# What's Not the Matter with Kansas?

Toward a New, Old School Finance! 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 doesnt rebound School spending varies substantially across states! For a variety of reasons Some states have really thrown public schooling under the bus 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 hasnt doubled and b) performance isnt 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 dont have it, you cant spend it! (assumes flexibility in trade-offs between staffing quality/quantity) LAUSD Class Size / Teacher Wage problem Test Scores BS BS BS BS BSB BS BS S S B B S

BS BS BSB S S B B S Clouds of Doubt! 2-Dimensional Social Science? Money Raw SAT scores Figure 3.2 The more a state spends on schools, the worse its students SAT scores are 1900 1800 1700 1600 f(x) = 0.01 x + 1706.56 R = 0.06 1500 1400 1300 1200 5000 7000 9000 11000

13000 15000 Current spending per pupil 17000 19000 21000 23000 f(x) = 1.57 x + 1549.52 R = 0.03 Figure 3.3 After cost-of-living adjustments, education spending shows no correlation to SAT scores 2400 2200 Raw SAT scores 2000 1800 1600 1400 1200

4000 4500 5000 5500 6000 6500 7000 Regionally cost-adjusted per-pupil spending 7500 8000 Figure 3.4 Participation rates and average SAT scores 1650 1600 Raw SAT scores 1550 f(x) = 1.57 x + 1549.52 R = 0.03 1500 1450 1400

1350 1300 1250 1200 0.5 0.55 0.6 0.65 0.7 0.75 Participation rate 0.8 0.85 0.9 0.95 1 The Long Term Trend The specious claim that school spending has risen dramatically over time coinciding with virtually no change in student outcomes THE GRAPH!

https://www.educationnext.org/could-disappointing-2017-naep-scores-due-to-great- International Comparisons? https://t.co/p4dgJR48zC Class Size (Primary) 35 Low Wage/Large Class High Wage/Large Class 30.28 30 Class Size (Primary) 26.95 25.15 25 22.75 22.60 19.19 18.28 20 21.39 20.76 21.35 21.13

20.99 20.62 20.04 19.41 18.69 18.41 16.9817.25 21.13 20.94 19.82 23.98 23.58 17.31 15.73 15 High Wage/Small Class Low Wage/Small Class 10 40% 50% 60% 70% 80%

90% 100% 110% 120% 130% 140% Relative Wage 24 to 64 (Primary) 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) Class Size (Lower Secondary) 35 33.42 Low Wage/Large Class High Wage/Large Class Class Size (Lower Secondary) 31.05 30 28.25 28.06

26.69 25.05 25 21.68 21.3021.11 21.23 20 19.57 24.47 24.46 23.58 23.52 22.43 21.88 21.2221.06 20.25 19.59 22.47 19.32 15.66 15 High Wage/Small Class Low Wage/Small Class 10 40% 50%

60% 70% 80% 90% 100% 110% 120% 130% 140% Relative Wage 24 to 64 (Lower Secondary) 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) ACTUAL Long Term National Trends & Cycles CURRENT OPERATING EXPENDITURES PER PUPIL ADJUSTED FOR LABOR COSTS \$12,000 \$11,000 Spending per pupil \$10,000

\$9,000 \$8,000 \$7,000 \$6,000 Recession \$5,000 Tech Boom \$4,000 1993 Recovery? Recession (but housing/ property values continue to grow) 1998 2003 2008 Year Note: *Education Comparable Wage Index (http://bush.tamu.edu/research/faculty/Taylor_CWI/) Source: Baker et al., School Funding Fairness Data System. ECWI* adjusted Nominal 2013

Direct education expense as a share of gross domestic product and income 7.50% % Personal income % National income % GDP 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% Recession 4.00% 1970 1975 1980 1985 1990 Tech Boom 1995 Recession (but housing/ property values continue to grow)

2000 Year 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. 2005 Recession Recovery? 2010 2015 TEACHERS (ALL) PER 100 PUPILS OVER TIME 6.60 6.40 6. 6. Teachers per 100 pupils 6.20 0 6. 6.00 5.80

