In the 21 states examined, public K-12 enrollment declined in every state except for three states and the District of Columbia. The AP and Stanford found that public K-12 enrollment dropped by approximately 711,000 students in those locations. California and New York experienced massive enrollment declines, with nearly 271,000 and 133,000 students leaving public schools. 

By contrast, K-12 enrollments increased in other schooling sectors. Homeschool enrollment grew by about 184,000 during the pandemic, as likely would’ve been expected, with the homeschooling sectors in Florida and New York growing the most. 

Private school enrollments also grew, but more modestly, increasing by nearly 103,000. Florida, again, and Tennessee experienced the most significant growth in their private schools. 

Yet, the private and homeschool sector growth only accounted for about 40% of public school enrollment losses. Dee estimated that population changes, such as students moving to other states and declining birth rates, accounted for more than a quarter of public school enrollment losses. 

At the same time, the report estimated that 240,133 students remain unaccounted for. These unexplained losses featured most prominently in California and New York, where nearly 152,000 and 60,000 students remain missing, respectively. 

Some absences are likely due to unregistered homeschooling and families not enrolling their children in kindergarten, which is optional in nine of the 21 reviewed states. In these cases, Dee estimated that skipping kindergarten accounted for almost 40% of unexplained absences.

Nonetheless, some students have not attended school for multiple years now. Researchers have previously estimated that the lifetime earnings of students who experienced just one year of learning loss could be reduced by more than 9%, so there will be long-term concerns about many of these students and their futures. 

These public school enrollment declines have also hastened financial crises for many school districts that were unprepared for them, especially urban ones. For instance, Minneapolis Public Schools announced an impending fiscal crisis due to declining enrollment last fall.

With fewer students in public schools and an increasing number of families more comfortable with switching schools, public school districts will need to up their game as they navigate a more competitive education marketplace. Research shows that school districts can positively respond to competitive pressures by implementing measures like open enrollment. 

Policymakers should weaken school district monopolies, so students have options outside of their residentially-assigned schools. Oftentimes students drop out of school because of bullying by other students, not feeling like they fit in with classmates, not getting the academic attention they need, or conflicts with teaching staff. Policies, such as education savings accounts and open enrollment, provide students with flexible schooling options to transfer to schools that fit their needs. Education savings accounts, in particular, allow for significant educational customization, paying for tuition, books, physical therapy, transportation, and much more.

From the states

State policymakers continue to advance school choice proposals nationwide.

The Utah State Senate failed to pass a proposal (S.B. 166) to make microschools legal in the state.

In Idaho, the Senate Education Committee passed a proposal (S.B. 1038) that would establish approximately 6,600 education savings accounts. These accounts could be used to pay for various approved education expenses, such as private school tuition or textbooks. There are no income restrictions on the accounts. 

The Arkansas Senate passed Gov. Sarah Huckabee Sanders’ LEARNS Act (S.B. 294), which would initially establish education savings accounts for students who are homeless, in foster care, have disabilities, or are assigned to failing public schools. However, student eligibility would expand by 2026 to all K-12 students. At the same time, the proposal would also remove any caps on charter schools and student transfers through open enrollment. Currently, the bill has 25 cosponsors in the Senate and 55 cosponsors in the House, providing a supermajority and majority, respectively.

What to watch

South Carolina policymakers are thinking about expanding open enrollment. Proposals in the South Carolina House and Senate would expand public school choice, allowing students to transfer to public schools other than their assigned ones. Currently, some public school districts in the Palmetto State permit students to participate in within-district open enrollment, but the new proposal would require all school districts to participate in cross- and within-district open enrollment. During his testimony, Reason Foundation Senior Policy Analyst Christian Barnard recommended adding transparency provisions to strengthen the proposal.

Texas governor’s State of the State address calls for school choice reforms. Texas Gov. Greg Abbott called K-12 education an “emergency item” this legislative session. Noting that Texas successfully implemented education savings accounts (ESAs) for students with special needs during the pandemic, Gov. Abbott stated that Texas now needs to establish universal state-funded ESAs for all Texas families. 

Recommended reading 

A Poor Poverty Measure
Ishtiaque Fazlul, Cory Koedel, and Eric Parsons at Education Next

“While it has been understood for some time that school lunch enrollment as a poverty indicator is blunt and prone to error, the magnitude of the problem has not yet been fully appreciated. In exploring the rules, features, and processes of the National School Lunch Program, we find that the program’s design, incentives, and lack of income-verification enforcement likely contribute to the oversubscription.”

Stockton, Calif., School Officials Could Face Criminal Charges after Audit Finds ‘Sufficient Evidence’ of Relief Fund Fraud
Linda Jacobson at The74

“The audit by an independent California agency largely focused on a questionable $7.3 million contract paid for with pandemic relief funds. In 2021, former officials appeared to ram through the purchase of 2,200 ultraviolet air filters designed to kill COVID despite multiple warnings that they weren’t following laws and procedures, the report said.”

___________________________________________________________________________

Are you a state or local policymaker interested in education reform? Reason Foundation’s Education Policy team can help you make sense of complex school finance data and discuss innovative reform options that expand students’ educational opportunities. Please reach out to me directly at jude.schwalbach@reason.org for more information.  

The post Funding Education Opportunity: Examining public school enrollment losses and sectors with gains, state education legislation, and more appeared first on Reason Foundation.

Reason Foundation’s Ari DeWolf and Christian Barnard recently sat down with the bill sponsor, Arizona State Senator Sine Kerr, to discuss the new policy and how she believes removing unnecessary busing regulations will help families and schools across the state.

DeWolf: Before we talk about the substance of your K-12 transportation policy reform from the 2022 session, would you share a little bit about your background before becoming a member of the Arizona State Senate? What got you involved in public policy and in public life?

Senator Kerr: Yes. Thank you so much for that. I always love to talk about my background because I think it is relevant to any American citizen who has even had a fleeting thought of becoming an elected official. My husband and I are longtime dairy farmers in Buckeye, Arizona, which is about 35 miles west of Phoenix.

Through agriculture, I got involved in leadership programs from the Arizona Farm Bureau with United Dairymen. I began taking leadership classes and anything else I could get my hands on. That’s where I learned to love engaging in public policy. I spent a lot of time at the state legislature meeting with members and advocating on behalf of agriculture.

Early on, it was apparent to me. that government regulation could really hurt you – and hurt you quickly. I understood how critical it was to have decision-makers who understood the impact each and every piece of legislation could have on farmers and ranchers, not only in Arizona but across our country. That carried over for me a love for policy and a recognition of how critical it is to have decision-makers who understand their impact on small businesses and other entities and folks trying to do what they do best.

DeWolf: What first made you see the need to reform the way K-12 institutions are incorporating or utilizing 11-to-15-passenger vans to meet students’ transportation needs?

Senator Kerr: This was a result of a first-of-its-kind in-the-nation grant program put into effect in Arizona last year. Through the granting application process, they found a large number of students came from rural schools. Lack of transportation flexibility was a frequently made comment, especially in those areas.

Great Leaders, Strong Schools, asked if I would be interested in the issue. I said, “Absolutely.” I represent a rural area. I raised our family in a rural area and they all attended, what I call, a small, rural farm school. Oftentimes, in rural areas, the roads are not maintained like in our urban areas. There are long distances that many of our bus drivers had to go, either to pick up students or deliver them at the end of the day. It was, in my opinion, a no-brainer and very common sense. We would offer flexibility to districts wanting to take this up. I heard from Reservation school officials about how this could be beneficial. And when, in our urban areas, there is a route that didn’t have a whole lot of students, then they could use this type of vehicle and be way more efficient.

Most importantly, are the safety features added to the program. These vehicles are already being utilized by sports teams and other groups. They have already been utilized to safely transport children for many, many years. This new law just allows these vehicles to be used on regular bus routes.

Barnard: I think every state needs these flexibility measures, especially as school choice proliferates. Students are zigzagging everywhere, trying to attend the school best for them. Yellow school buses are great, but they’re not able to serve every student, in every case. And they can be really expensive for districts trying to pick up only four or five students. So where do you see the benefits of this legislation? How do you see it affecting school choice students in Arizona?

Senator Kerr: There’s a great benefit to school districts of any size. As we all know, there’s currently a shortage of drivers who have CDL licenses. Fuel costs are through the roof. And there are maintenance costs for the standard 80-passenger buses.

For our school choice students, it provides an opportunity for those who wouldn’t have it. Parents could not always secure transportation for their children. This could be organized in those circumstances. I heard from a wonderful woman who oversees a school for autistic students and she expressed how beneficial this will be. Again, providing that flexibility too often lacking in public policy. And helping the drivers, who have to go through all the safety training with only one exception – they don’t have to have a CDL.

Barnard: What kind of pushback did you get to the legislation? What kind of pushback can policymakers in other states expect if they introduce similar legislation?

Senator Kerr: The biggest pushback was around safety concerns. And, again, it’s clearly outlined in the bill. Our Department of Public Safety, which oversees our current training for our bus drivers and bus safety, will oversee this program as well. The same agency dealing with safety and rulemaking on all the important safety decisions will still make decisions for these 11-to-15-passenger vehicles. There is also the Student Transportation Advisory Council overseeing the use of any vehicles. They will work in tandem. They are able to offer opinions and oversight on safety features as well. That was the biggest pushback I got. And really, I argued against that because it simply isn’t the case. It will be a very safe program.

