Backed by Gov. Pillen, Legislative Bill (LB) 583 would increase state reimbursements for special education expenditures as well as ensure that every school district—including the many rural Nebraska school districts that currently get no state formula aid—receives a minimum of $1,500 per student amount in state aid, also called Foundation Aid.

The bill would also set aside $2 billion in revenues to be collected from state taxpayers in a series of years in an Education Future Fund to sustain further increases in state education funding. All told, this would result in about $270 million in new revenues for K-12 education in the immediate year following the bill’s enactment.

Another bill, LB 589, aims to make the new influx of state funds from LB 583 result in a reduction in property tax burdens. This bill would cap the annual allowable growth in state and local school district revenues, both property tax and non-property tax, at three percent. Note that reimbursement funds for special education and donations are excluded from these revenues, which means that the increase in special education reimbursements wouldn’t count toward a school district’s revenue growth cap. Additionally, an amendment introduced would exclude payments on the principal and interest of bonds from the revenue growth limit. There are also exceptions allowing for higher revenue growth caps for districts that have substantial growth in total student enrollment or enrollment of low-income or English learner students. 

Laying aside these exceptions, however, the many Nebraska school districts that rely primarily on property taxes should see a necessary reduction in property taxes from the new per-student Foundation Aid and the three percent annual budget growth cap.

Take the example of Centura Public Schools, a school district with 442 students in the 2022-2023 school year that is heavily reliant on local property taxes. LB 589 specifies that all local and state revenues, excluding only special education funds and private grants and donations, should be used to calculate a district’s three percent revenue growth limit. According to the district’s most recent annual financial report (AFR) from the 2021-2022 school year, Centura receives $6.61 million from those funding sources. Now, if Centura were to receive $1,500 per student under LB 583, that would represent an estimated $663,855 increase in funding—a 10% increase on the funding sources considered under the cap based according to the district’s latest AFR.

Assuming Centura doesn’t qualify for any of the enrollment growth exceptions granted in LB 589, the new aid from the state would require a reduction in property taxes for the district to meet the three percent revenue growth limit. Based on the district’s AFR figures, Centura would only be able to grow its budget by an estimated $198,237. Therefore, the new state aid should result in an estimated total property tax reduction of about $465,618, spread across all property taxpayers in the district. These calculations are all summarized in Table 1.

This dynamic would apply to many of Nebraska’s other small, property tax-dependent school districts—the influx in state aid would necessitate a reduction in their property taxes to meet the three percent revenue growth limit.

But problematically, LB 589 provides a pathway whereby Centura–and similarly situated school districts– could minimize the property tax relief by allowing districts to override the revenue growth limit with the approval of 60 percent of the district’s voters in a special election. It also allows district school boards to override the revenue growth limit without petitioning voters at all if they receive an affirmative vote from at least 75 percent of school board members.

According to the bill, voter or school board approval would allow districts with “no more than four hundred seventy-one students”—which would include Centura—to have a revenue growth cap of seven percent instead of three percent. This cap would cut Centura’s required property tax reduction down to about only $200,000, a very small reduction in property taxes considering that Centura levied $5.55 million in local property taxes in the 2021-22 school year.

The advantages of LB 589 and LB 583 are that they aim to gradually decrease Nebraska’s heavy property tax burdens by increasing the state’s role in financing K-12 education. Future state investments would be subject to the same budget growth limits and should result in further property tax relief. But for the many Nebraska districts in similar situations as Centura, the current provisions in LB 589 that allow for school boards or voters to override the proposed three percent revenue growth limit risk creating a dynamic where $2 or $3 in new state funds are required to achieve only $1 in property tax relief.

To achieve cheaper and more immediate property tax relief, state legislators could consider removing provisions in LB 589 that allow school districts to increase their revenue growth cap with school board or voter approval.

More fundamentally, Nebraska lawmakers should also examine every aspect of how the state Tax Equity and Educational Opportunities Support Act (TEEOSA) formula works and how it’s funded. There are many problems in Nebraska’s education funding system that should be addressed, such as how the state formula sorts districts into complex, non-transparent comparison groups to determine base funding and how most Nebraska school districts raise more than their formula share from local property taxes alone. State policymakers shouldn’t pass up this opportunity to decrease the formula’s overreliance on property taxes and to make the formula more transparent and student-centered.

The post Analyzing Nebraska’s proposed legislation impacting school finance and property taxes appeared first on Reason Foundation.

In a new Reason Foundation policy brief, Public Education Without Boundaries, our team analyzes how school finance systems can get in the way of dollars following students across school district boundaries. Advocates of backpack funding should also pay attention to how dollars follow students between individual public schools, between public and private education environments, and how the whole education funding system ultimately ties together. In each case, backpack funding hits new roadblocks and requires different policy solutions.

1.       District-to-District Backpack Funding

An important subset of backpack funding concerns how education dollars follow students when they attend public schools outside of their residentially-assigned school district boundaries. Without strong funding portability mechanisms, school districts have weak financial incentives to welcome transfer students via cross-district school choice. The recent policy brief, Public Education Without Boundaries, tackles this problem and identifies three primary culprits preventing funding portability between public school districts.

First, most states have a group of school districts that are “off-formula,” meaning the districts can raise more than all the funding they are entitled to under their state’s main funding formula from local tax sources alone. Put simply, off-formula school districts create funding portability problems because they often don’t lose or gain funding when students transfer out or transfer in.

A second problem for funding portability between school districts is local education funding, which often comes from local property taxes. These taxpayer funds are often raised to support public school operations and finance construction projects, but because these local taxpayer funds aren’t raised based on student enrollment in schools or the district, they again don’t follow students when they transfer out of a school district.

The third funding source that doesn’t follow students easily is any state funding stream that’s not based on current enrollment figures or is not based on enrollment at all. To illustrate, in 2018, Missouri’s K-12 funding system funded 194 school districts based on past revenue amounts rather than current their student counts. Again, this means that a student transferring into any of those Missouri school districts doesn’t generate new funds for the district and that a student transferring out doesn’t take any funding away from the district if they leave.

Achieving backpack funding between school districts means finding ways to make these kinds of education funding sources—which don’t typically follow students—portable. 

One model for how to do this is in Wisconsin, which sets a single, statewide per-student funding amount that follows each student to their new school when they transfer to a new district. That calculated amount accounts for state and local funds–including some dollars that are not portable–which are then deducted from a sending school district’s state revenues. While this amount doesn’t include all funding devoted to a student in their home district, it exemplifies a way that other states can factor in education revenues from different sources and ensure that they come out of a sending district’s budget and follow transfer students out and to their new schools. 

2.     School-to-School Backpack Funding

Importantly, even if policymakers follow examples like Wisconsin to ensure education dollars are portable across school district boundaries, ensuring that funding follows students within school district boundaries when students transfer to a new school within the same district is a separate challenge. While all states have funding formulas ensuring that at least some education dollars follow students across district boundaries, none have statewide policies requiring that districts implement backpack funding at the school level. Therefore, implementing school-to-school backpack funding is a district-level decision that only a small subset of school districts across the country have implemented to some degree.

The standard method most school districts use to allocate dollars within their boundaries is to allot staffing and program-specific funding to each school. Under this common model, school resources aren’t usually thought of in terms of dollars. Budgets are largely administered at the district level, so school principals aren’t directly dealing with the financial effects of students transferring in or out of their schools.

This widespread practice of districts allocating staffing and programs to individual schools has several negative effects on within-district school choice as well as overall funding fairness. When dollars don’t automatically follow children between schools, districts might not be willing to allow for within-district choice because it can complicate budgeting for each individual school. 

Additionally, it’s long been noted that this budgeting practice based on staff positions leads to large per-student funding disparities between schools within the same school district due to differences in staff salaries between campuses. And as new state reports on federally mandated school-level spending data show, this practice often shortchanges schools serving high-need students. 

