school districts’ fiscal stability as students move to charters or move to nearby school districts via cross-district open enrollment: “Michigan offers an interesting case of a state with a highly centralized school finance system in which the state sets per pupil funding levels for each district, and most operating revenues follow students when they move among districts or charter schools.  Districts have very limited authority to raise additional tax revenues for school operations from local sources. Consequently local responses to financial stress focus primarily on efforts to reduce spending… Nearly all funding moves with students when they transfer to other districts or charter schools, and local districts have very little discretion to raise additional tax revenues.”

In perhaps the most lucid explanation of the way state charter and school choice laws are proactively destroying local school districts, we must turn to the very school finance expert to whom Jeff Bryant spoke this week—Bruce Baker of Rutgers University.  In a November 2016 report for the Economic Policy Institute, Exploring the Consequences of Charter School Expansion in U.S. Cities, Baker outlines the catastrophic consequences of state laws permitting rapid and unregulated expansion of charter schools: “One might characterize this as a parasitic… model—one in which the condition of the host is of little concern to any single charter operator. Such a model emerges because under most state charter laws, locally elected officials—boards of education—have limited control over charter school expansion within their boundaries, or over the resources that must be dedicated to charter schools….”  “If we consider a specific geographic space, like a major urban center, operating under the reality of finite available resources (local, state, and federal revenues), the goal is to provide the best possible system for all children citywide…  Chartering, school choice, or market competition are not policy objectives in-and-of-themselves. They are merely policy alternatives—courses of policy action—toward achieving these broader goals and must be evaluated in this light. To the extent that charter expansion or any policy alternative increases inequity, introduces inefficiencies and redundancies, compromises financial stability, or introduces other objectionable distortions to the system, those costs must be weighed against expected benefits.”

Can Momentum Be Sustained from the Spring’s Prophetic Walkouts by Teachers?

If you think about it differently, it is possible to turn Kurt Weill’s song into a story about school finance instead of love: “It’s a long, long while from May to December November, and the days grow short when you reach September.”

That is the lesson I learned 25 years ago when a friend and I co-chaired our local, November school levy campaign. Ohio law prohibits unvoted tax increases, prevents school districts from benefiting from property appreciation by capping the value of local levies at their dollar amount on the day they are passed, and therefore requires voters to come back on the ballot again and again—through failure after failure—until another levy finally passes. That is the only way for Ohio school districts to raise enough revenue to keep up with inflation.  In May of 1993, our local school levy had failed by 2,000 votes. My friend and I worked all summer and, beginning in September with even more intensity—16 hour days,  pulling out all the stops—to try to ensure success in November.

That November, on the third try, the levy passed by 4,000 votes. My friend and I both consider that levy campaign to be one of our primary lifetime accomplishments. We talk on the phone about it around election day every November. It was harder and more exhausting than any of our paid jobs. What we learned is that public opinion can be turned between May and November, but it happens neither easily nor naturally. It is a matter of changing the narrative frame and bringing massive peer pressure to bear—mobilizing people through thousands of personal phone calls, holding meetings everywhere, and working with others to organize nearly a thousand volunteers walking door to door. We even did our best to use social media in that pre-facebook era. A mass of parents recorded this message on their telephone answering machines: “I’m sorry. We can’t come to the phone right now because we’re so busy working on the school levy.”

My experience in 1993 makes me worry about the staying power of what we learned in this spring of 2018 from desperate and prophetic school teachers in West Virginia, Oklahoma, Kentucky, Arizona, Colorado, and North Carolina, teachers who told us that our selfish society has forgotten the needs of our children. Tax dollars in those states are so meager that underpaid teachers are leaving for other states, schools are in session only four days in some places, and classes are packed with 40 children, some of them sitting on the floor or on classroom counter tops.

The wildcat walkouts by teachers ended with the conclusion of this school year, and I worry that the message may fade from now to November. Why? Today, roughly 70 percent of households do not have children in school, and the power of corporate money in politics has affected no other institution more than public education.  In his important 2017 book, The One Percent Solution, political economist Gordon Lafer explains why attacking public education is a high priority for wealthy plutocrats: “At first glance, it may seem odd that corporate lobbies such as the Chamber of Commerce… or Americans for Prosperity would care to get involved in an issue as far removed from commercial activity as school reform. In fact, they have each made this a top legislative priority… The campaign to transform public education brings together multiple strands of (their) agenda. The teachers’ union is the single biggest labor organization in most states—thus for both anti-union ideologues and Republican strategists, undermining teachers’ unions is of central importance. Education is one of the largest components of public budgets, and in many communities the school system is the single largest employer—thus the goals of cutting budgets, enabling new tax cuts for the wealthy, shrinking the government, and lowering wage and benefit standards in the public sector all naturally coalesce around the school system. Furthermore, there is an enormous amount of money to be made from the privatization of education—so much so that every major investment bank has established special funds devoted exclusively to this sector. There are always firms that aim to profit from the privatization of public services, but the sums involved in K-12 education are an order of magnitude larger than any other service, and have generated an intensity of corporate legislative engagement unmatched by any other branch of government.” (The One Percent Solution, pp. 128-129)

Let’s begin with some signs of hope that, just perhaps, the teachers’ walkouts will have some staying power:

