Spending More on Education Makes a Difference. No Kidding.

The National Bureau of Economic Research concluded in a new paper that schools that spend more money have better outcomes for economically disadvantaged kids.

Here's the meat of the findings from NBER, which looked at education funding changes from 1955-2011:

Event-study and instrumental variable models reveal that a 20 percent increase in per-pupil spending each year for all 12 years of public school for children from poor families leads to about 0.9 more completed years of education, 25 percent higher earnings, and a 20 percentage-point reduction in the annual incidence of adult poverty.

The study concludes that between 2/3 and 100% of all the outcome gaps between kids raised in poor and non-poor homes can be eliminated with this spending increase.

Now, I know that here in Ohio, some pretty prominent education policymakers have argued that schools get enough money, or don't need more, or even would do better with less. But that's not what 56 years of data would suggest. It would suggest that removing $515 million from the classroom will have a deleterious effect upon the state's most at-risk youth.

It also calls into question conservative education policy guru Eric Hanushek's long-held conclusion that "Today the existing knowledge base does not ensure that any added funds will, on average, be spent wisely. That is true even if some schools may spend their funds wisely." 

Perhaps America's schools have been spending money more wisely than Hanushek gives them credit for. (By the way, in Ohio, Charter Schools spend far more on administration than school districts, so who's spending wisely in this state?) With only a 20% greater investment in addressing poverty, we've had 25% higher earnings and 20% reduction in poverty. Imagine if that percentage were 30-40%?

But when you can argue that up is down and down is up, I suppose these kinds of facts and realities don't matter anymore.

Finally, I'll leave you with this: When can we stop studying whether the sky is blue? Does anyone really think that money doesn't matter in education funding? Does anyone seriously believe that the answer is less money?

Until we have politicians who are willing to spend what needs to be spent for our kids to succeed, I suppose we're going to continue burning intellectual capital on reinforcing that most common of common sense truisms: You Get What You Pay For.

School Choice Ohio Sends Me A Flier Touting Vouchers

I went to my mailbox today and found something remarkable: A notice from School Choice Ohio telling me that I could get $4,250 a year for my kindergartner to attend a private school as long as I was part of a low-income or middle class family. And the best thing? I will be able to keep the voucher for Carson to attend private school all the way through high school!

Except, if I did that, it would leave my other son, Logan, with less money and opportunities because he would remain in the public schools, though it's being directly funded with state lottery money for now -- money that would have otherwise gone to Logan. But no matter.

Hey, that's fair, right?

Here's the mailing:

Last year, we reported at Innovation Ohio that middle class families would qualify for this expansion, with families earning $94,000 a year qualifying for a partial amount. The School Choice Ohio flier says if my family made $47,100, Carson would qualify.

Vouchers have exploded under the current Governor, from $99 million before he took office to more than $175 million this year. With the efforts of School Choice Ohio, we can only expect those numbers to grow larger. And remember that with each Voucher, less money is left for children who are not taking the Voucher, forcing all of us to have to vote for more property taxes or accept cuts in services to our children.

Ohio Department of Education Turns Political, Misleads Public

I came across something truly concerning the other day as I flipped around on the Ohio Department of Education website. It was a page that seemed really odd to me. Something called "Overview of School Funding."

Here's the page:

"Next year, the State of Ohio will spend more on primary and secondary education than at any point in state history. FY 2015, State General Revenue Fund and Lottery Profit spending for primary and secondary education will exceed FY 2010 funding levels by $1.3 billion, or 17.8 percent. Even including one time federal-stimulus funding, TPP/KwH reimbursements, and property tax relief, FY 2015 funding levels will exceed FY 2010 funding levels by $317.8 million, or 3.3 percent.

The following chart discusses the elements typically associated with primary and secondary education funding in the State of Ohio.

How School Funding is Distributed

Public school districts use a combination of state funds, local sources such as property taxes (and in some cases income taxes) and federal funds.

The amount of state funds that a district receives is based on a formula that takes into account the student enrollment and the property wealth of the district.

