School Spending – Education Next

New York City Public School Spending Soars to $38,000 per Student

Frederick Hess — Thu, 04 May 2023 09:00:17 +0000

A student climbs the steps at Richard R. Green Middle School in the Bronx borough of New York City, February 25, 2021.

I find that when you tell someone a school costs $38,000, they usually picture a ritzy private school with lots of bells and whistles. Well, last month, the Citizens Budget Commission reported that New York City’s public schools will spend $38,000 per student next year. And yet there’s little evidence that parents or teachers think the Big Apple’s schools are delivering that bells-and-whistles education.

So, let’s try something a little different today. Instead of calling for more funds or proposing a series of reforms to tackle teacher pay, staffing, or student mental health, let’s ask how else the New York City school district might spend those funds. Can it get more bang for its buck?

This is the kind of simple exercise I urge in The Great School Rethink, and I’ve found that the results can be revealing. Indeed, I suspect the district could double teacher pay, triple the student-counselor ratio, boost support for parents and teachers, ramp up its tech abilities—and do it all within the confines of its existing budget.

Let’s see if I’ve got a case. Envision a hypothetical 4th grade classroom in a typical New York City school. Let’s ask, if given a clean slate, how we might design it. For convenience, we’ll stick with the familiar and won’t get into things like home schooling or hybrid options.

The average New York City elementary class currently has between 24 and 25 students, but a new law will reduce that to 23 in the fall. So, presume there are 23 students in the class.

Spending $38,000 per student on 23 students yields a sum of $874,000. Let’s set aside 40 percent for district administration, including facilities, maintenance, meals, utilities, transport, testing, compliance, and such. That costs our class $350,000 (and leaves the central administration with roughly $15 billion a year—or more than $15,000 per pupil).

Across the city’s public schools, there is currently 1 counselor for every 325 students. Let’s roughly triple that ratio, to 1 for every 115 students. Counselors in the city’s schools earn a bit under $70,000, on average; let’s give them a 50 percent raise to $105,000, yielding a total tab of $130,000 with benefits. The cost to our 23-student class would be $26,000.

Top-end technology, personal laptops, and appropriate support can run $350 per student, or $8,000. Let’s add an on-site dedicated IT specialist for our K-5 school (which we’ll presume has 690 students). If we figure a $120,000 salary, with benefits bringing the total cost to $150,000, the specialist will cost another $5,000—for a total tech price tag of $13,000.

Pencil in two schoolwide P.E. teachers, a schoolwide music teacher, and a 4th and 5th grade fine arts teacher (shared across six classes). If we pay each teacher $120,000 (note that we’re offering some massive pay bumps) with commensurate benefits, that’s a cost of $150,000 each. Our class’ share of the total cost comes to $40,000.

Add in the cost of a principal, three assistant principals, a school secretary, a security presence, and special education support. Estimate the campus cost at an even $2 million a year, with our class paying its proportionate share. That’s about $67,000.

We’ll create a dedicated 4th grade staffer to coordinate parent outreach, assist parents, and provide back-office/secretarial support to three 4th grade teachers. If pay is $70,000 (yielding a total cost of $90,000, with benefits), that’s $30,000 to each 4th grade classroom.

And then there’s classroom instruction. Let’s double the pay of the classroom teacher, to $160,000, at a cost of $200,000 with benefits. Just to be clear: This means that the average New York City 4th grade teacher would earn that much. And we’ll add an aide who earns $70,000 (a bit more than a starting teacher in the city earns today), at a total cost of $90,000. So classroom staff costs $290,000.

Add it all up, and it comes to $816,000, leaving a bit over $2,500 per student for additional outlays.

Now, I’m the first to acknowledge that this thought experiment has all kinds of limitations. For starters, even if it wished to do so, the district leadership can’t just shrug off existing obligations or contractual constraints. But it’s valuable to see what’s possible: that different choices could allow New York City’s schools to ramp up counseling, enhance technology, bolster arts instruction, give parents and teachers better support, and radically boost teacher pay. Seeing what’s conceivable might give us the confidence to stop settling for what’s customary.

Frederick Hess is director of education policy studies at the American Enterprise Institute and an executive editor of Education Next.

This post originally appeared on Rick Hess Straight Up.

The post New York City Public School Spending Soars to $38,000 per Student appeared first on Education Next.

The Massive ESSER Experiment: Here’s what we’re learning.

Katherine Silberstein — Tue, 04 Apr 2023 09:00:08 +0000

An historic, massively expensive experiment is nearing its home stretch. In March 2021 the federal government sent $112 billion out to 14,000 districts with almost no strings attached. The Elementary and Secondary School Emergency Relief, or ESSER, funding came on top of another $60 billion from two earlier waves of pandemic relief dollars for schools (in sum, roughly three times the annual federal investment). Never before had schools seen anything like it.

To say school districts were (and still are) flush with cash is an understatement. District leaders have more money at their disposal than ever before. Normally leaders spend budget seasons trying to pare back planned expenditures to match their revenue reality. But with ESSER, districts had to come up with new ideas for how to spend one-time funds within a limited time period. Many invited employees, parents, and communities to submit suggestions. Some initially worried they wouldn’t spend it down by the September 2024 deadline.

With 18 months to go before this grand experiment ends, here’s what we’re learning:

Districts are now on track to spend it all, with only a small window left to correct course.

After a slow start, districts have reached a pace–roughly $5 billion a month—that will exhaust all ESSER funds by the deadline.

One challenge: in most districts, spending plans were developed before leaders understood the magnitude of drops in middle school math outcomes and even larger impacts of learning loss on high-needs students. Though not standard practice, districts can revis e their spending plans. This would make sense in districts where planned investments aren’t focused on these challenges or aren’t working to close gaps or to address ongoing issues like absenteeism.

And in fact, across the country, 2023-24 budgets are being prepared right now to deploy any remaining sums. That makes the next few months particularly high stakes for ESSER. Worth watching: Will districts take advantage of this last opportunity to leverage remaining funds to meet their students’ most pressing needs?

Many states have fallen short on tracking what districts are buying or what’s being delivered.

While districts were given wide latitude to spend these windfalls, federal regulation emphasized that “transparency on how ARP ESSER funds are used and their impact on the Nation’s education system is a fundamental responsibility of Federal, State, and local government.” (Does that mean no one is responsible?) The federal tracker on states’ use of relief funds shows only how much has been spent, so any transparency comes directly from states and districts—and even that’s a mixed bag. Different states use different buckets to code expenditures, and to date, 20 share no detail beyond how much money each district has spent (see here for what data are available in each state). Even for states that do offer more detail, “other” is a common category, providing little transparency into how funds were actually spent. In district financials, the detail is even patchier.

Figure 1: 20 states report no details on how ESSER dollars are spent

Should we have expected better data? State agencies did get a collective $900 million for administering the money, which might have been used to generate information to help the system learn as it goes and improve on what it does. That said, much agency time has been spent responding to different surveys, requests, and proposals made by the Department, some for reports issued long after the information was useful.

