Statewide Voucher (tuition tax credit scholarship) Program: Diverting Funds from failing Traditional Public Schools

A statewide voucher or tuition tax credit scholarship program providing a tuition grant of $10,000 annually to any student attending a failing local public school district, which can be applied to any private religious or independent school, lacks educational equity and does not provide an equal educational opportunity for all students. Asymmetric information would adversely affect voucher users. Not all students have equal knowledge of or access to desirable private religious or independent schools. Private religious or independent schools may not be equitably available within a 20 mile radius. Tax credits disproportionately benefit the affluent and would result in the public subsidizing the voucher program. The voucher program provides an unequal opportunity for students to attend a private or religious school potentially providing a higher quality education. Moreover, state subsidies of religious schools violate the constitutional separation of church and state.

The voucher plan would divert scarce state funds from failing TPSs to private and religious schools. Failing districts are often found in poor urban areas. The failing schools, from which the voucher students would transfer, would lose enrollment based state and federal aid. These failing districts may be poor performing districts because they were traditionally under-resourced districts. These districts may have become failing because they lacked the property tax base with which to generate the revenues necessary to provide an educational quality commensurate with affluent districts. State and federal governments may have contributed to the under-resourcing by providing aid that neither funded all students’ needs nor accounted for the lack of a proper tax base.

A $10,000 tuition grant is inequitable. A $10,000 grant may be less than the per pupil cost for religious schools and independent schools’ tuition. If private religious or independent schools cannot reject potential voucher students even for lack of capacity, who pays the difference between the $10,000 tuition grant and religious schools’ per pupil cost or independent schools’ tuition creates inequities. Affluent parents could more easily afford to pay the delta while requiring all parents to pay the delta would disenfranchise low income and poor parents.

If private religious or independent schools are given no discretion on whether they can afford to accept voucher students, these schools might be forced to close, expand even if expansion was uneconomical, or create a two-tiered tuition scenario within the school with non-voucher students paying higher tuition to offset the voucher deficit. Should private independent schools have discretion, they might admit only voucher students whose parents were willing to pay the delta, fail undesirable voucher students (e.g., disciplinary records), or refuse voucher students that were more expensive to educate such as special education, ELL, and free-and-reduced-price lunch creating more inequities. Moreover, many religious schools are already financially distressed while others are closing due to budgetary pressures (see Baker, 2010).

Copying a practice common to professional sports, the voucher program would create student “free agents” who would have an opportunity to attend a private or religious school potentially providing a higher quality education. If the program did not require voucher students to attend their chosen school for the full academic year, these free agents could use their vouchers to transfer to another school midyear. Private or religious schools losing free agent voucher students during the year would lose voucher revenue. These schools would experience increased costs especially if they had hired additional personnel or built more classrooms and other facilities to accommodate voucher students.

If no deadline exists by which voucher students must enroll such as by April before the upcoming school year, enrollment would be difficult to forecast exposing operating budgets to greater risk. If private religious or independent schools are given no discretion on accepting vouchers students, the more desirable of these schools could suffer overcrowding and congestion. These problems could cause free agent voucher and more mobile non-voucher students to depart during the year exacerbating operating and financial problems. Housing values might plummet commensurate with increased school overcrowding. Also, enrollment increases stemming from vouchers might not be equally distributed among schools or by grade level.

If no provision is made to provide equally accessible and affordable transportation, vouchers would disproportionately benefit the affluent who can more easily afford transportation. Not all students would have equal access to private or public transportation including public light rail. If the failing school district was required to provide or pay for voucher student transportation, failing school costs would increase especially if transportation expenses were not capped.

Failing school neighborhoods or districts depress housing values because poor school quality is negatively capitalized in housing values. Low assessed housing values keep district property values low. Those who can vote with their feet move to districts providing housing and schools that better meet their preferences. White or middle class flight exacerbates the decline of neighborhoods as jobs and capital exit with them. Taxpayers are investors who want their major asset, their home, to appreciate in value. Home owners or catchment area residents have a vested interest in the success of their local TPSs because they strive to offset the risks posed by vouchers to their community-specific social capital and property values which cannot be easily diversified.

The voucher plan subsidizes private religious or independent schools at the expense of traditionally under resourced failing TPSs. The voucher plan is not a means for improving failing schools. On the contrary, the voucher plan creates a triple assault on failing TPSs. First, the voucher plan diverts essential funds away from needy TPSs. Second, the voucher plan causes failing TPSs losing voucher students to lose state and federal enrollment based aid. Third, failing TPSs’ costs increase because costs do not decrease proportionately with lost enrollment. The more mobile and affluent voucher students may be more likely to use vouchers. Losing voucher students increases the proportions of those more expensive to educate remaining in the failing TPSs increasing costs.

If vouchers were used to their logical extreme perhaps with full funding and transportation, large high poverty urban areas could lose students to the extent that the traditional public education system would close leaving a skeletal district. Lacking true TPSs, housing values might plummet further eroding the tax base and increasing the exodus of the remaining relatively more mobile and affluent taxpayers. Neighborhood erosion would accelerate driving out businesses and employment. If taken to the extreme, an unfettered voucher plan could culminate in the demise of urban areas with a preponderance of failing schools.

The provision of education through local public school districts in which students who live in the district attend its TPSs enables community members to get to know and understand one another. Fischel (2002) argues this “reduces the transaction costs of citizen provision of true local public goods” such as public education (p. 1). The public benefit of children attending their local schools rather than schools in more remote areas accrues to the families living in the catchment areas. This “network of adult acquaintances,” that Fischel (2002) defines as “community-specific social capital,” would be reduced to the extent voucher students left their residential district.

The publicness of local public schools is an argument against vouchers in the following sense. By enabling parents to select schools outside their communities and outside of local public supervision, vouchers work against the neighborhood and community networks that facilitate the bottom-up provision of local public goods. Community-specific social capital is more difficult to form if members of the community send their children to schools in other communities. (p. 1)

Vouchers erode community-specific social capital and, thereby, the public support necessary for proper public funding of public education.

References

Baker, B. D. (2010, March 23). Would $8,000 scholarships help sustain NJ private schools? [Web log post]. Retrieved from http://schoolfinance101.wordpress.com/2010/3/23/would_$8,000_scholarships_help_sustain_NJ_private_schools?

Fischel, W. A. (2002). An economic case against vouchers:  Why local public schools are a local public good. Dartmouth Economics Department Working Paper:  Dartmouth College, Hanover, NH.

 

The Inequities of Inter-district Public School Choice

Like a statewide voucher program, an inter-district public school choice program permitting students attending a failing local education agency (LEA) to attend any neighboring LEA within a 20 mile radius lacks educational and taxpayer equity, and does not provide an equal educational opportunity for all students. Asymmetric information would adversely affect school choice especially among economically challenged families. Not all students have equal knowledge of or access to desirable alternative traditional public schools (TPSs).

Quality alternative TPSs may not be equally available within a 20 mile radius. More affluent families would have higher quality information on alternative TPSs and greater means of enabling their children to attend a choice school such as through family provided transportation. If parents pay tuition to the choice district rather than their failing district, and the tuition is more expensive in the receiving district’s TPS, children of more affluent families would have an unfair and unequal opportunity to attend choice schools compared to poor children.

If full transportation subsidies or free and accessible public transportation are not provided, economically disadvantaged children will lack an equal and equitable opportunity to participate in inter-district public school choice. Not all students would have equal access to private or public transportation including public light rail. If failing school districts were required to provide or pay for transferring students’ transportation, failing schools’ costs would increase especially if transportation expenses were not capped or if the state or federal government did not pay transportation expenses.

Several aspects of the inter-district public school choice program would cause taxpayer inequity. Taxpayer inequity would result when poor parents are unable to send their children to choice TPSs due to their inability to afford the choice TPSs’ tuition or lack of affordable accessible transportation. Taxpayer inequity would result when taxpayers living in the same catchment area have unequal and inequitable access to desirable alternative TPSs. Taxpayer inequity would result should host district residential taxpayers pay higher (or lower) property taxes than out of district school choice parents for the same kind, size, quality, and location of property. Affluent parents can use their disproportionate resource advantage to obtain a superior education for their children while children of parents unable to participate fully or fairly in the choice program would receive an inferior education by continuing to attend failing TPSs even though both families may live in the same catchment area.

State law requiring chosen target TPSs to accept transferring students, even if capacity constrained, results in taxpayer inequity. Forced acceptance of transferring students could result in TPS or district overcrowding. Grade congestion could result should a disproportionate number of students transfer into only a few grades by school or district. Overcrowding could result in higher class sizes, building expansions, or new school facility acquisition or rentals. Overcrowding would diminish the quality of education causing an exodus of students to alternative choice districts.