  • Two ballot initiatives supporting public education may appear in November on the ballot in Arizona. You may remember that Arizona has cut total state per-pupil funding by 37 percent since 2008, more than any other state; spending cuts have diminished teachers’ salaries, left buildings crumbling, and even eliminated free full-day kindergarten in some districts. Adding to these problems, the legislature has rapidly moved education dollars into privatized charters and into an education savings account vouchers program that gives away state dollars in little debit cards which parents who pull their kids out of public schools can use to pay for private services.  One ballot initiative will definitely appear in November to stop the expansion of the state’s education savings account vouchers. But teachers, motivated by their spring walkout, are mounting a second effort, a mobilization to qualify another referendum for the November ballot—a tax increase on the wealthy to pay for teachers’ salaries and public school expenses. Associated Press reporter Melissa Daniels explains: “The Invest in Education Act would increase income taxes for those who earn more than $250,000 a year. Sixty percent of the money raised would go toward teacher pay, with the rest earmarked for maintenance and operations. Supporters must collect more than 150,000 valid signatures by July 5 to get the initiative on the November ballot.”
  • For Education Week, Daarel Burnette II reports: “These funding wars in many states have spilled over into this fall’s midterm elections in which more than two-thirds of state legislative seats and 36 governorships—those positions with the most say over school spending—are up for election. More than 100 teachers have filed to run for state office in Arizona, Kentucky, and Oklahoma after they failed to get all they demanded from their strikes and protests.”

There are also reasons not to be too hopeful.  It is evident in Kansas that repairing years of tax cuts and underfunding of public education will be neither quick nor easy. In Kansas an all-Republican legislature has fought hard against the Kansas Supreme Court, which has established a deadline for a remedy in the long-running school funding case of Gannon v. Kansas. In May, the legislature came up with a minimal remedy, and Governor Jeff Colyer signed the final plan, leaving it up to the Court to approve the remedy for years of catastrophic underfunding during former-governor Sam Brownback’s era of tax cuts.  Attorneys for plaintiff school districts followed up early in May, however, to demand that the court shut down the state’s schools unless the legislature comes up with an additional $1.5 billion by June 30.  Later in the month, the Associated Press’s John Hanna reported that on May 22, when the Kansas Supreme Court reviewed the legislature’s new plan: “A majority of the Kansas Supreme Court expressed skepticism… that the Legislature and governor raised public school funding enough in the short term to comply with the state constitution, suggesting they could be wrestling this summer with providing more money and possibly increasing taxes.” A year ago, legislators overcame Brownback’s veto and finally raised taxes, though it wasn’t enough to compensate for years of cuts. The Court will announce its decision by June 30.

And in Oklahoma, strong political pushback has emerged against the minimal concessions made to striking teachers this spring.  Oklahoma law requires three-fourths majorities in both houses of the legislature to pass any kind of tax increase. Under pressure from striking teachers, the legislature passed taxes on tobacco, oil and gas production, and motor fuels, but now far-right, former U.S. Senator Tom Coburn is working with Oklahoma Taxpayers Unite! on a petition to block this first tax increase in Oklahoma since 1990. Coburn says teachers do deserve a raise, but it can be paid for by cutting waste in an already meager state budget: “Coburn said ‘ineffective and lazy state government’ is to blame for Oklahoma’s woes. He singled out what might be described as a $30 million shell game at the state Health Department as an example of poor management and oversight… Oklahoma Taxpayers Unite! has until July 18 together about 42,000 valid signatures on its petition, after which repeal of HB1010xx (the recently passed tax increases) would go to a vote of the people.”

What teachers taught us in the most personal way all spring continues to be confirmed by experts. And the crisis permeates many states beyond this spring’s walkouts.  In a brief for the Education Law Center, Rutgers University school finance expert, Bruce Baker reminds us:

  • “Most states fall below the funding levels necessary for their highest poverty children to achieve the relatively modest goal of national average student outcomes.
  • “High-poverty school districts in several states fall thousands to tens of thousands of dollars short per pupil, of funding required to reach average student outcomes.
  • “In several states—notably Arizona, Mississippi, Alabama and California—the highest poverty school districts fall as much as $14,000 to $16,000 per pupil below necessary spending levels.
  • “In numerous states, only the lowest-poverty districts have sufficient funding to achieve national average outcomes (but many low-poverty districts still do not have sufficient funding).
  • “Only a handful of states—including New Jersey and Massachusetts—are doing substantially better than others in terms of the average level of funding provided across districts….”

Baker also cautions us to consider a basic principle largely ignored by state legislative bodies who continue enacting regressive tax policy: “It costs more to achieve common outcomes in higher-poverty than in lower-poverty settings; in addition, costs associated with poverty rise as population density rises.”

I hope the school teachers who led the way this spring and the rest of us can manage to sustain the hope and momentum inspired by teachers’ recent wildcat walkouts. Teachers reminded us of the truth of the late Senator Paul Wellstone’s words: “That all citizens will be given an equal start through a sound education is one of the most basic, promised rights of our democracy. Our chronic refusal as a nation to guarantee that right for all children…. is rooted in a kind of moral blindness, or at least a failure of moral imagination…. It is a failure which threatens our future as a nation of citizens called to a common purpose… tied to one another by a common bond.”