Let us all issue a hearty thanks to those states that have shared the data they do have. We’ve assembled those data on the Edunomics Lab ESSER Expenditure Dashboard and used it as a backdrop to our investigations of hundreds of districts’ financials. Without it, we’d know even less than we do.

Investments in social-emotional learning are more popular than expanded learning time.

ESSER 3 requires that 20% must be used to address learning loss from the pandemic. While it appears that portion is being spent at a faster clip than highly flexible 80%, only a few states offer spending detail on those dollars. In Wisconsin and California, just 5% of ESSER 3 expenditures have gone to lengthening the school day or year, or adding time in summer. Two thirds of districts in these states chose none of those options, instead using their 20% for investments like professional development (notable since PD doesn’t directly touch students), technology, or curriculum.

In contrast, we see a higher number of districts investing in social-emotional learning (about half) even as the spending totals tend to be low (amounting to 6% of total ESSER expended so far in California).

Half of relief funds are paying for labor, setting the stage for a painful fiscal cliff.

In the 22 states that provide some detail on what was purchased, it’s clear that labor is the largest item (just under 50%). What we don’t know is how much of that is going to new hires versus pay raises versus stipends, although federal guidance did authorize districts to use these temporary funds to award permanent salary increases. If history is any guide, districts will struggle to rein in labor expenses as the clock runs out.

A sampling of district financials finds many are using large portions of ESSER to “backfill their budgets” – essentially covering recurring expenses rather than investing the dollars in anything new. Districts like Seattle used ESSER funds for “continuity of operations” (which meant paying for recurring budget items) thereby putting off annual efforts to rein in escalating costs or right-size operating budgets after years of enrollment declines. In these cases, ESSER is treated like any other revenue source (covering lots of labor expenses) rather than the one-time money it is.

ESSER fueled a large jump in vendor contracts, and with it a burden on districts to ensure these dollars deliver value.

In states that delineate spending on contracts, some 20-30% of ESSER is going out the district door for purchased services, curriculum, supplies, one-time-projects, technology upgrades, and more. If these numbers hold, ESSER will have brought $40-60 billion in new public money for vendors (nearly doubling the prior levels). The upside? Districts can add temporary capacity while avoiding recurring obligations, especially important when dealing with one-time funds.

But there are challenges – namely that contracts bring vulnerability to financial missteps. Making sure contracts deliver value for students requires writing smart contrac ts and ensuring rigorous approvals. With so many contracts coming at once often with newer vendors, we worry about poorly written agreements or sidestepped approval processes. For vendors, the boom and likely bust (when ESSER ends) will be destabilizing, and probably result in fewer players in the field. Either way, blame for any poorly spent funds will land on the leaders who approved these expenses.

Amidst mixed messages on what ESSER was for, districts are spending steadily on facilities.

Despite warnings from the feds against taking on new construction or extensive renovations, some 20% of ESSER 3 has been invested in facilities (and the percentages are rising as more projects get completed). Early on, headlines raised hackles about relief funds going to sports facilities. But more investments appear to be paying for HVAC systems and general facilities repair. Assuming districts scoped and timed their facilities projects right so costs don’t stretch after ESSER money runs out, such investments won’t worsen the fiscal cliff.

What facilities investments aren’t doing, however, is resolving gaps in learning which are at the heart of what most see as the purpose of relief funds. It’s likely that disconnect that’s fueled some of the scrutiny surrounding facilities.

We’re learning very little about what matters most: Are investments helping students?

It’s not just about where the ESSER money is going. Have summer school programs improved reading proficiency? Is the fleet of newly hired counselors delivering improvements in attendance or mental health? Did a heavy investment in more teacher planning time work to improve math scores?

Only a tiny fraction of districts and states are using data to chart the effects of ESSER investments on students. Notable exceptions include states like Tennessee, which asked districts to predict the effects of their investments and then publicly examined its test scores to explore whether investments are delivering. Connecticut launched a research collaborative to study whether ESSER investments are working, finding, for example, that a pandemic-era home visit program boosted attendance. We need more of this.

One final lesson stands out on the ESSER experiment: Each district makes its own choices.

While we’ve painted some big-picture trends here, different districts have gone in very different directions on spending. And the experiment’s not over yet. There is still much to watch about how districts adjust when ESSER is gone, and how students fare over the long haul. But perhaps most notably, the experiment is a reminder of the critical role district leaders play in how US education funds are spent and in determining how much value those funds bring to students.

Katherine Silberstein is Strategic Projects Lead at Edunomics Lab. Marguerite Roza is Director of Edunomics Lab and Research Professor at Georgetown University, where she leads the Certificate in Education Finance.

Updated April 6, 2023: Arizona and Oklahoma now have publicly available dashboards that report spending details. This piece has been revised to reflect that 20 states to date report no details on how ESSER dollars are spent.

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Education Choice Means Accountability to Families

Jason Bedrick — Tue, 21 Mar 2023 08:58:22 +0000

As education choice policies sweep the nation, critics are raising concerns about the potential for waste, fraud, and abuse. Yet a closer look reveals that these policies offer a model for accountability.

A dozen states now have K-12 education savings account, or ESA, policies that allow families to use a portion of state education funds to customize their children’s education. Families can use money drawn from an ESA to pay for private school tuition, tutoring, textbooks, homeschool curricula, special needs therapy, and more. In five states, every K-12 student has or will soon have access to ESAs or ESA-like programs.

The flexibility over how education dollars may be spent have raised questions about whether families will spend ESA funds responsibly. Opponents allege that ESA policies, like Arizona’s, have “few legal guardrails” and “loopholes the size of the Grand Canyon.” Yet independent audits and the agencies charged with providing oversight tell a very different story.

The most recent review of Arizona’s Empowerment Scholarship Account program by the Arizona Auditor General found an improper payment rate of almost zero. A prior review in 2018 had found “[m]ore than 900 successful [ESA] transactions at unapproved merchants totaling more than $700,000.” Opponents of the school choice blasted the program for its supposed lack of accountability, but they failed to mention that this accounted for only about one percent of ESA spending.

Moreover, as Matthew Beienburg of the Goldwater Institute has documented, much of the misspending was the result of innocent mistakes, not fraud. For example, the grandmother whose had purchased “educational games and supplies for her special-needs grandson that weren’t explicitly required by his at-home curriculum and thus not approved under the program.” Other parents found their accounts flagged for purchasing things like pens, pencils, notebooks, and other consumable supplies that are not eligible expenses. Innocent misspending must be reimbursed. The rare instances of intentional fraud are subject to prosecution.

Since the 2018 auditor general’s report, the program has improved financial accountability significantly. The Auditor General reports that “concerns with debit card administration have largely been addressed.” The ESA program has also begun shifting to an online platform called ClassWallet. Under the new system, the latest auditor general’s “review of all 168,020 approved transactions identified in the Department’s Program account transaction data” over the prior fiscal year had “found only 1 successful transaction at an unapproved merchant totaling $30.”

In other words, the rate of improper payments to unapproved merchants has fallen to 0.001 percent.