The other pushback was with insurance concerns. If a district doesn’t have an insurance company agreeing to back them, then obviously, they are unable to utilize this program. It’s an opt-in opportunity, it’s not required. Hopefully, most of the districts needing the flexibility are be able to work with their insurance agencies to establish a good plan.

Barnard: What interest have school officials shown so far? You said school districts that were applying for the grant wanted more flexibility. Do you think there’s going to be a lot of take-up by districts in the next year or two?

Senator Kerr: I do. Many rural districts, and even our larger, urban districts, have thanked me for the opportunity to have more tools in their K-12 transportation toolbox. I’m excited to learn how districts utilize this refreshing flexibility.

Barnard: And that makes sense because schools are already using them for things like transporting the tennis team or debate club. There are some federal barriers to purchasing vans for school transportation, but many districts already have these vans and they’re just sitting in the lot. Do you think many districts already have 15-passenger vans?

Senator Kerr: I do. And with the bus driver shortage, some bus routes get canceled. I can’t imagine, as a parent, getting a message while running out the door that says, “Oh, I’m sorry, we don’t have enough drivers. We won’t be running your route today.” It creates quite a bind for families. We’re going to alleviate a lot of bus schedule challenges because again, those drivers won’t have to have a CDL. But they are trained. The students are in good hands. The vehicle will have all the required safety features. It’s going to be a win-win for everyone.

DeWolf: As Christian referenced before, this is an idea policymakers in other states are likely to take up. Do you have any advice on how your leadership style allowed you to shepherd this bipartisan bill into law?

Senator Kerr: Yes. I guess I just bring the way I’ve always conducted myself. I’ve always been a good listener and, especially with all the bills we go through, I’m always listening to the pros and the cons. I feel it’s in that tension, it’s in that discussion, where we really craft the best legislation for the state or for that group a bill is affecting. I used to resist the tension and the fight. You can be at odds with members in your own caucus or members in the party opposite. I finally learned to embrace that tension, because again, that’s where the best legislation is hammered out and ideas emerge that you didn’t consider. Perspectives from all angles are really important. They can be put into a bill, making a good bill, a great bill.

The post Arizona State Senator Sine Kerr on transforming student transportation policy appeared first on Reason Foundation.

You can explore the interactive model here: Arizona K-12 Funding Model

Another unique feature of the Arizona K-12 Funding Reform Model is that it allows users to consider cases where school districts may want to opt-in to different funding formulas. While this isn’t an option for school districts under current law, it’s a policy that’s been proposed by recent legislation. Specifically, users can consider how any changes to the model might incentivize school districts to opt-in to receive funding from the state’s charter school funding formula or to opt for a per-pupil transportation funding amount rather than receive transportation funding based on school bus route miles.

The model’s features are intended to give policymakers and researchers insights into how Arizona’s flawed school finance system can be streamlined and strengthened. While K-12 finance reform is a big political lift, the tool empowers users who have some familiarity with the state’s funding system to explore how reform options could impact school districts and charters across the state.

The model includes several pre-loaded scenarios that will be explored below. Users should note that none of the three scenarios are being endorsed by Reason Foundation and they are only being used to understand the model’s capabilities and to explore potential reforms.

Scenario 1: Some Changes Proposed in SB 1269 of 2022

The first pre-loaded scenario in the model tool mirrors some of the changes included in a bill proposed in the Arizona legislature during the 2022 session, SB 1269. This scenario simulates the following changes to the state’s funding system:

• Increases the Base Level Amount per student to $4,413.37 (2.5% increase, based on the 2020-2021 base per student amount)
• Eliminates the Teacher Experience Index (TEI)
• Eliminates the Additional Teacher Compensation
• Eliminates the Transportation Revenue Control Limit (TRCL)
• Proposes per pupil transportation amount to $347 (for districts that want to opt-in to a flat, per student transportation funding amount)
• Adds a middle school weight of 0.198 (this change wasn’t in SB 1269)

Scenario 1 eliminates some unfair aspects of the state’s funding system, such as the teacher experience index (TEI), which directs greater funding to half of the state’s districts with more experienced teachers. Notably, it also repeals the transportation revenue control limit (TRCL), a funding source that allows districts to raise local transportation funds based on outdated student enrollment counts without voter approval. To counterbalance these cuts, Scenario 1 also increases the 2020-2021 base funding amount per student by 2.5 percent.

The model’s map and summary charts provide helpful data that estimates how these changes could affect Arizona school districts. Under Scenario 1, 121 school districts would see a reduction in overall funding, 104 would see an increase, and one district would see no change. Statewide, the average per pupil funding for Arizona district students would increase from $9,050 to $9,159 per student, and the amount of state equalization assistance required from the state budget for both districts and charters would increase from $4.992 billion to $5.244 billion (a $252 million increase).

Users can also look at the Transportation Comparison under the Modeled Output selection, which shows how many districts would have an incentive to opt into Scenario 1’s flat $347 per pupil transportation funding amount rather than receiving funding as they currently do under a transportation route mileage-based funding formula. This view shows that 70 districts would receive more transportation funding under the flat per-pupil allocation. These districts that opt for a flat per pupil transportation allocation would also have the added benefit of additional spending flexibility.

Scenario 1 simulates several important and much needed changes to the state’s K-12 finance formula. All eliminated funding factors such as the TEI and additional teacher compensation measures distort student funding fairness. But the most impactful component of Scenario 1 is the elimination of the TRCL. Statewide, districts receive about $80 million in additional funding from TRCL and it is a major revenue source for many of Arizona’s small school districts. For instance, users can hover over the southern region of the state with their cursor and see that some of the small districts in this region would lose substantial funding from the elimination of TRCL (e.g., Sonoita Elementary District). While this does not mean that eliminating TRCL isn’t possible or necessary, it is a reality that policymakers will have to consider when reforming Arizona’s funding system.

Scenario 2: Cleaning Up the Formula and Boosting the High-Incidence, Low-Need Special Education Weight

Scenario 2 simulates four changes included in Scenario 1. These are:

• Increases the Base Level Amount per student to $4,413.37 (2.5% increase, based on that year’s base amount)
• Eliminates the TEI
• Eliminates Additional Teacher Compensation
• Increases the weight for “DD, ED, MIID, SLD, SLI, and OH” to 0.1 (this is AZ’s mild disability weight and the largest student disability group by far)

Like Scenario 1, Scenario 2 also eliminates unfair features of Arizona’s funding formula and again increases the base funding amount per student by 2.5 percent. Scenario 2 also proposes an increase to the mild disability weight from .003 to 0.1, or from $13.24 to $441.34 for each student in this category. This attaches additional funds to students with a developmental delay, emotional disability, mild intellectual disability, specific learning disability, speech/language impairment, or other health impairment. Students in these groups comprise a large majority of Arizona’s special education population and most of them spend the biggest portion of their time in general education classrooms.

The map and summary charts estimate how Scenario 2 would impact every district and charter in the state. Under this scenario, 138 school districts would have higher funding, 59 would have lower funding, and 29 would see no change compared to current levels. Statewide, the average funding for traditional district students would increase from $9,050 to $9,105 per student, and the amount of state equalization assistance required for districts and charters would increase from $4.992 billion to $5.078 billion, an $86 million increase.

Scenario 2, like Scenario 1, would eliminate some of the most glaringly unfair features of Arizona’s funding system and counterbalance those cuts with both an increase to the base funding amount and a substantial boost to the mild disability special education weight. Interestingly, Scenario 2 wouldn’t be nearly as costly to the state budget as Scenario 1 because rather than adding a weight for all middle school students as the first scenario does, it would include a targeted funding increase for special education students.

Scenario 3: Merging Funding Formulas for Charters and Districts

The model’s District-to-Charter Formula view allows users to analyze how many school districts would be incentivized to opt into the charter school funding formula when considering changes made in the model. Interestingly, this view shows that even when no changes are made to the current funding system, 75 Arizona school districts would already have an incentive to opt into the charter formula. Although this isn’t an option under current state law, it was a proposed change in SB 1269 in 2022.

This is because the charter formula provides additional state funding primarily for facilities (known as Charter Additional Assistance, CAA) while traditional districts rely on voter-approved bond levies and other levies for school operations to raise additional funds beyond what the formula provides. While many traditional districts can raise more locally than what charters receive from CAA, these 75 districts either raise less from their local levies per student than the charter CAA amount or they can’t pass any local levies at all.

Scenario 3 gives users a good opportunity to further explore this charter formula opt-in feature under the following changes to the District-to-Charter Formula tab in the Model Input Panel:

• Increases CAA (Pre-schoolers with disabilities, grades K-8) from $1,875.21 to $2,200 per student
• Increases CAA (grades 9-12) from $2,185.53 to $2,500 per student

If users look at the District-to-Charter Formula map, they can see that these parameter changes in Scenario 3 increase the number of districts that would be more highly funded under the charter formula from 75 up to 96—about 42 percent of the state’s school districts. This insight highlights how further increases to CAA could both close the average funding gap between districts and charters and make the reliable funding streams from the charter formula a more appealing option for a large share of Arizona’s traditional school districts who can’t easily raise funds from local levies.

