Toward a New, Old School Finance!

1. Toward a New, Old School Finance!

2. Themes • Money matters! • Money translates primarily to human resources • Trade-off between quantity and wage • There are no magical substitutes • Tech-based solutions? • Pubic district, charter and private schools allocate resources largely the same! • Running multiple systems in a common space induces inefficiency • School spending has not grown out of control for decades! • During bad times, school spending stagnates or even declines • But during good times, at least in recent cycles, spending doesn’t rebound • School spending varies substantially across states! • For a variety of reasons • Some states have really thrown public schooling under the bus

3. Money matters myths! • Clouds of doubt • Weak correlation between spending and outcomes? • More thorough statistical analysis finds otherwise! • The Long Term Trend • Spending has doubled and performance is flat? • But a) spending hasn’t doubled and b) performance isn’t flat! • AND, more thorough statistical analysis finds otherwise! • International Comparisons • We spend more than any other nation (in the world, ever!) and get little, by comparison, in return? • Just no! • Spending figures most frequently cited simply not comparable (do not cover comparable range of costs/services) • Numerous other relevant factors invariably left out of comparisons. • How money is spent matters more than how much? • But, if you don’t have it, you can’t spend it! • (assumes flexibility in trade-offs between staffing quality/quantity) • LAUSD Class Size / Teacher Wage problem

4. Clouds of Doubt! BS BS BS BS BS BS BS BS BS Test Scores BS BS BS BS BS BS BS Money 2-Dimensional Social Science?

8. The “Long Term Trend” The specious claim that school spending has risen dramatically over time coinciding with virtually no change in student outcomes

9. THE GRAPH!

12. https://www.educationnext.org/could-disappointing-2017-naep-scores-due-to-great-recession/https://www.educationnext.org/could-disappointing-2017-naep-scores-due-to-great-recession/

13. International Comparisons? https://t.co/p4dgJR48zC

16. Low Wage/Large Class High Wage/Large Class High Wage/Small Class Low Wage/Small Class OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing. http://dx.doi.org/10.1787/eag-2014-en Table D2.1. Average class size, by type of institution and level of education (2012) & Table D3.2. Teachers' salaries relative to earnings for full-time, full-year workers with tertiary education (2012)

17. Low Wage/Large Class High Wage/Large Class High Wage/Small Class Low Wage/Small Class OECD (2014), Education at a Glance 2014: OECD Indicators, OECD Publishing. http://dx.doi.org/10.1787/eag-2014-en Table D2.1. Average class size, by type of institution and level of education (2012) & Table D3.2. Teachers' salaries relative to earnings for full-time, full-year workers with tertiary education (2012)

21. ACTUAL Long Term National Trends & Cycles

23. Recession Recovery? Recession (but housing/ property values continue to grow) Tech Boom Recession Sources: Current Population Survey: Income, US Census Bureau, http://www.census.gov/hhes/www/income/data/historical/families/; Population Estimates, US Census Bureau, http://www.census.gov/popest/data/historical/2010s/vintage_2013/national.html and http://www.census.gov/popest/data/national/asrh/2014/index.html; State and Local Government Finances, US Census Bureau, http://www.census.gov/govs/local/; National Income and Product Accounts Tables, Bureau of Economic Analysis, US Department of Commerce, http://www.bea.gov/iTable/index_nipa.cfm.

24. Recovery? Recession Recession (but housing/ property values continue to grow) Tech Boom Source: Baker et al., School Funding Fairness Data System.

25. Recession (but housing/ property values continue to grow) Recovery? Recession Tech Boom Notes: "College graduates" excludes public school teachers, and "all workers" includes everyone (including public school teachers and college graduates). Wages are adjusted to 2015 dollars using the CPI-U-RS. Data are for workers aged 18–64 with positive wages (excluding self-employed workers). Nonimputed data are not available for 1994 and 1995; data points for these years have been extrapolated and are represented by dotted lines (see Appendix A for more detail).

27. Tech Boom Recovery? Recession Recession (but housing/ property values continue to grow) Sources: State and Local Government Finance Data Query System, The Urban Institute–Brookings Institution Tax Policy Center, http://www.taxpolicycenter.org/slf-dqs/pages.cfm; US Census Bureau, Annual Survey of State and Local Government Finances, Government Finances, Vol. 4, and Census of Governments (1990–2014)

28. Interstate Variation

31. Note: *Per-pupil revenue projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. Source: Baker et al., School Funding Fairness Data System

32. Note: *Per-pupil revenue projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty.

33. Notes: *Current spending per pupil projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. **Teachers per 100 pupils projected for districts with more than 2,000 pupils, average population density, average labor costs, and 20% of children in poverty. Source: Baker et al., School Funding Fairness Data System

34. Notes: *Teacher wage as % of non-teacher wage at same age, degree level, hours per week & weeks per year Source: Baker et al., School Funding Fairness Data System

35. Districts (and kids) that never got a chance!

40. National Education Cost Model

41. Student Population Input Prices Structural/ Geographic Constraints Measured Student Outcomes Cost Spending Inefficiency Efficiency Controls: Fiscal capacity, competition, & public monitoring

42. Current Average Resources Adequacy Target Exceeds Current Average Actual Distribution Current Average Outcomes Outcomes Equal Opportunity Intercept Adequacy Cost Exceeds Current Average Resources

43. Current spending (2013-2015) as % of “cost” of achieving national average outcomes (red = lower, green = higher) Current outcomes (2013-2015) with respect to national average outcomes (red = lower, blue = higher)

47. Source: Data from Baker et al., The Real Shame of the Nation

50. Large Districts >75k 1 . 5 Jefferson County School District No. R-1 Wake County Schools Montgomery County Public Schools Anne Arundel County Public Schools 0 . Gwinnett County Cobb County Fulton County Baltimore County Public Schools Fairfax Co Pblc Schs Charlotte-Mecklenburg Schools Palm Beach Broward Lee Orange Dade Cypress-Fairbanks Isd Hillsborough 0 Duval Pinellas New York City Public Schools Prince Wm Co Pblc Schs Northside Isd Polk Clark County School District Austin Isd Jefferson County School District No. 1 In The County Of Denver And State Of C City Of Chicago Sd 299 Prince George'S County Public Schools Albuquerque Public Schools San Diego Unified Davidson County Sd 5 0 Dekalb County . Houston Isd - Long Beach Unified Philadelphia City Sd Dallas Isd Baltimore City Public Schools Fort Worth Isd Los Angeles Unified 1 . Milwaukee School District - 0 .5 1 1.5 2 Current Spending as % of Cost of Avg. Outcomes Gap between Current Outcomes & National Mean Fitted values