Achieving backpack funding within districts requires a different toolkit than what’s required to get backpack funding between districts. At the local level, school district leaders need to commit to a weighted student funding mechanism to fund individual schools and implement it with fidelity so that schools are funded solely based on the individual needs of the students they serve. 

Similarly, state policymakers could also advance legislation that requires districts to fund their schools on a weighted funding model and that gives students the option to choose schools within their boundaries. While these efforts would require substantial cultural shifts whereby districts place more budgeting responsibility on individual schools, they would lead to school-to-school backpack funding that fosters both public school choice and funding fairness.

3.       Public-to-Private Backpack Funding

Another definition of backpack funding expands the previous definitions to include non-public education environments. An example of public-to-private backpack funding would be universal education savings accounts (ESAs)—like the accounts recently implemented in states like West Virginia, Iowa, and Arizona. Universal education savings account programs are for all students in a state, regardless of their income or whether they are currently enrolled in public schools, private schools, or homeschooling.

In most cases thus far, students only qualify for an education savings account once they have withdrawn from the public school system. Also, ESAs and private school vouchers are often tied to the per-student amounts under the state’s education funding formula. When a student withdraws from a public school district to utilize an ESA or voucher, that state per-student amount generally leaves the district and follows the student. 

However, the problems that occur with district-to-district backpack funding also apply to public-to-private backpack funding. Local funds outside of the formula and state grants outside of the formula don’t typically follow ESA students, and off-formula school districts won’t typically see a reduction in funding when a student leaves to use an ESA. 

4.       Universal Backpack Funding

Finally, having a universal ESA is not all that’s required to have universal backpack funding. To achieve true universal backpack funding, policymakers need a single mechanism that allows for district-to-district, school-to-school, and public-to-private education choices. Education savings account amounts would need to be calculated similarly to how the per-student funding amount is calculated in the Wisconsin example above so that non-portable education funds become portable. 

Coming up with a single mechanism that accommodates all forms of backpack funding requires policymakers to make the public K-12 funding system more compatible with ESAs. When public school funding mechanisms have a mixture of portable and non-portable dollars, it’s difficult to have ESA amounts that are similar to the per-student funding levels in the public schools without costing the state extra money to make up the difference between the education dollars that follow students out of a school district and the dollars that are left behind in the district losing the student. 

As more universal education savings account bills make their way through legislatures and to governor’s desks across the country, policymakers should also consider how universal backpack funding can help streamline their education funding mechanisms so that all students are funded the same way, regardless of the schools they attend or the environments they are educated in.

Universal backpack funding would help break down the divide that exists between students being educated in public and private environments and ensure that all education funding follows students wherever they go to learn.

The post Clearing up definitions of backpack funding appeared first on Reason Foundation.

California Gov. Gavin Newsom’s recently-released budget projects a $22.5 billion deficit, which means school districts, especially those experiencing dramatic student enrollment declines like the Los Angeles Unified School District, will likely need to rightsize operations. School districts should be finding cost savings in areas such as reductions to the currently very generous post-employment health care and dental benefits for retirees, which are controlled at the district level.

California policymakers should also allocate any remaining federal funding for pandemic relief to tutoring services and programs that allow local school leaders the most discretion over how to use the money to help students. As of Sept. 30, 2022, California schools had spent just over 43 percent of the $21.5 billion federal stimulus funds allocated to the state’s school districts and charter schools during the pandemic. School districts need to ensure they don’t create new costs that outlast federal funding set to dry up. Schools must be shrewd about whether or not to add new staff. Many school districts aren’t in a financial position to make new hires due to their declining student populations.

Los Angeles Unified and Oakland Unified School District have heavily invested in tutoring, universal summer school, and small-group literacy programs since the spring of 2020. These programs may help explain why each school district gained ground in some reading metrics and experienced less significant overall National Assessment of Educational Progress (NAEP) score declines than many other urban school districts across the country. And because different student populations have vastly different learning needs, the more discretion local leaders have on how to use these resources, the better.

At the state level, policymakers should resist the urge to funnel education dollars through specific grants and earmarks. These programs make it difficult for school leaders to prioritize the programs they see helping their students when budget cuts are necessary.

Finally, California must consider ways to provide families with more education choices. Improving the state’s public school open enrollment programs is one way to do so. Ensuring that all public schools are participating in within-district and cross-district open enrollment would allow students to enroll at public schools that better fit their academic and social needs.

A 2021 study conducted by the nonpartisan Legislative Analyst’s Office gave the state’s biggest open enrollment option, the District of Choice program, good marks. Students using the program often enrolled in higher-performing school districts, and districts that lost students to the program showed increased community engagement in an effort to win families back. By consolidating and expanding California’s open enrollment offerings, policymakers would empower more families to find education options that better fit their children’s needs. Unfortunately, a recent Reason Foundation study of K-12 open enrollment policies found California’s open enrollment programs fall short in every key benchmark, so much work is needed.

With the state facing a significant budget deficit, federal COVID funding to schools set to dry up in 2024, and the need to help students make up for learning losses suffered during the pandemic, California’s schools and policymakers have their work cut out for them in 2023. But practical solutions like improving open enrollment policies and rightsizing schools can start to put the state on the right path to providing a higher-quality education to California’s students.

A version of the column previously first appeared in the Orange County Register.

The post California’s schools need to adapt to the state budget woes appeared first on Reason Foundation.

States are increasingly enacting open enrollment policies that give students options across school district boundaries. But this is only half the equation. Policymakers must also ensure that education dollars follow the child to the school of their choice, a concept referred to as funding portability. Without sufficient portability, school districts have weak financial incentives to enroll transfer students and may limit opportunities for families. Non-portable dollars also reinforce district boundaries, which lock families into public schools based on where they can afford to live, not what is necessarily best for their children.

The primary culprits inhibiting funding portability are districts that are entirely locally funded due to high property wealth, and both local education funding and state funding streams that aren’t sensitive to changes in enrollment.

New Hampshire provides a valuable case study that illustrates these problems. In total, 39 of the state’s 237 districts are off-formula and don’t generate additional state aid when new students enroll. Moreover, nearly two-thirds of New Hampshire’s non-federal education dollars are generated locally and aren’t portable across school district boundaries. As a result, most districts only receive a fraction of their average per-pupil spending amounts when enrolling additional students, which weakens financial incentives for an open enrollment program.

Ideally, school finance systems should “attach” dollars directly to students so that all state and local education funds flow seamlessly across district boundaries. States vary considerably with how close they are to this vision, and the first step for policymakers is to take stock of funding portability in their state. From there, states can take three different pathways to improve portability: comprehensive school finance reform, targeted solutions, and creating a distinct funding mechanism that supports open enrollment. While all solutions are worth considering, the most direct approach is to follow Wisconsin’s lead by establishing a stand-alone funding allotment for public school open enrollment. Three best practices can help policymakers craft this funding policy.

Uniform: Start with a Single Statewide Base Per-Pupil Amount

Open enrollment funding policy should center around a single per-pupil amount that follows students across school district boundaries, an approach Wisconsin has successfully employed for more than two decades. This provides robust transparency while also guaranteeing that all school districts are operating under the same set of financial incentives. There are numerous ways to set this amount, but policymakers should strive to maximize the share of overall state and local per-pupil funding attached to students.

Responsive: Account for Students’ Needs

Policymakers can attach weights or additional per-pupil amounts to students with disabilities and other categories of need. For example, Wisconsin provides a greater per-pupil amount for students with disabilities, plus reimbursement for costs that exceed this amount up to a specified limit, which is paid for by students’ home districts.

Incentivize: Tap into Local Education Dollars

Ideally, states should ensure that local dollars follow the child across school district boundaries. One way to do this is to deduct a per-pupil amount from home school districts’ state aid for each student who transfers out and allow it to follow the child across district lines. Tapping into local dollars ensures that districts’ incentives are maximized, and this approach negates the need for district-to-district billing of local dollars, which is undesirable because it reinforces the idea that dollars belong to districts, not the students.

