Day 1: A Conversation about Equitable School Funding with Bruce Baker

In 2011, Boston Public Schools implemented a budgeting tool called Weighted Student Funding, or WSF, which is a student accounting method intended to create a customized per pupil spending level specific to each student’s needs. Each student is allotted a base per pupil amount, and then additional money, or weights, are added for each type of student.

Because Boston is a city with school choice, students regularly move throughout our school ecosystem, and when they leave a school, the money goes with them. The fixed costs of operating a classroom and a school remain, creating financial instability, budget deficits, and the loss or programming for the students left behind.

Each year, we see winning schools and losing schools, depending on projected enrollment variations for the upcoming school year. And due to costs rising faster than the budget increases given to Boston Public Schools, even schools with slight enrollment increases may still be faced with a budget deficit.

To strategize on ways to stabilize school funding and improve equity, Kristin Johnson from the Boston Coalition for Education Equity had a conversation with Professor Bruce Baker from the Rutgers Graduate School of Education and author of the new book, Educational Inequality and School Finance: Why Money Matters for America’s Schools.

The transcript of our conversation is below:

JOHNSON: So tell us about your new book.

BAKER: Well the new book more than anything is just, it's a compilation of a whole bunch of blog posts and reports and other stuff that I've been writing for the last – most of this is from the last 10 to 15 years.

I had done some briefs on the issue of money matters, kind of summarizing the research on that, with Matt Di Carlo at the Shanker Institute. I've been writing a blog now for about 10 years, I've done a lot less on that in recent years, which has been kind of my palette for new and emerging ideas that are coming to mind, stuff that needs to be, that I think needs to be addressed or written about.

Oftentimes, it's reactions to a lot of the myths that are out there around school funding that, you know, that it's gone up and up and up out of control, and we've gotten nothing for it, that's one of the big ones – that somehow the United States spends more than any other country or planet has ever spent on education and yet still, our PISA scores are worse than Uzbekistan.

I just felt like it was time to put all this stuff in one place and I was actually contacted about that, I think through Matt Di Carlo at Shanker and some others had contact with the editor at Harvard Ed Press, and we talked about it and figured out a way to put it together. They took away some of the snark and sarcasm in the book from what's on the blog, but I've kind of softened over the past year anyway.

JOHNSON: We suffer in Boston from some of these myths. And so every year, the mayor and school committee and superintendent say, “this is the largest budget ever.” So as we all know, budgets go up and up – we kind of battle with this.

So as I mentioned before, every year when the budget comes out, we see winners and losers. So due to enrollment shifts, and weighted student funding, we see half the district be in the winning category and half of the district in the losing category. And in the losing category, they're losing art and music and social workers and school supports. And so I want to talk with you about your perceptions of weighted student funding in an urban district cohabiting with charter schools and private schools. And in a situation where there's not enough funding for everyone – your perspective how that plays out.

BAKER: So the issue, well there's so many layers of issues here. For a while, in the late 90s, early 2000’s, weighted student funding was pitched as this kind of panacea for solving within-district inequity across schools, as opposed to what was arguably the default method of district officials assigning, allocating personnel across schools, which was perceived to be always politically motivated, and the schools that had the most leverage, the principals with the most, would get the most personnel, they'd get the lines assigned to them. And those who didn't have the leverage wouldn't get the lines assigned to them.

I've argued for a long time that weighted student funding is just another political beast, it's just got different levers on it. And the same politics govern how weights are assigned and how money is shifted around under weighted student funding model as existed in personnel allocation models.

And I've shown in a number of studies that when you look, for example, in states like Ohio, or Texas, which have large cities that use and others that don't use weighted student funding, there really are no differences in the degrees of equity or progressiveness of funding they achieve across schools.

So either allocation model is subject to the same political kind of tug of war. It's always going to be tricky to figure out how to divvy up money across disparate populations across different power bases, and you're just changing the things that they get to tug on when you move from a personnel allocation based formula to a weighted student funding model.

Weighted student funding was also during the time, and still is, conflated with this notion of site-based budgeting and site-based governance. And it does enable site-based governance, but it's not one and the same. This idea that we're not having central office directly allocate teacher lines, but we're giving schools budgets, and they're going to figure out how to allocate these, doing it through weighted student funding enables that.

But then there are complexities. There's the issue that when you get to the dynamics of kids moving around, whether it's enrollment declines and increases that naturally occur by neighborhoods, across schools in the district, or how choice programs escalate that movement and make it less predictable, much more uncertain, every component of a school’s budget isn't flexible with each individual student.