While the model summary charts themselves don’t allow users to estimate the cost to the state budget of 96 districts opting into the charter formula, users can download the modeled data directly and quickly generate an estimate of this cost. If all 96 school districts that would be better off under the charter formula opted in, it would cost the state an estimated $188.7 million. Additionally, because the CAA amount would also increase for each charter student, users can pull from state-reported charter enrollment data to estimate that there would be an additional state cost of $74.8 million for the funding increase to charters.  

Conclusion

The three scenarios explained above are only a sampling of the Arizona K-12 Funding Reform Model’s capabilities. None of these scenarios should be interpreted as explicit policy recommendations, but they illustrate how this new tool provides users with transparent data and allows them to test the viability of potential reforms to Arizona’s school finance system.

The post Modeling Arizona education funding reform scenarios appeared first on Reason Foundation.

You can explore the interactive model here: Arizona K-12 Funding Reform Model

Arizona’s K-12 funding system is broken, with research showing the state’s highest property-wealth school districts generate $5,599 per pupil more on average than their lower-wealth counterparts. For instance, Queen Creek Unified School District gets 184% more per student than Isaac Elementary School District due to factors that have nothing to do with student needs. Matthew Ladner, director of the Arizona Center for Student Opportunity, also notes that nearly one-third of districts receive at least twice as much funding per-pupil as Snowflake Unified, Arizona’s lowest-funded district.

But gaping differences in funding levels aren’t the only problem. Equally as important is the fact that the school finance system—a relic of the 1980s—wasn’t designed to support an education ecosystem with robust school choice for families. With 21% of Arizona’s K-12 public school students now attending charter schools and many more exercising open enrollment, it makes little sense to continue tying dollars to local property wealth and the whims of low-turnout revenue elections.  

Over the past decade, the number of charter students in the state has nearly doubled yet, on average, students in charters receive $1,308 less per pupil compared to school districts and not all dollars follow students across district boundaries when families decide to transfer, leaving hundreds of thousands of students shortchanged. Reason Foundation’s Christian Barnard summarizes Arizona’s situation perfectly:

“School choice is becoming mainstream, and that’s great news. But before long, states will also need to grapple with updating school-finance formulas that fail to fund all kids fairly, are too reliant on local taxes, and don’t easily accommodate student movement between schools.”

Unfortunately, school finance reform is a daunting task for state legislators even when there’s widespread agreement on its merits. For example, it was only after years of deliberation that Tennessee finally adopted a student-centered funding system this past May, and until recently Texas was allocating billions of dollars each year through its Cost of Education Index, which adjusted funding using demographic data from 1989-1990.    

The reality is that politics is deeply ingrained in public education, and calls for greater equity only get you to the start line of the funding reform marathon. Many policymakers just want to know: how would a policy affect my school district’s bottom lines?

This type of information can be tough to come by, which is why Reason Foundation’s education policy team developed the Arizona K-12 Funding Reform Model. This tool, which streamlines several datasets into one dynamic interface, allows policymakers and advocates to explore complex policy solutions in real-time, including the estimated impacts on 226 school districts and 427 charter schools, and the state’s K-12 budget. Users can explore myriad combinations of reforms including adjustments to special education weights, changes to the base level amount, and the effects of replacing local levies with state dollars.

Our team mapped three reform scenarios, which are discussed here, to help users get started.

But this is only the start, as we aim to revise our model over time to reflect updated data, stakeholder feedback, and innovative policy solutions. Arizona’s K-12 funding system is in desperate need of repair, and stakeholders should be empowered with the tools needed to get reforms across the finish line. To learn more or to schedule a training, please e-mail Ari.DeWolf@reason.org.  

The post Arizona K-12 Funding Reform Model appeared first on Reason Foundation.

The administration recently proposed a new Department of Education rule to make it more difficult for nonprofit organizations to open charter schools, forcing them to comply with many unnecessary regulations and bureaucratic paperwork requests. The rule would also prevent for-profit charter school organizations from accessing federal start-up grants.

Regrettably, the president’s approach is out of touch with what parents across the country are demanding for their kids: more choices outside of the traditional public school system.

Nationwide, public school enrollment has fallen since the onset of the COVID-19 pandemic as many teachers unions blocked in-person learning and parents sought other opportunities for their kids. Charter schools, in contrast, largely successfully navigated the pandemic. A January 2022 poll of more than 1,200 parents with school-age children by EdChoice, a nonprofit advocating for school choice, found that 92 percent of parents with charter school students were satisfied with their children’s educations compared to the 76 percent of traditional public school parents who were satisfied.

Stanford University’s Center for Research on Education Outcomes found privately managed charter schools in New York, California and Washington state were “very successful” at meeting students’ needs from the onset of the pandemic in March 2020 through June 2021. Similarly, a National Center for Education Statistics survey of more than 80,000 public- and private-school teachers and principals found, “Sixty-three percent of private-school teachers, during the COVID-19 pandemic in the spring of 2020, reported using scheduled real-time lessons that allowed students to ask questions through a video or audio call” but just 47 percent of public-school teachers did the same.

The Biden administration’s proposal is also disappointing because it ignores the important role for-profit enterprises play in public education. Traditional public schools routinely use for-profit companies to provide students with transportation, technology, building management and much more. Although there have been some egregious examples of self-dealing in the for-profit charter school world, policymakers shouldn’t paint with too broad a brush. Some for-profit charter management organizations have produced impressive results for students.

“In the recent U.S. News & World Report Best High School rankings, four of the five top schools in the country are associated with a for-profit education company,” noted Andrew Rotherham, co-founder of Bellwether Education Partners.

Equally concerning is how Biden’s proposal would place new burdens on non-profit entities that want to use federal funds to open charter schools in their communities. To access federal funding under the proposed rule, nonprofits looking to establish a new charter school would need to create reports for the federal government proving there is a demand for a new school, detailing myriad ways the school plans to engage with the community, an in-depth analysis of neighborhood demographics, how the school plans to attract a racially diverse student body and staff, and more.

The National Alliance for Public Charter Schools said Biden’s proposal “would create roadblocks that would make Charter Schools Program funds almost completely inaccessible — particularly to new schools in Black, Brown, rural or indigenous communities.”

In many communities, charter schools are basically privately managed public schools that are stepping up to give students better options. In the case of for-profit schools, ideally, they wouldn’t need federal funding at all, but the current education finance system is so dysfunctional that many do, and thus the administration’s targeting of them is misguided.

Across the country, parents are telling elected officials they need more education options for their children. Sadly, the Biden administration’s charter school rule would do the opposite, limiting education options for the communities that need them most.

A version of this column previously appeared in InsideSources.

The post Biden keeps his bad promise on charter schools appeared first on Reason Foundation.

That’s why State Rep. Michelle Udall (R-LD25) has introduced a strike-everything amendment to Senate Bill 1269, sponsored by State Sen. Vince Leach (R-LD11), that would make important reforms to Arizona’s current K-12 finance system. The proposal would increase the amount of education funding most Arizona students receive each year and improve the overall fairness of the state’s education finance system. 

While critics of the proposal are concerned that the legislation is moving too quickly and too late in the legislative session, this reform is desperately needed for Arizona students and schools.

Arizona’s SB 1269 would eliminate several often-criticized components of the state’s school funding system. These components include additional funding for school districts with more experienced teachers and a transportation funding mechanism that allows districts to raise funds based on outdated student enrollment figures. 

Importantly, the proposal would also address some of the stark school funding disparities across Arizona school districts. By allowing school districts that can’t raise additional local funds via bonds and tax overrides to access additional funding streams through a State Student Funding Formula, the proposal would be a boon for property-poor school districts that have struggled for years to keep up with their neighbors who pass bonds and overrides to raise extra funding. With voter approval, these school districts could opt-in to a new state funding formula, which provides stable, reliable, and equalized funding for students.

This provision would make a meaningful step toward severing the tie between local property wealth and school funding in Arizona. Eventually, other districts that are tired of going back to local voters to raise more money every few years could also sign-on.

Another consequential change in the legislation is the repeal of the Transportation Revenue Control Limit (TRCL), which is a provision in Arizona’s funding system that allows districts to raise additional dollars locally without voter approval to fund transportation based on old student counts. This is an unfair provision that arbitrarily favors some school districts based on historic enrollment patterns and legislators have been aware of this issue for decades.  

In addition to moving away from TRCL, the legislation would provide districts another opt-in opportunity to receive a flat per-student amount for transportation rather than continuing to receive mileage-based reimbursements for transportation. This is another needed change that would make Arizona’s transportation funding more adaptable to the state’s robust school choice environment where students frequently attend school outside of their residential boundaries. It would also provide transportation funds for charter schools, which currently serve over 20 percent of the state’s students. 

Other funding formula provisions that SB 1269 would eliminate, such as the teacher experience index and additional teacher compensation, should also be welcomed by advocates of funding equity. The teacher experience index unfairly directs additional dollars to districts with more experienced teachers, regardless of student needs. This practice is especially problematic given research indicating that additional teacher experience is often negatively correlated with student need levels. Also, additional teacher compensation isn’t available to charter schools, which receive an average of $1,308 less per student when compared to district schools.

