The Truth About School Funding

Dmitri Mehlhorn, co-founder of StudentsFirst, wrote an article a few weeks ago about school funding titled, “How Money is Spent Matters.”  That statement is obviously true; who could disagree with it?

Unfortunately, the article’s actual argument – that “America’s schools are not underfunded” – is completely false.  This post corrects the record.  Funding for public primary and secondary education in the United States is, in fact, inadequate and inequitable, and rectifying this problem should be a top priority for anyone who cares about improving our schools.

We’re Far From School Funding Equity

But what is adequate and equitable school funding?  Researchers Bruce Baker and Danielle Farie and civil rights lawyer David Sciarra, who produce a National Report Card on school funding fairness, discuss this question at length in their 2015 report.  One of the most important principles they note is that, because “[v]arying levels of funding are required to provide equal educational opportunities to children with different needs[,] finance systems should provide more funding to districts serving larger shares of students in poverty.”

School funding in the United States doesn’t come close to meeting this criterion; as Baker, Farie, and Sciarra show, fourteen states have regressive school funding systems, meaning they allocate less money to schools serving disadvantaged students than they do to schools serving more affluent student populations.  Nineteen other states have roughly equivalent funding between the two types of schools.  Only four states – Minnesota, Massachusetts, New Jersey, and Delaware – score high enough across all of the researchers’ criteria (funding level; funding distribution; effort, or funding as a share of the state’s economy; and coverage, or “the share of school-age children enrolled in public schools and the degree to which there is economic disparity between households in the public versus private education system”) to have their funding systems deemed “fair.”

This analysis likely represents an upper bound on the degree of school funding equity in the United States.  While California appears to have roughly equivalent funding for low- and high-income schools in the report, for example, there are major funding discrepancies between some of the state’s “basic aid” districts, which serve affluent students, and districts that serve lower-income populations.  Within-district variations in spending also go undetected in the report’s metrics, as may situations in which funding that is supposed to follow high-need students doesn’t reach them.

Inequitable school funding is a widely acknowledged problem, so much so that people associated with StudentsFirst – the very organization Mehlhorn co-founded – recognize that addressing it is imperative.  Yet Mehlhorn’s article doesn’t mention the distribution of school funding at all, except when making misleading statements about charter school spending.

Charter School Research Supports Calls for More School Funding

As Baker, Ken Libby, and Kathryn Wiley found in a careful 2012 analysis of charter school and traditional public school spending:

Comparative spending between the two sectors is mixed, with many high profile charter network schools outspending similar district schools in New York City and Texas, but other charter network schools spending less than similar district schools, particularly in Ohio.

Mehlhorn’s counterclaim that charter schools spend significantly less money than traditional public schools likely stems from a 2011 report from the National Center for Education Statistics, but it, like more cursory and flawed studies, may fail to appropriately categorize spending that should be assigned to each type of school.  Transportation funding and spending on food services and special education, for example, can be misclassified in such analyses.

In addition, students in traditional public schools perform just about as well on average as students in charters; as Harvard professor Tom Loveless has explained, the differences in student test score results between the two sectors “are extremely small, so tiny, in fact, that they lack real world significance.”  Mehlhorn’s inaccurate claims to the contrary rely on a completely invalid “months of learning” conversion performed in a recent study of urban charter schools; the study actually shows a tiny difference between the charter and traditional public school sectors (less than .06 standard deviations, or a good deal less than one additional question answered correctly on most tests).

In other words, there’s only one real conclusion that can be drawn about the research on overall levels of charter school funding and average student test scores: arguments touting charter schools as a low-cost solution to boost student achievement are either uninformed or deliberately misleading (especially because the student populations charters serve are typically unrepresentative subsets of the surrounding traditional public school populations, and because many studies don’t distinguish school effects from peer effects).