Indeed, education savings accounts have proven far more financially accountable than other government programs. According to a 2021 analysis by the federal Office of Management and Budget, the government-wide improper payment rate is 7.2 percent. Federal school meals programs are among the worst offenders. A 2019 report by the U.S. Government Accountability Office found that “the school meals programs have reported high improper payment error rates, as high as almost 16 percent for the National School Lunch Program and almost 23 percent for the School Breakfast Program over the past 4 years.”

There is always room for improvement, but policymakers should keep things in perspective. Spending on Arizona’s universal ESA constitutes only two percent of the state’s education budget and improper ESA payments are nearly zero.

Of course, for the opponents of school choice, the real scandal is what ESA families are permitted to purchase. For example, a recent article in The 74 breathlessly reported that ESA families were buying “items like kayaks and trampolines,” as well as chicken coops, and “tickets to entertainment venues like SeaWorld.”

Yet as Michael Goldstein, a visiting scholar at Harvard University’s Center for Education Policy Research, pointed out, public schools “are already—and appropriately—doing all of these things.”

Indeed, Arizona’s former Superintendent of Public Instruction Kathy Hoffman, a Democrat, allocated $14 million to fund projects in public school classrooms. The public funds went to buy things like hula hoops, color-coded piano keyboards, comfortable seating for reading, folklórico shoes for special dance lessons, K’Nex kits, VR headsets, gardening supplies, and more.

It is not uncommon for public schools to have kayaks or trampolines for physical education or their athletic programs. Chicken coops are a feature in many schools, particularly in rural areas. Washington, D.C.’s Department of Health even published a guide to raising chickens in district school gardens. And what do you think all those public-school buses are doing outside of SeaWorld? Has The 74 never heard of educational field trips?

What salacious media accounts tend to miss is the context in which these purchases are made. ESA parents had to receive approval from the Arizona Department of Education for each purchase. In many cases, parents making unusual requests even reached out to the department’s helpdesk for preapproval, at which point they explained the context of their purchase.

One family recently explained why they used ESA funds to purchase a trampoline for their son, who has autism. Their son struggled to interact with other children and refused to engage in any physical activities. After following numerous suggestions from therapists, they had a breakthrough: a trampoline. In a letter to the department describing the educational value of the trampoline, the parents wrote:

We can’t believe how great it has worked for him! He excitedly goes and exercises by doing fun jumps, runs, and different workout activities on the trampoline that he views as just fun! He told me just the other week, “Mom! I’m not tired all the time anymore!! Before I would pick up one thing and want to go sit and rest on the couch. Now I can do it all!”

He has also opened up with social situations when they play a game on the trampoline with him and his brother (also an ESA student with ADHD that the trampoline could greatly benefit). [Our son’s] occupational therapist has consistently requested that they do many therapies on the trampoline for him and expressed how much he has improved since using it. We are truly so incredibly grateful for this as we couldn’t have done it without ESA, and it educates my son in a way that public school hadn’t been able to.

Likewise, ESA opponents scoff at children receiving horseback riding lessons. But what would they say to the mother of a child with cerebral palsy who describes her “tears of joy” watching as therapeutic horseback riding lessons helped her son develop the balance and muscle control needed to walk, run, and play on the playground?

States have a compelling interest in ensuring that every child has access to a quality education that meets his or her learning needs. Lawmakers and public officials also have a solemn duty to ensure that taxpayers’ hard-earned dollars are spent only for their intended purposes. Education savings account policies like Arizona’s have demonstrated their capacity to empower families with greater educational opportunities while maintaining a high degree of financial accountability.

Jason Bedrick is a research fellow at The Heritage Foundation’s Center for Education Policy.

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How Much Pandemic Relief Money Will Be Wasted on Professional Development?

Bernadette Looney — Thu, 26 Jan 2023 10:00:04 +0000

An August 2022 report from the U.S. Department of Education found that “professional development was the most popular use” of federal funds that could also be spent in other ways to improve educational quality.

Time is a terrible thing to waste. So is money. Teacher professional development manages to burn through vast quantities of both.

Even before the Covid-19 pandemic, advocacy groups were warning that the billions of taxpayer dollars spent annually on “professional development” for teachers was largely wasted. A 2015 study by TNTP found the 50 largest school districts in the U.S. were spending a total of $8 billion a year on teacher development, taking 19 full school days a year of the average teacher’s time, with no clear effect on teacher performance. In 2012, the federal education secretary Arne Duncan, mentioned $2.5 billion a year in federal spending on teacher professional development. He said that when he talked to teachers and asked them “how much is that money improving their job or development, they either laugh or they cry. They are not feeling it.”

The pandemic added more federal relief money to the sum available for spending, and it also, at least while travel restrictions were in place, made districts more likely to use the money for online events such as Zoom meetings rather than in-person conferences. An August 2022 report from the U.S. Department of Education found that “professional development was the most popular use” of federal funds that could also be spent in other ways to improve educational quality. Eighty percent of districts used that money for professional development, while only 19 percent used it for class-size reduction. The report found that in 2020-2021, school districts spent $1 billion in federal money from this pot on professional development. By far the most common use of the funds was “short term” professional development, even though some research indicates that “collaborative or job-embedded” professional learning is more effective.

Interviews with several teachers at University Academy in Kansas City shed light on why teachers often find professional development so frustrating. I interviewed voiced frustration at professional development. Keisha Ricketts, a middle school science teacher at University Academy in Kansas City, Missouri, said it can feel like a boring waste of time. Technology has advanced to the point where hybrid or completely virtual professional development programs are a possibility, but just because something can be done does not mean it should be. Technology can worsen program effectiveness, leaving a group of teachers who could think of better ways to spend their time than tinkering with a computer.

Darrenn White, a middle school health and physical education teacher from the same school as Ricketts, said the professional development he received during the pandemic over Zoom was mainly focused on racial inequalities that happened within school buildings. White also said that there were teachers from three or four different schools combined on one Zoom call to talk about racial injustices, which he said put a damper on everything and ultimately left him feeling as if his district participated as a way to check off a box.

Dustin Havens, an upper school history teacher at the same school, echoed White in many respects and said the 167-person Zoom call invited chaos, between people dropping bombs in the chat without hesitation and seeming to have really “enjoyed the hell out of it,” and other participants purposefully keeping their cameras off and microphones muted. Havens was personally called out by someone offended by his silence in a Zoom breakout room. He conceded that his reluctant participation was rude but said that he would have been a lot less likely to sit in silence and less likely to be called out for his lack of participation had the meeting been in-person rather than online. Havens also had a keen understanding that his district paid a lot of money for professional development in general, so his mentality when attending any required session is that it had better be good.

Ricketts conjectured that, like herself, many teachers would want to learn something in a professional development session that they can use right away in their classrooms. That was not something that seemed to have happened during the pandemic in the school, which received more than $4 million in relief funds through the Elementary and Secondary School Emergency Relief fund. White said the professional development programming takes him out of his teaching groove and makes him feel less of a veteran teacher than he had felt before, that it is not money well spent, and that many a professional development program can have all of the people involved working hard while simultaneously be hardly working towards the goals that they set out to achieve.