While this reform would be consequential, Arizona Senate Bill 1269 would only be a first step that addresses some of the most glaring problems in the state’s education funding system. 

At some point, the burden of proof should shift to those upholding the education system’s status quo. Critics of the SB 1269 need to defend why nothing should change after years of lawsuits and multiple analyses exposing the deep unfairness of Arizona’s school finance system. 

Arizona’s students, particularly those in the state’s lowest-funded school districts, can’t afford to wait any longer. 

A version of this column previously appeared in the Western Tribune.

The post Arizona’s school funding system is outdated and broken appeared first on Reason Foundation.

Ironically, however, many Californians are leaving the state behind. For the first time in California’s history, the population is shrinking. Expensive housing prices, high state and local taxes, and the state’s overall high cost-of-living are the drivers generating the most headlines about people moving out of California. But for families with children, the state’s slow K-12 school reopening decisions may have also been a motivating factor in deciding to flee.

California’s K-12 enrollment declined by 160,000 students during the COVID-19 pandemic. In May 2021, a survey of California voters conducted for the California Policy Center included a small subsample of parents with children in school. The poll found only 26 percent of parents said their kids were attending in-person school full-time and just 31 percent rated the job done by California’s public schools as “good” or “excellent.”

Is there a way for public schools to earn back their trust? An obvious start is for public schools to reopen for full in-person instruction this fall, as most currently plan to do. But that may no longer be enough.

This year, many students and parents got a taste of the benefits offered by homeschooling, learning pods, and private schools.  More families now see those as better long-term options than the one-size-fits-all educations public school districts offer.

Sixty-two percent of respondents to the survey agreed with the statement: “The pandemic has shown people that there are other ways to educate kids than through traditional public schools.” Fifty-four percent also said they would support a statewide ballot initiative to use public education revenues to fund education savings accounts (ESA)—which allow parents to use state education funds for public, private, charter, or parochial schools as well as tutoring and books. It is also important to note that this support was inversely proportional to income as low-income families were more attracted to expanded educational opportunities in the state. Sixty-four percent of those with household incomes below $40,000 supported the education savings accounts initiative, which was 18 percent higher than support from those with household incomes at and above $150,000.

This appetite for more flexible education in California reflects national trends. Homeschooling more than doubled during the COVID-19 pandemic and more than 30 states have introduced bills to start or expand educational choice in their legislative sessions this year.

California can make its public schools more attractive by mimicking innovative programs like Idaho’s Advanced Opportunities Program, which promotes greater flexibility and choice for families with kids in the traditional public school system. When an Idaho student gets to seventh grade, their family is provided with $4,125 to help customize that child’s education. For some students, this means adding summer or online classes to their course load. For others, it involves getting a professional certification or enrolling in career-centered classes and apprenticeships.

During the 2016-17 school year, the first official year of Idaho’s Advanced Opportunities Program, dual credit course enrollment (where high school students enroll in college classes) tripled and advanced placement (AP) exam participation doubled. And participation rates continued to increase over subsequent years. In 2019, Idaho’s state legislature expanded the program to allow for career and technical education.

The state’s students can now take courses in heating, ventilation, and air conditioning (HVAC) technologies, electrical, plumbing, emergency medical services, software development, and more—all while enrolled in their public schools.

To prevent more families from leaving California, and to try to win back the 160,000 students who have left public schools over the last year, the state should follow Idaho’s lead and move away from its one-size-fits-all K-12 education system. Students and parents seeking choices, flexibility, and tailored education options shouldn’t have to leave California to get them.

A version of this column originally appeared in the Orange County Register.

The post California’s Public Schools Need More Choices and Flexibility appeared first on Reason Foundation.

In most states, it is difficult or impossible to obtain data on student transfers and the rate at which students are allowed to attend a public school that is outside of their assigned school district’s boundaries.  Although Texas still has room to improve in its own reporting measures, the state is ahead of most of its peers in this regard and the school transfer data they do make available can help to assess if the state’s families have adequate educational opportunities outside of their own residentially-assigned school districts.

Student transfer policies like this are commonly referred to as open enrollment and research shows that families use open enrollment for varied reasons, including to access specialized programming and to escape bullying.

Reason Foundation and Texas Public Policy Foundation created the Texas Student Transfer Dashboard, to help shine a light on the state’s open enrollment trends. The dashboard unearthed a few key findings regarding student transfers in Texas.

First, there is strong demand for open enrollment. Three percent of Texas students transferred to a school outside of their home school district in the 2018-19 school year, which means that about 164,000 students benefitted from educational opportunities across district lines.

For comparison, the student population that transferred out of their home district represents a little more than half of the state’s charter student population in the 2018-2019 school years.

The Reason Foundation-TPPF analysis also revealed that students are transferring into higher-performing school districts and out of lower-performing ones, which holds true when looking at statewide and metro area data.

The chart below shows transfer trends categorized by school district accountability grade. For example, 39,525 students transferred into A-rated school districts while 26,876 transferred out, representing about 3.8 percent and 2.6 percent of these districts’ populations, respectively. Overall, transfers into school districts are relatively higher for A-rated districts, about identical for B-rated districts, and lower for C, D, and F-rated districts—where transfers out of the school district are higher.

Similarly, it’s also useful to examine student transfer flows by accountability grade, as displayed in the chart below. For example, 91 percent of students who leave C-rated school districts transfer into school districts with an A or B rating. In aggregate, about 45,000 Texas students transferred to a higher-performing school district that was at least one letter grade above their residentially-assigned school district.

The vast majority of Texas students attend schools in B-rated districts, thus the bulk of transfers are from one B-rated school district to another. However, this is not necessarily a lateral move since districts sometimes have substantial variation in the quality of their schools, and, more importantly, accountability scores don’t always capture factors that are important to families when choosing schools. As such, even identically-rated school districts cannot be considered homogenous or interchangeable entities since all students have unique needs.

While Texas’ open enrollment data provide a glimpse at some key trends, it is clear that more transparency is needed.

Currently, it is impossible to determine the demographics of transfer students, their reason for transferring, or even the specific schools they are leaving from and going to. In fact, even basic information—including the transfer policies of more than 1,200 school districts—isn’t collected and publicly reported in a way that is easily accessible for families and policymakers.

While Texas’ open enrollment data is vastly better than most states, it still falls short of providing stakeholders with the information they need to make sound policy decisions. Steps should be taken to ensure these and other data—particularly school districts’ transfer policies—are collected and reported regularly.

The post Examining Student Transfer Data in Texas appeared first on Reason Foundation.

Prince George’s County Public Schools (PGCPS) in Maryland entered a deal where a private consortium will design, build, finance and maintain six new K-12 schools in the county for 30 years. The contract looks to take advantage of private-sector resources in ways that have gained traction in many other public infrastructure and service arrangements, including highways, water systems, courthouses, and other government buildings. Instead of merely just entering traditional “design-build” contracts, agencies increasingly look to find ways to utilize networks of public and private actors that can remain committed to keeping infrastructure in a consistent and satisfactory state of use throughout the useful life of the infrastructure. In doing so, they’re transferring risks of designing, building, financing, and maintaining infrastructure assets into actors best equipped to handle them.

While the private sector does regularly perform those functions individually in schools, the Prince George’s County Public Schools long-term partnership agreement better aligns the private sector’s profit incentive with the public sector’s desire to keep facilities in a consistent state of good condition. Knowing they are on the hook for maintaining facilities for decades and ending the agreement with the facilities in good condition, the private partner will likely look to avoid costly deferred maintenance issues that might arise later down the road by spending more money upfront on quality construction materials, design techniques, and maintenance schedules that aim to minimize the deterioration of assets over time and ensure an effective lifespan.

Prince George’s County had a very familiar problem to school districts across the country—relying on school buildings for longer than their intended lifespan. Just as putting off maintenance on a highway can lead to greater replacement costs later, the failures of many government entities to properly plan for, and fund, more preventative maintenance actions and implement long-term solutions causes problems. And their growing size can make getting the right projects funded and selected very difficult and complex.

Educating nearly 150,000 kids is a difficult enough task in itself, but effectively operating and maintaining the billions of dollars in buildings and assets that are needed to facilitate their education is yet another vast area of needed expertise.

With 40 percent of its buildings over 50 years old and an estimated $8.5 billion needed —for which only $210 million is annually available— to repair, replace and upgrade existing facilities, the PGCPS saw an opportunity to find committed help in the private sector to handle those risks, while allowing them to better focus on educating students.

PGCPS retains ownership and control under the contract, which includes provisions that major construction elements are to be completed in under four years as opposed to the up-to 17 years it would’ve taken for construction if the district did not use the public-private partnership. As part of the agreement, PGCPS maintenance staff will complete and assist some of the work, too.

Financing is another dilemma facing school districts and state and local governments. While governments have inherent interest rate advantages over the private sector in obtaining loans, issuing new debt comes with its own credit rating risks and political risks that private financial capital considerations may be able to handle or avoid.

With PGCPS, the quicker construction timeline and overcoming deferred maintenance issues was enough to offset the more expensive cost of private capital, ultimately generating an estimated $180 million in savings over a traditional “design-build-bid” option.