About School Funding

The Department of Education’s General Revenue Fund budget represents the largest component of primary and secondary education.

These funds, along with profits from the Ohio Lottery are used to fund Ohio’s 612 public school districts, 49 joint vocational school districts, and approximately 370 public community schools. They also fund the activities of the Ohio Department of Education, including funding for early childhood education, pre-school special education, assessments, and the A-F report card.

In addition to state aid through the foundation program, many school districts receive reimbursements payments for lost property tax revenue caused by the phase out of the general business tangible personal property tax (TPP) and the reduction of property tax assessments rates on utility property (KwH). Finally, the state pays 10% of locally levied property taxes for residential and agricultural real property owners and an additional 2.5% for homeowners and represents property tax relief to individual property taxpayers in Ohio."

It may not seem weird to you at first, that is until you see the comparison years. Why is the Ohio Department of Education choosing to compare the last two budgets administered by John Kasich with the last one administered by Ted Strickland? I mean, that's a pretty random comparison, isn't it?

If this is an "Overview of School Funding", why not show the historic levels of funding since 1994? I mean school funding didn't start in 2010, did it? The department has the data to do that. However, it would show that the 2010-2011 school year was the only one on record where more state than local funding went into schools. And perhaps that's not fitting the narrative the page is trying to create.

Interestingly, the department removed $2 billion this year from what it had previously considered local revenue and called it "other non-tax", apparently trying to make it seem like more state than local money goes to schools. However, the "other non-tax" category was considered local revenue every year since 1994, so just add it to the local revenue category for the 2012-2013 data to get the true state-local makeup. 

Why is the department so emphatic about the "historic" levels of funding?

Perhaps because it appears this is a brand-new comparison and funding defense. According to the Wayback Machine (which traces website histories), there are 8 times in 2013 and twice in 2014 that the machine archived the website containing the "Overview of School Funding" page. The dates were June 8 and 15, July 13, August 20 and 31 and September 12. March 26 and 27 of this year were also archived. Here is the complete page on each of those dates:

Overview of School Funding

The funding of public elementary and secondary education in Ohio is a joint effort between the state and local school districts. 

Public school districts use a combination of state funds, local sources such as property taxes (and in some cases income taxes) and federal funds.

The amount of state funds that a district receives is based on a formula that takes into account the student enrollment and the property wealth of the district.

What followed were links to the most frequently requested reports.

That's it. No comparison with any prior years. No emphatic defense of current budgetary priorities. Nothing. Simple. Straight forward and accurate. And you couldn't even find it easily. You had to click through a couple pages to find it. 

Now, the Overview is on the Finance and Funding homepage and is much easier to access.

So, why is the "Overview of State Funding" page so different today? Could it be because the Governor employed the current State Superintendent of Public Instruction prior to his "appointment" as State Superintendent? Or perhaps that Kasich is tired of people repeating the fact that he has removed $515 million from Ohio's public school kids in direct aid payments compared with his predecessor?

Is it a mistake or happenstance that the page appears to have been updated on May 2, which was just a bit before his opponent, Ed Fitzgerald, announced a universal pre-school initiative in which he hammered Kasich on his education cuts?

Could it be because this is an election year?

What is most disturbing about his whole episode is that the Department is including education funding that has never, I repeat, never been seriously considered part of the state share of funding discussion (though believe me, many politicians have tried making these arguments before). 

For example, they are using over $1 billion in "property tax relief" as school funding. There is not a single dollar, that's right, not $1 more that goes to schools because of this funding pot. All the tax relief does is allow property taxpayers a small break on their property tax bill. So the district will still get $100 from local property taxes, for example, but instead of all of it coming from property owners, $88.50 will come from property owners and $12.50 will come from the state. But not a single additional dollar will go into the schools because of that chunk. Oh, and starting in November, the state stopped picking up that $12.50 for new levies. So there's that, yet, surprisingly, there's no mention of that change on the Overview page.

