Knowing that Money Matters: States Struggle With Adequate School Funding

Despite consistent academic and empirical proof that better education is more expensive, as well as numerous court rulings concluding that “money matters” in education, many opponents of education funding reform continue to deny the veracity of this claim. As state executives and legislators struggle to balance budgets and fund core services for the upcoming fiscal year, the ill-informed notion that money will not help struggling schools could have damaging repercussions for poor students across the country.

Research is Conclusive

Numerous studies have examined the relationship between money and achievement, and the results have been consistent and conclusive. As Michael A. Rebell and Joseph J. Wardenski explain in their article “Of Course Money Matters: Why the Arguments to the Contrary Never Added Up,” reforms such as small class sizes, quality professional development for teachers, extended day programs, quality preschool, and literacy programs have all demonstrated significant and positive impacts on student success. Mounting these programs requires funding. For many schools, these programs, and related services, are the best way to overcome socioeconomic and demographic factors that tend to negatively impact student achievement, yet some lawmakers doubt the efficacy of providing the programs and services that are so badly needed.

The new federal No Child Left Behind Act (NCLB) has created additional challenges for school districts. One of the law’s primary features is the requirement that all schools test all students at several grade levels and face “corrective action” and sanctions if their students do not reach certain test scores. As W. James Popham describes in his book, America’s “Failing” Schools: How Parents and Teachers Can Cope With No Child Left Behind, the success of this system depends upon the development of appropriate state standards and accurate and fair assessments. Most states, lacking the resources required to develop quality assessment systems that maximize the accuracy of student scores--to reflect student learning rather than student ability--instead turn to companies that produce tests designed for other purposes.

Courts Rule That Money Matters

The overwhelming majority of school funding adequacy lawsuits decided in the last several years have been plaintiff victories. Judges in these cases are presented with evidence about the actual costs of education, frequently in the form of extensive cost studies that consider either the current spending of successful schools and districts, or the judgment of experts in education as to the expenses associated with an adequate education, or both. State defendants often present cost studies that recommend a lower level of funding than plaintiffs’ studies. After thorough analysis and extensive evidence, judges in these cases have typically concluded that the current operating budgets of plaintiffs’ school districts in subject states are significantly below the actual costs needed to provide a quality education to their students.

Plaintiffs have further shown that the complaint launched by state defendants, that districts are wasteful or inefficient, is, in the vast majority of cases, without merit. In Texas, where an adequacy case was recently decided in favor of the plaintiffs by a state district court judge, school district after school district demonstrated administrative spending levels around two percent of the budget, with co-curricular and extra-curricular activities (arguably essential elements of a quality education) making up similarly low proportions of the total district spending. All other revenues were directed towards academically necessary programs, as well as the increasing costs of teacher healthcare, school maintenance, and transportation, amongst other non-expendable items.

Rulings for the plaintiffs in these cases have reaffirmed the conclusion that the lack of funding for schools has negatively impacted student performance. However, even with the mandate of the court pressuring them to fully fund quality education, some state legislatures and governors remain hesitant to find real solutions for the missing resources.

Implementing Court Decisions

As reported in Stateline.org, the prospect of raising statewide taxes, even to fund education, is anathema to many state legislators. Even when the courts have given legislatures ample impetus, and cost studies given them both evidence and a road map for effective and efficient spending, some elected officials are loath to make the difficult decisions required to find money for schools.

Texas, a state whose funding system was recently declared unconstitutional and whose governor and legislature publicly declared that school funding was the most important issue that the 2005 legislature will deal with, has witnessed several proposals to improve school funding that educators and advocates say badly underestimate the money that it will take to affect the quality of Texas public schools. The legislature has made a breakthrough by considering a controversial business tax and agreeing to increase state contributions to education; however, these efforts are coupled with a reduction in local property tax and, as reported in the Dallas Morning News, fail to raise funding levels anywhere near the numbers education experts have recommended.

This is also true in Kansas, where the Senate’s first proposal in what is certain to be a difficult debate over school funding does not come close to the level of funding recommended to the state supreme court during the state’s adequacy lawsuit. Legislators in Kansas, Texas, and many other states, seem far more inclined to fund schools at politically-determined, lower levels than to pay the actual cost of education; for Montana, this tendency was the basis of the state supreme court’s decision in favor of the plaintiffs, and the primary flaw in the state’s funding system. Fundamentally, this tendency seems linked to the dichotomy of public opinion on school funding and attendant taxation. In the compromise between taxes and education, legislators and governors are sometimes unwilling to come down on the side of schools.

Part of the process of fixing school funding involves setting up appropriate systems of accountability, which will ensure that the money is directed towards programs that are effective and cost-efficient, and, at the same time, ensure that schools have the programs and services kids need to become educated citizens and workers in the twenty-first century. However, for school funding to reach truly adequate levels, state lawmakers will need to acknowledge the true costs of adequate education.

Prepared by Nelly Ward, February 14, 2005