Education Funding

Many American debates about education are wildly misguided. All the common structural or policy questions, from sparring between traditional versus charter public schools, calls for textbook reform, the spread of e-learning, time-shifting to conform to teenagers’ circadian cycles, or questions about the efficacy of standardized testing, pale in comparison to the one solution that is, truly, the only viable large-scale remedy for our educational woes: increased funding. It is unlikely that American education writ large will improve without significantly more money from both state and federal governments spent in low-income community schools.

How do we measure teacher and school quality to know that we have a quantifiable problem? Clearly there are bad teachers: those who do not inspire kids to dream and guide them through treacherous times, much less teach basic math or grammar memorably, consistently. But valid measurement, comparison, and inference are not easy in education.[1] 

The easiest place to compare teacher quality against other professionals is at the beginning of careers, when university test scores are supposedly still valid. According to Sandra Feldman, then President of the American Federation of Teachers, as of 2003 the teaching profession was attracting recruits with academic scores in the bottom 1/3 of their colleges.[2] Despite this claim, one widely quoted and accepted in public discourse, there is actually not much good data about the academic credentials of teachers versus other entry-level professionals.[3] As will be discussed later, the fact the U.S. teachers are underpaid suggests that, at least, American teachers as a whole are less skilled at the beginning of their careers than they could be with bigger monetary incentives.

Within the profession, standardized tests are often used as the baseline measure of quality. For example, RAND Corporation highlights value-added modeling and student growth percentiles, both based on standardized test scores, as accepted measurement methods.[4] Grading teacher quality by raw test scores is important, there is basic knowledge that kids should learn, but multiple choice tests miss so much of what is important in a successful classroom.[5] 

And yet, despite the lack of good data on teacher quality in the United States, we know that the American school system is not very good and needs reform. In the subjects and on the material for which standardized tests are most useful, American 15-year-olds score average or worse among OECD countries in math, science, and reading.[6] The test data corroborates research comparing U.S. teachers’ access to mid-career development to those in other countries. According to Stanford’s Center for Opportunity Policy in Education, “a small minority of American teachers receive the kind of sustained, continuous professional development that research indicates can change teaching practice and improve student achievement. In 2008, for example, most U.S. teachers received most of their professional development in workshops of eight hours or less over the course of a year . . . A summary of experimental studies confirmed what teachers already know–that professional development activities of under 14 hours appear to have no effect on teachers’ effectiveness.”[7] This compares unfavorably with many countries, which institute more rigorous and continuous training programs on a broader basis, giving their teachers more time away from the classroom to learn and improve.[8] This is where debates usually start to rage about changing the school system in one or more various ways.

The amount we spend on education often gets left aside. Many people think that the United States already spends enough on education, driven by the widely-reported fact that the U.S. spends more per pupil than any other country in the world, meaning that the issues must be structural.[9] Yet this top-line number, the amount spent per pupil, is woefully misleading. 

Let’s start by analyzing the problem in a narrow educational sense.

First, teacher salary comparisons across countries, a major component of overall spending, are not the correct comparison. American teachers are underpaid, despite making more in dollars than many of their international peers, because they live in the United States and compete with other American workers. Salaries for American teachers from primary school up through high school are approximately 70% of those of similarly educated American workers.[10] This is a smaller proportion than teachers make in about 84% of OECD countries.[11] Clearly, American teachers are, in general, underpaid. Compared to some countries, U.S. teachers are dramatically underpaid. The average American teacher salary needs to increase over 50% to reach the same salary, adjusted for purchasing power parity, as French teachers.[12] Also, in some cases such as Finland, teachers’ education is subsidized, meaning the salary number does not reflect the full investment that foreign nations make in supporting teachers’ standard of living. Teachers’ low pay decreases the incentives of motivated young people to commit their lives to the profession and is an important component of the perceived prestige of teachers.
 
Second, America spends more money than other countries on ancillary school services like security, which raise our overall spend without increasing education quality.[13] In New Jersey, schools funnel, on average, 32% of their per-pupil spend to support services and administrative staff.[14] Among OECD countries, America spends the second most on ancillary services behind only Sweden.[15] Ancillary services can and do indirectly improve education, especially when they provide for the basic needs of economically unstable children. However, services like busing students in rural districts to school increase America’s spend per pupil relative to other countries with relatively little in-classroom impact (assuming those children would reach the classroom somehow if that money were spent in-school).
 
And third, education spending is grossly unequal. In Connecticut, which is indicative of funding models around the country, “[l]ocal property taxes are the largest source of funding for public schools. Community wealth varies widely in our state and some communities have very low property tax rates, while other communities have high property tax rates. This means some communities are able to fund their schools at higher levels than others.”[16] Financing disparity in Connecticut is a yawning $17,397 per pupil, from a high of $30,191 to a low of $12,794.[17] This picture is photocopied across the country. For example, in New Jersey the gap between the richest ($60,129) and poorest ($10,181) is an astounding $49,948 per pupil, driven by the fact that in New Jersey’s 50 highest spending school districts, a simple average of 59% of every dollar spent in schools comes from local taxes.[18] The average national spend per-pupil obscures the pernicious reality that our most economically disadvantaged students receive substantially less investment, both in core education and ancillary services, than their more economically stable peers. It is no wonder that the system and the children are struggling.
 
The extreme inequality in education spending is an important component of the failure of our society to provide meaningful opportunities for economic and social mobility. Decoupling school funding from local wealth is, at its core, a question effecting both distributional equity and equity of opportunity. There are few arguments more compelling than the quaint notion that all children, before they are too tainted by the mounting faults of imperfect life, deserve a fair opportunity, represented by the simplest and most comprehensive measure we have yet devised: equitable monetary investment.
 
