Author: 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.

Dollars for Disabilities? What do we know?

In this article, Jay Greene and Marcus Winters present a grossly oversimplified perspective of what we really know about the relationship between state school finance systems – special education aid formulas – and state special education classification rates.

http://www.ajc.com/opinion/funding-may-push-special-145257.html?printArticle=y

This supposed problem plays out at two levels. First, it is assumed that states which allocate funding based on local school district rates of classifying special education students will see greater overall growth in special education student populations than states that a) provide flat funding per fixed share of students in each district, b) cap the number of students classified for which funding will be provided or c) use some other better measures of local district resident rates of children with “real” disabilities – a  measure outside the influence of local district classification procedures. Second, some go so far as to assume that not only are state average disability rates different solely because of local responses to differences in state fiscal incentives, but that local rates of disability classification within states also vary largely because of differences in the extent to which local school officials play the special education fiscal incentives game. Green and Winters seem to be speaking primarily on the first point – state average differences and headcount incentives.

There is a small body of research, some of which is pretty solid, that supports the notion that there is a relationship between fiscal incentives and classification rates. That is not to say, however, that such incentives explain most or all of the differences, as implied by Greene and Winters in their absurd Maine to California anecdote. Second, studies that show that classification rates are partially responsive to fiscal incentives do not address whether the incentivised classification rate may actually be closer to the true rate of disabilities than the non-incentivised rate. Without a measure of true prevalence it is difficult to make the leap that the incentive is necessarily a bad one – one that distorts inappropriately the classification rates and services for children with disabilities.

Further, removing the fiscal incentives entirely does not necessarily bring to a grinding halt the overall statewide growth in classification rates or the variations across districts – even if capitation or flat funding does create modest statistical differences in growth rates between states. Pennsylvania has provided flat, census based funding since the early 1990s, yet classification rates grew dramatically since that time and rates continue to vary widely across Pennsylvania districts, from about 5% to over 30%.

Further, as with most demographic characteristics, families of children with mental or physical disabilities are simply not uniformly distributed across neighborhoods, cities and towns within states or across states making it very difficult to say that the typical school district or state should have only X% of such children. Complicating the issue is that the uneven distribution of families of children with disabilities is endogenous to the quality of services available across communities within states and across states. So, for example, if a state provides generous funding based on actual needs of students and that funding leads to higher quality services for students, families of children with disabilities are more likely to consider relocating to those states. The same applies to more local moves where services vary across districts. And parents of children with disabilities may make these decisions based on more than the services provided by the school district alone. Large towns and small cities in otherwise rural areas tend to have elevated disability rates in part because of greater availability of social services and health-care services less available in surrounding areas.

So perhaps a state can export its children with disabilities to a neighboring state by adopting school finance policies that ensure low quality programming and limit district incentive to pursue diagnostic testing. And perhaps some of the differences we see across states – especially between neighboring states – are a function of these programming and service quality differences. This question is yet to be thoroughly addressed in the literature.

In any case, it is a huge unwarranted stretch to argue that state limitation of funding for special education necessarily leads to a more correct identification rate of children in need while holding constant (or even improving) the quality of programs and services and while not exporting children with disabilities.

The problem for state policymakers is to find the correct balance between sensitivity to the needs of individual children as identified by those charged with providing their educational services (local school districts, etc.), and measures of population differences across cities, towns and school districts within states that can serve as a guide in the distribution of resources while avoiding the wrong incentives.

I have written about this topic in the attached research article.

Baker.Ramsey.CBased.JEFSubmit.May28_09

Fact Check: Washington School Finance

I read this today:

http://www.ncpa.org/sub/dpd/index.php?Article_ID=18464

And was especially intrigued by the first bullet point: “Schools receive more than $10,000 per pupil per year, about one-third more than private schools spend per student.”

Having just completed my study of private school tax returns, this statement seemed a bit out of line and there was absolutely no support for it, not even in their main report: http://www.washingtonpolicy.org/Centers/education/policybrief/06_finne_schoolfunding.pdf

They do argue (but do not validate) in this report that the typical Washington private school spends about $6,000 per pupil.