Incremental teachers, aids, and administrators might be hired to accommodate increased enrollment. Increased personnel and facility costs would most likely require property tax increases. Larger class sizes, TPS or district overcrowding, lower educational quality, and property tax increases would combine to lower local education’s capitalization in district property values. This would cause the relatively more mobile host district taxpayers to vote with their feet. Also, state law requiring chosen target TPSs to accept transferring students may violate court ordered desegregation plans.

Like the statewide voucher program, the inter-district school choice program would divert scarce resources from failing TPSs to choice TPSs. The failing schools would lose enrollment based state and federal aid commensurate with lost enrollment. Failing districts may be failing because they were traditionally under resourced. Failing TPSs may have become failing because their district lacked the property tax base with which to generate the revenues necessary to provide an educational quality commensurate with affluent districts. State and federal governments may have contributed to the under resourcing by providing aid that did not account for the lack of a proper per pupil tax base and did not fully fund the needs of all students.

Poor school quality is capitalized in housing prices making housing values low in failing school neighborhoods. Low assessed housing values keep district property values low. Those who can vote with their feet move to districts providing housing and schools meeting their preferences. White or middle class flight exacerbates the decline of neighborhoods as jobs and capital exit with them. Taxpayers are investors who want their major asset, their home, to appreciate in value. Home owners or catchment area residents have a vested interest in the success of their local TPSs. Whether living under a statewide voucher program or inter-district choice program, homevoters (see Fischel, 2001) strive to offset risks to their community-specific social capital and property values which cannot be easily diversified.

References

Fischel, W. A. (2001). The homevoter hypothesis:  How home values influence local government taxation, school finance, and land-use policies. Cambridge, MA:  Harvard University Press.

 

Chartering In New Jersey: Diverting Funds from failing Traditional Public Schools

Increasing charter school availability would increase charter school market share of total district enrollment. Although charter schools would draw students from independent, private, and religious schools, charter school growth would result in many traditional public school (TPS) student transfers. Charter schools would draw students primarily from those TPSs that parents believe are providing an inferior educational quality or that do not meet their preferences.

Charter schools would divert funds from TPSs if charter schools receive 90% of the host district average per pupil costs by grade as charter schools do in New Jersey. TPSs losing students to charter schools lose state and federal enrollment based aid. TPSs’ costs increase because costs do not decrease proportionately with lost enrollment. If charter schools receive host district revenues based on a formula similar to New Jersey’s, charter schools would be given the incentive to locate in districts with high average per pupil spending and to enroll students whose cost to educate is below the district’s average.

Charter school expansion would draw students from religious schools possibly forcing some religious schools to close or merge. The influx of students who previously attended religious schools would increase the proportion of total district enrollment in public schools whether charter or TPS. This would increase the overall cost to the district of having charter schools because a greater proportion of students would be enrolled in public schools whether charter or TPS.

Charter schools could lower their costs while increasing the proportion of the higher cost to educate students remaining in TPSs by cream skimming in potential high test scoring, well behaving (e.g., no disciplinary records), or below district average cost to educate students or cropping out higher than district average cost to educate students such as special education, ELL, or free-and-reduced-price lunch students. Charter schools may not locate randomly but target large urban districts with high per pupil spending. District enrollment losses stemming from charter school transfers might not be equally distributed among schools or by grade level. Thus, charter school expansion would result in an inequitable distribution of school resources. The inequity would be exacerbated because large urban districts have been traditionally under resourced by state school aid formulas and lack a tax base with which to raise the revenues necessary to provide an educational quality commensurate with affluent districts.

If state charter school laws require TPS districts to fully fund district charter schools and pay student transportation to charter schools, large poor urban areas could lose even more students further increasing their costs and decreasing state and federal enrollment based aid. If no provision is made to provide equally accessible and affordable transportation, charter schools might disproportionately enroll more affluent students from families who can more easily afford transportation. Not all students would have equal access to private or public transportation including public light rail. This would result in inequitable access to charter schools.

Asymmetric information might favor more affluent families who would be more aware of charter school availability and quality. TPS catchment areas losing students to charter schools in other neighborhoods even within the same district might experience an exodus of the relatively more mobile and affluent parents with a corresponding decrease in housing values. If carried to its logical extreme, unfettered charter school growth could force TPS or TPS district closures leaving neighborhoods or districts without true TPSs.

Should charter schools exit the district or close once TPSs have closed, districts would be left without the provision of true public education. Lacking public schools, districts would be forced to transport their students to other TPS districts or seek admission to non-district charter schools depending on available capacity. The impact of extreme charter school expansion would result in an inequitable distribution, accessibility, and availability of public education whether charter schools or TPSs. The inequity would most adversely affect those least able to afford or having limited access to education alternatives.

 

Increasing State Equalization Aid 10%: No Guarantee of Equitable Educational Funding

Although increasing state equalization aid 10% would improve the distribution of education funding and local fiscal capacity, state equalization aid does not ensure equitable funding at levels commensurate with affluent districts. This approach tries to ensure equal local property tax burden and more equal total educational funding benefitting districts with low local fiscal capacity. However, state equalization aid does not achieve equity with affluent districts spending at higher levels. State equalization aid improves housing in traditionally low property value per pupil districts by improving the resources the district needs to provide an improved educational quality. The higher quality education provided by the district is capitalized improving property values. Although state equalization aid programs can lead to greater per pupil spending in traditionally under resourced districts, state equalization aid programs can result in lower average per pupil spending or a leveling down (Hoxby, 2001).

Typical state equalization aid programs have caps on the amount of state aid a district can receive which disadvantage economically challenged districts. Caps prevent the provision of a high level of equal educational opportunity stemming from equitable allocation of educational funds. Caps set below the per pupil aid level necessary to equitably fund education commensurate with affluent districts function like foundation aid programs. Metzler (2003) found that various approaches to improving equity in state aid including flat grants, foundation grants, percent equalization aid, guaranteed tax base, guaranteed yield, and full state funding result in no significant difference in the equitable distribution of education resources among districts. Metzler (2003) summarized “that while a state’s school finance approach is unrelated to equity outcome measures, it is significantly related to both the total spending per pupil and the percentage of that spending that comes from the state (rather than local districts)” (p. 588). Metzler (2003) concluded that “Percentage equalizing programs … are mathematically equivalent to a flat grant approach if states impose a ceiling on equalizing aid” (p. 591).

States often distribute aid using various approaches in addition to their state school funding formula which can offset programs intended to increase the equitable distribution of resources. Metzler (2003) describes how New York State manipulates its state school funding formula which uses a percentage equalizing approach to such an extent that the approach becomes “functionally equivalent to a foundation program” (p. 592). New York State’s school funding formula manipulation results in “one of the most inequitable allocations of resources in the country, with a wealth neutrality score of .17 (5^th highest in country) and a coefficient of variation of .20 (2^nd highest in the country)” (Metzler, 2003, p. 593). Thus, New York State reduces its state school funding formula to a minimal adequacy level with a basic guaranteed state funding level that is relatively constant for all districts regardless of aggregate student need.

References

Hoxby, C. M. (2001). All school finance equalizations are not created equal. Quarterly Journal of Economics, 116(4), 1189-1231.

Metzler, J. (2003). Inequitable equilibrium:  School finance in the United States. Indiana Law Review, (36)3, 561-608.

 

How the New Jersey and New York State School Finance Formulae Create Educational Equity Gaps

How the New Jersey and New YorkState School Finance Formulae Create Educational Equity Gaps

The rising power of state government (Fusarelli & Cooper, 2009) over education has grown from the states’ increasing domination of school finance and policy making because of the strings attached to state funding.  Legal challenges to funding inequities and disparities led to court decisions such as Serrano v. Priest establishing financial neutrality as the basis for school funding.  Subsequent rulings focused on adequacy and required state governments to provide resources to disadvantaged school districts such that the provision of education adequately met their constitutional requirements.  States have tried to remedy the disparities among districts with the infusion of incremental state funds, regulation, and new or revised school funding formulae.  The courts’ decisions concerning the states’ school funding formulae rely on key provisions of the state constitution in New Jersey and New York.  The New Jersey State Constitution provides “for the maintenance of a thorough and efficient system of free public schools for the instruction of all children in the state between the ages of five and eighteen years” (Goertz & Weiss, 2009, p. 10) whereas the New York State Constitution has an education clause known as “the Education Article” (Article 11, section 1) which mandates that “the legislature shall provide for the maintenance and support of a system of free common schools wherein all the children can be educated” (Shrader, 2007, p. 84). 

Ladson-Billings (2006) underscores the importance of having state school funding formulae that meet or exceed constitutional requirements with her education debt concept.  Ladson-Billings (2006) concept of an education debt refutes the achievement gap notion because it ignores the importance for schools to have the proper financial and human resources with which to achieve proper academic outcomes.  The assumption embedded in the achievement gap is that the blame for schools failing to produce equal test score results among minority and majority students is placed on the students and teachers rather than on the unequal distribution of essential educational inputs.  Ladson-Billings’ (2006) education debt concept reframes the achievement gap in critical race theory’s (CRT) terms of educational inequality by shifting the paradigm to the equity gaps in school funding.