Fundamentally, establishing portable education funding moves states closer to a boundaryless public education system—an idea first pioneered by Milton Friedman. In its purest form, this means eliminating residential assignment and funding students directly so that they can choose whatever option best fits their needs.

Download the full policy brief: Public Education Funding Without Boundaries

The post Public education funding without boundaries: How to get K-12 dollars to follow open enrollment students appeared first on Reason Foundation.

Taxpayers and the tens of millions of families who rely on public schools to educate their children should expect transparency and accountability in all aspects of education operations. But public schools still have a lot of work to do to provide stakeholders with better data—particularly when it comes to special education, school capacity, and student transportation.

Special Education

Available data indicates that public school special education populations grew substantially over the past few decades. What’s more, the growth of special education populations has varied substantially between states. These trends alone raise important questions about why this population is growing and how these students are being served. But beyond basic federal data showing special education population trends by state, and national snapshots of students in various disability categories and how much time they spend in regular classrooms, researchers and advocates lack quality data to work with.

Most states provide district-level data on special education populations and disability subgroups and other data that are necessary to comply with federal law. Questions remain as to how districts place these students on individualized education plans (IEPs), the kinds of services special education students receive, and how these students are performing academically. Remarkably, even the question of how much public schools spend on special education services lacks a clear answer at the national level and isn’t reliably answered at the state level.

There are a few potential reasons why special education data is limited, one being that smaller school districts can’t report granular disability data without violating student privacy. Also, dividing expenditures by student need groups can be tricky because of how services are often shared across different subsets of students.

Paraprofessionals and specialists often divide their time between different students and schools, and they aren’t always working exclusively with IEP students. Additionally, districts vary widely in their IEP placement practices and the services they offer to students with certain needs. This creates challenges for having standardized data collection at the state and federal levels. Nonetheless, until state and local professionals can navigate these issues, policymakers and families will continue to be in the dark as to how they can better serve special education students.

School Capacity

Open enrollment is an increasingly popular form of public school choice that allows families to transfer to public schools outside of their residential assignment zones and in neighboring school districts. But according to a recent 50-state study published by Reason Foundation, most states have weak open enrollment policies and fail to give families ready access to public schools that have space. A key component of a strong open enrollment policy is for states to require that schools report how many open seats they have so that families know where they have options. But according to the Reason study, only seven states have policies requiring schools to annually report open seats.

The lack of robust capacity reporting requirements makes it easy for school districts to reject open-enrollment students for arbitrary reasons. This limits parent options and prevents students from finding a learning environment that best meets their needs. More generally, taxpayers should be allowed to know which schools are under-enrolled when their districts want to raise money to expand facilities or hire additional staff.

Student Transportation

Just over half of students get to school using school district transportation services, most often riding a traditional yellow school bus. But that number has steadily declined over past decades as school bus driver shortages plague school districts and transportation costs climb. School transportation is in need of innovation—but that’s hard to do when there are insufficient public data on school transportation services.  

How far are students transported in each district, on average? How much space is there on school buses during their routes? How long is the average student’s bus ride? Answering these questions can allow districts, policymakers, and transportation providers to better serve kids en route to and from school. But in a 2017 paper, Bellwether Education Partners analysts Phillip Burgoyne-Allen and Jennifer Schiess noted “Most transit systems routinely account for basic information like the cost per ride, percent of seat capacity utilized, length of ride times, and rate of on-time departures and arrivals, but many school transportation systems fail to collect these data consistently, if at all.”

A good first step to improving any policy area is to enhance transparency so that stakeholders can find common ground on what the problems are. Heading into 2023 legislative sessions, state policymakers should take stock of the areas in which public schools aren’t providing sufficient data and prioritize transparency improvements.

A version of this column previously appeared in RealClear Education.

The post Three areas in K-12 education that need more transparency appeared first on Reason Foundation.

To be sure, some of the Republican Party’s top performers in the midterms cruised to re-election after signing laws restricting public schools from teaching “divisive concepts,” including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott. But these election successes could just as easily be attributed to the candidates’ minimally restrictive COVID-19 policies and being in comfortably red states. 

Republican gubernatorial candidates in other states like Michigan, Arizona, Pennsylvania, and Wisconsin who heavily campaigned against critical race theory didn’t get enough traction from the issue to win. Similarly, local and state school board candidates running to get CRT and other controversial subjects out of classrooms saw checkered results, according to reports by The Wall Street Journal and Associated Press.  

During the 2021 and 2022 legislative sessions, Education Week found that state legislators or state school boards in 17 states successfully adopted policies that limit how school staff can address certain “divisive concepts” with students. Most of these policies restrict how educators can discuss concepts of race, gender, sexuality, and more. 

This wave of legislation came in response to a select number of troubling accounts — reported most prominently by the Manhattan Institute’s Christopher Rufo — going viral online as some local public school staff adopted highly politicized curricula. For example, one California school district asked its third-graders to sort themselves on “oppression matrices” by race, class, and gender.

While these individual instances are certainly disturbing, many of the one-size-fits-all state policies adopted in response have gone too far and raise serious questions of constitutionality.

Legislation passed in Texas, for example, flat-out banned any curriculum that requires an understanding of the 1619 Project, a New York Times Magazine project that, while flawed, even according to its critics, pursues “a worthwhile avenue of historical research.”

Oklahoma’s 2021 anti-CRT law caused two school districts to be at risk of losing accreditation for a teacher training video that discussed implicit bias toward minorities. This summer, a similar anti-CRT law in Tennessee law gave a parents’ rights advocacy organization grounds to sue one school district over its elementary English curriculum for reasons including its presentation of the civil rights movement, segregation, Civil War, and Greek mythology.

At face value, the concepts outlined in most of these policies seem trivially easy to avoid. It’s hard to believe many teachers want to teach students that one race is inherently superior to another or that an individual’s moral character is necessarily determined by their sex. But early rounds of litigation from various groups seeking to ban content from classrooms indicate these lawsuits and complaints will keep coming because concepts that some special interest group or parent object to can be detected when reading between the lines of almost any lesson plan. 

While taxpayers have a right to shape curriculum and hold schools in check when they get too ideological in classrooms, statewide policies that make sweeping, difficult-to-interpret prohibitions on lesson content are the wrong tool. Parents and voters have better avenues to express their views beyond asking governors and legislators to micromanage classrooms.

The best approach is for parents and policymakers to advocate for expanding school choice — which allows families to sidestep the culture wars and vote with their feet about the education environment they want by choosing the right school for their child. 

School choice is popular among voters, with a June poll from Real Clear Opinion Research showing 75 percent of Republicans and 69 percent of Democrats supporting the concept. By contrast, an April poll from National Public Radio found that just 18 percent of parents disagreed with what their child’s school taught about gender and sexuality. 

Leading with culture war issues like banning books and opposing teaching CRT in classrooms wasn’t the political juggernaut Republicans had hoped would help them gain ground in state and federal office, but school choice could be. Rather than further politicize schools and classrooms, politicians should pursue policies that let parents choose whatever school is best for their children.

A version of the column previously appeared in the Hill.

The post Cracking down on critical race theory in public schools was not a winning issue appeared first on Reason Foundation.

But despite having a strong open enrollment law, Oklahoma is still dealing with a problem faced by other states with strong student transfer policies: how to ensure school districts aren’t arbitrarily defining capacity to keep neighboring students out. 

Even in school choice-friendly states like Arizona and Florida, problems with protectionist school districts have lingered. In many cases, there seems to be a desire to preserve a public school system where families must purchase expensive real estate to access these public schools—thus, keeping low-income students out. Objecting to open enrollment legislation in Kansas, for example, two school district superintendents submitted written testimony last year that admitted, “Without intending to sound elitist, it is nonetheless true that housing costs in our districts often provide a check on resident student growth now.”

These problems raise important questions about how public school districts can be held accountable when they don’t open their doors to transfer students. 

An October report from Oklahoma-based public radio station KOSU indicated that nearly 11,000 students in the state requested a district transfer under the new law during the summer leading into the 2022-23 school year. At the time, roughly 8,400 of these applications were approved, 500 were pending, and 2,000 were denied. Most of the denials were reportedly due to insufficient school district capacity, i.e., a lack of space. 