There is, of course, important variation in the charter sector; some studies indicate that students in some charter school networks do very well.  As Baker, Libby, and Wiley note, however, many of these networks spend substantially more per pupil (sometimes well over 30 percent more) than comparable public schools.  Similarly, the test score gains in New Orleans charters that Mehlhorn applauds came with a substantial price tag, a fact that his article conveniently omits.  The following excerpt from an interview with researcher Doug Harris is instructive on this point:

At the beginning New Orleans was spending about $8,000 more per pupil relative to similar districts. In other words, spending didn’t quite double, but it came pretty close to doubling in the initial years. And then it converged back to the normal, or close to normal rate. Now they’re spending about $1,000 more per pupil than similar districts, whereas before the storm they were spending close to the same as those comparison districts.

Harris doesn’t believe the test score gains in New Orleans were entirely a product of increased funding – he finds that explanation unlikely and thinks “every element of the reform package, including the change in spending, probably contributed in some fashion” – but acknowledges that it’s possible that increased funding played the primary role.  In addition, while Harris thinks there are important lessons to be learned from school reform there, he doubts “you’d see the same effects in other places because the conditions [in New Orleans] were distinctive.”

Either way, to the extent that best practices in certain successful charter schools drive their results, these practices can likely be replicated in traditional public schools that receive more adequate funding, as research by Roland Fryer suggests.  Especially because rapid charter school expansion has often led to harmful side-effects (in New Orleans, the large-scale firing of Black teachers and inattention to community preferences are poignant examples), our efforts are best focused not on promoting charters, but on adequately and equitably funding all schools, thus enabling them to implement best practices that may include but are not limited to better teacher training and support, more competitive teacher pay (to facilitate recruitment and retention), reduced class sizes, extended learning time, expanded tutoring availability, and enhanced extracurricular opportunities.

School Funding Research Confirms How Much Money Matters

There’s also a very strong research basis to support increased school funding – a research basis at least as strong as, if not stronger than, that behind practically any other education policy proposal.  Mehlhorn’s article elevates shaky empirical work from 25 years ago by Eric Hanushek (and work from nearly 50 years ago by James Coleman) to argue that money isn’t particularly important while downplaying the much larger body of more recent and careful research that comes to the opposite conclusion.

In 2012, Baker reviewed dozens of newer, higher-quality studies pertaining to this topic (Mehlhorn’s article mentions Baker’s review, but doesn’t link to it and paints an inaccurate picture of its findings).  As Baker’s review shows:

[T]here are a few things we can say with confidence about the relationship between funding, resources, and student outcomes:

First, on average, even in large-scale studies across multiple contexts, aggregate measures of per-pupil spending are positively associated with improved and/or higher student outcomes…

Second, schooling resources that cost money, including class size reductions and increased teacher compensation, are positively associated with student outcomes…Further, while there may exist alternative uses of financial resources that yield comparable or better returns in student outcomes, no clear evidence identifies what these alternatives might be…

Third, sustained improvements to the level and distribution of funding across local public school districts can lead to improvements in the level and distribution of student outcomes. While money alone may not be the answer, adequate and equitable distributions of financial inputs to schooling provide a necessary underlying condition for improving adequacy and equity of outcomes.

A new high-quality study by C. Kirabo Jackson, Rucker Johnson, and Claudia Persico comes to the same conclusion.  Mehlhorn’s article also mentions this study, but misinterprets the results; it mistakenly compares the invalid “months of learning” statistic from the charter school research discussed above (which actually represents data on student test scores) with Jackson et al.’s data on completed years of schooling.

In reality, Jackson et al.’s results are much more striking than most results in education research; the researchers argue in EducationNext that, “for low-income children, a 10 percent increase in per-pupil spending each year for all 12 years of public school is associated with roughly 0.5 additional years of completed education, 9.6 percent higher wages, and a 6.1-percentage-point reduction in the annual incidence of adult poverty.”  While they concede in a follow-up piece that increased school funding won’t “eliminate all differences in outcomes by socioeconomic status,” they contend “that a 22.7 percent spending increase is large enough to eliminate the average outcome differences between the poor (those with family incomes below twice the poverty line) and the non-poor (those with family incomes above twice the poverty line).”

The researchers’ claims here are overstated – they’re extrapolations beyond the actual results that, while less misleading than the “months of learning” statistic, are still misguided attempts to help a broader audience understand research findings – but it’s important to note that the magnitudes are very large relative to the results in most education studies.