We have three levels: We have student-level costs, we have stepped costs, and we have fixed costs.

Now, assuming that the district is providing sufficient money to cover building overhead costs for every building as a separate component, that takes the fixed cost out of the puzzle. But classroom-level cost, program-level costs are step costs. They don't change when one student moves. You don't get to reduce the teacher salary by the value of the one student who left their class. So there's gotta be some way to account for that.

In studying charter dynamics, we've – and there are a few scholars that have looked now – Helen Ladd, Sonny Ladd, and then Bob Bifulco in a new piece, and in an older piece, on upstate New York schools, they looked at when you move students in these uncertain ways, and sometimes rapid patterns between district schools and charter schools, you leave behind cost, that can't immediately be reduced in terms of inefficient building use. So in terms of fixed costs and in the step costs.

Randy Reback who wrote one of the papers with Bob Bifulco argues that one of the ways that you have to keep the system whole as kids are moving between district and charter schools is with an additional 20% money, that's accepting that there's 20% inefficiency in this transition period.

So the dynamics are tricky. You have to account for the fact, whether it's just enrollment declines and increases by neighborhoods in a weighted student funding, or the movement of kids from district to charter or back, you have to account for the fact that there are these student-level costs, the step costs and the fixed costs.

We often ignore those step costs entirely. And that's where we see the hit on programs that get cut because you can't reduce a section of third grade as easily as you can cut the music program.

JOHNSON: Right. You just hit the nail on the head of what our focus is – can we flip this and have our district identify what are the basics of modern quality education? So are there districts that you know of that say: Our priority as a district is that we have an arts curriculum, we have social emotional supports, so that those are not on the chopping block? And that's a big question.

BAKER: Right. Having nurses, counselors, and music and arts programs is tricky, because to me, it's so much easier to eliminate those.

I mean, the problem is that you’ve got to have the “both and” – you've got to have that and you've got to have the reasonable class sizes.

And when you set up a scenario of unplanned mobility of students across schools, you make it very hard to efficiently plan the financing. It's just an embedded inefficiency of providing expanded choice. And, you know, these individual schools under weighted student funding model are then going to be stuck with this: Well, I had three classes of 22 kids at third grade now down to three classes of 18, but I can't really squish that into two classes and excess the third grade teacher, what am I going to do? I'm going to share a nurse with these two other schools. And we're going to share a counselor with these five other schools.

But it comes down to, would they have even had to do that if we didn't impose that inefficiency on them by having unregulated choice? Which might also up the district's overall operating expense for stuff like transportation. So all these other pressures that get thrown into the mix at district level costs. Transportation costs, in the New Orleans model, went way up. And that necessarily takes away from other areas. It's an inefficiency.

A lot of people say, “Well, you know, once we reach a new equilibrium, those costs go away.” Well, how many years are we – how many decades are we – into charter expansion now? It's ongoing. It didn't go away for the last 20 years. It's probably not going away in the next 10. If we were to go all the way to a New Orleans model, we then incur the ongoing inefficiency of high transportation costs in perpetuity. It’s not a short-run thing. Bob Bifulco's new paper does show that there's some convergence of those short-run inefficiencies over the long term.

JOHNSON:  Interesting. We haven't seen that here in Boston since we've had busing for 40 plus years. Right now, I think it's up to $120 million per year – 10% of our budget – and rising.

BAKER: The district retains the responsibility for transportation for all the kids in charters, right?

JOHNSON:  That's right.

BAKER: Charter expansion must have added to the number of kid-miles. Which, you know, of course, the transportation costs fluctuate with fuel costs, and everything else, too. Correcting for that, the number of kid miles must have gone up, and therefore, the long-term transportation costs are up.

JOHNSON: Yes, exactly.

So before I let you go, I wanted to ask you – when I spoke with you before, we had an interesting conversation about the impact our exam schools have on school funding. At the seventh grade, we see a lot of kids exit the district which puts a lot of instability in our seventh and eighth grade classrooms. So we have a lot of cuts, and those are the kids who are falling through the cracks, that haven't found the “golden thread” into our exam schools. They're overwhelmingly students of color and low income students. And they are faced with the deepest budget deficits. So you had some interesting ideas about ways to support them with WSF.

