Making Money Matter Financing America's Schools (1999) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-12
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A key component of this quest involves school finance and decisions about how the $300 billion the United States spends annually on public elementary and secondary education can most effectively be raised and used. A new emphasis on raising achievement for all students poses an important but daunting challenge for policy makers: how to harness the education finance system to this objective.
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In the past, finance policy focused primarily on availability of revenues or disparities in spending, and decisions were made independently of efforts to improve the educational system's performance. Although school finance policy must not ignore the continuing facts of revenue needs and spending disparities, it also should be a key component of education strategies designed to foster higher levels of learning for all students and to reduce the nexus between student achievement and family background.
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From page 3... ...
Instead, the challenges are to balance differing values in a thoughtful and informed manner and continuously to pursue bold, systematic, and rigorous inquiry to improve understanding about how to make money matter more in achieving educational goals. The committee is convinced that these challenges can be met and that the nation can improve the way it raises and spends money so that finance decisions contribute more directly to making American education fair and effective.
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In fleshing out the brief mandate assigned from Congress, the department charged the committee to evaluate the theory and practice of financing elementary and secondary education by federal, state, and local governments in the United States. The key question posed to the committee was: How can education finance systems be designed to ensure that all students achieve high levels of learning and that education funds are raised and used in the most efficient and effective mannerpossible?
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Regarding goal 3 raising revenue fairly and efficiently the United States is unique in its heavy reliance on revenue raising by local school districts, the extensive use of the local property tax, and the small federal role. Despite significant amounts of state financial assistance to local school districts, spending levels vary greatly among districts within states and also across states, a situation that many people believe is unfair.
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Beginning about 1970, the nation entered a notably vigorous period of school finance reform aimed at making the distribution of education dollars more fair. Litigants in a number of states succeeded in having state finance systems overturned in court on the grounds that they violated state constitutional equal protection provisions or education clauses.
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While there is still a great deal of uncertainty about how to make schools better or how to deploy resources effectively, the committee's review of the last several decades of research and policy development on educational productivity makes us more optimistic than our predecessors regarding the prospects for making informed school finance choices. Thirty years' worth of insights have generated a host of ideas about how to use school finance to improve school performance, and researchers have learned to ask better questions and to use improved research designs that yield more trustworthy findings.
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Altering incentives embraces changes in incentives designed to operate primarily within the existing system of school governance and includes policies such as restructuring teacher salaries, use of school-based incentive programs, and changes to the incentives built into financing formulas for students with special needs. Empowering schools and parents refers to policies that would decentralize significant authority over the use of public funds, to schools in the form of site-based management or charter schools, and to parents in the form of significant additional parental choice over which schools (public and perhaps private as well)
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· Empowering schools or parents to make decisions about public funds (via enhanced site-based management, charter schools or contract schools, or vouchers, for example) has been justified as a strategy for improving student achievement in a cost-efficient way based on a variety of different arguments: some contend that local control will enhance innovation at the school level; some believe that schools with a strong sense of community perform better; and some believe that the introduction of competition and the possibility of losing students (and their associated funding)
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schools can be reformed through strategic investments and related strategies, or whether they require much more fundamental structural change, such as might be brought about by a voucher program. · Most federal and some state aid flows to schools via categorical programs tied to the special needs of certain groups of disadvantaged students.
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Achieving Goal 3: Raising Revenue Fairly and Efficiently · Shifting away from local revenue raising to greater reliance on state revenues and/or increasing significantly the federal role in revenue provision for elementary and secondary education would foster the goal of raising revenues fairly. Both, however, have to be considered in light of trade-offs and complementarities with the other two goals of a good financing system and with attention to maintaining some local control over managerial decisions.
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From page 12... ...
Meeting the nation's education goals will depend in part on continuously and systematically seeking better knowledge about how to improve educational outcomes, through new research initiatives such as these along with more extensive evaluation of the many reform efforts already under way.
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