This deal is a structure that works well in infrastructure globally. The public sector retains control, oversight, and of the operation, as well as the ownership of its facilities, while the private partners deliver infrastructure and services to the agencies, often with innovations, speed, and cost savings that government agencies would be unable to achieve on their own.

With K-12 schools, the advantages of entering a P3 to build and maintain schools should be clear. School districts do not build new schools very often. Therefore, while local government boards of education do have some knowledge of how to design educational facilities to their needs, other grittier details over construction and maintenance may fall mostly outside of those agencies’ typical expertise. But by tapping into private expertise through a P3, the local agencies get infrastructure delivered to its specifications, with the added assurance that repair and maintenance problems are handled by parties that have readily available resources to complete the work.

While the Prince George’s County Public Schools public-private partnership deal appears to be the first of its kind for K-12 schools, colleges have increasingly embraced the P3 model to similar ends. The fast-growing University of California-Merced completed the construction phase of a campus expansion P3 last year. That deal includes provisions that hold the private partner accountable for meeting the school’s ambitious environmental goals for sustainable growth.

Prince George’s County’s P3 is something that other school districts should explore. Tapping the private sector to design and manage school facilities and preventing the costly and problematic deferred maintenance issues many school districts confront is worth examining. By entering public-private partnerships, local governments, school boards, and districts can transfer costs and risks they are often ill-equipped to handle over to private entities, allowing school leaders to focus on education.

The post A Landmark K-12 Education Public-Private Partnership appeared first on Reason Foundation.

Most notably, a commentary in San Antonio Express-News claimed that Texas charter schools receive $1,150 more education dollars per student compared with their local school district. Although it isn’t exactly clear how this figure was calculated, there’s no doubt that it falls short of providing a fair assessment of the facts.

To understand why this is the case it helps to take a quick look under the hood of how the Texas education funding system operates.

Texas allocates educations dollars based on two primary funding components. The first component is maintenance and operations revenue, which provides the bulk of education funding and pays for budget items like staff salaries, supplies, and administration costs.

Charter schools receive this funding in largely the same manner as traditional public school districts, but with a few key differences. Most notably, all charter schools receive a small and mid-sized allotment—about $1,058 per pupil—which is otherwise reserved for traditional school districts with fewer than 1,600 or fewer than 5,000 students, respectively.

Herein lies the source of the charter funding advantage confusion. Because the majority of charter school students reside within the boundaries of large school districts that aren’t eligible for this allotment, some are quick to claim that this means charters get more funding. And if you were to only look at maintenance and operations dollars, they’d be right: our analysis shows that in 2019 charter schools in Texas received an average of $692 more maintenance and operations funding per pupil than traditional public schools.

So it’s true, when a student leaves a large district such as Houston Independent School District or Dallas Independent School District and enrolls in a charter school, Texas’ funding formula often gives them a funding boost. But this isn’t where the funding story ends—far from it.

The other primary component of Texas’ school finance system is facilities funding. To fund facilities, capital projects, and to pay off bond debt, school districts mostly rely on local taxes. Statewide in Texas, local taxes for facilities funding averaged $1,505 per pupil in 2019, although this number varied by district. For example, Houston ISD raised slightly less while both Austin ISD and Dallas ISD exceeded $1,700 per pupil. In total, these local facilities dollars account for more than 12 percent of Texas’ state and local education revenue, and the vast majority of school districts levying this tax.

Because charter schools can’t levy local taxes—and facilities dollars don’t follow students from school districts to charters—they don’t receive any local facilities funding. Charter schools also aren’t eligible for the state’s two primary facilities grant programs, which 38 percent of public school districts receive. To help remedy this, lawmakers created a program during the 85th Legislature that provides charters with an average of $196 per pupil for charter facilities, but this falls well short of what school districts typically generate.

When all pertinent sources of state and local education revenue are considered, Reason Foundation’s analysis indicates that charter schools receive about $813 less per pupil on average than traditional public schools, a discrepancy that is driven by facilities funding.

Importantly, this finding is consistent with an earlier analysis by Texas Education Agency and also holds true when controlling for cost factors such as student demographics, enrollment, and location.

In fact, a recent paper by David Knight and Laurence Toenjes found evidence suggesting that Texas charters actually have higher costs than traditional public schools.

Unfortunately, there’s little reason to believe that the misleading comparisons from anti-charter activists will stop anytime soon. As such, policymakers should pose a simple question to any lobbyist or school district official claiming that Texas’ charters have a funding advantage: if that’s the case, then why don’t we fund all schools exactly as charters are funded?

Surely, if charter schools were actually better funded, they’d take this deal without hesitation. There’s little doubt that charter leaders would jump at the chance to be funded exactly as traditional public schools are.

The post Do Texas Charter Schools Receive More Funding Than the State’s School Districts? appeared first on Reason Foundation.

The post Infographic: Texas Charter Funding Gap appeared first on Reason Foundation.

In 2019, public charter schools received about $10,824 per pupil compared to $11,637 for public school districts, a funding disadvantage of $813 per pupil. Over the last five years, the funding gap has grown by almost 36 percent- from $596 to $813.

To help illustrate these trends and their importance to students, Reason Foundation’s education policy team created an interactive dashboard that uses statewide and metro school district data to allow users to examine important revenue and student demographic trends.

The new, interactive data dashboard is available here: Texas Charter School Funding Analysis. And you can also find a mobile-friendly version of the dashboard here: Texas Charter School Funding Analysis (mobile).

It is important to account for student demographics when evaluating how education dollars are allocated to Texas schools. Thus, the dashboard looks at important trends in student demographics, such as special education needs, low-income status, and limited English proficiency, which all have varying degrees of added educational costs.

The data show that statewide, public charter schools serve greater proportions of economically-disadvantaged and limited English proficiency students but a smaller proportion of special education students than public school districts.

Despite public charter students now accounting for about 5.8 percent of all Texas public school students in average daily attendance, they receive only 5.4 percent of all statewide education revenue.

You can find more information on Texas charter school funding, including revenue comparisons that control for cost factors such as location and student demographics here: Fiscal Explainer – Texas Charter School Funding Analysis 

You can also find an infographic on Texas charter school funding here: Infographic – The Texas Charter Funding Gap

The post Examining Student Funding in Texas Charter Schools and Traditional Public Schools appeared first on Reason Foundation.

• Public charters receive about $813 less state and local funding per pupil than public school districts, on average, representing a per-pupil funding disparity of 7 percent.
• The primary driver of this overall disparity is facilities revenue. On average, public school districts raise $1,505 per pupil from local I&S (interest and sinking) dollars and also receive $105 per pupil in state debt funding. In comparison, public charters aren’t eligible for I&S dollars and receive an average of $196 per pupil in facilities support from the state.
• On average, public charters generate about $692 per pupil more in M&O
  (maintenance and operations) dollars, which is likely driven by differences in how the small and mid-sized district allotment is calculated. However, this amount falls well short of bridging the revenue gap caused by facilities funding.
• Between 2015 and 2019 the inflation-adjusted funding gap grew by about 36 percent—from $596 per pupil to $813 per pupil.
• Regression analyses indicate that differences in several cost factors, including student demographics, do not explain the difference in funding between public charters and public school districts.
• On average, public charters operating in Texas’ metro areas receive fewer dollars per pupil than public school districts operating in metro areas.
• Public charters serve about 5.8 percent of Texas’ public education students in ADA (average daily attendance) and receive about 5.4 percent of state and local education dollars— $3.138 billion out of about $58.156 billion.

Reason Foundation’s data dashboard allows users to evaluate these trends, including statewide and local comparisons for several public school districts.

Full Fiscal Explainer: Texas Charter School Funding Analysis  

The interactive data dashboard is available here: Texas Charter School Funding Analysis

You can also find an infographic on Texas charter school funding here: Infographic – The Texas Charter Funding Gap

The post Fiscal Explainer: Texas Charter School Funding Analysis appeared first on Reason Foundation.

Reason Foundation’s series of policy briefs offer a Student-Centered Funding Roadmap for Policymakers, including:

• A Student-Centered Funding Roadmap for Policymakers
• Streamline: How to Allocate Education Dollars Strategically
• Equalize: Funding Policies That Put All Kids on a Level Playing Field
• Empower: How to Put Families and School Leaders in the Driver’s Seat
• Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions

The post Infographic: How Student-Centered Funding Works and How to Get There appeared first on Reason Foundation.

Yet, public education stakeholders don’t have access to basic financial data that are vital to making sound decisions.

In fact, most superintendents, school principals, and school board trustees are in the dark as to how education dollars are allocated among their own schools since many states don’t yet report school-level expenditures.

While budgets and financial statements are typically available, these documents are cumbersome and provide little context or meaning, making it difficult to compare trends across school districts or schools.

This is problematic.

State education dollars are often allocated unfairly among school districts, and research also shows that district formulas often shortchange students in low-income communities. Not only will robust transparency highlight these funding inequities, but it can also be used to replace top-down spending mandates that limit local flexibility over how dollars are spent while promoting greater accountability for performance. As a growing body of research shows a disconnect between test score gains and later-life outcomes, policymakers can use financial data and other key metrics to evaluate how schools are doing in meeting the demands of parents and local communities.