In the fall of 2022, the Oklahoma Council of Public Affairs observed that the definition of capacity is set by individual school districts, causing the transfer rules to “appear haphazard or even arbitrary from district to district.” This variation in definitions has disproportionately affected city students, with KOSU noting that although denials were relatively uncommon, the denials were “mostly concentrated in suburban and exurban areas around Oklahoma City and Tulsa.”

Lacking a standardized definition of district capacity isn’t a problem unique to Oklahoma. Arizona’s open enrollment law requires its school districts to report each school’s capacity by grade level and update the figure every 12 weeks — but never elaborates on how districts should determine capacity in the first place.

Florida’s Controlled Open Enrollment law includes more language on how school districts should assess school capacity, saying they can’t exceed a statewide maximum class size limit and must “incorporate the specifications, plans, elements and commitments contained in the school district educational facilities plan and the long-term work programs.” But even this definition of capacity still affords districts plenty of room to deny transfer applicants arbitrarily. 

But there are other routes that could circumvent this problem. The Foundation for Excellence in Education has suggested that school districts reserve space for nonresident students up front, making lack of capacity an unacceptable reason for denial. While intriguing, this proposal could go too far since there are certainly instances where schools truly don’t have space for additional students. Some flexibility is needed.

Another promising solution is to focus on more carrot and less stick. States should consider strengthening incentives for school districts to accept transfer students. While some states are worse than others, all state funding systems have provisions that prevent education dollars from following students who cross district lines. These nonportable dollars often come from local tax levies or state funding streams that aren’t sensitive to changes in enrollment. For districts evaluating transfer applications, it’s easy to see how a lack of funding portability can make them reluctant to receive a nonresident student.

Research from California’s Legislative Analyst’s Office shows that funding portability can have a real impact on how willing school districts are to participate in open enrollment. To strengthen incentives, state legislators should reduce school district reliance on these kinds of local revenue streams or find ways to make these funds move with students to the schools of their choice. 

Coming up with a clear and enforceable definition of school capacity is difficult and won’t solve every problem in states’ open enrollment systems. Beyond getting more punitive with school districts that close their doors to outsiders, legislators should ensure that financial incentives make welcoming nonresident transfer students too lucrative for school districts to pass up.

The post School districts use ‘capacity’ to keep low-income transfer students out appeared first on Reason Foundation.

Nationwide, inflation-adjusted average teacher salaries have been nearly flat since the turn of the century, going from $64,986 in 2000 to $65,090 in 2021. But there’s significant variation among states, with inflation-adjusted pay increasing by 10 percent or more in nine states — including Washington, Massachusetts, and Oklahoma — and decreasing by 20 percent in Indiana over that same timeframe. Average teacher salaries now range from less than $48,000 in Mississippi to nearly $88,000 in New York.

Many factors play into salary trends, with cost-of-living contributing to differences across states. Less noticeable is that the U.S. teacher workforce has shifted over time with proportionally fewer veterans in classrooms, making longitudinal comparisons imperfect. But when average salaries are broken down by experience level a similar picture emerges: Teacher salaries have barely outpaced inflation.

None of this means that taxpayers haven’t done enough to support public schools. Between 2002 and 2020 real U.S. public education spending increased by 25 percent per student and now stands at over $16,000 per student on average. In total, per-student education revenue increased in 49 of 50 states from 2002 to 2020 with ten states boosting funding by more than 33 percent.

In short, more education money hasn’t resulted in larger paychecks for teachers in many states. For instance, Illinois has increased education funding by 55 percent per student, yet average teacher salaries have declined, with similar trends playing out in Connecticut, Pennsylvania, and elsewhere.

So where are education dollars going, if not to boost teacher salaries?

For starters, real spending on employee benefits — a Census reporting category that includes teacher pensions, health insurance, and other expenditures — increased by 79 percent between 2002 and 2020, going from $1,907 per student to $3,406 per student. Salaries accounted for 74 percent of teacher compensation in 2004 they now account for just 65 percent, mainly due to ballooning retirement debt.

But pension benefits haven’t gotten better for many teachers, they’ve only grown more costly. For years, most states have failed to adequately fund their retirement obligations, with the public retirement research organization, Equable Institute, estimating a nationwide shortfall of $878 billion in teacher pension plans. As a result, an average of 20 percent of public school payrolls are eaten up by employer pension contributions, most of which goes to cover debt costs that don’t benefit current teachers.

Public schools have also been on a hiring binge in the last couple of decades as the latest available data show staff growth — nearly 7 percent for teachers and 20 percent for non-teachers — outpaced a modest 2 percent bump in public school student enrollment nationwide. This trend is especially pronounced in Pennsylvania, where over 23,000 employees have been added to the state’s public-school payrolls despite a 12 percent enrollment dip since 2002. Such a stark contrast leaves no doubt that public schools have prioritized staffing up over teacher salaries, a costly strategy with little student performance benefits to support it.

Differences in average student-teacher ratios between states also highlight the inherent tradeoff between teacher salaries and class sizes. All else being equal, states forgo increases to teacher pay when they use new education funds to decrease class sizes or to keep class sizes small. State variations in average class size might explain why lower-spending states with above average student-teacher ratios like Nevada and Utah pay teachers better than their spending rankings would suggest, while relatively higher spenders with low student-teacher ratios like West Virginia and North Dakota pay teachers less.

To be sure, there isn’t a simple answer to whether the country’s 3.2 million teachers are underpaid as compensation is more than just salaries and local context matters. But any meaningful policy aimed at delivering more dollars to teachers requires fixing the structural problems diverting education funding away from salaries. At the state level, this involves tackling the pension debt crisis by paying down legacy costs, like Arizona and Michigan have done in recent years. School-district leaders should also reconsider spending priorities, which might mean standing up to teachers’ unions that push for expanding membership rolls.

With the amount of money being spent on K–12 education in most states, there’s no reason for teacher salaries to be an issue. But without structural reforms, there’s little reason to expect that more funding will deliver the payday that teachers expect and voters want.

A version of this article previously appeared in National Review.

The post Why teacher salaries are flat as school spending soars appeared first on Reason Foundation.

Before the spring of 2022, 1992 marked the last time Tennessee had implemented a major K-12 education finance overhaul when the state adopted the Basic Education Program (BEP) funding formula. The BEP employed a complex formula with 47 funding components and was a resource-based formula, meaning it mainly allocated education dollars to school districts based on staffing positions and student-teacher ratios.

The TISA reform was a major positive shift in how Tennessee funds public education. Other states considering updating their funding systems should take notice of the legislative process that moved TISA across the finish line.

Tennessee Investment in Student Achievement Timeline

Before the 2021 Tennessee education funding review process started, Gov. Lee’s administration could rely on previously issued annual BEP reports that highlighted the shortcomings of the old formula over the last few decades. Through the years, members of the state’s BEP Review Committee—which produces the annual reports — had separately noted that the formula was outdated and complex.

“It is antiquated,” said BEP Review Committee member Chris Henson to the Tennessean, “The current version of it might be fully funded, but that doesn’t mean it funds everything it should and at the level that it should.”

Decades of tweaks and attempts to update the formula were all rooted in a compliance mindset from the state’s school districts, which relied on updates from state officials to the formula’s staffing and cost assumptions to meet student needs.

When the 90-day review process began in late 2021, the governor sought a new approach to school funding that was student-centered and a funding plan rather than a spending plan for school districts. In his opening press conference about the effort, Gov. Lee said, “K-12 funding is complicated. It’s bureaucratic. Everyone recognizes that our BEP formula is one that few understand, or many do not understand, and many do not like.” 

To meet these challenges, the administration appointed 18 different subcommittees, each focusing on different stakeholder groups including school principals and English learners, to hear thousands of public comments across the state. Their feedback was then relayed to the Funding Review Steering Committee, which used the comments to craft legislation.