It’s also worth noting that even Hanushek, who is one of the only researchers who continues to question the importance of school finance reforms, has never said that money never matters (Mehlhorn’s article gets that point right) and has admitted that schools serving more disadvantaged students should receive more funding.

We Can Afford to Spend More on Public Schools

Some skeptics of increased funding, Mehlhorn included, attempt to compare education spending in America with education spending in other countries.  Mehlhorn writes:

The best, though, imperfect way, to understand how well America is spending money on education is look at how much other nations – most-notably highly-touted Finland and South Korea — spend on their schools.

His article then proceeds to pull numbers from an OECD report to argue that Americans spend more on education than people in other countries, which, according to Mehlhorn, makes it “clear that money isn’t the main problem in American public education.”

The problem, however, is that the numbers in Mehlhorn’s piece are cherry-picked; they don’t actually speak to his argument about public K-12 education spending.  As the OECD report notes, the figures Mehlhorn cites include public and private spending on primary, secondary, and tertiary education – that is, college – including but not limited to spending on transportation, meals, school health services, college dormitories, and “private spending on books and other school materials or private tutoring.”

In general, the OECD data shouldn’t be used for cross-country comparisons; it doesn’t count spending the same way in each country and likely makes US spending appear larger relative to spending in other countries than it actually is.  To the extent that the data can be illustrative, however, the appropriate approach would exclude college costs and private spending and focus on K-12 public school spending as a share of the economy (as opposed to using raw numbers; spending as a share of GDP provides a better indication of how much a country spends relative to what it can afford).  Doing so (see Table B4.1 here) indicates that public spending on primary and secondary education in the United States, relative to GDP, is lower than spending as a share of the economy in Finland, the same as such spending in Korea, and slightly below the OECD average.  Again, the data is flawed, but it likely provides a high-end estimate of United States education spending relative to such spending elsewhere.

Mehlhorn’s article also paints an incomplete picture of historical levels of education funding in the United States.  The fact that K-12 spending has risen in inflation-adjusted dollar value terms over the past 45 years doesn’t tell us anything about whether school spending levels are sufficient, and real spending on practically everything has increased in dollar terms since the 1970s; in fact, real spending should increase as our economy grows.  A more appropriate (though still imperfect; one flaw is that it’s not adjusted for changing demographics) look at K-12 public education spending in the United States reveals that we are spending approximately the same amount relative to the size of our economy that we were several decades ago.

What’s more, K-12 education funding has declined significantly even in real dollar terms in recent years; during the 2014-2015 school year, 35 states were still providing less total state and local per pupil funding than they had been providing before the Great Recession.  Title I funding for low-income schools and special education funding have also fallen since 2010.

Finally, it’s important to remember that even if aggregate funding levels were higher, aggregate numbers don’t speak to the distribution of funding.  We’ve yet to target and sustain increased funding in schools that serve our neediest students.  Especially when it comes to low-income areas, America definitely can – and should – invest more in K-12 public education.

We Should Avoid False Choices and Invest in Kids’ Opportunities

Increased funding, to be useful, must of course be spent in smart ways.  Money by itself isn’t a panacea.  But it’s important to get the facts right: money matters, and it matters quite a bit.

It is incredibly counterproductive to pit increased funding and smart spending against each other (though Mehlhorn’s piece acknowledges “that money spent properly can be helpful in improving achievement,” it balks at the idea that schools need additional funding), especially when schools serving the most disadvantaged students tend to get the fewest resources.  Giving schools more money and making sure they spend that money wisely are complementary, not competing, goals.

Pitting education funding against social insurance and safety net spending, as former Tennessee education commissioner Kevin Huffman did in a recent article, is also absurd.  While it’s true that adequate income support and health care matter most for low-income students and that school-based reforms cannot, contrary to Huffman’s assertion, “be the lynchpin of social mobility in America,” schools are still very important.  Those truly committed to an equal opportunity agenda should stop taking potshots at its components and start getting to work on raising the revenues necessary to implement it.

As David Kirp wrote recently about pre-K programs: “Money doesn’t guarantee good outcomes, but it helps…In education, as in much of life, you get what you pay for.”