Enhancing Financial Transparency 

States should seek to create a robust system of financial transparency in which data are streamlined, actionable, and readily available in a centralized location. This can range from providing simple dashboards that provide meaningful comparisons to more comprehensive platforms that integrate numerous data sources.

Below are six reporting ideas that address the critical data education funding transparency gaps that exist in most states, which policymakers can tailor to their needs.

1.  Spending Transparency Reports: State funding formulas often contain burdensome restrictions that prevent local leaders from aligning spending decisions with students’ needs. A better approach is to give school districts flexibility over education dollars and shine a light on their expenditures and outcomes. As such, states should report per-pupil spending data by district and what these trends look like over time. These categories can be adjusted to align with state accounting practices and can be displayed by function, object, and program code.
2. Funding Equity Reports: In many states, local property wealth creates funding disparities among school districts that funding formulas fall short of equalizing. Data that compare per-pupil revenue, property wealth, and student demographics can highlight flaws with education formulas and can be difficult to obtain. A report that shows key metrics for each of these three categories can help stakeholders examine the extent to which property wealth and other factors contribute to funding differences. Other relevant data in this report might include local tax rates, expenditures, and additional student demographic categories such as student poverty, special education, and English language learners.
3. School-Level Spending Reports: Federal lawmakers included a provision in the Every Student Succeeds Act (ESSA) requiring all states to publicly report school-level expenditures by June 2020. This is a big step in the right direction, but it doesn’t go far enough. State policymakers should go beyond ESSA’s baseline requirements by providing accessible data that combine school-level spending figures with other data sources. Working with a consortium of state officials, Georgetown University’s Edunomics Lab recommends that states create three types of comparison reports: equity, efficiency, and productivity. Ultimately, this will help stakeholders assess whether resources are allocated fairly, and also provide insight into how schools are leveraging their resources so that best practices can be highlighted and shared.
4. Right-Sizing Reports: Enrollment trends are critical for school districts. Not only is enrollment a substantial driver of revenue, but it can also serve as a proxy for demand and provide insight into parent and community satisfaction. These data are even more powerful when paired with staffing data. For example, a declining student population and a staffing surge might indicate an inability to right-size operations (i.e. adjust to changes in revenue) and raise flags about financial stability. A right-sizing report that compares student enrollment with key expense categories will ultimately help stakeholders assess to what extent school districts are operating efficiently.
5. Open Enrollment Reports:  Open enrollment policies that give families options outside of their zoned school district are on the rise, with states such as Florida and Colorado leading the way. Nevertheless, many school districts still have restrictive practices that prevent families from seeking greater opportunities, even when seats are available. Given these realities, it’s critical for policymakers to publicly report open enrollment data. Stakeholders should know exactly what each district’s policy is, how many transfer applications districts receive, the number of transfer students enrolled, and how much revenue is collected each year from families in tuition payments.
6.  School Capacity Reports: It’s important for school district officials to know exactly where they stand in terms of school capacity. Not only is this a foundational component of strategic planning, but it can also help identify spending inefficiencies since school districts often divert more per-pupil dollars to schools with declining or low student populations. But this information should also be publicly reported. Stakeholders should know the extent to which buildings are being used and whether available seats could be offered to transfer students via open enrollment programs. As such, school districts should publicly disclose their capacity data by school. One model to follow is Florida’s Controlled Open Enrollment law, which requires school districts to provide an annual report on how many empty seats exist at each school.

Benefits of Increased Transparency

• More-informed decisions: Financial data can help stakeholders make better decisions with their education dollars.
• Flexibility coupled with transparency: By shining a light on education spending decisions, policymakers can eliminate top-down mandates and push flexibility down to the local level.
• Identifications of funding inequities: Financial data can highlight flaws in state and school district funding formulas that arbitrarily shortchange some students.
• Support for open enrollment: Student transfer and school capacity data support policies that put families in the driver’s seat.

A Student-Centered Funding Roadmap for Policymakers

Full Policy Brief— Inform: Give Stakeholders The Information They Need to Make Sound Education Funding Decisions 

Reason Foundation’s series of policy briefs on the Student-Centered Funding Roadmap for Policymakers includes:

• • A Student-Centered Funding Roadmap for Policymakers
  • Streamline: How to Allocate Education Dollars Strategically
  • Equalize: Funding Policies That Put All Kids on a Level Playing Field
  • Empower: How to Put Families and School Leaders in the Driver’s Seat
  • Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions

The post Inform: Give Stakeholders The Information They Need to Make Sound Education Funding Decisions  appeared first on Reason Foundation.

• Staffing
• Programs and support services
• Purchased resources
• Administrative and operational policies
• Employee compensation
• Extracurricular offerings

Centralized control happens at both the state and school district levels. For instance, South Carolina has many separate grants that must be spent on things including reading coaches, career specialists, and arts programs. Similarly, the New York City school district has roughly 100 different restricted grants for items including student auditions for arts programs, student clubs, and parent coordinators.

Additionally, many families have few options outside of their residentially assigned school, and it can be difficult or even prohibited to enroll kids across catchment areas or district boundaries. While state laws often allow for open enrollment, most don’t require districts or schools to offer open seats to families who would benefit from them, and education dollars don’t always follow kids seamlessly across district boundaries.

The Chain of Command

Control over school spending and organization is shared by a succession of stakeholders at various levels of authority, with those further down in the succession generally possessing less control.

State and Federal Policymakers → School District Officials → School Leaders and Teachers

State policymakers often limit local autonomy through mechanisms that require school districts to sponsor certain programs and spend funds on broad categories such as operations, transportation, or facilities. It’s also common for school districts to then further restrict school-level flexibility by distributing staff, not unrestricted dollars.

These layers of restrictions lead to situations where, according to a recent study from the American Institutes for Research, the average school principal has discretion over only 8 percent of their operational budget. And, in a recent survey of school principals and school district administrators published by Education Week, 52 percent identified state legislators as the biggest obstacle to making spending decisions that best address students’ needs.

Fundamental Principles: Devolving Discretions Downward

Local empowerment requires that the role of stakeholders who are further away from the kids be less oriented around top-down mandates and instead steered toward providing basic supports and ensuring transparency.

It also means moving away from rigid district boundaries that arbitrarily limit opportunities for families. Four key principles can help accomplish this:

1. Make state education funding streams and regulations more deferential to school district leaders. Since states are the primary authority in American education, they should empower school district leaders by delivering most resources as unrestricted weighted-student funding. They should also minimize their use of inflexible policies such as minimum staffing requirements, statewide salary schedules, mandatory programs, and instructional time requirements.
2. Maximize spending flexibility for schools.  School districts should further empower school leaders by adopting reforms similar to those needed at the state level. They should deliver the bulk of the resources to schools through flexible, weighted-student funding, and they should generally refrain from requiring school leaders to adopt specific staffing arrangements or compensation structures. District leaders also should consider giving principals flexibility over what centralized services they want to purchase, such as professional development, intervention programs, and technology.
3. Maximize choice and freedom for families.  Families should be allowed to attend the school of their choice, both inside and outside of their home school district. This can be facilitated by both inter-district and intra-district open enrollment policies, and further supported by portable funding policies.
4. Adopt bottom-up accountability. Rather than over-relying on top-down metrics, such as standardized test scores to evaluate school and teacher performance, accountability should primarily come from families who vote with their feet through options such as open enrollment. However, states and school districts can help families make informed decisions by making academic performance and financial data readily available, and by directly giving families a greater role over how schools are administered.

Benefits of Empowered Parent and School Leaders

Empowering parents and school principals with spending and operational decisions can have positive effects on every aspect of schooling:

• Eliminated inefficiencies: Without burdensome restrictions, local leaders can spend education dollars to meet their kids’ unique needs.
• Greater accountability: Giving school districts and schools more say over spending and operational decisions means they can be held accountable for outcomes.
• Customized approaches: Local stakeholders can adopt context-appropriate and diverse approaches, such as specialized staffing and service models to meet the various needs of individual students.
• Increased community responsiveness: When families aren’t restricted by neighborhood and school district boundaries, local leaders are must be responsive to their needs.

States That Provide Examples to Learn From

California

First enacted in 2013–2014, and implemented over the subsequent five years, California’s Local Control Funding Formula (LCFF) now delivers roughly two-thirds of all state and local education funding to school districts as unrestricted weighted student funding. The state rolled more than 30 restricted grants that existed before the reform into the LCFF, making it so that a majority of K-12 funding in California is now unrestricted.

Multiple recent studies and surveys have found wide support for LCFF among school district superintendents and school principals. Research also found that the LCFF reform led to positive cultural shifts within school districts where local leaders began to customize programs such as expanding school days and developing new services for disadvantaged students.

Florida

In 2016, Florida passed its Controlled Open Enrollment law, which allows families to enroll in any public school in the state provided it has not reached capacity and a child is not currently subject to expulsion or suspension. There are other minor stipulations, such as preferential treatment for students residing in the district, but, otherwise, all of the state’s 67 school districts must participate. Available data on the program are promising and show an increase in participation of more than 50 percent since 2016, with over 90 percent transferring to A- or B-rated districts.