Some of the most frequently mentioned items during the feedback period included covering most core staffing needs under an unrestricted base per-student allotment and adopting weights for high-need students such as students with disabilities and low-income students. Additionally, school district leaders and residents wanted assurances that they wouldn’t lose any state funding under the reform and that local taxes wouldn’t increase in the years following any reform. Finally, there were requests for specialized funding outside the core formula, such as direct funding for career and technical education.

In February 2022, Gov. Lee unveiled the Tennessee Investment in Student Achievement plan. The proposal featured a funding pyramid with four tiers:

Though imperfect, the TISA proposal was a substantial improvement from the BEP because it was more streamlined, flexible, and student-centered. The administration’s TISA proposal also outlined a procedural plan for the legislation with the goal that a bill would be introduced, evaluated by at least seven legislative committees, voted on by the state House and Senate, and signed by the governor. By the time the bill was signed into law, all these objectives were met. The new formula will take effect in the 2023-2024 school year. 

Key Elements That Helped TISA Pass

Achieving school finance reform is a politically difficult undertaking, as evidenced by the fact that most states utilize school funding formulas that are 15 to 30 years old. Moreover, K-12 education spending typically comprises about a third of any state’s total budget, and it is often the single largest state budget item. 

Because of this, changing how education dollars are allocated involves many stakeholders, such as school professional associations and school district officials—all of which have varied interests and proceed cautiously because they are concerned about losing funds or being treated unfairly by a new formula. Four key elements allowed Tennessee leaders to successfully navigate these challenges and pass the Tennessee Investment in Student Achievement.

1. Vision: As they began the public review of the BEP, Gov. Lee and Commissioner Schwinn set a clear vision for the reform. They highlighted a desire to adopt a more student-centered funding formula and prepared review committees ahead of time. Interestingly, the review committees were largely comprised of nonprofit, community, and business leaders—not just state policymakers. That clarity of direction was also evident when the governor released a funding proposal that was easily understandable and actionable.

2. Time Efficiency: From start to finish, the TISA reform took about six months. According to Education Commissioner Penny Schwinn, that timeline was intentionally short. In one of the first funding review subcommittee meetings, she made this important observation:

“States who have gotten something passed that is productive, (and) actually closer to the idea of what they wanted to accomplish have taken 2-6 months… The longer you draw out a process, the more people get stuck in their ways and are not as flexible. People are not willing to compromise on topics. And we’ve seen states who just kick the can down the road, year after year after year.”

3. Simplicity: While Gov. Lee’s administration was responsive to public comments and testimony offered during the review period, policymakers didn’t use the feedback to add complexities or restrictions to the TISA proposal. Instead, about 95 percent of the proposal’s funds remained in the base student amount and the individual student weights.

4. Transparency: Many school district leaders, advocacy organizations, and other stakeholder groups endorsed the school finance proposal because state leaders released financial projections addressing stakeholders’ most pressing concerns—namely, how school district budgets would be affected and whether local taxes would increase. Groups that endorsed the TISA included the NAACP and the Tennessee Educators of Color Alliance. While some of the details of TISA’s smaller funding streams will be solidified by education department rules during the 2022-2023 school year, school district leaders were not left in the dark to wonder how the reform would affect them.

“People can argue the fine points of TISA forever, but at the end of the day, TISA is a more equitable funding approach and cuts across demographics and circumstance to give each student in our state a better opportunity to succeed than they had under the old formula,” said Tennessee Chamber of Commerce & Industry Senior Advisor Jared Bigham to Chalkbeat. 

There are different pathways states can take to accomplish K-12 finance reform, but Tennessee’s example illustrates how robust public engagement, stakeholder buy-in, and planning can get it done. 

While researchers should continue following TISA’s implementation in the coming years, the new formula is a positive education finance reform because it bases funding on individual students, improves transparency, and gives school districts flexibility to customize budgets based on local needs.

Borrowing from Tennessee’s playbook, policymakers in other states who are considering school finance reforms should start the process early with a unified vision. The funding reform needs to be a central priority for the legislative session and should be supplemented with robust public engagement and reliable financial projections.

Finally, while the legislative timeline doesn’t necessarily have to be as brief as Tennessee’s, state leaders should avoid getting bogged down in analyzing whether the funding formula addresses every possible education need upfront—because ultimately, simple formulas that leave budgeting decisions to local leaders and families are better for students. 

The post Recapping Tennessee’s historic school finance reform appeared first on Reason Foundation.

In 1989, the state adopted the Tax Equity and Educational Opportunities Act (TEEOSA), in an attempt to alleviate disparities in property tax burdens and education funding between districts by having the state take on a larger responsibility for funding public schools. 

However, in the last 30 years, this funding formula has become outdated and increasingly failed to reduce property tax burdens on school district residents, especially those in rural areas. 

Currently, Nebraska ranks third in the nation for the proportion of total K-12 public school revenues it derives from local revenue sources, trailing only New Hampshire and the District of Columbia. These local tax sources–primarily property taxes–comprised 59.5% of the state’s public school funds in the 2019-2020 school year. This is a problem because it creates an education system that is too dependent on local wealth, leading to large disparities in education funding and tax rates. 

While implementing comprehensive school finance reform is a politically arduous process, Nebraska can’t afford to wait.

TEEOSA lacks transparency and doesn’t fund students fairly. School districts in the lowest property wealth quartile receive $13,048 per student from state and local sources on average, while districts in the highest property wealth quartile receive $23,245 per student.

Additionally, substantial increases in property assessments have rendered the current formula irrelevant for most of the state’s rural school districts. Nebraska residents’ frustration over rising property tax burdens has caused policymakers to adopt the band-aid solution of increasing individual property tax credits to partially offset increases in taxes for some property owners. 

However, the only sustainable education-related solution to alleviating high property taxes in Nebraska is to reform the state’s school finance system. At the same time, state policymakers should also use this opportunity to adopt a fairer, more streamlined, and student-centered formula. 

The decline in TEEOSA’s ability to fund school districts fairly and control property taxes began in the early 2000s. At the beginning of the millennium, most Nebraska school districts qualified for state equalization aid. But in the 2019-2020 school year, the number of school districts receiving equalization aid was just 34%. In other words, two-thirds of Nebraska’s school districts today are almost fully reliant on property taxes to fund schools and receive no equalization aid from the state. Additionally, the Local Effort Rate—the property tax rate school districts use to raise formula funds—varies substantially across the state.

The main factor that has driven most Nebraska school districts off the state funding formula is the skyrocketing values of agricultural lands. This phenomenon has driven a wedge between the state’s rural and urban school districts. On one side, Nebraska’s urban school districts serve most of the K-12 population and have a large proportion of low-income students. They are also less dependent on property taxes and receive the lion’s share of state equalization aid. This constituency is primarily concerned with how the state funding formula accounts for student needs.

On the other hand, the state’s rural districts rarely receive equalization aid from the state and have large property tax burdens—but they’re also more highly funded in per-student terms compared to the more urban school districts. Understandably, the rural constituency is more concerned with how the state funding formula imposes significant property tax burdens on their residents (for more data on K-12 funding patterns in Nebraska, see Reason Foundation’s resource here).

No singular reform will address all the issues with TEEOSA. Reason Foundation partnered with the Platte Institute to create the Nebraska K-12 Education Funding Reform Model, a new tool that allows Nebraskans to explore potential reforms to the state’s education funding system. 

Nebraska policymakers should consider forming a study committee with the goal of developing a better K-12 funding model. A politically viable proposal would likely include a permanent reduction in local property tax reliance for K-12 funding, a transparent student-centered formula, and other elements that make the reform attractive to rural and urban school districts. 

Modernizing Nebraska’s school finance system means adopting a model where taxpayers and students are treated fairly, regardless of where they live. State policymakers can get the momentum going by forming a study committee with that concrete goal. 

Find the full Nebraska K-12 Funding Reform Model here.