At least one professional development provider, Jen Holland-Marks, said she got into the field after seeing as a teacher that “sit and get” styles of professional development were not working. Holland-Marks said she has changed her approach over time, to emphasize ongoing engagement with schools and repeat visits rather than one-shot events. She said her business had boomed during the pandemic, in part because she’d already developed some asynchronous online content, and districts had relief money to spend.

Academic research has found mixed results about the effect of teacher professional development on student learning. A 1998 paper by Joshua Angrist and Victory Lavy about the Jerusalem schools found that, at least in non-religious schools, “teacher training provided a less costly means of increasing test scores than reducing class size or adding school hours.” Closer to home, however, a 2002 paper by Brian Jacob and Lars Lefgren looked at Chicago and found “marginal increases in-service training have no statistically or academically significant effect on either reading or math achievement.” In a 2009 review article, Harvard education professor Heather C. Hill acknowledged that a few boutique programs backed by research evidence “serve a handful of fortunate teachers” but concluded that “most teachers receive uninspired and often poor-quality professional development and related learning opportunities.”

The frustrating reality that billions of dollars are being spent on teacher professional development that takes hours of effort for mediocre or nonexistent results has sparked a lot of conversation. That, in turn, often leads to more revamped professional development programs with additional murky outcomes.

Eventually, the federal, state and local lawmakers authorizing all the spending may take notice and decide the money and teacher time may be better directed elsewhere. If professional development providers aim to avert that, they may need to do a better job of showing concrete results for students—or at least, and perhaps relatedly, of not frustrating the teachers who are supposedly being developed.

Bernadette Looney is an undergraduate at Harvard College studying Government.

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Biden Administration Sues a City Over “Rampant Overspending on Teacher Salaries”

Ira Stoll — Wed, 15 Jun 2022 15:31:40 +0000

Biden SEC chairman Gary Gensler

The Biden administration’s Securities and Exchange Commission is suing the city of Rochester, New York, contending that “rampant overspending on teacher salaries” plunged the Rochester school district into “extreme financial distress,” misleading investors who bought municipal bonds.

The legal action is unusual. Sure, the federal government’s interaction with K-12 education has often extended beyond the bounds of the U.S. Department of Education. The Department of Agriculture administers the school lunch program, and the Department of Defense operates schools serving military-connected children. Under George W. Bush, the Justice Department toyed with the idea of using antitrust law to support charter schools. And in the waning days of the Trump administration, President Trump issued an executive order authorizing “emergency learning scholarships” to be provided via the Secretary of Health and Human Services.

But, notwithstanding Bloomberg columnist Matt Levine’s theory that
“everything is securities fraud,” in practice, the K-12 education beat hasn’t intersected greatly with the fraud provisions of federal securities laws. At least until now.

The securities laws don’t offer a technical definition of “overspending on teacher salaries,” much less “rampant overspending.” The SEC may claim that if the city is spending so much that market participants doubt the city’s capacity to meet its obligations, and bondholders lose value as a result of ratings downgrades, that’s overspending by common-sense definition. The city is contesting the SEC action, the Rochester Democrat & Chronicle reported; the paper quotes a statement from the city claiming, “the city does not have access to or authority over the finances of the Rochester City School District, and therefore cannot be responsible for the district withholding financial information.”

How much has Rochester been “overspending?” The website Seethroughny.com, a project of the Empire Center for Public Policy, lists 717 Rochester City School District Employees who earned more than $100,000 in 2019. The district has about 25,000 K-12 public school students, according to the state of New York. Spending runs about $20,000, a little below the statewide average. Whether that amounts to “overspending” probably depends on one’s view of how much the children are learning, and also one’s view of whether the students could learn more, and how much more, if more money were spent.

The teachers may point out that they earn less the SEC staff, who average more than $200,000 a year, according to the FederalPay.org, which tracks government pay. Though the SEC may counter that its lawyers can earn much more at corporate law firms, a consideration that may be less applicable to Rochester teachers.

In practice, the legal aspects of the case will probably turn more on considerations about disclosure to potential bond buyers than about the details of the spending on teacher salaries.

Even so, the mere mention of securities law and bondholders as potential tools to curb school district “overspending” is intriguing, especially when the action comes under a president who campaigned promising to increase school spending so as to pay teachers “competitive salaries.” For years, reformers have complained that teachers unions capture school boards and run school systems for the benefit of adults rather than children. Now a different set of influential adults—bondholders—is, in a way, asserting, via the SEC, its own claim that could be a countervailing force.

It’s intriguing, but also not fully satisfying. The union is there to represent the teachers. The SEC is there to represent the supposedly misled bondholders. The securities laws exist to protect bond-buyers. There’s not much by way of federal law, though, to protect parents or students when a child enrolls in a public school and then doesn’t get the education that was advertised. Absent as a result is a federal government agency with robust enforcement powers to stand up for students misled about the education they can expect.

Ira Stoll is managing editor of Education Next.

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Why It’s So Tough to Get the Data Educators Want

Frederick Hess — Thu, 07 Apr 2022 09:01:37 +0000

A decade ago, Harvard’s Jon Fullerton and I penned “The Numbers We Need,” arguing that educational data systems focus too much on metrics useful to policymakers and too little on the numbers that are useful to educators and families. We observed that the data most useful to policymakers “are often simple, straightforward data on assessment results and graduation rates, whereas the key data for district officials shed light inside the black box of the school and district—illuminating why those results look like they do and what might be done about them.”

Jon Fullerton

Those same concerns are still with us today. And the disruptions of the pandemic have only made the need for useful, actionable data even more pressing. Well, in a recent report, “Bridging the Gaps in Education Data,” Fullerton, the executive director of Harvard’s Center for Education Policy Research, tries to make sense of why dissatisfaction with data remains so high and what we can do about it. Fullerton has worked intimately with state and district data over the years, as part of CEPR’s Strategic Data Project, and he’s a wealth of wisdom on this topic. The analysis was published by AEI Education, which I direct.

Fullerton argues that we never seem to have enough data for two reasons: technical constraints and normative disagreements about what schools should do and how to measure this effectively. To make sense of all this, he walks through the “data gaps” that bedevil early childhood, school spending, postsecondary outcomes, and tutoring interventions.

For instance, when it comes to determining whether tutoring is effective, he notes that we frequently don’t know how much is spent on particular interventions or even which students receive which interventions. Fullerton writes that, so long as this is the case, neither school systems nor evaluators will “be able to determine whether tutoring worked,” “the cost of tutoring relative to student growth,” or “whether tutoring is more or less cost-effective than other interventions.”

These kinds of problems can be solved. If we want to understand whether and when tutoring (or any other intervention or program) actually works, Fullerton says schools need to get consistent about how they collect and report the essential data. Districts, he explains, do not currently standardize or even collect basic information: Is a student being tutored in math or history? During or after the school day? Does the student even attend each session? Fullerton suggests that schools track program and intervention participation and integrate that into student-information systems. So, for instance, “A student receiving high-dosage tutoring might get tagged with ‘high-dosage tutoring, [provider name], math, two hours per week, in-school, in-person.”

Even if we get such things right, though, data dissatisfaction will persist because of broader technical shortfalls, especially with how we measure outcomes. For instance, he notes that “grades are not particularly reliable in demonstrating students’ actual skills,” while standardized tests omit important skills and competencies. As Fullerton puts it, “Measures, particularly of educational outcomes, almost never capture the richness of what we want to measure efficiently and in time to be useful.”