School District Examples to Learn From 

Most school districts across the country provide school leaders with very little flexibility, with the average U.S. school district giving school principals control over only 8 percent of their operational budgets.

However, a growing number of districts are adopting weighted-student funding and delivering additional flexibilities to schools.

Denver Public School District

Denver Public School District funnels more than half of its general fund revenues through a weighted-student formula, a model it has used since 2007. It provides its schools with an array of autonomies, such as flexibility over staffing decisions, the ability to grant work-based stipends to some teachers, and the ability to opt-out of district-provided professional development and instead purchase their own programs.

It also allows well-performing schools to apply for “Innovation” and “Innovation Zone” status, whereby they can get even more flexibilities, such as the ability to hire teachers with alternative certifications and change school hours.

Chicago Public School District

Chicago Public School District has used weighted-student funding since 2013 and has around 40 percent of its general fund budget in the formula. It affords its schools broad autonomies over staffing arrangements, allows both work-based and performance-based stipends for teachers, and generally gives schools a lot of options to opt-out of central services like professional development and district curriculum in exchange for dollars that can be spent on strategic priorities.

A Student-Centered Funding Roadmap for Policymakers

Full Policy Brief — Empower: How to Put Families and School Leaders in the Driver’s Seat

Reason Foundation’s series of policy briefs on the Student-Centered Funding Roadmap for Policymakers includes:

• • A Student-Centered Funding Roadmap for Policymakers
  • Streamline: How to Allocate Education Dollars Strategically
  • Equalize: Funding Policies That Put All Kids on a Level Playing Field
  • Empower: How to Put Families and School Leaders in the Driver’s Seat
  • Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions

The post Empower: How to Put Families and School Leaders in the Driver’s Seat appeared first on Reason Foundation.

This also makes it difficult to implement open enrollment programs since school districts that are less reliant on state funding sometimes have little or no financial incentive to enroll transfer students. Additionally, charter schools in most states don’t have access to local mill override and bond levies, which can make it difficult for them to offer competitive wages and pay for facilities.

Most states have mechanisms in place to equalize local dollars, but they often don’t go far enough. The most common approach is a foundation formula, which sets a revenue entitlement for each school district that is funded by a combination of state and local dollars such that property-wealthy districts are less reliant on state funding.

While this is a solid framework, school districts are often allowed to retain and raise dollars beyond what state formulas provide, giving some a substantial advantage over others.

Depending on a state’s school finance formula, there are several ways policymakers can equalize funding more effectively. In some cases, this might only involve tweaks to a state’s existing funding system, and hybrid solutions are also possible. Note, that each approach has both advantages and disadvantages and that a good equalization system must be accompanied by a fair way to allocate dollars, such as weighted student funding.

Equalizing Local Education Dollars 

Option #1 Centralize to Decentralize

Centralizing education funding at the state level can help promote both funding equity and portability. Under this scenario, the state assumes responsibility for at least a portion of what’s currently raised locally, or the state funding formula is changed so that it’s responsive to local revenue amounts raised by each school district. There are several ways to accomplish this that don’t necessarily require tapping into new or existing state-level revenue streams.

• • Statewide Property Tax: Barring any legal restraints, local property tax assessments could be replaced by a statewide levy that pools revenue. For example, education funding in Vermont is raised almost entirely at the state level using this approach. School districts are still permitted to increase their budgets with voter approval, but additional dollars are pegged to specific tax rates, with the state retaining any excess revenue raised above these levels (a form of recapture). Interestingly, Vermont also has a surtax on school districts that spend at a certain threshold beyond their previous year’s per-pupil expenditures, which discourages excessive spending by property-wealthy districts.
  • Tax Swap: Dollars that are currently raised locally could be replaced with state revenue sources, as was the case in 2008 when Indiana eliminated local operating dollars and in 1994 when voters in Michigan passed Proposition A.
  • Recapture: Several states employ some form of recapture in which at least a portion of local dollars is remitted to the state. Wyoming’s provision, which recaptures all local dollars collected beyond what the state’s education formula provides, is the strongest. Texas’ recapture mechanism, which is less stringent, has distinct recapture thresholds and still gives school districts some discretion over local property tax rates. Although recapture can be controversial and perhaps present legal challenges, it doesn’t necessarily require the state to collect local revenue. For example, a state could potentially “recapture” dollars by reducing a district’s state revenue entitlement by a commensurate amount for any excess dollars raised.

Option #2: Contain Local Dollars

Policymakers can limit school districts’ access to local revenues. California school districts, for example, aren’t permitted to raise additional operating revenue from local property taxes. And Texas, which caps local tax rates, now requires efficiency audits before asking voters to approve new funding. These publicly-available reports will help voters assess the degree to which additional operating dollars are necessary.

Option #3: Local Dollars Follow the Child

This option attaches a per-pupil share of local dollars to students, which could include both charter students and inter-district enrollment students. The basic idea is simple: convert local revenue stream(s) to per-pupil terms and compensate receiving charter schools and districts accordingly. For example, all school districts in Colorado must distribute a per-pupil share of any additional mill levy revenue raised to charters, and in Florida charters are eligible to receive a per-pupil share of local capital funding under certain conditions. Importantly, the focus here is on local dollars that are raised outside of a state’s primary equalization formula, as opposed to mechanisms in which local dollars merely contribute to charters’ state revenue entitlement.

Benefits

• Increased equity: A greater share of education dollars can be allocated based on students’ needs when revenue is pooled together.
• Education dollars are more portable: Funding equity provides all school districts with a financial incentive to offer open seats to transfer students and puts charter schools on a level playing field.
• Greater efficiency: Limits the ability of property-wealthy school districts to spend excessively while other districts struggle to generate funding.
• Tax fairness: A unified and simpler tax structure is more transparent.

A Student-Centered Funding Roadmap for Policymakers

Full Policy Brief — Equalize: Funding Policies That Put All Kids on a Level Playing Field

Reason Foundation’s series of policy briefs on the Student-Centered Funding Roadmap for Policymakers includes:

• A Student-Centered Funding Roadmap for Policymakers
• Streamline: How to Allocate Education Dollars Strategically
• Equalize: Funding Policies That Put All Kids on a Level Playing Field
• Empower: How to Put Families and School Leaders in the Driver’s Seat
• Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions

The post Equalize: Education Funding Policies That Put All Kids on a Level Playing Field appeared first on Reason Foundation.

The concept is simple: a per-pupil foundational allotment is established for regular program students, then weights are added to this amount for selected categories of need.

For example, California’s Local Control Funding Formula (LCFF) allocates a per-pupil foundational amount based on students’ grade level and adds a 20 percent weight for unduplicated counts of English language learners, students from low-income households, and foster care students. As a result, additional dollars are targeted in a fair and transparent manner to individual students who are costlier to educate.

Unfair and Restrictive Features That Are Common in Existing Systems

An important first step is to identify and eliminate funding streams that can undermine the goal of streamlining education dollars. Here are some of the most common examples:

• Non-equalized local revenues: Many state education funding systems allow school districts both to raise local dollars beyond their formula amount and to tax at above formula-assumed rates. This creates funding inequities, restricts school choice by making dollars less portable, and makes competing for talented teachers more difficult for neighboring school districts that can’t access the same levels of property tax dollars.
• Non-equalized state grants: Many states—outside of their equalized funding formulas—also disburse funds to schools via grants that do not factor in available school district resources. This creates inequities by allocating state dollars to districts that may already have excess local resources. It also can be inefficient because it puts the full funding burden for certain purposes on the state in cases where, if the education funding were instead disbursed in an equalized formula, the funding responsibility could be shared between state and local sources, and greater state funding could go to districts with less local wealth. For example, in Arkansas, funding for low-income students and teachers’ professional development is disbursed as pupil-based block grants that aren’t part of school districts’ equalized formula.
• Categorical grants: Often disbursed as non-equalized grants, categorical funding has restrictions around its use that prevent school districts from repurposing those dollars for more-pressing local needs. This means that districts with varying amounts of property wealth are getting the same education funding from the state and the dollars can only be spent on specific, state-approved programs or purposes. South Carolina is an example, with many categorical grants for early childhood programs, reading programs, and the like.
•  Hold harmless provisions: These are school funding mechanisms intended to ensure that certain school districts don’t lose funding or go below a historical funding level. They are common in many education funding systems, but some states rely more on them than others. For example, Pennsylvania has a large hold harmless function in its funding formula where, by some estimates, more than half of its total basic education funding is disbursed based on 1990–1991 school district enrollment numbers.
•  Minimum state aid requirements: This kind of provision effectively establishes a funding floor for state supports, so that even the wealthiest school districts still receive it even if they already have excess resources. In New York, for example, school districts can’t receive less than $500 per pupil in foundation aid, even if their local revenue contribution is enough or nearly enough to cover their total revenue entitlement.
• Resource-based allotments: Some states primarily disburse funding via a “resource-based” model, or a model where funding amounts are based on staffing costs to serve certain types of students or deliver certain programs, or to specific types of resources like technology or supplies. These allotments are generally restricted in use. Delaware is an example of this, because it doesn’t use a per-pupil funding amount to determine school district funding but instead mandates staffing ratios to deliver general education services, as well as services for low-income and special needs students.
•  Adjustments for school district size, costs, and sparsity: States often build in special allocations, both inside and outside of their main formulas. While these are intended to account for unique cost and economies-of-scale challenges faced by some school districts, they undermine student-based equity. For example, Arizona uses several adjustments in its main formula that place higher funding weights on students living in small and isolated school districts, and also grants special taxing authority for these districts to raise additional money without voter approval.