BAKER: I think that the main issue with that, and then one of the really important points you bring up here, and something that a number of the charter advocates like to also point to, is that districts also impose, to a great extent, some of these disparities on themselves by actually providing, in some cases, relatively large elite, selected magnet schools, and exam schools, whether it's the middle school sorting process in New York City, or the Stuyvesant and Bronx Science, or the schools that you have in Boston. So districts impose some substantial inequities on themselves. And without completely undoing those schools, or getting into the whole debate over whether we need to modify how one gains access to those schools. Setting that aside for the moment, cause I'm not touching that.

Going back to WSF, I'm assuming that this sorting process leads to selective schools that have fewer kids with disabilities, fewer low-income kids, fewer of the kids from the lowest-income families. First of all, it's my understanding, looking at the weighted student funding formula in Boston over time, is that, like many cities, it had a relatively regressive distribution of per pupil expense by school with respect to student needs. It's converged on being less regressive. Boston may have made more progress with weighted funding and other cities. That's yet to be seen in some forthcoming work.

But one of the ways to make it even better, and this doesn't doesn't address it specifically as an exam schools issue, but it it hits at the problem – you're using using SNAP eligibility right now for the application – that the poverty weighting should probably be bigger than they are.

A couple different angles to take on this is, if you also have data by neighborhood, or by families, at schools that indicate even more stringent family income thresholds, lower and lower income families or families in homelessness, other indicators of more severe poverty by school, they ought to be scaled up with even bigger weights to address that. That would just drive more money to the schools that have greater needs, be able to get the class sizes down while keeping the counselors and nurses in those schools. And yeah, if you've got the exam schools on the weighted budget, they're going to end up with smaller classes while the exam schools may have to deal with a large class of AP Physics. But you know, the big issue of budget trade-offs in a large urban district – a large class of AP Physics for a group of relatively privileged kids who've tested into the school is bearable if you're able to then have a much smaller class of low-income and minority kindergarteners across town. That's what you get by upping those weights for more severe poverty and homelessness.

New Jersey in its funding formula has a poverty concentration weight, that weight goes up as the proportion of kids in poverty – in New Jersey, it's by district, but you can do it by school – as the proportion of kids in poverty goes up, the weight gets bigger as the share.

JOHNSON: Yeah, interesting.

BAKER: And there's actually a research base that reveals these higher costs of achieving common outcomes as poverty intersects, really specifically with urban population density and poverty density in urban centers. It also seems to have some kind of racial dynamic to it. So you can really scale those weights up, that's the only way the system is going to become more progressive to begin with.

And yes, that's going to drive more money to the middle schools with more low-income kids left behind, to the elementary schools with the highest poverty concentrations. And yes, it's going to make those exam schools bigger losers in the mix. Again, when your trade-off is, you can have 30 kids in the AP physics class with a group of kids who tested in to be able to do that, and have a class of 15 in the kindergarten, first grade, in a high poverty neighborhood. It's the way to go.

JOHNSON: So I want to end with just one curveball: One thing that drives me nuts in Boston is there's a lot of private money going into some schools. The exam schools see a lot of private money. I did an analysis two years ago of money coming to the district via the website Donors Choose, and I found that the affluent zip codes in Boston benefited by $77 to $123 per pupil extra due to Donors Choose, but in Mattapan and Roxbury, kids only benefited from about $3.81 additional money. So how do you account for private money coming into public education?

BAKER: Well, they should have less to complain about when we scale up the poverty weights, okay?

And really, that's the only solution I have here. It goes back to my original, we’ve got to focus on scaling up those poverty rates, increasing them more with deeper poverty and increasing those weights with poverty concentration.

The problem is, I've tried to come up with other creative methods for kind of counter-balancing that, but ultimately you can come up with methods that counterbalance that but then also produce the disincentive for them to give anything, and maybe that's the policy message we want to give. For every dollar you give, maybe the district wants to set up a system that creates a sharing of a proportion, creating a pool, a sharing. People are just going to find a way around that anyway – find a way to escape the pool.

When Vermont adopted Act 60 following its school finance litigation, they forced a sharing pool of certain excess property tax revenues and districts were trying to find ways, Stow was trying to find a way to create a foundation to get around it. People will subvert it. If you were to treat it as if it's like local contribution in a state aid formula and offset it, people go around the system that way. The best thing we can do here, and it solves that enrollment dynamic problem a little bit to the exam schools: Boost those poverty weights, address deeper poverty even more, and scale up the poverty rate and concentration as much as is practically possible, politically palatable. I hate to have that last part is a constraint.

JOHNSON: It's true. That's the reality we're in. Well, thank you so much for taking the time to talk to me.

BAKER: Thanks for having me.