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How the TEEOSA Formula Works

Nebraska’s core K-12 funding formula, the Tax Equity and Educational Opportunities Act (TEEOSA), controls about 94% of all state and local school operations funding in Nebraska. Put simply, the TEEOSA formula calculates school district funding as follows:

Needs – Resources = State Equalization Aid

The formula uses three basic steps:

Step 1- Determine School District Needs: The state first calculates each school district’s revenue entitlement, or Need, based on a wide array of factors. The key factors are student enrollment counts, concentrations of students in poverty, counts of limited English proficiency students, and qualifying special education expenses from the previous year. The result is a total revenue figure for each school district that will be covered by local and state funds.

Step 2- Determine District Resources: The state determines how much of a school district’s revenue entitlement can be covered by local property taxes, allocated income tax funds, and several other revenue sources. The property tax contribution is called the Local Effort Rate, and it was $1 for every $100 of adjusted property valuation in the 2020-2021 school year. Importantly, the Local Effort Rate is an assumed contribution, not a required one. Most school districts in Nebraska tax below the Local Effort Rate. Districts can also keep any revenues they raise locally that exceed their Need calculation.

Step 3- Determine State Equalization Aid: For any school districts that can’t cover their Need calculation from the revenue sources in Step 2, the state fills the difference with state equalization aid. This ensures that every school district in Nebraska at least receives its revenue entitlement as determined by Step 1. About two-thirds of Nebraska’s school districts don’t qualify for state equalization aid. This is very often because their Local Effort Rate is more than enough to meet their Need calculation.

How to Use the Nebraska K-12 Funding Reform Model

Improving the fairness of Nebraska’s K-12 finance system and alleviating property tax burdens will require shifting school district revenue sources and streamlining the state’s funding formula. Reason Foundation’s Nebraska K-12 Funding Reform Model allows users to simulate how changing the state’s school funding system might affect each school district in the state. With this tool, stakeholders can make changes to the school district’s Local Effort Rate and state funding formula mechanisms in the Model Input Panel on the lower-left corner of the screen. Once changes are made, users can hover over individual districts to view the financial effects and view summary impact charts on the right side of the screen. 

Users can also select from three different pre-loaded scenarios to get a sampling of the tool’s capabilities. Note that none of the three scenarios are being endorsed by Reason Foundation or the Platte Institute.

Assumed Local Effort Tax Rates

Using this tool, users can make changes to the assumed Local Effort Rate. After decreasing the Local Effort Rate in the Model Input Panel under the Tax Rates tab, one can evaluate how any change will affect school district funding, district tax rates, and the additional state equalization aid required.

For example, if one decreases the statewide assumed Local Effort Rate from $1 (meaning $1 for every $100 of assessed property valuation) to $0.75, they can view different summary results on the right side of the screen. In this scenario, the model estimates that 73 school districts see an overall increase in per-student funding, 145 districts see an increase in per-student state equalization aid, and 157 districts see a decrease in tax rates. Moreover, the total amount of state equalization aid required increases from $880 million to $1.269 billion. Notice also that no changes are expected for the formula Need calculation since changing the assumed Local Effort Rate should have no impact on this calculation.

State Formula Mechanisms

The second major component users can change in the model is how the state funding formula is calculated. Nebraska funds school districts by calculating the Need for each school district. This calculation is based on a complicated formula that factors in both individual student characteristics—such as poverty, limited English proficiency (LEP), and special education—as well as district size and district comparison groups. In the Model Input Panel, users can change different aspects of the current formula by selecting tabs labeled Basic Funding, Poverty Funding, SPED Funding, or LEP Funding. Under any of these tabs, users can deviate from how that funding component is currently calculated and simulate how adopting a more student-centered formula would affect individual districts and state equalization aid.

For example, under Basic Funding, a user can select the “single base” option and make no adjustments for school district size. This selection models the effects of funding each school district based on a single per-student amount, regardless of size. If users select a single base amount of $10,000 per student, the model estimates that 30 school districts see an overall increase in per-student funding and 33 districts see an increase in their per-student formula Need calculation. Notice the model estimates no changes to tax rates, since changing formula calculations alone doesn’t impact tax rates.

Conclusion

Importantly, the Nebraska K-12 Funding Reform Model has limitations when it comes to modeling tax policy changes. For instance, the model can’t probe potential tax reform strategies such as broadening the state sales tax base or changing property valuation practices—two issues that require separate analyses. The model also doesn’t account for the impact of property tax credits on individual taxpayers. The tool is limited to evaluating how changes to the assumed Local Effort Rate can impact actual district-wide property tax rates. It also assumes that any additional state funds required to compensate for decreases in property taxes are available. 

The Nebraska K-12 Funding Reform Model is an excellent resource for stakeholders to better understand the state’s funding system and its dependence on property taxes. The model also empowers users to explore potential reform pathways to make the state K-12 finance system more transparent and fair to both taxpayers and students. 

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

National Trends in Support Services Spending

Support services are a broad category of K-12 education expenditures that cover all operational spending that isn’t direct student instruction. These include social workers, guidance counselors, and health services as well as administrative and instructional support costs.

Nationally, inflation-adjusted per-pupil support services expenditures grew by 25% from 2002 to 2020, outpacing growth in per-student instructional expenditures, which increased by 20% over the same period.

In 2020, the inflation-adjusted national average for support services spending was $4,815 per-pupil, up from $3,841 per student in 2002, while the average per-pupil instructional expenditure was $8,176, up from $6,818 per student in 2002. Use the drop-down tool in the below charts to see changes in support service and instructional spending for each state.

Our analysis shows that the increase in support services spending has been driven by a disproportionate increase in benefit costs for support service personnel. These findings are corroborated by data from the National Center for Education Statistics which show a steady increase in total support personnel, as well as the total share of school staff that is considered support personnel, over the last few decades. In fact, 49% of the overall increase in per-pupil support services spending between 2002 and 2020 is attributable to benefits alone. This means the share of total support services spending going to staff benefits rose from 15% in 2002 to 22% in 2020.

This trend whereby increased education spending gets swallowed up by employee benefits has similarly been observed in the instructional spending category. My colleague Aaron Smith explains:

“One substantial cost-driver is spending on instructional and support staff benefits, a Census expenditure category that includes teacher pensions, health care insurance, retiree health care insurance, and other expenses. Disaggregated figures aren’t available, but research suggests that teacher pension costs are responsible for a substantial share of the growth observed in the last two decades.”

The Spending Spotlight also breaks down support services spending by function, meaning that users can observe what kinds of services are driving spending increases. Importantly, when looking at support services spending by function category, salary and benefit costs are included in those figures but are divided into subgroups of support services. 

Although each category of support services spending grew between 2002 and 2020, the largest contributor to the overall growth was student support services, which increased from $556 to $864 per student during this timeframe. This means more spending on guidance counselors, social workers, and school psychologists as well as more specialized services for special needs students like speech pathology and occupational therapy.

Though there are many factors contributing to the outsized growth in pupil support service spending, explanations potentially include the significant growth in students identified as having disabilities over the last few decades as well as an alarming spike in mental illness reports in teens.

State Trends

Individual state spending trends vary widely. For instance, many of the country’s highest education spenders—northeastern states like Connecticut, Vermont, and New Hampshire as well as Washington and Hawaii—also saw increases in per-pupil support services spending of 60% or higher from 2002 to 2020. Conversely, several states saw only small increases in support services spending—with Florida, Oklahoma, Idaho, and Michigan having increases of less than 5% per-pupil from 2002 to 2020. The below map shows inflation-adjusted per-pupil support service spending growth for each state.

In general, the states that have seen the largest increases in support services spending are also states that have seen the largest increases in overall education revenues per student between 2002 and 2020. Similarly, the states that saw the smallest increases to support services also saw some of the smallest increases in overall revenues in that timeframe.

However, some states have a trend whereby support services spending has well outpaced the overall increase in revenues. Missouri, for instance, saw a 6% increase in total per-pupil revenues between 2002 and 2020 but saw a 26% increase in per-pupil support services spending. Arkansas also had a 17% increase in all per-pupil revenues but had an outsized jump in per-pupil support services spending of 36%.