In America right now, we unfortunately don’t pay for the education system our students deserve.  Until we do, we won’t get it.

Update (11/5/15): Mehlhorn has written a new article that is supposed to be a response to this piece but that barely attempts to rebut any of the actual claims in it.  Instead, its argument is mostly that the factual errors and omissions that I discussed above are unimportant.

I’ve already explained why many of the article’s sections are misleading, particularly those about the school-funding and charter-school research (Mark Weber has also chimed in on charters), and I’m confident that the vast majority of education researchers (and others who have read the research in question) will agree that my summary is more accurate.

There are a couple topics that are worth slightly more discussion:

1) Mehlhorn devotes a lot of space to attacking Bruce Baker for editorializing. Baker certainly does have strong opinions, but I actually think it’s nice that he’s transparent about his perspective – all researchers have biases, and it’s in many ways preferable to know about them upfront.  Baker’s work is strong and consistent with other recent research.  The research Mehlhorn relies on – from Eric Hanushek, a member of the Right-wing Hoover Institution (note that Mehlhorn does not once mention Hanushek’s affiliation and biases) – is typically much older and a clear outlier (as I explained above).

2) David Dayen recently wrote an excellent piece about why citations of raw numbers for government spending – of the type that appear in Mehlhorn’s piece – are misleading.  I highly recommend it.  Mehlhorn is also mistaken about historical trends in real (inflation-adjusted) spending outside of education; as a quick look at the data for some of the categories he mentions (like certain technologies or defense) confirms, spending on (which is different than prices of things in) these categories has also grown over time (though by different amounts than education spending and not on a per capita basis for defense, which it would have been fine to point out).

One fair point Mehlhorn does make is that inflation-adjusted spending levels have value.  I used spending as a share of GDP above to note that the US spends less on education relative to what we can afford than many other countries and that our education spending relative to what we can afford hasn’t changed much over time.  Those facts in and of themselves don’t necessarily mean that our spending levels are insufficient; they just show that our investment in education is consistent with historical and international norms.  But while it’s fine for Mehlhorn to note that per-pupil spending in the US is up significantly in real terms since the 1970s, that also doesn’t necessarily tell us anything about whether spending levels are sufficient.  We may have been spending way too little in the 1970s, and we still may be spending way too little now.

In any case, Mehlhorn’s note that education spending has increased more than test scores doesn’t say anything, by itself, about the efficacy of that spending.  Student test scores are influenced more by outside-of-school factors than by school-based factors and it’s impossible to know how effective an intervention was without knowing what would have happened in the absence of the intervention.  Maybe test scores would have fallen if spending had remained flat.  We don’t know.  What we do know is that studies that attempt to identify a counterfactual, like Jackson et al.’s, indicate that increased school funding makes an important difference.

As I’ve repeatedly noted, money also has to be well spent.  But while increased funding for schools serving the neediest populations is not sufficient, it is necessary.

Update 2 (5/1/16): Mehlhorn wrote two additional pieces on this topic, one of which repeated most of the errors in his first “rebuttal” and the other which attacked Baker. He has insisted on Twitter that these pieces are fair.  In truth, anyone stumbling across them will be wildly misled.  After Mehlhorn commented on another blog post I wrote about a different topic, I made him an offer: I would catalogue exactly why I find his responses in this exchange to be disingenuous, and we would sit down and chat in person before he wrote anything else on the topic.  Mehlhorn agreed.

The piece linked below reviews in detail five areas in which Mehlhorn has continued to distort the facts and/or gotten them completely wrong.  There are reasonable disagreements to be had on school funding issues, but these aren’t some of them.

Mehlhorn’s mode of argument has often been to claim point X and cite “facts” A, B, and C to back X up.  When I show that A is wrong, B is misleading, and C provides incomplete information, Mehlhorn says, “X is still true.  So what if A, B, and C weren’t support for it; look at D and E.”  When I then show that D and E are misleading, Mehlhorn pivots to point Y and accuses me of disagreeing with Y throughout our earlier conversation.  I don’t think this approach constitutes good faith engagement.