Next is the lottery money. First of all, the reason the lottery money is up about $250 million a year is because Kasich allowed Video Lottery Terminals at racetracks -- an idea put forward by Gov. Strickland in 2009, which was summarily opposed by Kasich's legislative allies at the time. Second of all, Lottery money is included in the state direct payment district-by-district runs generated by Kasich and his legislative allies -- runs that are included in this spreadsheet showing the $515 million cut.

Finally, the fact that the department is putting the funding baseline below what State Fiscal Stabilization Fund dollars provided to districts in the 10-11 budget suggests beyond much doubt that this ODE Overview is nothing less than an Ohio Republican Party political document.

Just so everyone understands this again: SFSF money was contained within the 2009 Stimulus Bill, but it was not stimulus! It was meant to make up the difference between what states spent in prior years and what the recession would allow them to spend in 2009. This was not money on top of what we were already spending; it was money meant to allow us to spend what we had been spending in previous years. The feds required states to run the money through the states' funding formulas. It was never meant to serve as an excuse to cut $900 million from kids. Yet that's exactly what Ohio legislators have done, arguing over and over that SFSF money should not be included in any comparative calculation.

But the fact is this: districts received that money in the 09-10 and 10-11 school years. They were promised by me and others that the money would be replaced by state funds when tax receipts returned to normal levels. Importantly, they were told not to expect any replacement of the true federal education funding stimulus from 2009 -- additional Title I and IDEA payments.

However, a new legislature came in and immediately called SFSF "stimulus", thereby justifying removal of about $900 million in funding that we had been spending prior to the recession!

The baseline considered by serious Ohio education finance analysts has always included SFSF for this reason. Yet ODE has now taken the Ohio Republican talking point and put it on a web page that -- until this election year -- was bland and banal, which was exactly what it should be.

Once you get rid of the non-direct payment portions of the new Overview page (lottery and "property tax relief"), what you see is the state is spending $524 million less over the FY14-15 budget than it spent over the FY10-11 budget -- just about what the state runs indicated in this spreadsheet.

And don't forget this either: That ALL spending is up under Kasich. However, the state's relative spending on education is way down. If the state spent the same percentage of its all funds budget on education today that it did in the budget prior to Kasich, there would be $1.3 billion more for kids.

It is no secret in Ohio education circles that ODE has been shedding staff like the Hulk sheds henchmen (sorry, I have a 5-year-old comic book reader in my house!). There is little question that politicizing ODE has contributed to this exodus. I feel for the true professionals at the Department who are being told to do things they've never been asked to do before, all in the name of misleading the public into thinking this Governor has increased money for education, when everyone knows he hasn't.

It can't be easy working in that environment. 

ODE should start improving the work environment by taking down that webpage and just hand it over to the Ohio Republican Party so it can be placed where it belongs -- on a site that is trying to convince people to vote for someone, not a site that's supposed to provide unassailable data for the public.

After all, it is the public whose dollars are paying for this.

And to those who think I'm blowing hot air, or trying to stick it to Republicans or something, all I ask is you do one thing: Ask the Ohio Department of Education to show you the district-by-district simulations of direct payments made by the state to districts for all these pots of money. See what's produced for the lottery and property tax relief pots -- the pots that allow ODE to make the claim that more money is going to schools now than before.

Then ask about my motives.

Gov. Kasich Misleads on School Funding

I really hate writing these kinds of posts -- the kind that de-bunks specious claims made by politicians. I don't want this space to become like too many other blogs and get into political back and forths.

But I couldn't let this whopper from Gov. John Kasich go.

His November opponent, Ed Fitzgerald, held an education-related event Friday. In it, he claimed that Gov. Kasich cut $2 billion from education in his first budget and replaced $1.5 billion of that in his second budget. The cut was actually $1.8 billion in the first budget, and the second budget replaced $1.3 billion of that. While in Fitzgerald's case, I can chalk up the difference to rounding, there is a much more nefarious explanation for Gov. Kasich's response.

