“Estimating the Costs of Meeting the Texas Educational Accountability Standards”

May 17, 2004; revised July 9, 2004

The study estimates the cost of a low level of student achievement, i.e., an overall average school district pass rate of 55 percent on state tests.

The study uses three different definitions of the 55 percent passing rates on the TAKS exam. The first definition specifies that for districts with passing rates between 52 and 55 percent, researchers estimated the cost of moving the districts to 55 percent; for districts below 52 percent, they estimated the cost of moving the current rate one-third of the way towards 55 percent, which is a measure of the annual improvement mandated by Texas law. The second definition is the same as the first for schools below 52 percent, but requires all other schools (including those above 55 percent) to increase their pass rates by 3 percent. The third definition is the same as the second, but requires those schools with rates below 52 percent to reach the 55 percent standard in just one year.

Between $1.65 and $6.17 billion ($405 - $1,511 per student) to reach 55 percent passing rates, which is 5.9 and 22 percent of total state and local school expenditures in 2004, respectively.
Between $2.52 and $10.1 billion ($617 - $2,464 per student) to reach 60-90 percent average district-level passing rates.

The authors state that the minimum amount of money required to meet the NCLB and Texas accountability standards varies considerably across districts, “for reasons that are outside the control of local school officials” (21) (The study does not address NCLB’s 100 percent proficiency requirement for all subgroups by 2014).

The vast majority of the additional funds that the authors estimate are necessary are for three of the largest urban districts in the state: Dallas, Houston, and Austin, with totals that vary under different definitions of the 55 percent passing rates. Meanwhile the authors suggest that 26 districts (of the 43 in the study) require no additional money with the base definition of a 55 percent average passing rate and 29 districts require less than $10 million with a more ambitious definition of the 55 percent average passing rate.

The authors explain that the study substantially underestimates the costs associated with meeting the accountability standards for several reasons, including:

Despite NCLB’s requirement that all subgroups meet annual performance targets, the study only accounts for the costs of meeting average district passing rates. The study considers one district as an example in which the passing rates for blacks, Hispanics, and economically disadvantaged students were 7.8, 13.4 and 8.9 percent below the overall passing rate. The study does not assign a particular number, but acknowledges that the costs of improving the performance of these subgroups will be considerably higher than average.
The new TAKS standards for 2005-2006 included, for the first time, standards for social studies and science exams, as well as promotional exams in grades 3, 5, 8, and 11. The study again does not attach a specific number, but suggests that there will be costs associated with these standards that are unaccounted for in the study.

Measures. Just prior to the study, Texas changed its standardized tests from TAAS (the Texas Annual Assessment of Skills) to the more rigorous TAKS (the Texas Assessment of Knowledge and Skills). Because TAKS is new, the researchers did not have two years of test results on which to base their study. Therefore, they converted the last two years of TAAS scores into TAKS scores, using a schedule developed by the Texas Education Agency. The authors also examined: the tests taken by those students with disabilities who do not take TAKS; ACT and SAT scores; and dropout/retention rates.

Value-Added Approach. Researchers designed the study to measure improvements in test scores over time, seeking to find the costs associated with annual changes in passing rates consistent with Texas law and the annual yearly progress called for by NCLB, but only up to 55 percent average passing rates.

Efficiency. The authors also used an “efficiency” factor in estimating the cost of educating students, ostensibly to isolate those schools whose higher spending is a result of an inefficient use of resources. The study assumes that schools facing more local competition, e.g. from private schools, spend more efficiently, citing research that such schools have lower spending and better outcomes. Instead of addressing the issue directly, the study includes the Herfindahl index, which is designed to define counties as local “markets” for education. Since the index increases with competition and competition is correlated with efficiency, the authors suggest that the index serves as an appropriate proxy for efficient spending.

None

Statistical Cost Function Model
The goal of this method is to find the minimum amount of spending needed in each district to meet the required standards, given characteristics of the district. It attempts to do so by quantifying the relationship between per-pupil spending and student standardized test scores, taking into consideration student characteristics (such as poverty, limited English proficiency, disabilities) and characteristics of school districts (such as size, rurality, etc.), as well as the prices school districts must pay for teacher salaries. This methodology attempts to account for characteristics out of a district's control, such as cost of living, as well as those within a district's control, such as certain requirements set by the districts in hiring teachers. In addition, the authors use the “efficiency” factor described above.

None.

Plaintiffs in the West Orange Cove v. Neeley school funding litigation