5. 73 7 75 5. . 5 8 17 6. 30 6. 30 19 7 6.4 3 6. 2 6. 5 6. 24

49 6. 0 3 6. 4 4 6. 2 2 3 25 .24 . 24 6. 2 . . 6 6 6 6 3 88 . 5 Recession

Recovery? Recession (but housing/ property values continue to grow) 74 . 5 5.60 5.40 5.20 1993 Tech Boom 1998 Source: Baker et al., School Funding Fairness Data System. 2003 Year 2008 2013 6

78.6% 77.9% 79.0% 79.6% 80.6% 83.1% 84.1% 82.4% 83.3% 84.6% 82.0% 82.6% 82.4% 82.6% 83.9% 85.0% 80.9% 78.8% 78.1% 76.3% 76.5% 77.4% 78.3% 76.4% 75.9% 77.0% 77.2% 78.5% 80.1% 78.8% 78.4% 78.1%

77.2% 77.2% Teacher wages as % of all college graduate wages 90.0% 88.5% 87.2% 86.9% 85.4% RATIO OF TEACHER WEEKLY WAGES TO COLLEGE-EDUCATED NONTEACHER WEEKLY WAGES Recession (but housing/ property values continue to grow) 80.0% Recovery? 75.0% 70.0% 65.0% 1979 Recession

Tech Boom 1984 1989 1994 1999 Year 2004 2009 2014 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-URS. Data are for workers aged 1864 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). Long-term trends on salaries and benefits as percentage of current spending 90% 80% % of Current Spending 70% 60% 50% 40% 30% 20% 10% 0% 1993

1998 2003 2008 2013 Year Salaries & Wages Benefits Combined % Current Spending VOLATILITY OF TAX REVENUES BY SOURCE Property tax Sales tax Income tax 115% 110% % differnce over prior year 105% 100% 95% Tech Boom

90% 85% 80% 1990 1995 Recession (but housing/ property values continue to grow) 2000 2005 Recession 2010 Recovery? 2015 Year Sources: State and Local Government Finance Data Query System, The Urban InstituteBrookings 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 (19902014) Interstate Variation Wyoming Alaska

New York Vermont New Jersey Nebraska North Dakota West Virginia Iowa New Mexico Rhode Island Ohio South Carolina Georgia Pennsylvania Arkansas Mississippi Delaware Minnesota Texas Kansas Kentucky Maine Montana Louisiana Wisconsin Alabama Illinois Missouri New Hampshire Michigan Connecticut Oregon Utah Washington Virginia Oklahoma

Indiana Massachusetts South Dakota California Maryland Colorado Nevada North Carolina Tennessee Idaho Hawaii Florida Arizona Fiscal Effort 2016 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% Share of GSP Share of Income 0.00% Teacher Wage Competitiveness

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Rhode Montana Pennsylvania Island Wyoming New New York Jersey Hawaii Vermont North Dakota South Iowa Dakota Maine Alaska West IdahoVirginia Ohio California Massachusetts FloridaNevada Michigan Mississippi

Maryland New Nebraska Mexico Illinois Delaware Wisconsin Connecticut Arkansas Kentucky Louisiana Tennessee Minnesota South Carolina Indiana Alabama Oregon Missouri District Utah ofVirginia Columbia North Texas NewCarolina Hampshire Washington Kansas Georgia Colorado Oklahoma Arizona Age 25 Age 35

Age 55 State GDP and revenue \$20,000 18719.02 18585.5 18188.29 17938.9 State & local revenue per pupil* \$18,000 17008.23 16930.21 \$16,000 15074.12 f(x) = 0.24 x 861.77 R = 0.42 \$14,000 13875.43 14272.98 12671.59 12320.38 12241.63 \$12,000

\$10,000 \$8,000 13597.92 13276.27 7212.92 \$6,000 \$30,000 11546.65 11687.79 11342.5 11065.56 10853.58 10315.7 10248.96 9932.24 9887.08 9868.96 9806.49 9559.91 9318.53 9473.7 9462.21 9334.82 8969.82 8961.05 8955.5 8807.12 8752.48 8671.54 8342.57 8263.93 8259