The educational equity gap is a function of the unequal distribution of educational resources among schools that disenfranchises low income urban school districts especially those with high concentrations of minority and special needs student.  This results in continuing educational inequality.  Ladson-Billings (2006) explains how closing the educational equity gap by redistributing financial, material, and human resources requires that schools have the necessary capacity to improve the achievement of all students especially those who are racially, ethnically, and economically disadvantaged.

CRTtakes to task school reformers who fail to recognize that property is a powerful determinant of academic advantage.  Without a commitment to redesign funding formulas, one of the basic inequities of schooling will remain in place and virtually guarantee the reproduction of the status quo.  (Ladson-Billings, 2009, p. 32)  

Shifting the paradigm to equalizing school funding for all schools according to race, ethnicity, socioeconomic status, and unique student needs is at the core of the school finance litigation and funding formulae forNew JerseyandNew York. 

Legal Background 

New Jersey. 

The judiciary’s heightened role inNew Jerseyschool finance reform began in 1970 when four cities (East Orange,Jersey City,Paterson, andPlainfield) challenged the constitutionality of state’s school funding system, arguing that large wealth based variations in per pupil expenditures across districts deprived students in low-wealth communities of achieving a thorough and efficient education.  The large disparities in school funding were a function of large disparities in property tax bases especially among affluent and poor districts.  New Jersey’s education finance system had used a guaranteed tax base formula (GTB) to address these disparities that enabled affluent districts to raise disproportionately more property taxes at correspondingly lower tax rates with which to fund their schools at higher levels than poor districts. 

The New Jersey Supreme Court ruled in favor of the plaintiffs in Robinson v. Cahill and defined a “thorough and efficient” (T&E) education as one that “Embraces that educational opportunity which is needed in the contemporary setting to equip a child for his role as a citizen and competitor in the labor market” (Robinson I, 1973, p. 295).  BecauseNew Jersey’s GTB formula failed to equalize school spending across districts, these inequalities disproportionately disadvantaged poor urban districts from providing at least an adequate education.  But the Robinson litigation focused more on the intricacies of the school funding formulae and its resource equalization effects across school districts than on the educational components of a thorough and efficient system of free public schools. 

The New Jersey Supreme Court “accepted the legislature’s definition of T&E, the input and process standards included in the state’s school finance reform law – the Public School Education Act of 1975 (more commonly called Chapter 212)” (Goertz & Weiss, 2009, p. 10) and struck down the state’s school funding system in Robinson v. Cahill based on the state constitution’s education clause.  These actions culminated in Robinson v. Cahill V in 1976 in which the New Jersey Supreme Court shifted their standard for adequacy from economic disparities to substantial educational content.  Goertz and Edwards (1999) explain how spending parity would no longer be the main criteria in the Court’s determining whether a school funding formula was constitutional, “without sufficient resources, other measures of an adequate education will not satisfy the constitutional mandate” (Goertz & Edwards, 1999, p. 10).

 The New Jersey Supreme Court used the “thorough and efficient system of free public schools” clause more as a unifying concept to address fiscal resources and the relationship of financial resources to educational outcomes in Robinson v. Cahill while focusing increasingly on “thorough” education in terms of financial and programmatic inputs and outcomes in its Abbott v. Burke decisions.  The Court defined the role that school funding plays in enabling a district to provide a thorough and efficient education and “broadened its definition of a T&E education especially as it applied to disadvantaged students in urban communities” in its Abbott rulings (Goertz & Weiss, 2009, p. 11) as Goertz and Weiss explain: 

 In 1981, five years after the implementation of Chapter 212, the Education Law Center (ELC) challenged the constitutionality of this funding law on behalf of students from four cities (Camden, East Orange, Irvington, and Jersey City). . . .  Addressing the court’s new focus on substantive educational opportunities, the plaintiffs charged in this new case, Abbott v. Burke, thatNew Jersey’s education finance system caused not only significant educational expenditure disparities but also vast programmatic differences between poor urban and wealthy suburban school districts.  (Goertz & Weiss, 2009, p. 11) 

 In its Abbott v. Burke decisions, the Court’s ruled that the unequal distribution of financial, material, and human resources inputs resulted in funding disparities among the Abbott and affluent districts that prevented the Abbott school districts from providing a thorough and efficient education. 

The Court increasingly raised the threshold for meeting its constitutional standard for a thorough and efficient education in its Abbott rulings.  The Court decided in Abbott v. Burke, 1990, the second Abbott case, that spending disparities among the Abbott and affluent districts, especially those with a district factor group (DFG) code of I or J, demonstrated an inadequate level of education in poor urban districts and consequently established the kinds and quality levels of the educational programs, personnel, and facilities in affluent suburban districts as the adequacy standards for poor urban districts.  As a result, the Court ordered the state legislature to design a new or revised funding system to equalize spending for the regular education programs among poor urban districts and property rich districts as well as to provide additional funds to meet the special educational needs of urban districts to remedy their disadvantages.  This ruling led to the Quality of Education Act (QEA) which replaced the state’s GTB formula with a foundation aid formula.  Although the foundation level less the amount raised by a school district at a state equalized tax rate was defined as the minimum spending level, the “maximum foundation budget” (Firestone, Goertz, & Natriello, 1997, p. 27) was defined as the combined amount from all governmental sources (Firestone et al., 1997, p. 28).

The Court declared QEA unconstitutional in Abbott v. Burke III, 1994, because it failed to equalize funding among Abbott and property rich districts as well as to meet the special needs of urban students.  The New Jersey State legislature enacted the Comprehensive Educational Improvement and Financing Act of 1996 (CEIFA) that focused more on academic outcomes and established “a set of input standards, such as class size, administrators/teachers per student, schools per district, and types and amount of classroom supplies, services and materials, that are considered to be sufficient to achieve the state content standards” (Goertz & Edwards, 2009, p. 19) in response to the Court’s decision.  Baker, Green, and Richards (2008) explain: 

 The CEIFA defined an adequate education in terms of academic standards and provided funding on the basis of what a hypothetical school district would need to achieve these standards.  The CEIFA also provided aid for two supplemental programs designed to address the disadvantages of SNDs:  demonstrably effective program aid (DEPA), and early childhood program aid (ECPA).  (Baker, Green, & Richards, 2008, p. 158).  

 But instead of fully funding CEIFA’s school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs, and state and federal under funded mandates.  The state aid shortfall’s impact was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of approximately $1,627 in non-AbbottDFGA and B districts, $758 inDFGC through H districts, $386DFGI and J districts, and $188 in Abbott districts (Reock, 2007, pp. 1-9).  Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state” (Sciarra, 2008, p. 4).

 The Court declared CEIFA unconstitutional in Abbott v. Burke IV, 1997, because it neither linked educational outcome standards for all districts nor met the state’s adequacy goals.  The Court found that the State ofNew Jersey failed to show how its resource delivery system model underlying the foundation amount was tied to the state’s Core Curriculum Content Standards:

 In the absence of documentation demonstrating that the CEIFA model provided sufficient resources to educate students in districts with high concentrations of poverty, the Court required an interim remedy:  Abbott districts would receive “parity aid,” or an amount equal to the average regular education per pupil expenditures in the State’s wealthiest districts.  (New Jersey Department of Education, 2007, p. 4) 

 In addition, CEIFA failed to meet the Court’s three fundamental tests of constitutionality: 

 The Court established a three-prong test of the constitutionality of CEIFA.  First, does the law establish standards for defining a thorough and efficient education?  Second, does the State provide adequate resources to ensure the achievement of a T&E education?  And, third, does the law meet the special needs of disadvantaged urban students?  (Goertz & Edwards, 2009, p. 21) 

 EIFA failed to address the special needs of Abbott districts because its efficient school district model was not based on the characteristics of the Abbott districts.  The Court ordered the state to provide parity aid to remedy the unconstitutional funding and educational disparities as well as to equalize per pupil expenditures among affluent and Abbott districts.  Although the Court ordered “whole school reform designs” in Abbott v. Burke V, 1998, (Goertz & Edwards, 2009, p. 26) and ruled in Abbott XX, 2009, that the School Finance Reform Act of 2008 (SFRA) was constitutional, Superior Court Judge Doyne, who was appointed as special master by the Court, found that Governor Christie’s school funding reductions “violate the state’s mandate to provide children ‘a thorough and efficient’ education” (Rundquist & Calefati, 2011, p. 1) and, therefore, whether SFRA continues to be found constitutional depends on how the Court rules on Judge Doyne’s findings. 

 New York.  