A Kasich spokesman claimed that "Under Gov. Kasich, education funding has increased by 1.3 billion dollars and that's an increase in funding that the Democrats opposed."

This is so blatantly misleading I had to comment on it. The only way Gov. Kasich can make this claim is if he ignores about $1.8 billion in cuts to other revenue streams districts received from the state prior to his taking office -- cuts that perhaps help explain why Democrats voted against his budgets.

One of the first things Kasich did upon taking office was all but eliminate state reimbursement payments to school districts for Tangible Personal Property and Kilowatt Hour taxes -- taxes that were eliminated in 2005. However, many school districts relied on these revenue streams to fund their programs for children. So state leaders told school districts that the state’s new Commercial Activity Tax would replace those taxes until a new, permanent source of funding could be found. The state lived up to that promise ... until Kasich all but eliminated those payments in 2011. That means that the reimbursements for those taxes went from $1.9 billion over the FY2010-FY2011 biennium to $819 million over the FY2012-FY2013 and all future biennia – a cut of more than $1 billion.

Kasich’s $1.3 billion figure does not include the loss of more than $850 million districts received over the 2010-2011 biennium through the federal government's State Fiscal Stabilization Fund. The SFSF money was meant to prevent massive educator layoffs during the Great Recession. It was not meant to serve as an excuse to eliminate $850 million from Ohio's children, but that’s exactly what Kasich and his legislative allies have done. They claim that this was one-time federal money that they have no duty to replace. I heard this mantra constantly when I was a state legislator. Yet the money, by federal law, had to be run through each state’s school funding formula. That's because it was meant to make up the difference between what states had been spending on education and what their depleted state revenues would allow them to spend during the Recession. When Kasich and his allies refused to replace the money, they were essentially saying that they didn't think Ohio’s children should have their pre-Recession resources.

So, when you add the $1.8 billion (rounded) in cuts to revenue streams to the $1.3 billion "increase" Kasich claims, you see that the bottom line is that kids in traditional school districts are receiving $515 million fewer over Kasich's current budget than they received in the budget I moved through the Ohio House. Here's the district-by-district spreadsheet to show the calculation. Children in about 3 in 4 school districts have less money coming from the state today than they did prior to Kasich taking office.

Kasich's claim also fails the smell test from these two angles: The state share of education funding has dropped precipitously since Mr. Kasich took office, and local property tax levies are way up. 

The chart below (from Ohio Department of Education data) demonstrates just how much the disparity between state and local revenue streams has grown under Kasich. I would be remiss if I didn't mention that the last year of the budget I moved through the Ohio House (the budget prior to Kasich's arrival) was the first time on record that state money being spent on education eclipsed local taxpayer money.

So if Kasich has indeed "increased" state education funding, why has the state share dropped so deep?

One more piece of evidence: Why are levies for new operating money up so dramatically under Kasich? Again, this is just for new operating money, not capital money for buildings. 

Kasich supporters frequently mislead on this stat too by lumping operating and capital money together. Capital levy frequency was much greater under Gov. Ted Strickland because the state securitized more than $5 billion in tobacco money to put into the Ohio School Facilities Commission, which made funding through the OSFC much cheaper -- leading to more districts seeking a share of that revenue. So the reason there were more capital issues on the ballot under Strickland is because he put $5 billion more into capital funds for school buildings, not because he cut money for capital projects.

I don't begrudge politicians playing fast and loose with facts, arguing semantics, or parsing words to serve their own ends. But when they tell you up is down or down is up (rather than down is a little less down than the opponent claims, or up is much more so), then they've crossed a line in my book.

Kasich has increased state aid by $1.3 billion, that's true. But that increase has been more than offset by his drastic cuts in other areas of the state budget that children in public school districts had been using to better their futures. At the end of the day, children and parents know what Kasich is saying isn't true. 

They're the ones seeing larger classes, fewer extracurriculars, more fees and fewer additional learning opportunities.