And then, of course, Fullerton points to the role of normative disagreement about what data we should be collecting and why. As he writes, technical debates about how and when to collect data often skip past the fact “that we don’t agree, at least in any deep way, on the specifics about what education is for and what we are even trying to measure.”

In the end, Fullerton wisely cautions, “We must also maintain an appropriate sense of humility and realize that data will not answer all our questions or make our core disagreements go away.” We shouldn’t ask data to do what they can’t. But we should also ensure that we’re doing what we can to ensure that the data do what they can to help us understand the impact of our dizzying array of programs, practices, and interventions.

Frederick Hess is director of education policy studies at the American Enterprise Institute and an executive editor of Education Next.

This post originally appeared on Rick Hess Straight Up.

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Punishment for Making Hard Choices in a Crisis: Federal Prison

Marguerite Roza — Thu, 27 Jan 2022 10:00:39 +0000

Julia Keleher, secretary of education of Puerto Rico, was sentenced to six months in federal prison after ushering in sweeping reforms, such as including breaking up the central education bureaucracy and introducing charter schools.

This is a scenario we all know well: Responding to a crisis, the federal government quickly doles out sizable sums of relief dollars for schools with confusing rules about how education leaders can use it.

Here’s the part that’s maybe not so familiar: The federal government then discredits, prosecutes and imprisons an education leader for what amounts to a procedural error in spending the money, an error that (by the way) yields the leader no personal gain.

This is not a made-up scenario. It happened to Julia Keleher.

It’s a scenario that could have a chilling effect on district and state education leaders across the nation who are right now tasked with moving quickly to deploy federal relief funds.

Today’s crisis is the Covid-19 pandemic, and the $190 billion in federal pandemic relief money sent to states and districts is the closest thing to a blank check we’ve seen. Clearly there’s no playbook for this moment, and successive waves of U.S. Department of Education guidance have left many leaders unclear about how they’re allowed to spend the money.

Flash back to 2017, and the crisis was Puerto Rico, decimated from Hurricane Maria and facing a deepening financial predicament. With many of its historically low-performing schools in disrepair, and massive enrollment declines as families fled the island, the education system was in bad shape. The federal government sent nearly $500 million to rebuild schools and revamp the education system. Puerto Rico’s then-Secretary of Education, Julia Keleher, signed contracts to tackle the most immediate challenges quickly, including repairing buildings and working to resume and improve learning for the island’s remaining students as quickly as possible.

She wound up sentenced to six months in federal prison, accepting a plea agreement in 2021. The U.S. government charged her with conspiracy for violating a prohibition on subcontracts. She signed off on having a subcontractor to do less than $50,000 worth of analysis of school-level damage post hurricane—work the federal government required and whose quality was never in question. The government also took issue with $12,000 in closing incentives on an apartment Keleher bought–incentives that were offered to anyone who purchased a unit in that building. In the end, there appears to be no legitimate claim that Keleher took or personally benefited from public money. I wrote a letter of support for Keleher to her sentencing judge, attesting to her tireless and dogged dedication to Puerto Rico’s students, having provided informal advice on a volunteer basis on school finance issues during her two-year tenure.

Compare that scenario to another eyebrow-raising decision a leader made with federal pandemic relief dollars. In 2020, former Los Angeles Unified Superintendent Austin Beutner signed a $49 million contract with a three-month old startup headed by a former business partner to do COVID-19 testing for students. He bypassed the district’s tedious procurement process and signed it himself using emergency powers.

Jail time? No. He’s lauded for tapping his business connections and moving fast to get things done. No federal inquiry has been initiated.

Why the wildly different reactions to these decisions on how to spend federal relief funds?

One plausible explanation is that it was never about Keleher’s infractions. To quote one columnist: “Keleher became a lightning rod of public criticism for the changes” she made in the system.

Keleher made enemies aplenty in her tenure on an island with a reputation for corruption, angering the teachers’ union and others as she closed hundreds of excess schools as students fled to the U.S. mainland. She also ushered in sweeping (and controversial) reforms to boost abysmal student outcomes, including breaking up the central education bureaucracy and introducing charter schools. As an outsider, she was dubbed a “colonizer.” She resigned in April 2019, citing toxic politics.

Federal prosecutors seemed to take their cues from those angry about Keleher’s changes, and jumped in with a legal fishing expedition. She was indicted three months later. In the months following, prosecutors smeared her name in the media with press releases of baseless charges only to then drop the original charges after the media circus died down. During this whole time she’s under a gag order, unable to even publicly dispute the claims made against her. She accepted the plea deal to move on with her life.

Readers might be wondering if there’s something I’m missing. At first, I wondered too. When federal prosecutors go after someone, many of us often assume it’s for good reason.

But what if it isn’t? Others have taken issue with the federal government’s conduct in her case, including some in outlets like Forbes and the Miami Herald. I’ve reached out directly to the federal prosecutors José Capó-Iriarte and Alexander Alum to hear their reasoning first hand, but have never received a response.

This reality has implications far beyond Keleher, to any leader making tough decisions that could anger some segment of the system. Lots of districts are seeing enrollments drop in the wake of today’s pandemic crisis. That means as federal funds dry up, many may find themselves grappling with some of the same issues that surfaced in Puerto Rico’s post-hurricane turmoil. Some will face the prospect of closing schools and laying off staff to right-size the system for a new, smaller population. These decisions will be painful and unpopular.

I’ve said it before: Leaders can be especially vulnerable to accusations of financial missteps where board members, teachers’ unions or others in the community are at odds with those leaders. When tensions are high, any potential misstep can get magnified. And the pandemic does not inoculate leaders from charges of financial blunders. Big money draws big scrutiny. So, leaders need to be aggressively transparent, especially with contracts.

Still, Keleher’s case stands out as troubling. It leaves me wondering: What does it tell leaders who make the tough trade-offs, especially in a crisis? Does shifting public sentiment mean federal officials will come knocking at the door? Is the best move one that keeps the loudest voices happy at any cost? This case would seem to offer the nation’s education leaders a sobering answer, to say the least.

Recently I shared Keleher’s case with a room full of superintendents as part of a training on using Elementary and Secondary School Emergency Relief, or ESSER, funds. The room was silent. Incredulity was written on their faces. I could see them pondering whether they regretted accepting these roles and the responsibility to steward the federal relief dollars.

District leaders I know are working absurdly long hours right now. Much of it is the nature of a crisis, but some is also to understand the federal rules, file required spending plans, submit proper reimbursements, meet reporting deadlines, and comply with financial record-keeping.

Whether intended or not, the legacy of the Keleher case may be to make leaders even more bureaucratic and risk-averse than they already are. That should be unsettling to all of us. Especially in a crisis, we desperately need leaders whose focus is squarely on meeting the needs of kids.

Marguerite Roza is research professor at Georgetown University and director of Edunomics Lab.

