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Introduction and Overview

Introduction and Overview. School Finance: A Policy Perspective, 4e Chapter 1. What is School Finance?. What is School Finance?. “School finance concerns the distribution and use of money for the purpose of providing educational services and producing student achievement.”

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Introduction and Overview

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  1. Introduction and Overview School Finance: A Policy Perspective, 4e Chapter 1 1

  2. What is School Finance? What is School Finance? “School finance concerns the distribution and use of money for the purpose of providing educational services and producing student achievement.” Odden and Picus (2004) p. 1 2

  3. School Finance Focus • Equity (most of 20th century) • Variation in per-pupil expenditures • Uneven distribution of property tax base • Productivity (1990s) • Linkage between level and use of funds and student achievement • Adequacy and Accountability (now and in the future) 3

  4. Today • Introduction to the course • Course material and expectations • Required readings • The scope of school finance • Nationally, Regionally, Locally • School finance adequacy 4

  5. School Finance Simulations • 20 district and state simulations available • http://www.mcgraw-hill.com/odden4e/ • You must have Excel to run • Download and run • If it does not operate properly, delete and download again • If you have a problem, I can e-mail it to you • Special consideration for Mac users 5

  6. Education and the Fortune 500 *Does not include Federal Revenue RI State Budget 6.9 Billion RI State Education Budget 690 Million RI Education Spending Total 6

  7. Annual Public School Enrollment: United States—1919 to 2005 7

  8. Share of Revenue: 1919 to 2000 8

  9. Pupil/Teacher Ratio: 1955 to 2001 9

  10. Key School Finance Issues • Until recently, money per pupil, after inflation adjustment, has risen ~ 3.5% annually for 95 years • But this money is distributed very unequally across states, districts, and schools • When it gets to schools, some argue that it is not used as effectively or productively as it can be • This in the context of student performance measures which haven’t been as hoped particularly for kids with special needs 10

  11. And So THE Challenge: • Accomplish the goals of standards-based education reform, by employing “evidence-based” practice in everything we do • Which means at least to double education performance over the next decade • We must improve the productivity of our actions and boost student performance with the money we have and the limited additional money we will get 11

  12. School Finance Background • SF issues have shifted in two ways: Equity shift: • Old equity problem: low wealth, low spending with high tax rates, versus high wealth, high spending with low tax rates • New equity problem: low wealth, average spending with lower tax rates, versus high wealth, high spending with higher tax rates Catalyst for S 3050 type legislation 12

  13. New equity problem harder to fix and the fix is different from the fix for the old equity problem • And most individuals—school leaders and policymakers—are still focused on the old equity problems (In part why RI has struggled with adopting Education Funding Formula) 13

  14. Second Major Shift • Equity has taken a back seat to adequacy— is there enough or an adequate amount of money to have educators teach students to new high performance standards • If not, what is the adequate expenditure level that is required? Is there enough money in the system? Critics argue yes, and point to collective bargaining and teacher compensation as misdirecting Resources. 14

  15. What Is Adequacy? • Adequacy requires provision of sufficient fiscal resources to enable all students to perform at high levels 15

  16. Costing Out Adequacy • Defining adequacy • Establishing a system to achieve the educational standard or goal • Measuring costs and expenditures • Concerns and other issues 16

  17. Four Approaches to Defining Adequacy • Cost functions • Expenditures in districts/schools that meet performance benchmarks • Professional judgment • Evidence-based approach 17

  18. Implementation • How prescriptive should the model be? • Who controls spending decisions? • Simple, transparent, and easily understood • Establish a base “foundation” level • Adjust for: • Student characteristics (eg poverty) • District characteristics (expectations and involvement) • Price differences (“gold coast” Ct) 18

  19. Funding Adequacy • If we can identify an adequate spending level, how do we fund it? • By taxing the rich, and if so, who are the rich? • By tapping “progressive taxes,” which the tax- paying public does not want • By tapping more “regressive taxes,” like sales taxes, which if more taxes are needed, the tax- paying public will swallow? • And how “regressive” are the so-called regressive taxes? (so in an economic recession like now when spending is less then revenue base is diminished) 19

  20. What Does This Mean for a State? • School spending • School operations • Tax rates • Other implications? • School finance reform • What would you recommend? 20

  21. Reform of School Finance • Need for comprehensive reform of the finance system • System must be simple, easy to understand, and transparent • Should it be based on a measure of adequacy? And if so, how would that impact equity? • Recent evidence (Odden, Goetz and Picus, 2007) suggests that relatively little additional money is needed overall to reach adequacy – part of the problem is the distribution across states 21

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