They're the ones who have to keep approving levies to pay for the things the state used to fund. 

They're the ones who understand that when politicians turn school funding into a football, parents and kids will have to pay for the right to play the game.

And God help them if they don't, because there's no indication the state government -- whose constitutional duty it is to fund Ohio's education -- will.

More Evidence Ohio Charter Experiment Failing

Piggybacking on the evidence from yesterday's release of a report I authored at Innovation Ohio, which demonstrated again that the vast majority of kids in Ohio charter schools came from better performing traditional public school districts, US News & World Report's rankings of the country's best high schools provides another sobering picture of Ohio's 16-year-old charter school experiment.

Not a single one of Ohio's 97 charter high schools outperformed the state average in reading and math. Meanwhile, 167 of the 735 traditional public high schools did that. So that's an amazing 167-0 score. Not a single charter high school in Ohio rates in the top 115 high schools in the state -- the lowest rank given by U.S. News.

This confirms what Stanford's CREDO study demonstrated last year -- that the average Ohio charter school student loses a full marking period in math and half of one in reading to their traditional public school counterparts. And, CREDO showed Ohio is only one of four states where charter school performance has declined during the last four years, due in large part to the state not being more aggressive in closing the failing schools.

Remember that nearly every district in this state loses children and money to charter schools, including the finest districts in the state. So the argument that one should only compare charter performance with the poorest performing public schools is flawed. You can't take money and children from every district, then demand to be only compared with the most struggling. That's having your cake and eating it too, and it doesn't serve the needs of kids.

Excuses can no longer suffice. Action must be taken.

Ohio's charter schools are in desperate need of reform. There are some that are successfully educating kids. And charters have an important role to play in Ohio's educational landscape. But far, far, far too many are simply collecting taxpayer dollars and making the adults who run them wealthy.

It is incumbent upon the state's leaders and policymakers to wake up and make the changes that must be done. And do it before this $900 million program continues to grow in bloat and failure.

Our kids are counting on us.

Next Constitutional Commish Meeting Set for May 8

For all those interested in expressing their feelings about whether the state should eliminate the "thorough and efficient" clause in the state's Constitution, the next meeting for the Ohio Constitutional Modernization Commission's standing committee on Education, Public Institutions & Miscellaneous and Local Government (in which the change is being proposed) will be May 8 at 10:15 a.m. in Room 114 of the Ohio Statehouse.

Here is the list of committee members. Let them know what you think. For those of you who haven't read it yet, here's what I think.

Brenner Strikes Again

Remember state Rep. Andrew Brenner, who last month claimed that public education was socialism? Well, he's back at it -- pimping and making excuses for statewide eSchools (which are among the worst performing schools in the state) while saying those same excuses are not allowed for traditional public schools.

Here's the Gongwer Report where he does this (subscription required). The opening sentence is perfect irony when he excuses poor performance of eSchools because they "can be tied to the challenging population they serve." Couldn't that be said of major urban districts too?

Oh no. Not to Brenner, who happens to be the vice chairman of the House Education Committee. He claimed that the urbans hadn't made the "management decisions" other districts have made.

For the record, the Big 8 Urban districts (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown) spent 14% of their money on administrative, non-instructional costs last year. The major statewide eSchools (the Alternative Education Academy, Buckeye Online School for Success, the Electronic Classroom of Tomorrow, Ohio Connections Academy, Ohio Virtual Academy, Treca Digital Academy and the Virtual Community School of Ohio)? Try 23%. Perhaps eSchools should be making the "management decisions" the Big 8 have made.

And why should we be even comparing the statewide eSchools in performance or cost with the Big 8 anyway? About 80% of all statewide eSchool students come from non-Big 8 districts. So shouldn't the "apples-to-apples" comparison Brenner requested we make on performance be with non-Big 8 districts?

Anyway, remember that eSchools don't have busing, lunch rooms, buildings or any other fixed cost of a brick-and-mortar operation. Yet the average statewide eSchool still spends more per pupil than a handful of school districts, even though school districts get local revenue too. In fact, the average eSchool spends $7,266 per pupil while the average district spends $9,826 per pupil.