So, I went back to my data set of private schools. Note that the main finding of my report was that private school spending varies widely and varies especially as a function of the affiliation of the schools. The lowest spending schools in my set of 1500 tax returns were those which are members of the major Christian Associations. My sample included 26 such schools in Washington state, which spent in 2007, on average about $6,656 per pupil. So, even the lowest spending group of private schools in Washington spend more than $6k per kid. The largest group filing their IRS 990 returns in Washington were private independent day schools. These schools spent, on average, $19,283 per kid per year.  Hey, that’s about twice what the posting said was the allocation for public schools. Sadly, only 2 catholic schools reported their IRS 990 in Washington, and those schools spent about $13k per kid per year, but are not necessarily representative of all Catholic schools in Washington.

A busy day in school finance…

Just checking my news alerts today. A lot going on:

Massachusetts formula review: http://www.wickedlocal.com/gloucester/news/education/x786214932/Lawmakers-seek-review-of-18-year-old-education-funding-formula

Kansas meeting among potential plaintiffs in response to aid cuts: http://www.dodgeglobe.com/education/x402527694/Schools-for-Fair-Funding-meeting-in-Dodge-City

New lawsuit brewing in Arizona: http://www.kold.com/Global/story.asp?S=11138528

Comments on these at a later point.

Coulson’s selective reading skills…again!

So… I’m browsing the Cato web site and Andrew Coulson’s blog entries this morning and find  post where Coulson explains that a 2008 study shows that spending more on K-12 education reduces economic growth (9-2-09 post).

http://www.cato-at-liberty.org/2009/09/02/fretting-about-college-costs-dont-forget-k-12/

So, I look at the study. Here are the first two sentences of the conclusion section of that study:

“Overall, our findings indicate that the three most consistent predictors of income growth are expenditures on higher education, highway expenditures, and K12 pupil–teacher ratios. They consequently contribute to the debate over the effects of class size, by supporting the body of research asserting that smaller classes make a positive difference (e.g., Burr 2001; Glass and Smith 1978; McGiverin et al. 1989).”

http://www.springerlink.com/content/26p7q52122326523/fulltext.pdf

Is there a reason why this wasn’t cited? It’s the main conclusion of the study? Does Coulson expect his readers not to actually make the effort to … read the study? and it’s findings? Even a lazy jump to the conclusions (all I could muster this morning) casts a very different light on the study than Coulson’s one liner: “State-run schooling has become so profligate and inefficient, in fact, that one recent study finds higher public school spending is associated with LOWER subsequent economic growth.”

Note that class sizes are perhaps the most significant driver of K-12 education expenditures.Yes, the same study does show a negative relationship between the education spending measure and economic growth, but in a model which also includes the pupil to teacher ratio measure – which makes interpreting the spending measure somewhat trickier. That is higher spending – at constant pupil to teacher ratio (which strongly affects spending) – is associated with lower growth. This is certainly not the same as a bold conclusion that spending more on K-12 education lowers growth.

Coulson still clueless

In his most recent response to my response:

http://www.cato-at-liberty.org/2009/09/01/author-of-the-private-school-spending-study-responds/

Coulson continues to miss the entire point of my report and misunderstand methodological detail. First, Coulson assumes that the entire point of the report is to show that private schools spend a lot and that they spend more than public schools. The point is that some do and some don’t. The report is about the variation and factors associated with that variation.

Coulson continues to obsess over the potential bias in the sample of religious schools in particular noting that those attempting to maximize revenue are more likely to file their tax returns and make them public in a timely manner through sources such as Guidestar. Perhaps. But, what I have shown of those schools – the largest group reporting being Christian Association Schools – is that they spend very little. I have triangulated this aggregate spending data with data on class size and teacher salaries (from other sources) to show the relationship among these factors. CAS schools spend very little, have low teacher salaries and teachers with relatively weak academic backgrounds. If this is a select group of upward bias spending CAS schools, I find that somewhat depressing. But it is possible. In any case, it does not compromise the findings or policy conclusions of the report. Note that on certain key characteristics that drive spending, the schools in the IRS 990 sample were comparable to all CAS schools in the NCES Private School Universe. That is the purpose of comparing the class sizes between the two. Again, the CAS schools reporting IRS 990 represented nearly 30% of student enrollment in CAS schools based on the NCES PSU survey (which really isn’t a universe. there are missing schools).