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Ed Finance Guru Marguerite Roza on How Schools Can Best Spend Covid Aid

Frederick Hess — Wed, 10 Nov 2021 11:00:02 +0000

Marguerite Roza, director of the Edunomics Lab at Georgetown University

During the pandemic, the federal government has provided unprecedented amounts of emergency aid to K–12 education. How can school leaders most effectively use these funds to overcome learning disruptions, give students the support they need, and position students and schools for future success? To tackle these queries, I reached out to Marguerite Roza, the director of the Edunomics Lab at Georgetown University, author of Educational Economics: Where Do School Funds Go, to get her take on how to spend COVID-19 aid wisely and well. Here’s what she had to say.

—Rick Hess

Hess: Can you remind us how much Covid-relief money there’s been for K–12, what strings are attached, and who decides how it gets spent?

Roza: Sure. Congress basically went all-in on a grand experiment by cutting checks in three waves to send funds to districts to the total tune of roughly $3,750 per student—for a total of $189 billion—while asking for very little in return. Yes, the broad goal was to help students get back on track, but districts have virtual carte blanche in how they spend the money, and it is indeed the district that gets to decide. Just about any expenditure is fair game, including paying for new buildings, teacher bonuses, security contracts, staff stipends, COVID tests, electric buses, data systems, and more. Those are all real examples of district choices, by the way. The money must be spent by 2024. Districts have to make a spending plan, with fall due dates that vary by state; get it approved by the state ed. agency; and post it online.

Hess: What are some of the more promising ways you’ve seen these dollars spent?

Roza: We’re seeing districts adapt to help make sure students are returning—things like finding ways to transport kids during bus driver shortages, updating ventilation, creating virtual offerings where needed, and so on. These actions make sense as schools restart from pandemic shutdowns. And to get kids back on track, we’ve seen districts launch summer programs, tutoring, tele-counseling, longer school years, and more. Some districts are targeting one-time raises to address key shortage areas, like special education teachers, offering incentive packages to cover moving expenses plus retention bonuses, and paying stipends for teachers who take on extra work. These are promising pay innovations that run against the grain of the uniform step-and-column pay structure that’s dominated for decades. That’s not to say that every investment will be a success; some districts will need to pivot again. But where we see districts drilling down on student needs and nimbly solving the problems at hand, that’s good news.

Hess: What are schools doing that gives you pause?

Roza: Any investments that aren’t made on behalf of kids, like giving outsized across-the-board base-pay raises. Or spending on new facilities that won’t be completed in time to benefit today’s students, the ones impacted by the pandemic. Or when districts invest in the easy thing—like hiring more vice principals or paying forward on a security contract—not because they believe in the value but because it moves a lot of money quickly in a familiar way. Or using the money to backfill budgets that should have been rightsized years ago for enrollment drops that started long before the pandemic. (Ahem, Minneapolis, we saw what you did there using half your relief funds to stave off layoffs and program reductions.) We worry, too, about districts using this temporary money to hire a slew of new permanent staff because it sets them up to fall off a fiscal cliff.

Hess: What are a few of the more common mistakes you’re seeing?

Roza: We’ve created a list of six common mistakes that include making recurring commitments that bring a disruptive fiscal cliff and using federal funds to avert overdue cuts in a system that’s been losing kids for years. Also included is the risk of issuing problematic contracts that haven’t been vetted publicly and don’t include measurable milestones for the vendor. These kinds of contracts can get leaders in trouble down the road if not given proper attention. On equity, we suspect in hindsight some districts will have concentrated their relief funds in more advantaged schools, which can happen unintentionally, especially when positions get filled immediately in advantaged schools while vacancies linger in higher-needs schools. Another mistake: Some districts may be spending in a way that’s at odds with what the community values. Lastly, the mother of all mistakes would be spending in a way that doesn’t demonstrate results for students.

Hess: Overall, what share of the spending that you see do you find concerning?

Roza: That’s the $189 billion question, Rick. For starters, only 10 percent of the funding has been spent so far. And any eventual answer to your question is going to come on a district-by-district basis. One district may have spent thoughtfully while the neighboring one may not have much to show for it. That last part is key. Because part of the proof on spending is in the outcomes. What did you get for the spending? We need to think hard about how we’re tracking this and on what basis we’re evaluating what success means for this money, because the feds certainly didn’t define it. But communities sure can press their districts on this.

Hess: You spend a lot of time talking to state, system, and school leaders. When you do, what kind of advice are you giving them?

Roza: I don’t think it’s about what specifically to buy because districts and schools are different. But we did outline some principles to guide those choices and drafted questions to hopefully prompt wise spending. We suggest avoiding recurring commitments, spending equitably, and measuring whether investments are working. We’ve encouraged districts to keep the focus on students and avoid one-size-fits-all solutions. Toward that end, we’ve seen some districts, like Atlanta, Chicago, and Denver, send a portion of the money directly to schools so principals and communities can work together on what their students need. Many, including us, were hoping that a federal education package of this size would spur some lasting innovations. So far, many districts are doing more of the same things they’ve always done. But a few states, like Utah, are deploying a slice of funds via competitive grants for new ways to serve students. And some districts are making bold moves, such as allowing drivers to bring their toddlers on their bus routes or offering parents cash incentives to arrange their own transportation in response to the school bus driver shortage.

Hess: How well do you think the media is covering the use of these funds? Pretty well? Not so well?

Roza: This is an important moment for ed-finance journalism. Most districts have more funds than they’ve ever had. But some in the media are having a hard time shifting their coverage to meet this new reality. I think media got used to a certain narrative, one of scarcity and cuts in public education. And the media story that “teachers are leaving in droves” keeps popping up even though the numbers say otherwise—job openings are indeed everywhere, but so far, those appear to be driven more by a surge in new hiring funded by relief dollars than by teacher departures. There’s so much for journalists to cover right now: how districts are investing new dollars; whether that’s working to meet student needs; what that means for the labor market. The public needs media to meet this moment.

Hess: What should readers know about federal Covid aid that may surprise them?

Roza: The money is so flexible, and if districts are saying they’re not allowed to do something, they’re usually wrong. We’ve heard districts cite all sorts of restrictions that just don’t exist. For instance, some say they aren’t allowed to give any of the money to families, and that’s simply not true. There are districts right now sending a portion of the dollars to families for all sorts of things, like to parents for getting their kids to school, or to high schoolers for attendance in various programs or for getting vaccinated, or to families to pay for enrichment programs of their choosing or college savings accounts, and so on.

Hess: OK, last question. Any advice for parents, educators, or local officials who want to help ensure this money gets spent wisely and well?

Roza: While the feds attached very few strings to this money, one significant string is the requirement that districts engage with their communities when making spending decisions. This means that for the first time ever, parents can have a real voice when it comes to these decisions. And their voice has the backing of federal law. Hopefully, the added participation in financial choices can help keep the focus on students. Otherwise, it’s easy for budgets to be driven by a few strong political players or focus more heavily on employee impacts and potentially lose sight of what all the spending is about, really, which is the kids. There’s a real opportunity with this engagement to rebalance the school budgeting process. And that would be a win for districts as it has the potential to build community trust, ideas, and buy-in.

This interview has been edited and condensed for clarity.