Interpretation

While some could argue that adding support staff and other contracted services is a good way to supplement how students are doing in classrooms, prioritizing new funds for support services could be causing unnecessary staffing bloat in some states. Outsized growth in support staff can pull funds away from instruction. For example, return to the cases of Arkansas and Missouri—which again saw a 36% and 26% increase in per-student support services spending, respectively, from 2002 and 2020. During that time frame, Arkansas only managed a 7% increase in per-student instructional spending and Missouri only a 3% increase in per-student instructional spending. 

At the national level, this preference for using new education funds for support services rather than instruction has also played a part in keeping inflation-adjusted teacher salaries flat over the last three decades.

When state policymakers and local leaders are making decisions about where to spend new education funds, they should consider how further investment in support services may impact competitive teacher pay as well as responsible management of the pension obligations that are driving the rise in benefit costs.

Find Reason Foundation’s full K-12 Education Spending Spotlight here.

The post How K-12 support services spending can divert education funding from instruction appeared first on Reason Foundation.

As Governing’s Girard Miller pointed out, most state and local government revenue sources are inflation elastic, meaning that they automatically respond to inflation. Because income and sales taxes are usually anchored to percentage rates, increases in taxpayers’ wages and in prices lead to commensurate increases in tax revenues for states and local governments. 

However, high inflation poses several challenges for public schools, particularly when it comes to property taxes that many school systems depend on and with labor negotiations.

While the percentage of overall education revenue coming from property taxes varies from state to state, public schools nationwide tend to get between 30% and 50% of their total revenues from local property taxes. Although property taxes can also adjust to inflation—particularly when there’s a booming housing market—most states have limitations in place to restrict how much property tax collections can grow from year to year.

While these kinds of protections are wise and understandably welcomed by taxpayers, especially retirees, school districts might argue the caps may prevent school budgets from keeping up during periods of especially high inflation.

The states whose K-12 schools may be most impacted by rising inflation are those with strict limits on property tax growth. For example, Michigan and Arizona both limit the annual growth of property valuations to 5% and 2%, respectively. These states can use general state funds to partially compensate for increases in inflation so it is unlikely that education revenues will be reduced overall.

However, asking state budgets to take on more school funding responsibility to keep up with the costs of high inflation will create its own fiscal squeeze if the economy is in a prolonged recession. Rather than remove these caps that protect taxpayers, school districts should plan for the squeeze that delayed property tax growth may cause.

Many public school district budgets will also have to deal with high-stakes teacher salary negotiations this year. As inflation has mounted over the last year, teachers saw the purchasing power of their paychecks shrink under the rising cost of groceries, gas, and other goods. Further complicating the picture heading into labor negotiations are the billions of federal stimulus and relief dollars school districts need to spend by 2024. These two factors will likely give teachers’ unions leverage as they fight for new salary contracts for their members.

But school districts will need to walk a fiscal tightrope during labor negotiations because, as Georgetown University’s Marguerite Roza pointed out in Education Next, salary increases for teachers are usually permanent and set a new baseline for future pay raises. And if inflation subsides within the next year or two, school districts could be stuck with new salary schedules they can no longer afford. 

Retired teachers are also calling for cost-of-living adjustments that would bolster their pension checks in the face of rising prices. Teachers’ pension systems in some states, including California, New York, and Virginia provide automatic cost-of-living adjustments to retirees’ pension checks each year based on the rate of inflation. The increases are typically capped at 3% to 5%.

Many states that don’t offer this type of automatic cost-of-living adjustment are still considering making ad hoc increases to retirement benefits or providing extra pension checks to help retirees keep up with the rising cost of living. But, because these states haven’t been setting aside funds for unplanned pension benefit increases, any benefit bump would add to the already out-of-control pension debt problem that is becoming costly for schools and taxpayers alike.

Federal COVID-19 stimulus and relief funds allotted to education have largely protected state governments and schools from grappling with the rising costs related to inflation so far. But these federal dollars will dry up in 2024 and then school districts will have to sustain whatever commitments they may have made using their traditional revenue sources. School districts and states that have spent this federal funding irresponsibly and have not prepared themselves for a recession or economic downturn may be facing tough decisions on future layoffs, program cuts, and/or school closures. 

State governments and public school systems need to be prepared for economic downturns. School budgets, including labor and pension costs, should be built to withstand the pressures that come with recessions and inflation. Rather than relying on federal relief funds and rosy forecasts, state and local policymakers involved in public education need to prioritize long-term budget sustainability over short-term cost pressures.  

The post How inflation could impact public school finances 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.

A new law signed by Arizona Gov. Doug Ducey will remove restrictions on the types of vehicles schools can use to transport students. It will also reform licensing rules that prevent schools from hiring more drivers. Other states would be wise to adopt similar reforms that could help address the myriad transportation challenges that schools face.

Arizona is not the only state struggling to hire bus drivers. At the start of the 2021-22 school year, a survey conducted by the National Association for Pupil Transportation, the National Association of State Directors of Pupil Transportation Services, and the National School Transportation Association found that just over fifty percent of school district respondents said their school bus driver shortage was “severe” or “desperate.” Only one percent said that driver shortages were not a problem.  

Federal law requires traditional school bus drivers to hold commercial driver’s licenses (CDLs), which typically require one or two months of training and course fees for learning how to operate heavy-duty trucks, as well as additional training on student safety and driving a school bus. While it is crucial that drivers be properly trained to transport students, requiring 200-plus hours of big-rig training is preventing new employees from entering the field. And some of the driver shortages can also be attributed to the fact that bus drivers left schools to pursue higher-paying commercial jobs during the COVID-19 pandemic.

While states don’t have the authority to waive federal CDL requirements for standard school bus drivers, states that follow Arizona’s lead and give school districts access to other transportation options could expand the field of capable candidates for open positions. 

Arizona’s new law also acknowledges the need for flexible busing options for rural schools and students taking advantage of educational choice opportunities at public and private schools in other jurisdictions. 

Up to now, only eight states have allowed school districts to contract with companies that operate vans of 11-to-15 passengers for school transportation. Federal regulations also prevent manufacturers from selling vehicles that don’t comply with rigorous school bus safety standards to school districts or to private contractors for the purpose of school transportation. 

Big yellow school buses are much more expensive to operate than smaller vehicles and are much less energy-efficient. School district administrators bear a heavy financial burden when they have to send a traditional school bus along a rural route with only 10 students. 

Arizona will remedy this problem by allowing schools to use 11-to-15-passenger vans to transport students while also creating new safety standards for the vehicles. Combined with the new law’s provision that increases the distance that schools can transport students outside their school districts from 20 miles to 30 miles, smaller vans could transform how students in the state get to school and which schools they can attend. 

While allowing for 11-to-15-passenger vans and easing licensing requirements wherever possible is a step in the right direction, states should also ensure that school districts can contract with Uber-like transportation network companies and that they have the funding flexibility to do so. Most states have a long way to go toward ensuring that their transportation options reflect the diverse needs of today’s students.

If policymakers across the country considered similar ways to diversify their transportation fleets, they could deliver a win for school district budgets—and for students pursuing school choice and others with limited transportation options.

A version of this column previously appeared in Real Clear Education.

The post What states can learn from Arizona’s new student transportation law 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.

A February poll by Great Public Schools Now, for example, found that 85% of registered voters say the mayor is responsible for the quality of education provided at Los Angeles schools. And voters don’t think the current mayor is living up to that responsibility. Just 12% of Angelenos surveyed say there is a high-quality public school available in every neighborhood in the city.

With voters wanting better schools, the mayoral candidates would be wise to explain to voters how their policies could help improve the future for students. Beyond needing to lift the quality of education, the most pressing problems facing LAUSD are declining enrollment and an increasingly unsustainable budget.

