Financial analysts predict a little-known requirement tucked into the Every Student Succeeds Act that states break out and publish annual school-by-school spending numbers has the potential to revolutionize how state and local lawmakers distribute their education dollars.
But state education departments for a variety of reasons are struggling to meet the requirement, and a growing chorus of district superintendents and civil rights activists are at odds over how school spending amounts should be collected and reported.
Recognizing the complexity and sensitivity of the issue, U.S. Secretary of Education Betsy DeVos in the summer of 2017 gave states an extra year to comply with the law.
The data, now required to be published by December 2019, could be used as a potent weapon in upending politically thorny teacher tenure laws, state funding formulas, and decisions around costly special education programs.
While most people understand K-12 education spending in terms of average district per-pupil amounts, how districts distribute federal, state and local dollars between schools has long been a mystery even to district superintendents.
But many have theorized that seeing distribution levels by school can reveal to the public how (or whether) money boosts academic results and whether money is being spent as intended.
Districts have received a flood of money in recent years to better balance the amount spent on the nation’s growing number of poor students.
But civil rights advocates have long asserted that a large portion of that money intended for poor students is instead going to schools attended by wealthier students whose parents are better equipped to advocate for their schools.
“Giving parents and advocates those numbers will allow them to say, ‘Does this or doesn’t this align with my sense of fairness,” said Ary Amerikaner, the director of P-12 resource equity at The Education Trust, which advocates on behalf of low-income children and students of color.
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District superintendents predict there will be a severe backlash to real or apparent school spending disparities that will pit parent groups, board members, and neighborhoods against each other.
With that in mind, district superintendents and civil rights advocates have paid a large amount of attention to making sure the data are as close to accurate as possible and comparable within schools and between districts. That process is turning out to be more politically and technically difficult than officials originally thought, several state departments said.
“With this ESSA opportunity, we need to be asking, are we collecting the right data so that it’s insightful, and is meant to improve education?” said Brent Engelman, the director of education data and information systems for the Council of Chief State School Officers.
Where It’s Spent
Districts spend their money on myriad things, including teacher salaries, school supplies, technology, and transportation. In order to figure out school-level spending, state departments have to determine how to categorize those potentially hundreds of education costs as either school-level costs or district-level costs.
Some costs, such as a full-time English teacher’s salary, can easily be categorized as a school cost.
But how do you categorize the salary of a school counselor who spends time at several schools and works on establishing district-wide policies?
Or the cost of a school bus that makes stops at multiple schools?
Most crucially, how do you handle special education and pre-K costs, some of the biggest drivers in school cost inflation? Those services are sometimes handled at only a few buildings within a district.
What’s more, many districts find their sometimes-antiquated data software is incapable of categorizing school-level funding amounts.
In order to comply with the law, states or districts may have to either replace their school spending software wholesale or update the software to include new spending categories.
Either effort could cost a state millions of dollars. “There is a very, very broad spectrum among districts of readiness,” said Jess Gartner, the CEO of Allovue, a company that sells finance software and has helped states and districts comply with the law. “Some districts are essentially registering and accounting their budgets the way the law requires. But a lot of districts that have not been budgeting or accounting at the school level—there’s going to be a serious change for them.”
There has been a flurry of activity in recent months as more and more state politicians and district officials are finding out about the law’s requirement through their membership associations and as state education departments release guidance to help districts start to collect the data this fall.
Some district superintendents have asked that state departments be careful about restricting how school-by-school spending amounts are determined at the local level.
“It takes away from the whole concept of local control of school districts which has been a tenet of public education throughout history ... the idea that no one knows better to meet the ends of education community than the local community,” said Brian Lane, the superintendent of the Brentwood school district in Missouri. “We certainly have a democratic process in place where the local community votes for school board members and they are held accountable for things such as budgets and school expenditures.”
Political Tensions
But civil rights advocates are pushing for strict statewide guidance so that parents and advocates can compare school spending amounts across district lines.
In New York, where school funding and the state’s funding formula have taken on an outsized role in state politics, Democratic Gov. Andrew Cuomo this year proposed that—independent of ESSA—the state’s largest districts have their school-level spending data approved by the state’s education commissioner and budget director.
The proposal, which is being considered by the state legislature, generated swift backlash from the district superintendents.
They say school-level spending data will only reveal where the most-experienced teachers work, not where the state’s most-qualified teachers work, and that the state is not equipped to evaluate district spending.
“At best, this is premature,” said Robert Lowry, deputy director of the New York State Council of School Superintendents. “I don’t accept that a 25-year teacher is a better teacher than a teacher with one, two, or three years of experience. But they may be more expensive. The fact that a school building has more expensive teachers may indicate a problem and it may not.”
But some in the state say that amid stagnant test scores and rising costs, it’s time to crack down on state spending.
“Education, at $26 billion a year, is the biggest source of expenditure in our state budget right now,” said Jim Malatras, the president of the Rockefeller Institute of Government, a think tank that pushes for government accountability. “But how does that get distributed within the districts themselves? It’s just an unknown right now.”
A handful of states have already figured out how to comply with ESSA’s school-by-school reporting requirement because of legislative efforts in prior years to replace their funding formulas.
While the data aren’t widely used today, some officials in those states said they anticipate that including it on state report cards, as ESSA requires, could spark interest and push change in district spending processes.
Louisiana has posted such data on its website in a PDF file, but the data aren’t comparable between schools within districts.
“I think the states are going to need to put out some sort of training to help them understand what this data means to them,” said Beth Scioneaux, the chief financial officer at the Louisiana Department of Education.
“This is additional data they can use to make sure the needs of their kids are being met. It won’t be a single piece of information they will ever use to budget with, but it will add to them being as informed to how they make those decisions.”