I actually enjoy the discussions I’ve had with Mehlhorn in person thus far and hope that the conversation following this update goes well.  I also hope he will update his prior pieces with transparent corrections that note that the pieces were initially riddled with factual errors (knowledge about the evolution of articles is informative for readers).  It is perfectly fine for him to still disagree on certain points, and I would still be happy to consider any legitimate arguments he makes in the future (as I did in the update above).

Without further ado, here is the description of the errors he should correct.

Update 3 (5/3/16): Mehlhorn and I had a good conversation and he has posted a new piece that contains some clarifications of his positions.  I very much appreciate his engagement and his willingness to hash things out in person.  I also learned from the discussion myself.  Many of Mehlhorn’s conclusions are still off-base, I believe, and he hasn’t corrected all of his earlier errors yet, but since we’ve debated this issue at length already and he has made a good-faith effort, I’ll leave it here for now.


Filed under Education

6 responses to “The Truth About School Funding

  1. Jack Covey

    Dimitry Melhorn is a disinformation specialist for the privatizers and corporate reformers.

    Their overall strategy is the starve the traditional public schools of funding, causing dysfunction (i.e. teacher shortages) and low academic performance, then used that dysfunction and low academic performance—that they actually caused through the initial starvation—as justification for privatizing all public schools, or turning them over to private management by unaccountable charter chains.

    In the process, the ability of the parents or the citizen-taxpayers to have any decision-making power or influence over the governance of their schools. It’s essential the death of democratic control of schools, and the ascension of corporate dominance of all education.

    Any-hoo, when someone tries to stop the starvation of the traditional public schools or tries to increase funding, the corporate masters send in well-paid propagandists like Melhorn — or that teleginic twit Campbell Brown — to make the claim that… “THOSE SCHOOLS ARE GETTIN’ PLENTY OF MONEY RIGHT NOW, SO JUST SHUT ABOUT MORE FUNDING.. and to prove it, let me show you some bogus studies, or selectively distort the results of other studies… “… all once again, to keep that starvation of traditional public schools going. .. with the endgame being the destruction of traditional public school.. like in New Orleans.

    It’s funny how the corporate reformers say, “We’re about giving parents ‘choice’ in schools.”

    However, when a parent in New Orleans (or elsewhere) says, “Well, my choice is to have a traditional, open-enrollment public school in my neighborhood, and have that school under the oversight of a school board where I and my fellow citizens can vote for who is on that board.”

    The response from corporate reformers is, “Well, you can’t have THAT choice.”

    As Jennifer (Edushyster) Berkshire puts it, “What’s the good of having so-called ‘choice’, when you don’t have any control over the choices that you get to choose… if every choice is a privately-managed charter school where the parents and the citizens have ZERO decision-making power?”

    On another topic, Jonathan Kozol’s books point out the hypocrisy of the folks from wealthy districts who attempt to fight the lawsuits from parent plaintiffs from poor districts who want equitable funding for those poor districts — i.e. taking from the wealthy districts and giving it to the poorer districts.

    The folks from the wealthy districts make the contradictory claim — money in schools is unimportant — while simultaneously fighting tooth and nail to prevent any loss of funding from those wealthy districts (and given to poor districts.”

    In essence, they argue:

    — when it comes to wealthy neighborhoods, funding for schools matters, and any & all money they get will be money well spent …


    — when it comes to poor districts, funding for schools doesn’t matter one bit, as any & all money that is or will be given to them is wasted on those hopelessly stupid and undeserving poor people.

    A bit simplistic, but that’s essentially the argument that’s promulgated.

    Sometimes that prevails—in Illinois, for example. However, sometimes the judges rule against it — in New Jersey, for example, with the historic Abbott lawsuit. New Jersey governor Chris Christie tried to eviscerate Abbott with legislation, but the courts ultimately ruled against him, and the nation’s most equitable funding of a state was allowed to continue. By the way, Christie made cuts elsewhere.

  2. If Abbott spending is so effective, then why do Abbott districts perform no better than equally poor non-Abbotts?

  3. Abbott should be drastically reformed because of progressive values, not just conservative ones. The 31 Abbott districts aren’t even close to being the 31 poorest districts in NJ. Due to Abbott, NJ distributes education aid according to need and resources in 1984, not 2015.

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