LAUSD schools receive most of their funding based on student enrollment, so drops in enrollment are going to cause a reduction in the state funding that schools receive. LAUSD Superintendent Alberto Carvalho recently said the looming fiscal cliff caused by losing students and the ending of federal COVID-19 relief is “Armageddon” and “going to be a hurricane of massive proportions.”

In this case, policies the mayor does have some power over are definitely to blame for some of LAUSD’s enrollment losses. High housing prices and LA’s exorbitant cost of living caused Los Angeles County’s population to decrease by 70,000 people in 2021. The mayoral candidates should detail if they’ll lower local tax burdens and reduce the city zoning regulations that drive up home prices by limiting the supply of housing available to buy and rent. Without local leaders taking these kinds of effective steps, declining enrollment and strained budgets are likely to continue at LAUSD.

Schools are also dealing with transportation challenges caused by school bus driver shortages, which have triggered longer bus rides for students that are further exacerbated by the city’s inability to adequately address its infamous traffic congestion. The new mayoral administration should prioritize reforms to improve transportation accessibility in partnership with LAUSD and the city’s public transit authority. The mayor could push for students to receive vouchers to ride Metro buses and trains to get to school, for example.

To be clear, none of these policy suggestions absolve the LAUSD school board and superintendent of their own shortcomings. Many of the major causes of LAUSD’s declining enrollment and budget problems are caused by the district’s leadership and policies. LAUSD went on a hiring spree even as it was losing hundreds of thousands of students over the last decade. The district implemented and maintained strict COVID-19 protocols that were far more restrictive than most other school districts—even after data showed students were at low risk of severe illness and after vaccines were available for teens.

To get back on track, LAUSD should speed up the removal of its aggressive COVID-19 restrictions, right-size staffing and facilities to align with the lower number of students and embrace choice programs that allow parents and students to customize parts of their educations and allow LAUSD to better compete with the abundance of online, private and charter options now attracting students.

Los Angeles’ high housing costs, taxes, and regulatory barriers are hitting low- and middle-income families especially hard. These problems are also contributing to LAUSD’s shrinking student population and worsening the district’s financial crisis.  The mayoral candidates should explain how they’ll improve LAUSD and address the city’s underlying problems hurting students, families, and schools.

A version of the column previously appeared in the Daily News.

The post Can the next mayor of LA help the city’s failing school district? appeared first on Reason Foundation.

Without viable transportation options, some families can’t reap the benefits of school choice even if they want to. States can pass laws to allow students to enroll in public schools outside of their zip codes — but those opportunities are meaningful only if families can afford to make the trip.

While solving the transportation puzzle is as much a logistical challenge as it is a policy one, one thing is clear: Traditional yellow school bus routes alone won’t cut it.

K-12 school transportation is one of the most regulated sectors in the nation’s economy. At the federal level alone, at least 20 congressional committees and federal agencies can promulgate laws and regulations that directly affect the industry. Generally, these laws and rules are related to safety standards for school buses as well as the vehicles’ sales and manufacturing. States impose additional requirements regarding who qualifies for K-12 school transportation, how it’s paid for and the types of vehicles public school districts can use.

Understandably, these heavy regulations aim to maximize student safety. But they aren’t without their tradeoffs.

First, federal and state rules heavily limit the types of vehicles districts can employ for school transportation. For instance, according to research from Bellwether Education Partners, only eight states allow for the use of smaller passenger vans for carrying children to and from school. And even in this small group of states that don’t limit themselves to big yellow buses, the availability of alternative vehicles is severely restricted by federal regulations prohibiting the sale of any vehicles to schools, public or private, that don’t meet the definition of a “school bus” determined by the National Highway Transportation Safety Administration. The agency only allows for seven types of buses to be sold for the purpose of transporting students to and from school. These are specialized vehicles that leave schools with limited choices, and myriad regulations concern every aspect of their design, from stop safety arms to seat size. 

State laws also make it difficult to accommodate students who cross residential assignment and district boundaries. According to a 2020 paper published by EdChoice, only six states require transportation services for any student enrolled in a public school district outside their own at a level roughly equivalent to what districts must provide for students who live within their boundaries. In most cases, state laws either don’t address who is responsible for school transportation when students cross district lines or put the onus on the families.

Of course, districts can’t be expected to provide whatever level of transportation service nonresident families might desire — that would be unreasonable. But if a district is prepared to receive the education funds that accompany a new enrollee from outside its boundaries, some level of transportation support should be provided for that student, ideally by the district. 

In the same way that schools are expected to use a students’ education dollars to teach them, they should provide transportation services or, at least, funding to help the family organize alternatives.

Wisconsin, for instance, places responsibility for transportation across district boundaries on parents, but there is state reimbursement of up to $1,200 a year for low-income families who participate in interdistrict school choice. While the policy isn’t perfect, it prudently recognizes both district limitations in providing transportation services and families’ limitations in paying out of pocket to get their kids to a school that serves them best.

In addition to clearing away policy barriers that restrict transportation access for students exercising school choice, state legislators should also allow districts to look beyond big yellow buses. While federal regulations make it difficult for school districts to purchase a more diverse fleet of vehicles, states like Arizona now provide financial incentives for school districts to partner with ridesharing companies like HopSkipDrive, which specializes in school transportation. 

HopSkipDrive operates similarly to other ridesharing companies like Uber, albeit with more thoroughly vetted drivers who can use any four-door vehicle that’s less than 10 years old. The company offers specialized services that the yellow school bus system can’t efficiently provide, such as transportation for individual students with disabilities or for small groups of children to schools of choice or sporting events. 

No silver bullet will solve the transportation challenges brought about by increasing public school choice. But if state policymakers place greater responsibility for transportation on public education providers and give school districts greater flexibility to find solutions, school choice will be more attainable for more families.

A version of this column previously appeared in the 74.

The post How states and schools can provide students more transportation options 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.

But Michigan’s program wouldn’t just serve students who decide to leave their public school to homeschool or attend a private school. It would also make $500 available annually to qualifying students who remain in public schools and provide $1,100 annually for public school students with disabilities. While those amounts are only a fraction of the funds that would be available to students who withdraw from public school, it would be the first time a school choice proposal puts education dollars directly in the hands of students who remain in public schools. 

This would be a big deal because granting the option of small-scale customization to families who are happy with their public schools may be exactly the reform strategy the school choice movement has needed for decades.

Opting out of a public school system to transfer to a private school is a big change for most families. Even with access to a publicly-funded private school scholarship, a change of that degree might not be worth it for families who are only somewhat unhappy with their public school. This reality can help to explain why private school choice programs have grown at a slow pace over the last few decades and why the U.S. spends less than 0.4 percent of public education funds on private school choice programs.

It should also be noted that most families are generally happy with their public schools. A 2021 Gallup Poll found that “73% of parents of school-aged children say they are satisfied with the quality of education their oldest child is receiving.” There simply isn’t enough dissatisfaction with the current system at this time to catalyze a large-scale shift away from traditional public schools and toward a customized, private sector-led education system.

Because of this, school choice proponents need policy solutions that meet most families where they are, something Michigan may be on the cusp of accomplishing with its education savings account (ESA) for public school students. 

Most families might not be ready to leave the public K-12 system, but they would be excited for a chance to customize on the margins. While many parents can’t imagine curating their child’s entire curriculum, they can certainly envision the benefits of having some funds to pay for an SAT tutor, enroll their student in a financial literacy course at a community college, or buy them a laptop.

This incremental step can introduce education choice to a large swath of previously unreached public-school families, whetting their appetites for more customization. And while there are already programs in other states that resemble something like a public school ESA, Michigan would build on these programs by providing public school students with even more flexibility over how they can use their funds.

For more than 20 years, the private school choice movement has focused on bringing a lot of choice to a relatively small contingent of families lucky enough to have access to vouchers, tax-credit scholarships, and ESAs. Maybe it’s time for school choice proponents to consider Michigan’s approach of also giving a taste of choice to the majority of families who, understandably, aren’t ready to leave their traditional public schools.

A version of this column previously appeared in The Hill.

The post How to bring school choice to public school families appeared first on Reason Foundation.