Developing a Weighted-Student Formula

As non-optimal funding streams are eliminated, those dollars can then be collapsed into a weighted-student formula (WSF). While there isn’t one right way to structure a weighted-student formula, policymakers can customize a formula to their students’ needs by applying the following principles.

• Be strategic: Weighted-student categories should be selected based on a state’s unique needs, accounting for things such as student demographics and current performance levels. States must also ensure that accurate data exist for these categories and that good projections of student counts can be made.
• Keep it simple: Generally, it is best to employ a straightforward formula that avoids overlap among categories.
• Consider all funding: Policymakers should aim to allocate all, or nearly all dollars, through a WSF. Some states will need to create one from scratch, while those that already have a WSF in place might need to eliminate outside-the-formula provisions so that all revenue is streamlined.
• Phase-in changes: Because school districts need to be able to adjust to funding changes, it’s sometimes helpful for large-scale reforms to be introduced gradually. But it is also important to ensure that transitional funding amounts are temporary and don’t become locked into the formula in the long run.
• Examine allocation patterns: While it’s clear that some students are costlier to educate than others, it’s difficult to determine exactly how much more they should receive. When setting weights, policymakers should start by examining current allocation patterns for various student sub-groups and model how changes to the formula would affect these distributions.
• Don’t attach strings: Education dollars should be delivered as unrestricted revenue so that school district leaders are empowered to make spending decisions. Such a system makes schools accountable for outcomes, not inputs. Financial reporting tools should be created so that stakeholders know exactly how dollars are allocated and spent.

Benefits

• Better alignment between spending and strategy: District and school leaders are given the flexibility to make tradeoffs over how resources are used, which allows them to respond to the unique needs of students, staff, and communities.
• More equity: Education funding is targeted to students who are costlier to educate without complex and restrictive formulas.
• Portable dollars: Tying education dollars to individual students makes it easier for funding to follow students outside of their residentially assigned school districts, which is especially crucial for open enrollment policies.
• Increased transparency: This increases the understanding of exactly how funding is allocated, while also giving policymakers a lever to prioritize scarce resources.
• Responsive funding: Because funding levels automatically adjust to a district or school’s student population, dollars are directed to where they’re needed most.

State Models to Learn From 

California

In 2013, California enacted its Local Control Funding Formula (LCFF), which sought to increase funding equity and give school districts greater autonomy over spending decisions. LCFF streamlined more than 30 categorical grants into a weighted-student formula that delivers dollars with fewer strings attached, including additional funding for three categories of at-risk students. Early research has given LCFF high marks. There are several emerging themes.

• Widespread support: In a survey of superintendents, 82 percent agreed that the Local Control Funding Formula allows them to better align goals, strategies, and resource allocation decisions. Researchers have also found “little enthusiasm” among school district officials for returning to categorical funding.
• Cultural shifts within school districts: There is evidence of greater collaboration between fiscal and academic leaders in developing budgets as silos. According to one official, “We’re finally [asking] who are the students with the highest need and how do we address those needs?”
• Evidence of customization: Research by Edunomics Lab found evidence that districts have used flexibility to customize without radical shifts in spending.
• Greater focus on equity: Research by The Education Trust-West found a substantial improvement in equity. By 2015–2016 the state’s highest poverty districts received on average $334 per pupil more than its lowest poverty districts.

Hawaii

Hawaii adopted a weighted-student formula (WSF) in the 2006–2007 school year, with the goal of increasing both funding equity and school-level flexibility. The state had already introduced several programs in past decades to boost school autonomy, and the adoption of WSF expanded upon those efforts by aiming to deliver at least 70 percent of state funds directly to schools.

Hawaii also required that every school develop a community council with teachers, principals, and parents who had broad authority to develop school budgets.

Empirical evidence shows that Hawaii has significantly boosted funding equity through the weighted-student formula and that the funding system has earned the support of the community. WSF has been successful because central administrators re-evaluate formula weights each year and have been committed to keeping the formula simple. Moreover, school leaders have continued to push for more flexibility over school funds—further showing that the WSF pathway has been effective.

A Student-Centered Funding Roadmap for Policymakers

Full Policy Brief — Streamline:  How to Allocate Education Dollars Strategically

Reason’s series of policy briefs on the Student-Centered Funding Roadmap for Policymakers includes:

• A Student-Centered Funding Roadmap for Policymakers
• Streamline: How to Allocate Education Dollars Strategically
• Equalize: Funding Policies That Put All Kids on a Level Playing Field
• Empower: How to Put Families and School Leaders in the Driver’s Seat
• Inform: Give Stakeholders the Information They Need to Make Sound Education Funding Decisions

The post Streamline: How to Allocate Education Dollars Strategically appeared first on Reason Foundation.

The only way to truly address the diverse needs of families during the pandemic — and beyond — is for Pennsylvania to fund students, rather than school districts, directly.

This is exactly how we fund many other taxpayer-funded initiatives, including Pell Grants for higher education and prekindergarten programs. For these programs, funding goes to families who can then choose from a wide array of public or private providers of the service. The same goes for food stamps. In these scenarios, the power is rightly in the hands of families rather than institutions.

The current public health crisis has produced countless examples of special interests pushing to prevent families from having educational options. Pennsylvania is no exception. In March, the Pennsylvania Association of School Administrators lobbied to make it illegal for families to enroll in virtual charter schools during the lockdown because they were concerned about school districts losing money.

Earlier this spring, the state legislature passed a bill preventing state education dollars from following additional students to charter schools, which protected traditional public schools at the expense of families who might need other options. Now, State Rep. Steve McCarter (D., Montgomery) is planning to introduce a bill that would freeze enrollment at virtual charter schools.

Pennsylvania could decide to instead put families first by allowing education dollars to follow children to the school that works best for them — whether that be a traditional district-run public school, charter school, or private school. One way to do so would be to expand access to the state’s two private school choice programs.

Expanding families’ educational options would not only benefit children but would also have a positive impact on the rest of society. My recently-released study suggests that giving Pennsylvania’s families more options could produce substantial economic and societal benefits through higher lifetime earnings and reductions in crime. The study’s model estimates that doubling current tax-credit scholarship funding in Pennsylvania could produce around $3 billion in additional lifetime earnings associated with improved academic achievement, and save $115 million via reductions in the social costs related to crime.

A timely solution to providing families with more educational options was introduced in the Pennsylvania legislature last month. The proposal would provide federal education dollars from the Coronavirus Aid, Relief, and Economic Security (CARES) Act directly to students to help families offset the costs of homeschooling and private education. These scholarships would be available to help 500,000 K-12 students in Pennsylvania get back on track this fall.

Other states like Oklahoma and South Carolina have already taken advantage of this idea by reallocating much of their federal stimulus dollars directly to families to help them adapt to the current situation as the country deals with the coronavirus pandemic this school year.

Funding students directly would also reduce inequities in school systems by allowing all students to have access to alternative education options. Wealthier families are already accessing “pandemic pods” and micro-schools. Families without the funds for these models risk seeing their students fall further behind.

Allowing just two-thirds of Pennsylvania’s currently allocated K-12 education dollars to follow students to their school of choice would provide each child with $12,500 per year. That’s well over the average private school tuition in the state, and would be more than enough to cover the costs of pandemic pods and micro-schools.

If a business like Walmart chooses not to reopen, families can take their money elsewhere. Shouldn’t families similarly be empowered to take their children’s education dollars elsewhere if schools don’t reopen in ways that fit the individual needs of students and parents? Education funding is intended to help children learn, not to protect a government monopoly.

A version of this column first appeared in the Philidelphia Inquirer. 

The post Pennsylvania Should Fund Students, Not School Districts appeared first on Reason Foundation.

“Principals typically control only 8 percent of operating dollars. Instead, spending decisions should be pushed down to school leaders as districts in cities such as Denver, Indianapolis, and Boston have done.” — Aaron Garth Smith and Christian Barnard, Reason Foundation

School Finance In the News

Infographic: School Finance in the Aftermath of COVID-19
State policymakers should push spending flexibility down to the local level and minimize the effects of budget cuts on disadvantaged students.

It’s More Important Than Ever to Let Education Funding Follow Kids
A massive crisis like the coronavirus pandemic means that families need flexibility and options.

Families Considering Homeschooling Have a Variety of Options and Curriculum Choices
A guide to popular homeschooling models and resources.

Research and Resources Spotlight

Targeting Education Funding to Disadvantaged Students
This report explores how states that want to fine-tune their funding formulas to better meet the needs of their economically disadvantaged students can learn from the experiences of others.

Despite Budget Deficit, Texas Must Stay Committed to Funding State Pension Plans
Policymakers should maintain consistent pension contributions at appropriate levels and adopt more risk-averse plan assumptions for teacher retirement systems.

The post Education Newsletter: School Finance During the COVID-19 Pandemic appeared first on Reason Foundation.