The front end of the report (pages 15 to 23) spends a great deal of time pointing out the distribution of children in private schools by affiliation. I included this front end specifically because I wanted the reader to know what I was and was not able to address in relation to private schooling generally. The report is very clear that Catholic schools are noticeably absent in financial filings despite their enrollment dominance in some regions. Perhaps some financial accountability is in order for these schools if we expect them to play such a strong role in serving the public good. However, in some regions, Catholic schools on average take a back seat to CAS schools and Independent Schools combined, both of which are relatively well represented in the analysis. This is true in the South. See figure 8, page 23. Private Independent schools do include some very elite schools (though I’ve excluded boarding schools from the analysis) but are a more diverse group and larger sector of schools than Coulson acknowledges. And, I was able to compile IRS filings for Independent Schools serving about 75% of the total Independent School population in the states and labor markets in the analysis.

Andrew Coulson should learn to read… Private School Study

I just read this piece from Cato attempting to discredit my recent policy report:

http://www.cato-at-liberty.org/2009/08/31/union-funded-study-says-private-schools-expensive/

Among other things Andrew Coulson asserts that large degrees of selection bias taint my study of Private School Expenditure and that not only did I ignore this, but I hid it intentionally and skewed the results. Okay, I urge anyone to read the study and check the extent of methodological detail.

http://www.greatlakescenter.org/docs/Policy_Briefs/Baker_PvtFinance.pdf

http://epicpolicy.org/publication/private-schooling-US

Regarding Coulson’s specific claims of selection bias:

Apparently, Coulson failed to read pages 24 and 25 of the report or view Figures 9 or 10 of the report where I detail precisely the extent to which the IRS 990 sample of 1,500 schools is representative of various private school affiliations as reported in the NCES Private School Universe Survey. Here, I show that the IRS filings represent 74.2% of private independent school enrollments for the states and labor markets studied and nearly a third of Christian Association Schools. I acknowledge the possibility of sampling bias, and make additional comparisons in Figure 21 (page 39) of the report, showing that the reported pupil to teacher ratios in the full NCES Private School Universe Survey align well with the pupil to teacher ratios in the schools which reported finances on IRS 990. Class sizes are a primary driver of per pupil spending.

On a more trivial note, elimination of schools with budgets of less than $500k has little or no effect on labor market, state or national averages which are weighted by the numbers of children served. Further, Coulson’s assertion that these schools are systematically lower spending per pupil is incorrect. They are all over the map.

To clarify the parenthetical regarding DC spending on Page 42. Current Expenditures per pupil in that year (2006-07) were about $14,300 in DC, and total about $20,200. It would be relevant to compare the total figure here. Nonetheless, the DC private independent schools in particular still outspent DC Public.

Finally, Coulson appears to totally miss the point of the study, which is not that private schools are somehow invariably high spenders. Rather, the point is that spending among private schools varies. It varies a lot, and it varies largely by religious affiliation with Christian Association Schools in particular spending much less than public schools. As such, when low voucher levels are set in existing voucher programs like that in DC, it should come as no surprise that most vouchers are used at religious schools. They (typical vouchers) simply aren’t even close to sufficient for private independent schools. Perhaps if the DC voucher program did allocate $28k per child (Coulson’s version of DC public schools spending per pupil), this would make a difference.

Also, regarding the sponsorship of the study – The study received a nominal honorarium of $4,000 from the Great Lakes Center and EPIC. Note, however, that from a public school teachers’ union perspective, there’s not much in there to cheer about. In fact, the study finds that even the higher spending privates do not necessarily pay their teachers more than public schools in the same labor market. Rather, the additional expense is in smaller class sizes which are largely a function of more diverse curricular offerings. Indeed the much lower spending private schools do have both larger classes and lower paid teachers.