 In 1978, several property-poor Long Island, New YorkCity, and other large urban districts combined to challenge the state’s school finance formula in Levittown v. Nyquist because of the funding disparities among their school districts and the state’s property-rich districts.  The New York State Court of Appeals ruled “that the state’s constitution guaranteed all New York children an opportunity for a ‘sound basic education’” (Chambers, Levin, & Parrish, 2006, p. 3) based on the New York State Constitution’s education clause, known as the Education Article, which states that “the legislature shall provide for the maintenance and support of a system of free common schools wherein all the children can be educated” (Shrader, 2007, p. 84) even though the Court found that the constitution did not mandate equal funding.  Although the finding in Levittown v. Nyquist was that funding inequities did not violate the state’s Education Article, the Court did not define a sound basic education (Chambers, et al., 2006, p. 3).

 The New York State Education Department (NYSED) assembled a task force to define a “sound basic education” in response to the Court’s decision.  The task force defined a “sound basic education” in terms of learning standards that resulted in a “state sponsored research and public engagement process culminating in 1996 in the issuance of the Regents Learning Standards” (Chambers, et al., 2006, p. 4).  These standards established benchmarks for student achievement in seven academic content areas and ultimately the definition of adequacy “as providing to all students a full opportunity to meet the Regents Learning Standards” (Chambers, et al., 2006, p. 3).

 Standards are at the core of the Campaign for Fiscal Equity’s (CFE) lawsuit challenging the constitutionality of New YorkState’s education funding system in CFE v. State of New York, 1993.  CFE argued that the state’s school finance system failed to provide students with a sufficient opportunity to receive a state constitutionally guaranteed “sound basic education” particularly inNew York City (Shrader, 2007, p. 84).  In CFE I, 1995, the Court of Appeals ruled that the state has an “obligation to provide ‘a sound basic education to all the children of the state,’” including “the basic literacy, calculating, and verbal skills necessary to enable children to eventually function productively as civic participants capable of voting and serving on a jury” but the Court declared that even adequate facilities and teachers fulfill the state’s responsibility (Shrader, 2007, pp. 84-85).  As a result, the Court of Appeals overturned the Appellate Division.

 In CFE II, 2001, CFE prevailed in trial court and State Supreme Court Justice DeGrasse declared that “the school funding formula unconstitutional because it failed to supply New York City school children with a ‘sound basic education’ as required” and affirmed the essential components of “a sound basic education” (Shrader, 2007, pp. 85-86).  Justice DeGrasse required the State of New York to ensure that all of its public schools provided an equal opportunity for a sound basic education for all of its students, to ensure that all of the Court’s standards were met, and to perform a costing-out study to determine the costs of providing a sound basic education as well as to serve as the basis for a new school finance formula.

 In CFE III, 2002, the Appellate Division reversed Justice DeGrasse’s 2001 decision declaring that “Justice DeGrasse exceeded the ‘minimally adequate’ standards stipulated in the Court of Appeals’ 1995 ruling” (Shrader, 2007, p. 88).  But in CFE IV, 2003, the New York Court of Appeals overturned the Appellate Court’s decision as it “rejected the state’s argument that it had satisfied its duty to provide a ‘sound basic’ education by providing New York City students with an 8^th- or 9^th-grade education” (Baker, et al., 2008, p. 157) and, therefore, “New York State’s current educational funding arrangements were definitively determined to be unconstitutional and required to be altered to ensure that school funding is adequate” (Chambers, et al., 2006, p. 4).  As a result, in CFE V, 2003, “the New York Court of Appeals commissioned a study to determine the cost of providing an adequate education for New York City” (Baker, et al., 2008, p. 159). 

 State School Finance Formulae

 New Jersey.  

The driving force behind the School Finance Reform Act of 2008 (SFRA) was the need for a “formulaic remedy for all districts” based on actual community characteristics that could be applied equitably to all school districts and would address the increased funding targeted primarily to Abbott districts as well as the inequities that had resulted from the imbalance of resources among districts (New Jersey Department of Education, 2007, p. 4).  SFRA replaced CEIFA and the state’s unique Abbott remedies of parity aid and supplemental funding with one formula because the New Jersey State Supreme Court found CEIFA’s funding provisions unconstitutional.  Although SFRA’s formula contains “three major components:  equalization aid, categorical aid, and adjustment aid” (Goertz & Weiss, 2009, p. 28), it calculates aid in two ways:  “wealth-equalized and categorical” (New Jersey Department of Education, 2007, p. 19).

 SFRA’s wealth-equalized aid is allocated according to each district’s ability to raise enough local revenue based on its equalized property valuation and aggregate district income, both of which are indexed using the state wealth multipliers, to support its adequacy budget.  The adequacy budget represents the amount of resources necessary for a district to meet state imposed standards or outcomes such as the Core Curriculum Content Standards (CCCS) and includes: 

•  The base amount for elementary, middle, and high school students
• The weights for at-risk and limited English proficiency (LEP) and county vocational students
• Two-thirds of the census-based costs for the general special education category
• All of the census-based costs for speech (New Jersey Department of Education, 2007, p. 19) 

 New Jersey’s adequacy based school funding formula seems to have been developed in response to the Court’s demands for “standard-based reforms” that “have ‘judicially manageable’ tools that allow them to devise effective remedial orders” (Rebell, 2002, p. 219).

 Equalization aid is calculated using a “foundation formula based on an ‘adequacy budget’” which includes “funding for the regular education program and costs for student poverty (“at-risk” aid), limited English proficiency (LEP) students, and special education services” (Goertz & Weiss, 2009, p. 28).  A district’s adequacy budget, therefore, equals the amount calculated according to the following formula: 

 A district’s adequacy budget equals the total of all of the base student costs plus at-risk student costs plus LEP student costs plus the combined costs of all LEP students who are also eligible for free or reduced-price lunch plus the special education census-based costs that are wealth-equalized together times the Geographic Cost Adjustment (GCA).  (New Jersey Department of Education, 2007, pp. 19-20) 

 In contrast to wealth-equalized aid, categorical aid is not based on a district’s ability to levy local property taxes but is determined by multiplying the cost factor for a particular category by the number of students that qualify for the aid (New Jersey Department of Education, 2007, p. 19).  The purpose of SFRA’s adjustment aid is to hold districts harmless but only in the short term:

 Adjustment aid is a save-harmless program for districts that receive less state aid under SFRA than they did in 2007-2008, particularly Abbott districts where state approved expenditures exceeded their SFRA adequacy budgets.  For 2008-09, the state guarantees that all districts will receive a minimum of 102% of their 2007- 08 state aid.  Adjustment aid will be reduced in the out-years as equalization and categorical aids grow.  (Goertz & Weiss, 2009, p. 28) 

A district’s state aid allocation equals the amount calculated according to the following formula:  state aid equals a district’s adequacy budget amount less the district’s local fair share amount to which the district’s amount of categorical aid is added (New Jersey Department of Education, 2007, p. 25). 

 SFRA’s impact on the Abbott districts was significant because it eliminated the Abbott’s special needs district designation and rescinded the Court prescribed remedies such as requiring spending parity with affluent districts and providing additional funding for supplemental programs.  Although SFRA maintained the Abbott districts’ facilities aid, it increased: 

 The “fair share” or expected local tax revenues from the Abbott districts.  The local share attributed to Abbott districts under SFRA is nearly double what they currently raise in local taxes. . . .  This provision overrides the court’s requirement that increases in local revenues be limited due to high levels of municipal overburden in these districts.  (Goertz & Weiss, 2009, p. 31)  

Abbott districts received less equalization aid as a result of having to raise their required local fair share even though Abbott districts were prevented from levying the necessary amount of property taxes to raise their local fair share beyond a four percent increase (Goertz & Weiss, 2009, p. 31).  Although SFRA benefited most low and middle income non-Abbott districts but only if these districts also increased their local property tax levies by the four percent state maximum, most high income districts with DFGcode I or J lost aid especially “categorical aid for special needs students” as a result of SFRA’s wealth equalizing (Goertz & Weiss, 2009, p. 32).  The New Jersey Supreme Court ruled in Abbott XX, 2009, that “SFRA provides the appropriate ‘measuring stick’ against which to gauge the resources needed to achieve a thorough and efficient education for every child in the state” (Goertz & Weiss, 2009, p. 35).  

New York.   

The conceptual framework that has framed school finance inNew YorkStateis focused on achieving adequacy.  This conceptual framework is based on trying to achieve wealth and need equalization among school districts.  To meet this definition of adequacy,New YorkStateuses the Regents Learning Standards as the barometer against which to determine whether a district is meeting its adequacy requirements as established by the school finance formula.  This adequacy concept focuses on the provision of an adequate education that equalizes outcomes rather than inputs so that all students will have an equal opportunity to receive an education which meets or exceeds state standards.  The rationale undergirding the adequacy concept is that a district’s financial resources should be sufficient and adjusted for cost variations beyond a local school district’s control to enable the district to meet or exceed the adequacy standards and to provide an opportunity for all students to meet the Regents Learning Standards.  

