California Study Reveals Staggering Resource Gaps; Six More States Release Studies

“Getting Down to Facts,” the unprecedented education finance study in California that brought together researchers from 32 institutions was released in March, after 18 months of planning and preparation. The final 1700-page report encompassed 20 separate studies that touched on virtually every aspect of the education finance and governance structures in California. Included in the project were two professional judgment cost studies, which found that the state government needs to increase its public school expenditures by many billions of dollars in order to have any chance at providing a meaningful educational opportunity to all the state’s children.

Since last summer, cost studies have also been completed in Arkansas, Nevada, Washington, Minnesota, Montana, and Rhode Island. A study in Ohio is due out soon.

Multi-faceted California Project

The California project, overseen by Dr. Susanna Loeb and others at Stanford University, was exceptionally broad in scope, including studies of the state’s school finance systems, education governance, personnel issues, and data systems, as well as more traditional “adequacy” cost studies. For a detailed explanation of the project, see the “Getting Down to Facts” website or Access’s previous story on the project.

The executive summary of “Getting Down to Facts” alone was sixty-nine pages in length, and more than anything else, it focused on the need for more data and more research and all areas of education finance in California. In addition, as widely reported in the media, one of the project’s main findings was that the school finance system in California is overly complicated, extremely inefficient, and actually hindering the ability of schools to provide quality education. However, these particular criticisms are not new.

Staggering Resource Gaps

The two main adequacy studies in “Getting Down to Facts” were performed by Jay Chambers, Jesse Levin, and Danielle DeLancey of the American Institutes for Research (AIR) and by Jon Sonstelie of the Public Policy Institute of California (PPIC).

The AIR study was a professional judgment cost study, which asked panels of superintendents, principals, teachers, and business officials from “beating-the-odds” schools to outline the resources necessary for providing children an adequate education. California, the researchers found, has incredible resource gaps. The state ranks 25th overall for per pupil expenditures, but falls to 44th when expenditures are adjusted for geographic cost differences. In addition, 42 percent of all students come from language minority backgrounds and 25 percent of students are classified as English learners. The state currently spends $45 billion annually on education, and the study concluded that $24 to $32 billion more – a 53 to 71 percent increase – is needed for all schools to reach adequacy. Most of the increased costs come from extending the school day and/or year, hiring more teachers to reduce class sizes, hiring more specialists to work with special-needs students, and more high-quality professional development time for educators.

As staggering as this number sounds, the authors explain, it is a demonstration of how dramatically under-funded California schools current are. The per pupil expenditure recommended in the study is actually less than the amount recommended in AIR’s 2004 New York cost study. Furthermore, California has very high standards relative to many other states, and the authors note that enabling students to meet high standards come at a cost.

A New Type of Study

The spending increase recommended by the PPIC study was slightly lower, coming it at $17 billion, or 40 percent, but the authors note that this amount is not the full amount required to meet the state’s education goals, which California calculates as an Academic Performance Index (API).

The PPIC study utilitized a new costing-out methodology. Instead of asking panelists to design schools, researchers gave electronic surveys to almost 600 educators. Each educator, working independently, was given a hypothetical school and a maximum budget, and was asked to allocate resources and estimate the API for that school. The authors then extrapolated the costs necessary for each of California’s schools to reach the state goal of an API of 800.

The authors found, however, that to reach an API of 800 many schools would have to exceed the highest maximum budget provided to participants in the study. Not wanting to extrapolate the cost-achievement relationship outside the bounds they studied, they truncated estimated costs, resulting in a maximum per pupil cost for any school of about $11,500. This truncation, the authors note, leaves fully half of schools below an API of 797. The $17 billion increase, therefore, is not the full cost of adequacy, but only an estimate of what is needed to start California’s climb towards adequacy.

Needs of Special Education and English Learner Students Underestimated

“Getting Down to Facts” also included studies looking specifically at the resource needs of special education students and English learners. Both of these studies concluded that conventional “costing out” techniques shed little light on the true costs of educating these groups of students. The special education study, for example, found that the actual per pupil expenditures for students receiving special education services was greater than estimates derived through various costing-out methodologies. In addition, while current levels of spending may be enough for students to meet the goals outlined in Individualized Education Programs, they may be insufficient for reaching federal targets under the No Child Left Behind Act.

A study on English learners recommended programs experts considered necessary for allowing English learners a meaningful educational opportunity. The recommendations included high-quality preschool, additional instructional time, additional student and family support, ongoing professional support for teachers, and safer school climates. In addition, the study noted that schools that have relatively high levels of EL student achievement have additional technology to help the students, libraries with books in more than one language, greater parental outreach, and more bilingual personnel.

Arkansas, Nevada, Washington, Minnesota, Montana, Rhode Island

Since last summer, cost studies have been released in six other states. In August, Picus and Associates released an update of their 2003 cost study for Arkansas and recommended a base per pupil funding level almost $500 greater than they recommended in 2003, with additional costs estimated at over $200 million, six percent of 2003-2004 funding. In August, Augenblick, Palaich, and Associates (APA), recommended an additional $1.3 billion in school funding in Nevada – a 59 percent increase over 2003-2004. The Nevada study noted that Nevada is the fastest growing state in the country, and resources have not kept up with student population growth; the state currently has a student/teacher ratio of 18.5, well above the national average of 15.9. Some legislators reacted negatively, but they had requested a study that estimated the costs of reaching NCLB’s 100 percent proficiency, a goal generally regarded as impossible and considered costly to even approach.

In September, Picus and Associates released their final report for Governor Christine Gregoire’s “Washington Learns” agenda. The study, an evidence-based study, did not provide a total recommended sum for the entire state, but rather listed the cost per pupil of a series of individual programs. In November, APA released a cost study done on behalf of the organization P.S. Minnesota that estimated that the state’s schools needed over $1 billion more in order to provide all students an adequate education. In January, an APA study in Montana, sponsored by the Montana Quality Education Coalition, found that Montana schools need $725 million in additional funding, a 63 percent increase.

Finally, in March 2007, R.C. Wood and Associates released a cost study for Rhode Island that recommended an increase of between $42 and $205 million dollars, between two and 12 percent. Wood’s study, however, has been criticized by some experts on cost studies as having methodological problems and lacking necessary transparency. Later this month, the Human Services Policy Center of the University of Washington is expected to release the final report for a cost study done in Ohio; the preliminary summary, released in February, recommended an additional $1.2 to $2.4 billion, about 7 to 14 percent more.

Access Fact Sheets for the costing-out studies can be found at the costing-out page of our website.

Prepared by Matthew Samberg, April 5, 2007