UPDATE: Coulson updated his post to include the statement: “The religious private schools that do file Form 990 are thus a small self-selected group that is presumably seeking to maximize its revenue from charitable donations, and hence very likely biased toward higher spending schools.”

So, the implication is that my sample of private religious schools is biased toward the higher spending ones. Note that I have a near 30% sample of Christian Association Schools, and that my main conclusion about these schools is that they are very low spending and coupled with that have very weak teachers, relatively larger class sizes (than independents) and very low teacher salaries.  Is he sure that he wants to argue that this group is likely a biased, self-selected group of high spenders among CAS schools. Again, I compare my 990 sample to all CAS schools in the NCES PS universe survey in Figure 21. I do point out that my very small Catholic sample does appear biased in this very way (those few that did report were somewhat different than “average” Catholic schools in Figure 21).

Ed Trust, DFER and Center for American Progress misguided

Let me start by saying that these are three groups for which I have a good appreciation. But, these groups have allowed much of their education reform agenda to be misguided by bad analyses and the time has come to clear up some major problems with the assumptions that drive many of the policy recommendations of these groups.

Issue 1 – Teacher Quality Distribution: Yes, the uneven distribution of teacher quality is a major factor – perhaps the greatest inequity in education that must be resolved.

Hanushek and Rivken conclude: “The substantial contribution of changes in achievement gaps between schools is consistent with an important role for schools, and we find that the imbalanced racial distribution of specific characteristics of teachers and peers—ones previously found to have significant effects on achievement—can account for all of the growth in the achievement gap following third grade.” (p. 29) Hanushek, E., Rivken, S. (2007) School Quality and the Black-White Achievement Gap. Education Working Paper Archive. University of Arkansas, Department of Education Reform.

There are undoubtedly inequities in the distribution of quality teachers across public schools within public school districts and some of the causes of these inequities may be traced back to district leadership and teacher contract structure.

But, without a doubt (and validated by most rigorous analysis of teacher labor markets), most of the disparities in the distribution of quality teaching occur BETWEEN, NOT WITHIN school districts – just as most of the differences in student populations occur between, not within districts. Most of the disparities have little to do with school district HR offices succumbing to seniority privileges and contractual bumping provisions, and have much more to do with racial and socioeconomic differences in students between districts and persistent disparities in school funding, infrastructure, etc.

Ed Trust and CAP in particular have been off base, driven there by empirically bad, conceptually weak, largely non-peer reviewed “policy” research. They have been led to believe that teacher quality distribution is primarily a district problem and one that can be fixed by altering “comparability” regulations of Title I. That is, using federal pressure to make districts fix their own problems. While districts should be required to do so, these problems are small piece of the much bigger puzzle. By obsessing so much on these issues, these organizations have completely taken their eye off the ball on the largest and most persistent inequities that plague our public schooling systems.

Issue 2 – The Role of Federal Title 1 Programs. These organizations are excessively if not obsessively focused on the role of Federal Title I funding. On the one hand, because they believe that most teacher quality disparities exist within districts – mainly districts having Title I schools, they also seem to believe that these disparities can be largely resolved by changing what are called “comparability” regulations of Title I to require districts receiving Title I funds to make greater assurances that their teachers are equitably distributed. Great! Let’s do that. I’m fine with that, but again, it’s trivial piece of the puzzle when districts with large numbers of Title I schools, or even 100% Title I schools can’t compete with their neighboring districts for teachers to begin with – and where those school districts may have few or no Title I schools.

These organizations also appear somewhat obsessed with this idea that Title I money itself is being allocated in ways that make rich districts and rich states richer, while depriving poor districts and poor states. This is also largely a conclusion drawn from very weak analysis which fails to account sufficiently for regional variations in the cost of providing services and for regional variations in the fit of poverty thresholds to income distributions. I’ll happily elaborate for anyone who  truly gives a damn about the technical details, but suffice it to say that – but for the small state minimum allocations to places like Vermont or Wyoming – the cross state and within state distribution of Title I funds is much less awful than I ever expected, and actually not so bad. Driving more Title I funds to southern and rural districts and away from poor urban core northern districts would likely be a very bad policy choice and would be based on deeply problematic analyses.