7964.61 7683.6 7485.45 7453.89 7086.47 7070.33 6967.06 6276.52 6522.13 \$35,000 \$40,000 \$45,000 \$50,000 \$55,000 10579.48 \$60,000 \$65,000 \$70,000 State GDP per capita 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 Fiscal effort and revenue \$20,000 18719.02 18585.5

17938.9 \$18,000 17008.23 State & local revenue per pupil* 16930.21 \$16,000 f(x) = 333265.87 x 985.95 R = 0.33 15074.12 14272.98 \$14,000 18188.29 13597.92 13875.43 13276.27 12671.59 12320.38 12241.63 11687.79 11546.65 \$12,000 11342.5 11065.56 10853.58

10579.48 10315.7 10248.96 9932.24 9887.08 9868.96 9806.49 9559.91 \$10,000 9473.7 9462.21 9334.82 9318.53 8969.82 8961.05 8955.5 8807.12 8752.48 8671.54 8342.57 8259 8263.93 7964.61 7683.6 \$8,000 7485.457453.89 7212.92 7086.47 7070.33 6967.06 6522.13 6276.52 \$6,000 2.50% 3.00% 3.50% 4.00% 4.50%

5.00% 5.50% Effort ratio 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. Spending and staffing ratios 10 9.21 8.96 9 8.5 Teachers per 100 pupils** 8.34 8 7 6 5 R = 0.39 7.91 7.71 7.67 7.46 7.4 7.31

7.27 7.19 7.17 7.1 7.08 7.06 7.02 6.9 6.9 6.9 6.88 6.87 6.856.756.74 6.71 6.76.71 6.68 6.54 6.43 6.3 6.19 6.1 6.02 5.94 5.87 5.92 5.87 5.59 5.57 5.41 5.27 5.08 4.94 8.7 7.76

7.727.75 6.6 4.37 4 \$5,000 \$7,000 \$9,000 \$11,000 \$13,000 \$15,000 \$17,000 \$19,000 \$21,000 Current spending per pupil* 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 Spending and teacher salary competitiveness 100% 0.94

Teacher salary parity (age 45)** 95% 90% 0.85 85% 80% 0.82 R = 0.32 0.79 0.76 75% 70% 0.75 0.75 0.73 0.730.73 0.73 0.73 0.72 0.72 0.72 0.72 0.71 0.72 0.71 0.7 0.7 0.69 0.69 0.68 0.67 0.67

0.67 0.67 0.67 0.66 0.66 0.66 0.66 65% 60% \$5,000 0.79 0.77 0.77 0.75 0.62 \$7,000 0.85 0.84 0.62 \$9,000 0.77 0.77 0.74 0.72 0.71 0.71 0.68

0.67 0.63 0.63 \$11,000 \$13,000 \$15,000 \$17,000 \$19,000 Current spending per pupil* 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 \$21,000 Districts (and kids) that never got a chance! Philadelphia Pennsylvania 1995 2000 2005 Fiscal Year

Census Poverty State&Local Revenue per Pupil 2010 2015 Current Spending per Pupil Chicago Illinois 1995 2000 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil 2010 2015 Current Spending per Pupil 1995 2000 Bridgeport New Britain

Connecticut Connecticut 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil 2010 2015 1995 Current Spending per Pupil 2000 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil Waterbury Connecticut 1995 2000 2005

Fiscal Year Census Poverty State&Local Revenue per Pupil 2010 2015 Current Spending per Pupil 2010 2015 Current Spending per Pupil 1995 2000 Reading Allentown Pennsylvania Pennsylvania 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil

1995 2000 2010 2015 Current Spending per Pupil 1995 2000 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil Schenectady Waukegan New York Illinois 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil 2010

2015 Current Spending per Pupil 1995 2000 2005 Fiscal Year Census Poverty State&Local Revenue per Pupil 2010 2015 Current Spending per Pupil 2010 2015 Current Spending per Pupil National Education Cost Model Spending Structural/ Geographic Constraints