Equity of opportunity must start early. The long term benefits of pre-kindergarten care are well documented.[19] Leaving children behind at such an early, formative, and critical point in life, when there are no valid arguments to be made about personal responsibility and choice, is to condemn the child for the sins of the father or mother, and debases our society. State and federal lawmakers should use their tax and spend powers to invest in our youngest citizens, creating distributional equity between the children of wealthy citizens and the children of their poorer peers, by instituting free opt-out pre-kindergarten child care, meaning a child’s attendance is expected unless parents opt their children out.
 
Equity of opportunity must also be comprehensive. Students of all ages, from pre-kindergarten through high school, should have equitable access to a broad range of services. Schools provide education, health care (physical and mental), food, laundry, entertainment, and more. But not all schools provide all these services nor of even close to similar quality. One significant challenge that schools serving economically disadvantaged students face is that their students often not only have less access to these services at school than their richer peers but they also have less access to these services at home too. Government welfare spending should be centralized through schools and targeted towards children. Doing so increases incentives to attend and such a system ensures that welfare benefits children directly, the most vulnerable yet resilient of beneficiaries.
 
Finally, states should mandate a minimum spending level per pupil that is a percentage of the highest spend-per-pupil in their state. Alternatively, the federal government could mandate this minimum spend and use federal funds to supplement the shortfall. There are multiple reasons to support such a rule. First, it limits the ability of rich school districts, those in wealthy neighborhoods with high property taxes, to run away from schools in the rest of the state. Second, if implemented at the federal level, highly populated states also tend to be wealthier, meaning federal tax dollars will likely return to the states and communities from where they came. Also, the federal government’s spend would be limited because state, local, and private funds would make up most of the funding for almost every school in the country, whether or not they met the minimum spend-per-pupil threshold.
 
The failure of our education system is not a failure of overall resources, as indicated by America’s lead position in spend per-pupil, but a failure of human decency and equality. Assuming parents of students with the best education are not willing to invest less in their children, remedying America’s failing education system requires dramatic increases in both state and federal education spending, in both direct and ancillary services to our poorest schools. The additional funds must be levied in higher taxes or by cutting spending in other areas. Those tradeoffs are never easy, but achieving distributional equity and equity of opportunity in education, an investment with major positive social externalities, is worth every penny.

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[1] See, e.g., articles in the journal Educational Measurement: Issues and Practice, which has been publishing for more than 75 years on the topic.

[2] Paul Kihn & Matt Miller, Why aren’t our teachers the best and the brightest?, The Washington Post (Oct. 10, 2010), http://www.washingtonpost.com/wp-dyn/content/article/2010/10/08/AR2010100802741.html.

[3] Matthew Di Carlo, Do Teachers Really Come From The ‘Bottom Third’ Of College Graduates?, Albert Shanker Institute (Dec. 5, 2011), http://www.shankerinstitute.org/blog/do-teachers-really-come-bottom-third-college-graduates.

[4] https://www.rand.org/education/projects/measuring-teacher-effectiveness.html.

[5] Terry Heick, The Characteristics Of A Highly Effective Learning Environment, TeachThought, https://www.teachthought.com/learning/10-characteristics-of-a-highly-effective-learning-environment/ (accessed Sept. 30, 2017).

[6] Julia Ryan, American Schools vs. the World: Expensive, Unequal, Bad at Math, The Atlantic (Dec. 3, 2013), https://www.theatlantic.com/education/archive/2013/12/american-schools-vs-the-world-expensive-unequal-bad-at-math/281983/.

[7] Linda Darling-Hammond et al., How High-Achieving Countries Develop Great Teachers, Stanford Center for Opportunity Policy in Education (Aug. 2010), https://edpolicy.stanford.edu/sites/default/files/publications/how-high-achieving-countries-develop-great-teachers.pdf.

[8] Id.

[9] Associated Press, U.S. education spending tops global list, study shows, CBS News (June 25, 2013), https://www.cbsnews.com/news/us-education-spending-tops-global-list-study-shows/.

[10] Dick Startz, Teacher pay around the world, Brookings (June 20, 2016), https://www.brookings.edu/blog/brown-center-chalkboard/2016/06/20/teacher-pay-around-the-world/.

[11] Id.

[12] Id.

[13] Amy Sherman, Does the United States spend more per student than most countries?, PolitiFact Florida (Apr. 21, 2015), http://www.politifact.com/florida/statements/2015/apr/21/jeb-bush/does-united-states-spend-more-student-most-countri/. Also, http://www.nj.com/education/2017/05/the_50_school_districts_that_spend_the_most_per_pu.html.

[14] Ted Sherman, The 50 school districts that spend the most per student in N.J., NJ.com (May 16, 2017), http://www.nj.com/education/2017/05/the_50_school_districts_that_spend_the_most_per_pu.html.

[15] OECD (2014), “Indicator B1: How much is spent per student?”, in Education at a Glance 2014: OECD Indicators, OECD Publishing. http://dx.doi.org/10/1787/888933116908.

[16] Connecticut School Finance Project, Why is the System Unfair? (Accessed Sept. 27, 2017), http://ctschoolfinance.org/unfair-system.

[17] Connecticut School Finance Project, Spending Per Student, (Accessed Sept. 27, 2017), http://ctschoolfinance.org/spending/per-student.

[18] Id.

[19] Claudio Sanchez, Pre-K: Decades Worth Of Studies, One Strong Message, National Public Radio (May 3, 2017), http://www.npr.org/sections/ed/2017/05/03/524907739/pre-k-decades-worth-of-studies-one-strong-message.