Finally, on this point, most issues of funding inequity are STATE POLICY ISSUES. The federal role remains relatively small. Some states do much better than others and we need to focus our attention on that. Further, while there do exist disparities within school districts across schools, the larger disparities are still STATE POLICY CONCERNS and exist BETWEEN, NOT WITHIN DISTRICTS. As a side note, it is also the case that districts adopting these hip-and-cool weighted student formulas as within district allocation mechanisms, do no better than districts in the same state using other allocation methods, at improving either fiscal equity or teacher quality equity across schools.

Issue 3 – Measuring Equity in School Funding. Here I have more appreciation and less to gripe about, but wish to point out some critical flaws in the approach used by The Education Trust in their Funding Gap analyses. I bring this topic up because the language used by the above mentioned organizations speaks to the Education Trust framework for evaluating whether states are doing the right thing on school finance. The Ed Trust approach is to look at the average spending of the highest and lowest poverty school districts in a state, with a few arbitrarily selected weights to adjust for “costs” associated with poverty. There’s a whole lot missing here which ultimately leads to some bad conclusions about some states. To begin with, I agree that what we need to be looking for is a progressive distribution of fiscal inputs – systematically higher in higher poverty settings than lower poverty settings. Unfortunately, taking the average of the top and bottom group tells us NOTHING of how SYSTEMATIC the patterns are! Instead, one must evaluate the overall relationship – ACROSS ALL DISTRICTS, EVEN THOSE IN THE MIDDLE – between district fiscal inputs and poverty. On inputs, if we  are truly interested in measuring the state’s own policies, we should look at the sum of state and local revenues per pupil. Second, because of the mis-measurement of poverty across rural versus urban settings (something noted in a few Ed Trust reports) and because of economies of scale related cost differences, we should actually account for differences in the location and size of school districts. We should also account for differences in regional wage variation, which Ed Trust does. But, when all of these are thrown in together, into a rigorous analysis of funding progressiveness across districts within states, one gets a much different picture for some states than the picture provided by the oversimplified Funding Gap analysis. See Connecticut

Conclusions – Okay, so this is just Baker, a school finance techie geek bitching and moaning about trivial statistical problems with research largely conducted by Marguerite Roza and colleagues at the Center for Reinventing Public Education and the reliance of CAP, DFER and Ed Trust on that work. Perhaps – BUT – we are talking about billions of dollars here. And the distribution of billions of dollars should be backed by reasonably rigorous analysis and good assumptions. So, here are the take home points:

1)      Teacher quality distribution is critically important and the main problem exists between school districts.

2)      State school finance systems – not Title I and not district allocation policies – are the primary underlying cause of resource disparity across children in public schools, where the primary types of resource disparity are those that exist between districts.

  1. Funding one or two high poverty districts well in state is by no means “systematic” progressiveness
  2. FUNDING EQUITY – FUNDING PROGRESSIVENESS – IS A NECESSARY (though perhaps not in-and-of-itself sufficient) UNDERLYING CONDITION FOR ACHIEVING TEACHER QUALITY EQUITY

As such any legitimate requirements for states to qualify for additional fiscal stabilization funds or for Race to the Top Funding should include precise indicators about state responsibility to improve school funding equity and adequacy. Ed Trust, CAP and DFER have done a huge disservice by missing this point entirely.

Most recent presentation on Title 1:

Baker.AERA.Title1

Most recent presentation on Within/Between Funding & Teachers:

AEFA 2009b_color

HERE IS A MUCH MORE PRECISE SET OF COMMENTS REGARDING SCHOOL FUNDING, FROM THE EDUCATION LAW CENTER OF NJ:

ELCRTTFcoments.Aug28

Who should qualify for Race to the Top?