Frederick Hess is director of education policy studies at the American Enterprise Institute and an executive editor of Education Next.

This post originally appeared on Rick Hess Straight Up.

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Don’t Plan on That Federal Education Spending Spree

Frederick Hess — Mon, 11 Oct 2021 09:00:50 +0000

Senator Kyrsten Sinema, a Democrat of Arizona, has made clear she doesn’t support spending a full $3.5 trillion.

After cramming most of the Biden agenda into one massive $3.5 trillion “Build Back Better” bill, it looks like Democrats are going to have to settle for a whole lot less—and possibly nothing. Though equipped with the frailest of congressional majorities, Democrats have opted to take the go-it-alone route rather than try to negotiate a smaller bill with Republicans, betting everything on a reconciliation bill that they hope to squeeze through a 50-50 U.S. Senate on a party-line vote and Vice President Kamala Harris’ tie-breaker.

Well, that’s not going so well. And it has big implications for education, given that the original $3.5 trillion plan included $200 billion for pre-K, $188 billion for higher education, and billions more for various K-12 items. Passage of the whole bill requires that Democrats hold every Democratic vote in the Senate and lose no more than three votes in the House. That, in turn, gives massive influence to both the most centrist and most left-wing members in each chamber. And the key Democratic centrists in the Senate, notably Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., have made clear that they don’t want to spend anything close to $3.5 trillion.

The upshot is that a Democratic spending spree once depicted as inevitable is shrinking before our eyes. Yet I’m not sure that education leaders appreciate that the $82 billion they expect for school construction and repairs or the $35 billion they expect to expand free and reduced-price school meals is unlikely to materialize. Indeed, in a story on how the White House is dealing with this, The Washington Post has reported, “If constrained to $1.5 trillion, Democrats could only fully fund a handful of their most important policy priorities. . . . [They’d] come close to reaching that number in spending if, hypothetically, their plans consisted of just three top priorities—tackling climate change, creating a national paid-leave program, and extending a tax benefit that alleviates child poverty.”

Such a tack would leave roughly zero dollars for universal pre-K, “free” community college, or other education programs. And even if the bill ends up closer to $2 trillion, as Manchin has recently signaled he may be willing to accept, the Democrats will still have to make significant cuts to their original plans. If Democrats instead opt for the “spread-it-around” approach, education will be going toe-to-toe with the likes of the powerful seniors lobby (which is eager to add dental and vision benefits to Medicare). In short, education programs seem destined to get a lot less than half of the total initially included in the $3.5 trillion package, meaning that ambitious plans to make community college “free” or pre-K “universal” will have to be radically downsized.

And that’s assuming a bill actually gets passed. Between razor-thin majorities, Biden’s sinking poll numbers, the contretemps over the debt ceiling, and internal Democratic tensions, there’s now a small but real chance that the bill stalls out. This is what happened to Bill Clinton on his massive health-care plan in 1993-94 and to George W. Bush on his ambitious proposal to overhaul Social Security in 2005. Those pushing for transformative spending would do well to remember that the New Deal and the Great Society were produced by massive congressional majorities—not skin-of-your-teeth ones. Given that the current Democratic majority barely eked into power behind Biden’s promise to return the nation to normalcy, historians would suggest that failure is certainly an option.

The clashes between progressive hopes and prosaic reality could bring the whole proposal crashing down. There’s the odd dynamic of progressives forcing House Speaker Nancy Pelosi, D-Calif., to pull the $1.2 trillion bipartisan infrastructure bill because they’ll only vote for it if they can extract support for the reconciliation bill from Manchin and Sinema—who have already made it clear that they’re bothered by runaway spending. It’s the oddest kind of hostage-taking. There’s some chance that the centrists say, “The heck with it,” and Democrats wind up with nothing.

Meanwhile, Rep. Pramila Jayapal, D-Wash., leader of the House’s 100-member progressive caucus, says she won’t support the reconciliation bill if it includes the decades-old Hyde Amendment, which stipulates that taxpayer money can’t be used to fund abortions. But Manchin has said that the bill would be “dead on arrival” if the Hyde Amendment isn’t included. That’s what you call a standoff.

Oh, and Manchin and Sinema are now being subjected to the kind of harassment that’s apparently prompting them to further dig in their heels, especially since both stand to gain politically from being seen as checks on their caucus’ more left-wing members. And none of this gets into the byzantine politics of raising the ceiling on the federal debt or the risk that Democratic factions wind up stalemated over what gets included.

During Trump’s first year in office, Democrats guffawed when Republican attempts to repeal the Affordable Care Act (Obamacare) collapsed under schisms between the centrists and the right wing. They cheered Sen. John McCain for protecting the ACA. Well, that’s how the legislative process is supposed to work. Sweeping policy change shouldn’t be the product of bare majorities. It’s striking how many Democrats and pundits who celebrated McCain’s independence have adopted a very different take now. What we’re watching is a textbook study in how our political process is supposed to work. I hope educators and educational advocates treat it as such.

Frederick Hess is director of education policy studies at the American Enterprise Institute and an executive editor of Education Next.

This post originally appeared on Rick Hess Straight Up.

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Maintenance of Equity: A New Provision with Big Implications for District Budgeting

Chad Aldeman — Thu, 19 Aug 2021 08:59:26 +0000

When Congress passed the American Rescue Plan in March 2021, we were happy to see that it included new language requiring districts to protect high-poverty schools from disproportionate budget cuts. In the last recession, state revenue declines hit districts hard, forcing hiring freezes and seniority-based layoffs that often hurt the poorest schools most.

Thankfully, state revenues are quite healthy, with many states announcing higher-than-anticipated increases in funding for schools. Like many others who follow school finance closely, we assumed the new “maintenance of equity,” or MoEquity, provision would only be relevant in the small handful of places with revenues declining.

But then, this summer the U.S. Department of Education released its guidance on the MoEquity provision, asserting that the provision applies even if revenues are growing. As written, it would have forced thousands of districts to rewrite their budgets just as they were trying to reopen schools. After hurried and intensive behind-the-scenes conversations and a lightning- fast-by-government-standards response, the department released a new Dear Colleague letter which gives districts more flexibility on how to implement the MoEquity rule and permits districts with rising revenues to file for a one-year delay.

While districts will appreciate the added flexibility and the timeline extension, the more expansive interpretation could still have unintended consequences, and there may be better mechanisms to drive equity than the formulas dictated in the guidance.

How the MoEquity Provision Works

The law states that:

As a condition of receiving funds under section 2001, a local educational agency shall not, in fiscal year 2022 or 2023—

(A) reduce per-pupil funding (from combined State and local funding) for any high poverty school served by such local educational agency by an amount that exceeds

(i) the total reduction in local educational agency funding (from combined State and local funding) for all schools served by the local educational agency in such fiscal year (if any); divided by

(ii) the number of children enrolled in all schools served by the local educational agency in such fiscal year

A similar rule governs staffing levels. Many people, your authors included, read this language as only applying to districts that were reducing their spending.

