School Spending Is Poorly Tracked, at Odds With Policy Goals

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School finance expert Marguerite Roza doesn't mince words in her new book on education spending. Of mandated student-achievement standards, she writes, "It seems reasonable that policymakers and researchers should know how much it costs to achieve them. The problem is, no one has a clue."

Roza's "Educational Economics: Where Do School Funds Go?" uncovers an education-finance system in which district after district does not know or does not effectively calculate how resources are allocated among its schools. School leaders who try to track dollars and services from the district to each school often use district averages to estimate per-school spending. But averages, writes Roza, mask wide variations in the actual distribution of experienced teachers, enrichment programs, and social services among schools in the same district.

More than an accounting problem, the current practices make it nearly impossible for education leaders to align spending with goals. In fact, Roza finds districts whose objectives and resources are not just weakly linked, but contradictory. Even state and district leaders who agree that closing the achievement gap between low-income, disadvantaged students and wealthier kids -- a driving force in national education policy -- end up sending better-paid teachers and more services to higher-income students.

"When the federal government invests funds to ensure that the highest-poverty schools have more resources," Roza explains, "local governments counteract this investment by directing their resources disproportionately to lower-poverty schools." In one district, she writes after untangling the data, schools with the fewest poor students were allocated about $600 more per student in state and local funding than the highest-poverty schools. The additional federal funds targeted to needy students weren't enough to equalize the budgets of the high- and low-poverty schools; the poorest schools still fell short.

Resource distribution in conflict with districts' goals, Roza writes, "happens almost invisibly and incrementally, not because of grand design." To remedy the conflict, she devises a framework for making allocations transparent, coherent, and better aligned. Roza acknowledges the immensity of the task and stresses the urgency of tackling it.

"The challenges are many," she writes, "but until district leaders recognize that their financial accounting systems are inadequate at the school level, they will continue to be 'driving blind' and heading toward financial instability, even disaster."

Marguerite Roza is a research associate professor at the University of Washington's College of Education and is affiliated with the Center on Reinventing Public Education at the University of Washington. Her research focuses on education spending and productivity at all levels of government.

"Educational Economics," by Marguerite Roza, is available from the Urban Institute Press (ISBN 978-0-87766-764-3, paperback, 128 pages, $26.50). Order online at http://www.uipress.org , call 410-516-6956, or dial 1-800-537-5487 toll-free. \\

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