TheNew YorkStateschool finance formula is similar to the SFRA formula in terms of the ways in which it distributes aid:  flat grants, wealth-equalized aid, and effort or expense-based aid.  Wealth equalized aid is distributed by the state “in inverse proportion to local fiscal capacity to offset dramatic differences in the ability of school districts to raise local revenues” and in terms of an equalized per pupil amount while expense-based aid is based on the state share of a district’s actual approved spending (University of the State of New York & The New York State Education Department, 2010, p. 9).  Although flat grants per pupil distribute the same amount of state aid per pupil in every district and this aid is not wealth equalized while lump-sum grants are distributed progressively based a district’s total property value and income, the New York State school finance formula’s aid relies on a foundation amount.  Total foundation aid equals selected foundation aid (a district’s foundation aid per pupil but not less than $500) times selected Total Aidable Foundation Pupil Units (TAFPU) (University of the State of New York & The New York State Education Department, 2010, p. 21).  This aid is based on the cost of providing general education services, compared to the instructional costs of a successful school district, and is adjusted annually for the percentage increase in the consumer price index (CPI) (University of the State of New York & The New York State Education Department, 2010, p. 21).

 The New York State School Tax Relief (NYSTAR) program, enacted on August 7, 1997, as the New York State Real Property Tax Law, is a school property tax rebate program that is designed to lower local school property taxes and, in particular, the tax price of school property taxes with the intention of causing local school districts to increase their spending and, thereby, the level of the educational programs and services that they provide.  NYSTAR providesNew Yorkhomeowners with a partial exemption of a portion of their school property taxes as levied only on owner-occupied primary residences.  The school district will continue to receive the same amount of property tax revenue because New York State reimburses the district to make up for what would otherwise be lost revenue as a result of the rebate as long as the district maintains the existing tax rate.

 The NYSTAR program has two types of exemptions:  Basic NYSTAR and Enhanced NYSTAR. 

Basic NYSTAR is available for owner-occupied, primary residences where the owner’s total income is less than $500,000.  Basic NYSTAR works by exempting the first $30,000 of the full value of a home from school taxes. . . . Enhanced NYSTAR provides an increased benefit for the primary residences of senior citizens (age 65 and older) with qualifying incomes.  For qualifying seniors, Enhanced NYSTAR exempts the first $60,100 of the full value of their home from school taxes. (New York State Department of Taxation and Finance, 2011, p. 1) 

 Baker (2011b) concludes that NYSTAR aid is allocated inequitably and disproportionately benefitsNew YorkState’s affluent school districts: 

1.  That STAR aid in particular is allocated to more affluent downstate school districts;
2. ThatSTARaid, by reducing the price to local homeowners of raising an additional dollar in taxes to their schools, encouraged increased local spending on schools;
3. That when the relative efficiency of school districts is measured in terms of increases in measured test scores, given additional dollars spent,STARaid appears to have encouraged less efficient spending. STARaid enabled affluent suburban districts to spend on other things not directly associated with measured outcomes, but things those communities still desired for their schools.
4. ThatSTARaid contributes to inequities across districts in a system that is already highly inequitable. (Baker, 2011b, p. 3) 

 The homeowner’s property value is reduced by the amount of the NYSTAR exemption and then divided by an equalization rate. New YorkState’s equalization rate equals the ratio of the homeowner’s total assessed property value less the NYSTAR exemption divided by the homeowner’s total market value whereby the district’s host municipality determines assessed property values andNew YorkStatedetermines market values.       NYSTAR is, therefore, a state funded school property tax exemption which makes NYSTAR a state school financial aid program. 

 A district’s foundation aid equals its foundation amount times the Pupil Need Index (PNI) times the Regional Cost Index (RCI) all combined, less its expected minimum local contribution or what would be referred to as their local fair share inNew Jersey.  The RCI reflects regional variations in purchasing power aroundNew YorkStatebased on the wages of non-school professionals.  The PNI reflects the costs of providing extra time and help for disadvantaged and special needs students to succeed.  PNI equals one plus the district’s Extraordinary Needs (EN) percentage and ranges between one and two.  The PNI adjustments are based on a school district’s concentrations of at-risk and disadvantaged students (University of the State of New York & The New York State Education Department, 2010, pp. 21-22).  The expected minimum local contribution is an amount that a district is expected to raise on its own and spend as its share of the total cost of general education which equals the lesser of the two following calculations: 

•  The selected actual value per pupil times a tax factor of 0.0137 times income per pupil relative to the state average which is capped between 0.65 and 2.00. 
• The district’s foundation amount times its PNI times its RCI all together times one minus its Foundation Aid State Sharing Ratio. 

 The foundation aid state sharing ratio compares a district’s wealth measures to the state average wealth measures.  It is computed by calculating the district’s Combined Wealth Ratio (CWR) that is a measure of district’s fiscal capacity.  A district’s CWR is calculated by multiplying a district’s actual property value per pupil and then dividing this amount by $564,900 which is then multiplied by 0.50.  This amount is then added to the total of the district’s income per pupil which is divided by $177,200 and then multiplied by 0.50 (University of the State of New York & The New York State Education Department, 2010, pp. 24-27).  The state sharing ratio is the state aid to local fiscal capacity ratio which is inversely related to a district’s wealth as compared to the state average and this ratio is multiplied by 1.05 only for high need/resource capacity districts (University of the State of New York & The New York State Education Department, 2010, p. 25). 

 State Finance Formulae Data

 New Jersey.  

 The New Jersey school finance formula, SFRA, distributes aid to school districts primarily through a foundation formula.  Aid calculations are based on a per pupil adequacy budget developed by the state that represents what the state believes each district should spend to provide the level of education necessary for its students to meet or exceed the state’s educational standards as contained in the CCCS.  SFRA adjusts the per pupil baseline amount by applying weighting factors to account for the additional costs of educating students with disadvantages and special needs.  These weights are then multiplied by the number of students who qualify for those need categories within the district and by a regional cost adjustment factor in ways similar to those employed inNew YorkState.  The per pupil baseline amount reflects the cost to educate a typical elementary school student and has a weighting factor of one.  The weights increase for students enrolled in middle, high, and vocational school as well as for those students living in poverty. 

 A district’s adequacy budget is funded by both local district and state revenues.  A district’s local fair share is the amount the formula dictates that the district must contribute toward funding its adequacy budget.  The local fair share is based on the formula’s calculation of a district’s total income and property values or wealth as compared to those measures for other districts across the state which resembles the calculations of theNew Yorkschool finance formula for similar components.  The formula attempts to equalize property values, personal income, and local property tax burdens by calculating state aid based on the wealth and the local fair share of each district.  The formula deducts a district’s local fair share from its adequacy budget to determine the amount of state aid the district receives that is referred to as the district’s equalization aid.  A district, however, only receives state equalization aid if its local fair share is less than its adequacy budget and it receives no state equalization aid if its local fair share is greater than its adequacy budget.

 The formula compares a district’s current spending level with its per pupil adequacy budget.  Although a district may spend more than its adequacy budget amount, state aid increases are capped at 10% for districts spending more than their adequacy budgets as compared to a 20% cap on those districts that are under spending their adequacy budgets.  The formula requires a district to increase its property tax levies if it is falling short of providing its local fair share.  A district that is over spending its adequacy budget amount and whose local property tax revenues exceed its adequacy budget is subject to the two percent giveback provision.  In this case, the district is required to apply the amount of its state aid increase that exceeds two percent toward local property tax relief.  But districts that are under spending their adequacy budgets are not subject to the two percent giveback provision.

 The percentage of students receiving a free or reduced price lunch is regarded as a reliable indicator of a school district’s students’ economic need, disadvantage, or poverty level.  Graph one (see Appendix A) shows the relationship of total state aid, as determined by the foundation formula, to the percentage of students who receive a free or reduced price lunch for all New Jersey school districts.  This graph shows a relatively flat distribution of state aid relative to the percentage of a district’s students who receive a free or reduced price lunch until the 40% level is reached when the upward slope of the distribution of state aid becomes rather positive through the 80% level.  Although there seems to be fewer districts having a percentage of students who receive a free or reduced price lunch that exceeds 40%, the sharp upward slope beginning at the 40% level seems to indicate that the formula becomes more sensitive to districts with extremely high concentrations of students who live in poverty or near the poverty level.

 SFRA seems to provide much more categorical state aid for at-risk students and students with special needs such as those who qualify for a free or reduced price lunch, special education, as LEP or English language learners (ELL), or are economically disadvantaged especially for those districts with high concentrations of students with these characteristics.  Affluent districts receive categorical state aid for at-risk students and students with special needs to the extent that their student populations meet the formula’s criteria, however, two-thirds of all state special education aid and all of the state’s at-risk student aid is included within the formula’s foundation per pupil amount and is thereby subject to the formula’s district wealth equalization process.  It could be argued, therefore, that those districts with high concentrations of students receiving a free or reduced price lunch are also high poverty districts because affluent districts seem to have proportionately fewer students receiving a free or reduced price lunch, qualifying for special education, are LEP or ELL, or are living in or around the poverty level.  Also, state aid to affluent districts is wealth equalized which seems to indicate that affluent districts receive proportionately less categorical aid and formula foundation aid for at-risk students and students with special needs than poor districts. 