I’ve been asked at least a few times this past week about what types of requirements should be included for states to qualify for Race to the Top federal stimulus funding. Interestingly, there seems thus far to be little focus on whether states are actually financing their schools equitably and adequately and putting up reasonable effort to finance their schools as a requirement for accessing stimulus funds. More disconcerting is the fact that there also seems little emphasis on even whether stimulus stabilization funds are being used to advance equity and adequacy of funding. In some cases, which I will elaborate at a later date, stabilization funds have actually been allocated in ways that erode equity and reduce state effort. That being water under the bridge, what might be some reasonable requirements for Race to the Top and second year stimulus funds, and which states might qualify and not qualify?

Category 1: Fiscal Effort

A state’s effort in school finance is often measured as the aggregate state and local pk-12 public education resources allocated as a percent of Gross State Product (now labeled Gross Domestic Product – State). Some have suggested that states which maintain current effort levels should qualify for stimulus funds. This seems a low bar for states that put up very little effort like Delaware and Louisiana. It seems to me that low effort states – states below the average state – should have to show that they’ve increased effort significantly. But, states that are above the average should perhaps be held to the maintenance standard. I discuss Louisiana’s effort here.

Category 2: Fiscal Adequacy

Effort and adequacy are somewhat linked, as one can see in my rant about Louisiana and Mississippi. Louisiana is low effort and low adequacy in funding whereas Mississippi is average effort and low adequacy. That is, Louisiana is perhaps more to blame for its own inadequacy than Mississippi, which simply lacks the economic base.

I would argue that any state which has (a) below average effort and (b) per pupil spending adjusted for regional variation in wages (using the NCES Comparable Wage Index)  should be low on the list for additional stimulus funds. States with below average regional adjusted spending and below average effort should be required to increase both in order to qualify.  Sadly, however, I suspect that states like Louisiana would gladly further deprive the less than 85% of children who actually attend their public schools of these additional resources (LA has the highest share in private schools). Indeed, these requirements are a double-edged sword.

Category 3: Fiscal Equity

This one is a little more complicated, but the general idea is that states should have to be able to show that they’ve made effort toward targeting additional resources – state and local district revenues – to higher poverty school districts. In a forthcoming indexing system, we control for a variety of school district characteristics to evaluate whether, on average, a state school finance system results in systematically more state and local revenue per pupil in higher poverty school districts than lower poverty ones. Unfortunately the Education Trust approach of looking at the highest and lowest 25% of districts by poverty misses the boat – because it fails to capture whether the pattern is systematic across all districts. A good example is Connecticut, which shows a positive differential in state and local revenue between high and low poverty districts, but when measured statistically across all districts, the relationship is not statistically significant – or systematic. That’s because Connecticut district revenues are all over the map. The average spending for high poverty districts is skewed by only two (Hartford and New Haven) which are relatively higher state and local revenue districts. Meanwhile, districts like Bridgeport, Waterbury, New Britain and others are pretty much left out.

So, that in mind, what needs to be measured here?  Well, to qualify for Race to the Top funds, I believe that the first states in line should be those where there exists a systematic positive relationship between state and local revenues per pupil and either/or (a) US Census Poverty estimates (b) NCES Common Core Free/Reduced Lunch rates. This includes only a handful of states such as New Jersey and Minnesota (although also driven by Minneapolis and St. Paul, but better than CT). For states with either no relationship between state and local revenue and poverty, or a negative one, those states should have to show that they have improved significantly the relationship between state and local revenue per pupil and poverty.  For example, New York State, one of the nation’s most “regressively” funded states could reduce it’s negative relationship significantly by following through with planned increases to funding to New York City schools and to many other poor, small city districts around the state which remain, in the hole, so to speak.  Similarly, Pennsylvania which until recent reforms was the most regressively funded state in the nation, could really put a dent in its negative funding relationship by following through with the Governor’s plan to continue phase in of the new funding formula. This, in my mind would make PA an ideal candidate for Race to the Top funding.

Random thoughts on CT

I picked this article up on twitter: http://www.courant.com/news/education/hc-education-commissioner-0819.artaug19,0,3631152.story

From these figures below, it looks to me like Connecticut has some other issues to deal with. This is  a perfect example of just how illogical state aid distribution and state school finance formulas can be.