The U.S. Department of Education interpreted it differently. The department said that districts with flat or growing revenues had zero reductions and that, thus, no high-poverty school could see a reduction greater than zero in either spending or staffing ratios. The law exempts small districts under 1,000 students, but that still leaves about 7,000 districts potentially on the hook.

The law includes a specific definition of “high-poverty schools,” for this provision only. Every district must rank each of their schools in terms of poverty. The district’s highest-poverty 25 percent of schools are protected “high-poverty” schools for purposes of MoEquity. Every district—regardless of whether all of its students are low-income, or whether the district has only a few pockets of poverty—must rank their schools in this manner to create a list of protected schools.

Each of the protected schools must meet a spending and a staffing test. They cannot experience a decline in per-pupil spending or staff per pupil over the next two school years, as compared to the 2020-21 school year. Figure 1 shows the formulas behind each of the tests. The tests are administered for each of the protected high-poverty schools individually.

Figure 1: Districts must pass MoEquity fiscal and staffing tests

These formulas may appear reasonable at first blush. But their reliance on student enrollments, the comparison with the prior year’s allocations, and the focus on individual schools could ultimately force districts into some costly, inefficient, and potentially inequitable decisions.

Timeline Problems Pose a Challenge for Equity

The first challenge for the MoEquity provision—and really any federal rule attempting to govern district-level spending decisions in real time—is that most districts simply don’t have school-by-school budgets. That means they don’t always look at the school by school consequences of their budgeting decisions.

It wasn’t until the 2015 Every Student Succeeds Act that states began collecting school-by-school expenditure totals, but that took time, and the most current data at this point are from 2018-19. While our team at the Edunomics Lab recommends more districts put that type of data to use, we are not aware of many district budget offices that are actually equipped to do it in real time yet.

So instead of actual expenditures, the MoEquity rules will rely on estimates and projections. To set a baseline, districts can use prior enrollment data, an average of enrollment over multiple years of time, or estimate enrollment data for the coming year. When looking forward, districts can meet the tests by using average teacher salaries and projected staffing levels, rather than actual expenditures.

These flexibilities will help ease the implementation challenges, but they’ll undermine the underlying goals of the MoEquity provision. Using average teacher salaries, for instance, can hide large pay discrepancies across schools. And districts could put forward ambitious hiring plans on paper, only to be thwarted by hiring challenges. The guidance explicitly exempts districts with “unpredictable changes in student enrollment or personnel assignments.” Once a district determines it passes the tests based on its estimates, it does not have to re-examine its results.

Creative financial officers will be able to figure out how to pass the MoEquity tests by finding an enrollment metric that fits their purposes. But in an ideal world, we’d want districts to track actual results, not just certify their intentions. In other words, the MoEquity guidance may provide the appearance of equity without actually ensuring it.

The Outliers Problem

The MoEquity rule protects individual schools, and the protected schools cannot be considered as a group. It doesn’t matter why a school might have received extra dollars or staffing in the prior year, the funding levels must stay, even if the funding comes at the expense of other schools or if the rationale for the extra funding is no longer relevant (such as when a student with disabilities no longer needs a dedicated aide). The federal guidance invites requests for exemptions but cautions that very few will be granted.

In the real world, these outlier cases are quite common. They vary by location, but they’re usually tied to where a school’s enrollment happens to be unusually low or some spending anomaly has pushed up the per-pupil figures outside of a normal range. If a school received $25,000 per pupil in prior years, MoEquity will require that for each additional student at the school, the district must allocate another $25,000, regardless of the needs of the new student.

More Equitable Districts May Be More Likely To Fail

Because the MoEquity rule compares districts with their own prior spending, it will hold more equitable districts to a higher standard than less equitable ones. In our forthcoming study of 40 large districts, we found Denver to be the most “progressive” in that it spent nearly $1,500 more in state and local funds on its low-income student as compared to its non-low-income students. Some districts were regressive, meaning they spent less on their low-income students than their non-low-income students. A progressive district like Denver will be required to clear a much higher hurdle (involving more dollars) to pass the MoEquity tests than more regressive districts will.

The Remedies Could Be Counterproductive

Perhaps most concerning, the MoEquity provision could work to supersede districts’ other efforts to send more resources to low-income students. To pass the tests, districts might have to override their weighted student formulas or targeted allocation formulas — many of which are used to direct more dollars to schools with higher concentrations of English learners, foster or homeless students, students with disabilities, and students living in poverty. That runs counter to the goals behind the MoEquity provision, and there are better options that could more reliably ensure districts are allocating their dollars toward students who need them the most.

What Should the Department of Education do instead?

On average, the federal government provides about 8 percent of school district budgets. It’s understandably tempting but practically complicated to use that leverage to steer how districts spend the other 92 percent of their budgets. The recent rounds of federal relief funds provide a large infusion of money, but that’s temporary. The feds should not abandon the notion of pressing states and districts to more equitably distribute resources, but Washington will need to carefully think through any financial test to understand how it will play out across districts and schools to ensure it isn’t unleashing more harm than good.

In the long run, Congress could consider several alternatives to the MoEquity rules. They could start by calling for more transparency about how districts allocate their money by requiring any district receiving federal dollars to compare how much money they provide to their highest-poverty schools compared to all their other schools. Such a requirement could be a natural next step from the recent ESSA requirement to publicly report school-by-school expenditures. This transparency requirement would have the added benefit of getting more districts to examine and weigh these figures when preparing their next year’s budgets — possibly breaking them out on a school-by-school basis, which would facilitate an easier examination of district spending decisions in closer to real time.

Federal lawmakers are always going to struggle to come up with rules that apply to every district and every school. Instead of the MoEquity’s focus on individual schools, Congress should instead consider a district’s high-poverty schools as a collective group, rather than each school individually. That would avoid the outliers problem. Districts that were found to be regressive could work with their state education agency to devise a plan to address it over a short but reasonable period of time.

Above all else, any federal test should focus on dollars, not staffing levels or other line-item allocations. We warn federal lawmakers against prescribing how districts spend their money or how many people they employ in their schools. The combination of spending and staffing tests used under MoEquity will hamstring districts and potentially force them into staffing and hiring decisions that they won’t be able to afford when the federal money runs out in a few short years.

Without changes, the MoEquity guidance could cause an unnecessary upheaval in American public schools. It could lead to a widespread re-shuffling of spending and staff, with no guarantee that it would lead to more equitable resource allocations within districts. To the Department of Education’s credit, its latest Dear Colleague letter said it was, “eager to learn from the experiences and perspectives” of states, school districts, and other stakeholders, and that it, “plans to use the comments it receives to inform future guidance and potential rulemaking.” So they’re open to feedback on the MoEquity rules now and how those are playing out on the ground.

As districts start planning for their next budget season starting in November, we think the U.S. Department of Education would be wise to consider making its one-year moratorium permanent and to interpret the law as focusing exclusively on the places that are making real reductions to spending and staffing. The specifics of the MoEquity rules make more sense when applied to districts that are cutting their budgets, rather than all districts nationwide. That would provide more time and space to focus on the places truly at risk of making harmful and inequitable spending cuts.

Marguerite Roza is research professor at Georgetown University and director of Edunomics Lab. Chad Aldeman is policy director at Edunomics Lab.

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