 Graph two (see Appendix B) shows the relationship of total state aid, as determined by the foundation formula, to the base cost per pupil adjusted for the student’s grade level.  This graph shows a relatively flat distribution of state aid despite a number of outliers below $12,000 relative to the base cost per pupil which does not seem to indicate a meaningful relationship.  Although there are a number of outlying districts receiving higher amounts of state aid between the levels of roughly $10,000 and $11,000 base cost per pupil, the relatively flat distribution of state aid may result from the fact that total state aid incorporates the base cost in its formulaic calculations.  Also, because the total state aid plots do not reflect which districts are over spending their adequacy budget amounts, have local property tax revenues that exceed their adequacy budgets, and as a result are required to apply the amount of their state aid increase that exceeds two percent toward local property tax relief, total state aid levels for these affluent districts could be overstated because a significant portion of their state aid is not applied to their district’s schools.  These factors seem to combine to make the graph less meaningful. 

 Graphs three and four (see Appendices C and D) for all New Jersey school districts showing the relationship of district income per pupil and property value per pupil respectively to the percentage of students receiving a free or reduced price lunch show a distinctly flat distribution, despite a few affluent district outliers without students who qualify for a free or reduced price lunch, relative to the student poverty or economic need factor.  Graphs five, six, and seven (see Appendices E, F, and G) for all New Jersey school districts showing the relationship of local fair share, aggregate income, and a district’s 2009 fiscal year property tax revenues respectively to the percentage of students receiving a free or reduced price lunch show a rather disbursed distribution relative to the student poverty or economic need factor.  There does not seem to be a meaningful relationship among these variables.

 Graphs eight, nine, ten, eleven, and twelve (see Appendices H, I, J, K, and L) for all New Jersey school districts showing the relationship of income per pupil, property value per pupil, local fair share, aggregate income, and a district’s 2009 fiscal year property tax revenues respectively to the base cost per pupil adjusted for the student’s grade level do not seem to show meaningful relationships.  A possible explanation for the relative lack of significant distributions in graphs three through twelve is that the formula may have a disproportionately high threshold for districts to receive state aid especially categorical aid for students who qualify for a free or reduced price lunch, special education, as LEP or ELL, as economically disadvantaged, or as otherwise at-risk which in turn results in a higher local fair share calculation.  In addition, SFRA’s use of income in the calculation of a district’s local fair share and measure of wealth distorts state aid distributions such that it disadvantages those districts that are income-rich relative to the state average for income but property-poor relative to the state average of equalized property valuation. 

 New York. 

 Although theNew YorkStateschool finance formula seems conceptually simple, its structure is complex which makes understanding and applying the formula challenging especially in terms of providing an equitable distribution of state aid.  The majority of state aid is determined by a statewide formula that calculates a foundation aid amount for each district.  A district’s foundation aid amount consists of the cost of educating a pupil or the Adjusted Foundation and the cost to the district or the Expected Minimum Local Contribution (EMLC). New YorkStateuses these components in an attempt to equalize state aid based on a district’s wealth and pupil need.  The NYSED analyzes the general and special education costs in successful school districts to calculate a district’s foundation aid amount that approximates the average per pupil cost of typical successful school districts’ educational instruction.

 Foundation aid is based on an enrollment measure called the Average Daily Membership (ADM) that is the maximum possible daily attendance of all students in a district divided by the number of days in which the district’s schools are operating.  The foundation aid amount is calculated by using two specific measures of enrollment:  TAFPU and Total Wealth Foundation Pupil Units (TWFPU).  TAFPU is a weighted pupil count that is used to calculate the Adjusted Foundation.  The NYSED uses different weights for different levels and types of student need such as 1.41 for students with disabilities, 0.50 for students declassified from special education, and 0.12 for students attending summer school.  TWFPU is a weighted pupil count that is used to calculate the EMLC to determine a district’s relative wealth.  TWFPU equals the district’s students’ADMincluding half day Kindergarten students weighted at 0.5 plus the full time equivalent number of resident students attending other public school districts less the district’s number of nonresident students and special education students attending BOCES. 

 A district’s Adjusted Foundation is the formulaic calculation of the estimated cost of educating a student in a typicalNew Yorksuccessful school district that is adjusted for the costs of unique student needs by applying the PNI and regional cost differences through the application of the RCI.  A district’s EMLC is the portion of the district’s total educational cost that is funded by the district according to the state’s formula.  The EMLC is based on a number of wealth factors including the Income Wealth Index (IWI) that is based on a district’s adjusted gross income for the calendar year per TWFPU and is multiplied by the state Adjusted Statewide Average School Tax Rate.

 IWI is a district’s average income per student compared to the statewide average income per student.  The IWI can be neither below 0.65 nor above 2.00.  The flaw inherent in IWI is that the formula treats those districts whose IWI is actually less than 0.65 as if their IWI equaled 0.65 because the formula does not allow the IWI to fall below 0.65.  The most economically disadvantaged districts in the state lose aid as a result of this flaw in the IWI.  Also, the RCI is not as robust as the Geographic Cost of Education Index (GCEI) which causes many of the state’s most economically disadvantaged districts to lose aid they would otherwise receive if the GCEI were used instead.  A district’s EMLC is subtracted from its gross foundation aid amount after the gross foundation aid amount is multiplied by the RCI and PNI because a district’s EMLC equals a loss of state aid based on the district’s wealth relative to other districts in the state. 

 The foundation aid amount or the baseline state aid incorporates a number of pupil need based expenditure adjustments.  A district’s foundation aid amount is adjusted for such factors as its pupil need and number of pupils living in poverty or significant economic disadvantage.  Pupil need is determined by the PNI which is based on a district’s poverty and census data.  PNI calculates a district’s number of students with extraordinary needs such as those who qualify for free or reduced price lunches, are LEP, or meet the Census’ poverty requirements because they are so economically disadvantaged and are ages five to seventeen.

Duncombe and Yinger (2004, “Cost Indexes,” para. 2) use a two-year average of the number of students who qualify for free or reduced price lunches because this “variable fluctuates from year to year,” meet the Census’ poverty requirements, and are ages five to seventeen.  Duncombe and Yinger (2004) explain the distinctions among the two primary measures of a student’s economic disadvantage:  qualifying for a free or reduced price lunch and living in poverty aged five to seventeen as well as having LEP.  

Although these two variables are correlated, they are by no means identical. . . .   Moreover, the two variables have different strengths and weaknesses.  The Census poverty variable has the desirable feature that it cannot be manipulated by school officials, but it is not available every year, it is often excluded from data bases maintained by state education departments, and we have no evidence about its accuracy in years not covered by a decennial census.  The subsidized lunch variable has the advantages that it is available every year, is included in many state data bases, and covers a broader population than does the poverty variable.  This variable has the disadvantage, however, that it reflects parental participation decisions, and perhaps even school management policies.  Given these contrasting strengths and weaknesses, we do not believe that either variable dominates the other . . .  One final difference between the two variables arises when another measure of student disadvantage, the share of students with limited English proficiency (LEP), is added to the cost model. . . .  this LEP variable is highly significant in cost models that include the census poverty variable.  In contrast, this variable is not close to significant in models that include the subsidized lunch variable.  Thus, in case ofNew York, the subsidized lunch variable appears to capture the cost effects both of poverty and of LEP . . .  (Duncombe & Yinger, 2004, “Cost Indexes,” paras. 3-4) 

Although the percentage of students eligible for a free or reduced price lunch is a commonly used indicator of a school district’s economic disadvantage or need, because New York State’s formula does not provide aid to offset the full cost of students participating in the free or reduced price lunch program poor districts receive disproportionately less state aid. 

The graph for allNew Yorkschool districts showing the relationship of foundation aid to the percentage of students who receive a free or reduced price lunch has an upward, positive slope.  Graph thirteen (see Appendix M) shows that the level of a district’s foundation aid seems to increase as the percentage of students who receive a free or reduced price lunch increases.  Graph fourteen (see Appendix N) showing the relationship of foundation aid to PNI has an even more significant, positive, and upward slope than the relationship shown in graph thirteen perhaps because PNI is a broader measure of student need.  Although the values of PNI can range only between one and two, PNI is a more inclusive measure of student need because it is based on a district’s concentrations of at-risk and disadvantaged students. 