Cost Input Prices Measured Student Outcomes Inefficiency Efficiency Controls: Fiscal capacity, competition, & public monitoring Student Population Outcomes Adequacy Target Exceeds Current Average tio u b i str i D l a

tu Ac n Equal Opportunity Intercept Resources Current Average Outcomes Current Average Resources Adequacy Cost Exceeds Current Average 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) Funding Gap - Low Poverty (10000,20000]

(5000,10000] (2000,5000] (0,2000] (-2000,0] (-5000,-2000] (-10000,-5000] [-20000,-10000] No data Funding Gap - Median Poverty (10000,20000] (5000,10000] (2000,5000] (0,2000] (-2000,0] (-5000,-2000] (-10000,-5000] [-20000,-10000] No data Funding Gap - High Poverty (10000,20000] (5000,10000] (2000,5000] (0,2000] (-2000,0] (-5000,-2000] (-10000,-5000] [-20000,-10000] No data Funding and outcomes relative to national average (middle-poverty quintile)

0.08 0.06 Outcome Gap 0.04 0.02 0.00 -0.02 -0.04 -0.06 -\$8,000 -\$6,000 -\$4,000 -\$2,000 \$0 \$2,000 Spending Gap Source: Data from Baker et al., The Real Shame of the Nation \$4,000 \$6,000

\$8,000 \$10,000 \$12,000 Figure 10.3 Funding and outcomes relative to national average (lowest-poverty quintile) 0.14 0.12 0.10 Outcome Gap 0.08 0.06 0.04 0.02 0.00 -0.02 -0.04 \$0 \$10 \$20 \$30 Spending Gap \$40 \$50

\$60 Figure 10.4 Funding and outcomes relative to national average (highest-poverty quintile) 0.04 0.02 Outcome Gap 0.00 -0.02 -0.04 -0.06 -0.08 -0.10 -\$25,000 -\$20,000 -\$15,000 -\$10,000 -\$5,000 Spending Gap \$0

\$5,000 \$10,000 .1 Large Districts >75k -.1 -.05 0 .05 Jefferson County School District No. R-1County Public Schools Wake County Schools Montgomery Anne Arundel County Public Schools Gwinnett County Cobb County Fulton County Baltimore Public Schools Fairfax Co County Pblc Schs Charlotte-Mecklenburg Schools

Palm Beach Lee Broward Orange Dade Cypress-Fairbanks Isd Hillsborough Duval Pinellas New York City Wm Public Prince CoSchools Pblc Schs Northside Isd Clark County School District AustinPolk Isd Jefferson County School District No. 1 In The County Of Denver And State Of C City Of Chicago Sd 299 Public Prince George'S County Public Schools Albuquerque Schools San Diego Davidson UnifiedCounty Sd Dekalb County

HoustonLong Isd Beach Unified Philadelphia City Sd Dallas Isd Fort Worth Isd Baltimore City Public Schools Los Angeles Unified Milwaukee School District 0 .5 1 1.5 Current Spending as % of Cost of Avg. Outcomes Gap between Current Outcomes & National Mean 2 Fitted values Effort versus funding gaps, 201315 \$15,000 Spending Gap Median Poverty \$10,000 \$5,000 \$0 -\$5,000 -\$10,000 2.50%

1002.50% 2002.50% 3002.50% Effort Source: Data from Baker et al., The Real Shame of the Nation 4002.50% 5002.50% 6002.50% The Road Ahead Redefined Federal Role? Funding Pool all federal aid allocate through a national foundation aid formula using cost to average outcomes as target Required minimum state effort Regulation? Feds should focus on oversight, guidance (regs) and enforcement where necessary, pursuant to federal statutory protections Research Advancement/Technical Support Federal data collections (and research access to them!) Renewed role in federal research support! And reporting! State Role Funding! SEAs?

Additional Guidance Use economic good times to catch up! Maintain sources balanced portfolio of revenue Traditional investments matter! It really does still come down to staffing quantity and quality that is having enough, competitively compensated staff (teachers, administrators, etc.) to get the job done!

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