What's the difference?

Try operations support (busing, mostly). The average eSchool spends $78 on this category. The average district spends $1,935 per pupil. If you subtract out the districts' busing costs, the average Ohio eSchool spends more per pupil than 234 school districts, or nearly 4 in 10 districts. And they only get outspent by less than $3,000 per pupil in the Big 8.

And remember that because they're urban districts, the Big 8 are mandated to spend a lot of that money -- they have little choice. So actually, when you account for those spending realities, the average Big 8 district spends $8,490 per pupil -- not far off from the statewide eSchool average of $7,266. And remember that number includes busing. Subtract it and urbans are likely spending less per pupil than eSchools.

So how efficient are these virtual operations, really?

Which brings me to Brenner's most outrageous statement, where he claims that eSchools' performance is achieved spending "$6,000" while some districts are spending $20,000 for similarly bad results. Again, the statewide eSchools (which house nearly all of the eSchool kids) spend about 21% more than Brenner's claim -- $7,266 on average. And, for the record, there are 2. That's right, 2 school districts in Ohio spending $20,000 or more per pupil. One is Orange City Schools -- one of the state's top 5 districts. The other is Cleveland Heights, which, while struggling, is hardly as bad as, say, the Electronic Classroom of Tomorrow -- Ohio's oldest, largest eSchool.

That's it. And once you subtract costs for busing, etc. no Ohio district spends more than $20,000 per pupil. Not a one.

Again, Brenner is spinning the apocryphal story that public schools spend money less efficiently and get worse results. The truth, my friends, is the exact opposite. And when you look at Fleeter's analysis, the more discretionary money an Ohio school district has, the better they tend to perform. The highest performing districts in the state, in Fleeter's analysis, have the highest discretionary per pupil spending.

It wasn't that long ago that I discovered that the statewide eSchools received enough state money to pay for 15:1 student-teacher ratios and a $2,000 laptop every year for every student and still clear nearly 40% profit. I'm not the only one who's questioned why Ohio taxpayers should be forking over nearly double the per pupil amount for eSchools as they do for traditional public schools. The average online eSchool gets about $6,800 per pupil from the state (the rest of the $7,266 is mostly federal and private money). The average district gets a bit more than $3,500.

So, when kids go to eSchools, they typically remove more state money from the district than the state would have received if the kid had stayed in the district, which leaves kids not in eSchools (who are in mostly higher performing districts) with less state revenue.

It would be one thing if eSchools were rocking the socks off traditional districts on performance. But they aren't -- a fact Brenner, to his credit, acknowledged, before he made his excuses. In fact, ECOT graduates barely 1/3 of its kids. Yet they were able to pull Gov. John Kasich to speak at their 2011 graduation ceremony. Would Kasich go to to a traditional public school graduation where even 70% of the kids graduated? No way. Even though that's twice the rate of ECOT.

My biggest disappointment with Brenner is this: Our kids need guys like Brenner -- people who are strong choice proponents -- to be the fiercest proponents for excellence in choice. Brenner had an opportunity to stand before eSchools and demand they do better. The rest of the state has to do more with less. So should they. "The days of 35% graduation rates for double the state money are over," he could have said.

But he didn't.

Instead, he did that which folks in the choice movement have derided public school advocates for years: make excuses.

That constitutes a failure of leadership. And it's extremely disappointing. But I can't say it's unexpected. After all, the operator of ECOT -- William Lager -- did spend $180,000 on Republican lawmakers just in the last few weeks of the last budget. So perhaps Brenner is angling for some of that.

There's an old saying that goes something like this (PG rated version): "If you can't eat their food, drink their booze, take their money, then vote against them the next day, you shouldn't be in politics." Brenner is in a great position to make much needed changes in Ohio's eSchool landscape. Instead, he excused their miserable failings by using misleading arguments.

Our kids deserve better.