Although graph fifteen (see Appendix O) showing the relationship of foundation aid to the census poverty rate has a generally positive, upward slope, the points are much more tightly bunched especially in the five to fifteen percent poverty rate range and, therefore, may not reflect a significant or systematic relationship.  PNI covers a broader population than does the census poverty rate and this may contribute to the distribution of points that shows an extremely wide range of foundation aid being provided to low poverty districts such as those with a poverty rate of approximately 15%.  Graph sixteen (see Appendix P) showing the relationship of foundation aid to the pupil need component per free and reduced price lunch plus LEP student seems to be so tightly bunched that it does not provide a meaningful relationship perhaps because the percentage of LEP students by district varies tremendously.  

The amount of foundation aid provided at a given level of pupil need seems to show that many more districts are receiving a great deal more aid than those with the same level of need which indicates that the distribution of foundation aid is regressive.  Baker (2011a) discusses theNew YorkStateschool finance formula’s inequitable distribution of aid: 

 Like many state funding formulas, even though the first (and most logical) iteration of calculations for estimating the district state share of funding would end up providing 0% state aid to many districts, those formulas include a floor of funding – minimum guarantee of state aid. . . . Here, for example, is the effect of New YorkState’s minimum threshold factor on foundation aid.  State share hits 0 at an income/wealth index around 1.0 in the basic calculation. . . .  First, between income/wealth ratios of about 1.0 to 2.0, the actual state share cuts the corner providing more gradually declining aid rather than going straight to 0.  Then, above IWI of 2.0 it never hits 0, but rather levels off providing a minimum allotment of several hundred to about $1,000 per pupil to even the wealthiest districts in the state (which, by the way, are among the wealthiest in the nation!). . . . Many state aid formulas include a variety of other types of aid, some which are distributed in flat amounts across all districts regardless of need, and some which may be even allocated in inverse proportion to what most would consider needs – either local capacity related needs or educational programming and student needs.  Such is the politics of school finance. . . . New YorkState’s piece de resistance is a program calledSTAR, or School Tax Relief program.  In simple terms,STAR provides state aid in disproportionate amounts to wealthy communities to support property tax relief. . . .  ExcludingSTAR aid to NYC, the aid program in 2008-09 provided $642 million in aid to districts with an income/wealth ratio over 1.0.!  . . . Note that our recent report on school funding fairness … identifiedNew YorkState (along withIllinois andPennsylvania) as having one of the most regressively financed systems in the nation.  On average, low poverty districts have greater state and local revenue than higher poverty ones, yet the state is still allocating significant sums of aid to low poverty districts!  . . . many of these wealthier communities are picking up millions inSTAR aid and upwards to a thousand dollars per pupil in basic foundation aid.  Yes, the state is subsidizing the spending – quite significantly – of some of the wealthiest districts in the nation, while maintaining a regressive system as a whole.  (Baker, 2011a, pp. 5-8)

 New YorkState’s use of foundation aid is highly regressive. 

 TheNew YorkStateformula uses a district’s CWR which is the ratio of a district’s per pupil income and property wealth to the state average for each variable that is calculated to determine a district’s wealth relative to other districts.  TheNew YorkStateformula uses CWR to wealth equalize district state aid.  The CWR not only measures a district’s wealth but also determines a district’s ability to fund its school system relative to other districts in the state.  An average wealth district, therefore, will have a CWR equal to a value of one while more affluent districts will have a CWR greater than one and economically disadvantaged districts will have a CWR less than one.

 The CWR is used to determine a district’s sharing ratio that is included within the calculation of a district’s foundation aid, is the proportion of the State’s aid contribution, and equals the formula of one minus the district’s wealth measure (i.e., CWR) divided by the state average times the district’s local contribution percentage.  Although CWR measures a district’s wealth using the actual valuation of the district’s property and income, it does not fully account for unusual circumstances or fluctuations in a district’s property valuation or income such as during times when the state averages for property wealth and income decrease while the district’s wealth and income remain unchanged.  This would cause the district’s CWR to increase relative to the state averages causing the district to receive less state aid despite the fact that the district’s wealth and income levels remained the same. 

 Graphs seventeen, eighteen, and nineteen (see Appendices Q, R, and S) for all New York State school districts showing the relationship of total state aid to the percentage of students receiving a free or reduced price lunch, PNI, and the census poverty rate respectively show a significant flat or slightly negatively sloped distribution of state aid relative to the student need factors despite some outliers.  Also, graphs twenty, twenty-one, and twenty-two (see Appendices T, U, and V) for all New York State school districts showing the relationship of CWR to the percentage of students receiving a free or reduced price lunch, PNI, and the census poverty rate respectively show a significant flat or slightly negatively sloped distribution of state aid relative to the student need factors.  There does not seem to be a meaningful relationship of total state aid and CWR respectively to the pupil need component per free and reduced price lunch plus LEP student because graphs twenty-three and twenty-four (see Appendices W and X) show a tightly bunched and almost flat to declining pattern. 

 The flat to slightly negatively sloped distribution of total New York State aid as well as the distribution of district wealth and income relative to the respective state averages for wealth and income as compared to the measures of student need and poverty leads to the conclusion that the amount of combined state and local revenues funding high student need or poverty school districts is disproportionately less than the total revenues funding low poverty or affluent school districts.  These disparities in the distribution of state aid cause inequities in the provision of a quality education across school districts.  The distribution of total state aid, therefore, is regressive because it includes NYSTAR aid and does not effectively equalize wealth or income among school districts.  The NYSTAR aid program is the antithesis of an equitable state aid distribution system based on wealth and income equalization.  TheNew YorkStateschool finance formula causes large, urban, economically disadvantaged school districts to receive significantly less state aid than they would have otherwise received with a progressive distribution. 

 Conclusion

Although the school funding formulae for New Jersey and New York are largely the result of years of litigation brought primarily by members and representatives of disadvantaged students and schools, the formulae for both states have adequacy as their goal.  SFRA and theNew Yorkschool finance formula are similar in terms of the types of aid the state distributes such as foundation, wealth equalization, categorical, and specific adjustment aid.  Both states use standards as the barometer against which to determine whether a district is meeting its adequacy requirements as established by the state school funding formula. New Jerseycompares a district’s educational outcomes to the Core Curriculum Content Standards (CCCS) whileNew YorkStateuses the Regents Learning Standards. 

But both states’ formulae have components that are readily subject to manipulation. New Jersey’s cost indices and its formulaic restrictions on the Abbott districts’ equalization aid are easily politically manipulated.  A number of these manipulations are manifested in SFRA’s provisions that require the Abbott districts to raise their required local fair share despite the fact that the state prevented the Abbott districts from levying the necessary amount of property taxes to raise their local fair share beyond a four percent increase which resulted in an overall reduction of state aid for the Abbott districts (Goertz & Weiss, 2009, p. 31).  SFRA raised the threshold that defines the level of need especially for students who are at-risk or otherwise disadvantaged which also contributed to a reduction of aid especially for large, urban, poor districts because these districts typically have disproportionately high levels of special needs students.  

Although SFRA’s local fair share calculation was designed in principle to compel school districts to adopt the state average equalized property tax rate in an attempt to equalize property wealth statewide and establish equalized district property values as the basis for a district’s ability to fund its school system based on local property taxes, SFRA uses a district’s income and not just a district’s equalized  property values as the only or primary measure of a district’s ability to fund its local schools when it calculates a district’s local fair share.  SFRA’s reliance on income in the calculation of a district’s local fair share and measure of wealth shifts the distribution of aid disproportionately away from districts having lower income but higher assessed property values as compared to the state averages for each variable.  This causes SFRA to determine that these districts are artificially wealthier than their actual level of resources and, thereby, to calculate a disproportionately higher local fair share for these districts than would otherwise be the case if a district’s equalized property values were the only measure of a district’s ability to fund its local schools.  This reinforces inequities in the state equalized property assessments and the over reliance on local property taxes as the primary basis for funding local school systems that undergird SFRA’s aid calculations. 

 New York’s foundation funding level is generated by the state aid formula as derived from an adequacy filter based upon a successful school district approach.  Although Baker (2011a) focuses on high school education, his description of the shortcomings of theNew YorkStateschool finance formula apply equally to all levels of schooling inNew YorkState:

•  Either in terms of the analytic approach used (successful school districts) or foundation level adopted in policy, the current foundation funding level in the state aid formula is not grounded in any real estimate of the cost of providing meaningful high school education.

• I explain that the application of the “efficiency” filter based on statewide median spending among successful districts, was arbitrary and I show that this arbitrary decision has the effect of applying different efficiency requirements on downstate and upstate districts – a grossly inequitable assumption. 