Variation in Nominal Expenditures

Variation in Need & Cost Adjusted Expenditures

Private School Spending

New out today (copy of press release):

Ground-breaking study has major implications for public school spending and voucher programs

Contact: Teri Battaglieri – (517) 203-2940; greatlakescenter@greatlakescenter.org
Bruce Baker – (732) 932-7496 ext. 8232; bruce.baker@gse.rutgers.edu

EAST LANSING, Mi., (August 18, 2009) – Private school spending varies far more widely than spending on public education, a new report finds. Further, the differences in spending among different parts of the private school sector reflect clear patterns with major implications for voucher policies and even for spending levels in the public sector.

Those are some of the findings in a first-ever, comprehensive examination of some 1,500 private schools nationally conducted by Rutgers University associate professor and school finance expert Bruce D. Baker.

The report, Private Schooling in the U.S.: Expenditures, Supply, and Policy Implications, is based on a review of financial and enrollment information contained in IRS tax returns combined with data from the National Center for Education Statistics. It was released today by the Great Lakes Center for Education Research and Practice.

Baker presents comparisons of expenditures among different types and affiliations of private schools, and compares those expenditures with public school expenditures for districts in the same state and labor market. Results indicate that (1) the less-regulated private school sector is more varied in many key features (teacher attributes, pay and school expenditures) than the more highly regulated public schooling sector, (2) these private school variations align and are largely explained by affiliation—primarily religious affiliation—alone, and (3) a ranking of school sectors by average spending correlates well with a ranking of those sectors by average standardized test scores.

“On average,” Baker explains, “the private schools studied spend more than public schools in the same metropolitan areas (and nationally), although some spend much less. Some private schools have lower pupil-to-teacher ratios than public schools, while others have comparable ratios. Some have comparable teacher salaries, and some pay their teachers much less. And, some have teachers with stronger academic qualifications than public school teachers, while others have teachers with weaker academic qualifications.”

What’s “most striking” about such patterns, Baker observes, is that they are largely explained by religious affiliation alone. Christian Association Schools have the lowest spending, the lowest salaries, teachers with the weakest academic records, and the highest pupil-to-teacher ratios. Moreover, earlier research concludes that these schools have the lowest student test scores. Catholic schools tend to approximate public schools in all these areas. Hebrew schools and independent day schools (generally not religiously affiliated) have higher spending – often substantially higher – and this is reflected in these resource categories.

Baker’s findings may provide some insights into why research on voucher programs has yielded mixed results regarding student achievement levels for participating low income students. The potentially high-performing parts of the private school sector are the ones that spend much more than available voucher subsidies. In fact, they spend much more than public schools. Private independent day schools—which have the academically strongest teachers and the smallest classes among private schools—will, Baker points out, “remain well out of reach of voucher recipients.” In many markets, such schools on average spend twice what public schools spend, which in turn is often twice the voucher levels allocated. Thus, even under a voucher scheme that paid what public schools receive per pupil, these private schools would have to subsidize half the total cost of teaching voucher students to match what they spend on their non-voucher students.

Baker recommends that policy makers who would look to private schools for lessons on how to improve public education begin with a clear awareness of the stark differences among subsets of private schools, avoiding policy recommendations based on averages or isolated instances. He also points to the importance of understanding the differences between private school spending and tuition, given that spending is often subsidized by outside resources (which themselves are often taxpayer subsidized). Regarding voucher policies, policy makers need to understand the tradeoff between attempts to craft policies with a limited impact on the public treasury and to craft policies that provide real choice to voucher recipients. Current policies appear to sacrifice choice for fiscal prudence, but this report demonstrates that the result is access to only a couple parts of the private sector, both of which have strong religious affiliations and neither of which appears to offer academic benefits over public schools.

Find Bruce Baker’s report, Private Schooling in the U.S.: Expenditures, Supply, and Policy Implications, on the web at: http://www.greatlakescenter.org.