• Taking the lower half spending successful districts statewide leads to inclusion of 100% successful districts in some upstate and westernNew Yorkregions, but includes only 1/5 to less than 1/3 of downstate districts.
• Taking the lower half districts statewide rather than by region (RCI region) inappropriately reduces the foundation amount for downstate districts by about 20%. 
• Arbitrarily altering the steps of successful schools analysis creates large swings in estimated foundation levels, especially for downstate districts, calling into question the usefulness of the approach. 
• As originally explained by Baker, Taylor and Vedlitz (2004) successful school districts analysis is highly suspect and easily politically manipulated to generate desired foundation levels.  Successful schools analysis is not a credible method for estimating the costs of meeting empirically defined standards, or constitutional standards. 
• Further, the weighting scheme that leads to the Pupil Need Index (PNI) is not grounded in any empirical analysis of the costs of providing meaningful high school education to populations of varied needs. (Baker, 2011) 

Funding gaps in the adequacy of educational inputs result in concomitant gaps in student achievement and educational outcomes especially in under funded and large, urban, poor school districts inNew Jerseyand particularly inNew YorkState.

 Although the courts in New Jersey and New York State have frequently declared each state’s formula for financing its public schools unconstitutional, each state’s declared educational mission is to enable its public schools to provide at least an adequate education to all students statewide.  As a result of many court rulings in both states, New Jersey and New York State have wrestled with how best to define the content of an adequate education, calculate formulaically the level of spending necessary to provide an adequate education based on the unique needs, costs, and resources of each district, and the appropriate measures of educational outcomes so as to determine whether a district is achieving its adequacy goals.  In response to the many court rulings on their state school finance formulae, New Jersey and New York State primarily use a foundation aid approach that establishes a targeted district spending level which the state deems necessary to meet state adequacy goals and subsidizes to the extent that a district’s local fair share or local minimum contribution is below the state formula’s respective minimum target level.  In this way, both states attempt to address the disparities and inequities in school district spending and funding that are primarily a result of differences in local property tax bases and revenues.  

Achieving educational adequacy means enabling all of the students within a state to meet or exceed the educational outcome standards established by the state.  Although defining educational adequacy in this way is a worthy goal and is theoretically sound, the major obstacles preventing New Jersey and New York State from accomplishing this mission are found in the ways in which each state’s school finance formula is structured, interpreted, and implemented especially in New York State.  The problems inherent in each state’s school finance formula, therefore, could result in the following:

In the aggregate, a state’s education system could be deemed adequate merely on the basis that a sufficient number of students overall achieve an adequate educational outcome – for example, 80% of all students, statewide scoring proficient or higher on state assessments.  That is, adequacy, in isolation means only that a sufficient number of students perform sufficiently well, regardless of who may or may not be left out and regardless of the extent that some children far exceed the “adequacy” threshold.  Significant equity concerns may arise when statewide adequacy is the exclusive focus. . . . At the intersection of educational adequacy and equal opportunity lies the notion that all children, regardless of their individual differences or where they attend school in a state are deserving of equal opportunity to achieve adequate educational outcomes. . . . Where equal educational opportunity provides that each child have equal opportunity to achieve any given set of outcomes, equal opportunity linked with adequacy provides that each child have equal opportunity to achieve a specific set of adequate educational outcomes. (Baker, 2011) 

In conclusion, there is a fundamental problem with theNew JerseyandNew YorkStateschool finance formulae.  Furthermore, it is most likely that this problem will disproportionately affect those students attending the state’s large, urban, poor or otherwise socio-economically disadvantaged school districts.  The major problem is that even if New Jersey and New York State ultimately achieve their adequacy goals, both states will most likely have supported a level of education that is inadequate in terms of providing all students with the skills necessary for success in adult life rather than providing a quality education that meets not only the declared principles that underlie state standards but also the unique needs and priorities of every student statewide. 

 References

 Baker, B. D., Green, P., & Richards, C. E. (2008). Financing education systems.Upper Saddle River,New Jersey:  Pearson Education, Inc. 

 B. D. Baker. (2011a, February 4). Where’s the pork? Mitigating the damage of state aid cuts [Web log post]. Retrieved from http://www.schoolfinance101.wordpress.com. 

 B. D. Baker. (2011b, April 6). Distilling rhetoric & research on NY State education spending [Web log post]. Retrieved from http://www.schoolfinance101.wordpress.com.     

 Chambers, J. G., Levin, J. D., & Parrish, T. B. (2006). Examining the relationship between educational outcomes and gaps in funding:  An extension of the New York Adequacy Study, American Institutes for Research, 81(21), 1-32. 

 Duncombe, W. D., & Yinger, J. (2004). How much does a disadvantaged student cost? Syracuse, New York:  Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University. Retrieved from http:/www.surface.syr.edu/cpr/103. 

 Firestone, W. A., Goertz, M. E., & Natriello, G. (1997). From cashbox to classroom:  The struggle for fiscal reform and educational change in New Jersey.New York:  Teachers College Press.  

 Fusarelli, B. C., & Cooper, B. S. (Eds.) (2009). The rising state:  How state power is transforming our nation’s schools.Albany,New York:  SUNY Press. 

 Goertz, M. E., & Edwards, M. (1999). In search of excellence for all:  The courts and New Jerseyschool finance reform. Journal of Education Finance, 25(1), 5-32. 

 Goertz, M. E., & Weiss, M. (2009). Assessing success in school finance litigation:  The case of New Jersey.New York,New York:  ColumbiaUniversity Press.

 Ladson-Billings, G. (2006). From the achievement gap to the education debt:  Understanding achievement in U.S.schools. Educational Researcher 35(7)3-12. 

 Ladson-Billings, G. (2009). Just what is critical race theory and what’s it doing in a nice field like education? In E. Taylor, D. Gillborn, & G. Ladson-Billings (Eds.), Foundations of critical race theory in education (pp. 17-36).  

 New Jersey Department of Education (2007). A formula for success:  All children, all communities,Trenton,New Jersey:  New Jersey Department of Education.   

 New YorkStateConstitution, Article XI, Sec. 1. 

 New York State Department of Taxation and Finance (2011). STAR – New York State’s school tax relief program. New York:  Office of Real Property Tax Services. Retrieved from http://www.orps.state.ny.us/star/faq.htm.   

 Rebell, M. A. (2002). Educational adequacy, democracy, and the courts. In T. Ready, C. Edley, Jr., & C. E. Snow (Eds.), National Research Council, Achieving high educational standards for all:  Conference summary (pp. 218-268).Washington,D.C.:  The National Academies Press. 

 Reock, E. C. Jr. (2007). Estimated financial impact of the ‘freeze’ of state aid on New Jersey school districts, 2002-03 to 2005-06. Newark, New Jersey:  Institute on Education Law and Policy, Rutgers University. Retrieved from http:/www./ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf.  

Robinson v. Cahill, 303 A.2d 273 (1973).  

 Rundquist, J., & Calefati, J. (2011, March 23). Judge slams Christie’s cuts to school aid. The Star-Ledger, p. 1.

 Sciarra, D. G. (2008). Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the plaintiffs’ opposition to the School Funding Reform Act of 2008. Newark, New Jersey:  Education Law Center. Retrieved from http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf.  

 Shrader, D. W. (2007). Morse, Yinger, and the campaign for fiscal equity:  School finance reform in New York. Educational Change, 75, Spring 2005-2007.   

University of the State of New York, & The New York State Education Department (2010). State aid to schools:  A primer pursuant to laws of 2010.New York:  New York State Education Department. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix E

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix F

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix G

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix H

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix I

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix J

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix K

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix L

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix N

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix O

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix P

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix R

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix S

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix T

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix U

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix V

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix W

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix X

 

 

 

 

 

 

A Superior Alternative to Tracking or Detracking

To solve the challenges confronting our nation so that we can continue to improve our quality of life, we must improve education for all students because education is the cornerstone of our civilization and we need the talent level raised for every student if we are to accomplish this goal.  But our schools must provide more challenge for all students in all classes if our nation is to improve education.  State mandated restrictions and school district imposed curriculum limitations must be lifted to empower teachers to teach more and better classes as well as for all students to have the opportunity to learn as much as they possibly can. 

While performing consulting services for a wide range of school districts including Abbott, urban non-Abbott, suburban,DFG“I and J’s,” and rural districts, I have listened to students discussing the perceived shortcomings in the quality of their education and one the most commonly heard complaints is the lack of challenge especially in middle school and high school  classes.  Whether I attend the respective board of education meetings for these districts or interview parents as part of my research, I have learned how parents readily agree.  Students feel as if their classes too often level down to the lowest common denominator.  Students report that teachers spend too much time trying to raise the performance of the lowest common denominator while the more talented students as well as those most in need of instruction or those who are members of disadvantaged groups languish. 

Rubin (2003) and Wenger (2008) address many of these issues involved with how to properly perform instruction for all students especially classroom based instruction from perspectives that add value.  Rubin (2003) performed a year-long ethnographic case study of a group of students in detracked ninth grade English and history classes in a diverse urban high school.  Rubin (2003, p. 540) explores not only detracking which she describes as the “conscious organization of students into academically and racially heterogeneous classrooms” but also the kinds of social interactions that result from detracking both within and outside of the classroom.  Wenger (2008) presents a learning theory which is based on the “communities of practice” which is a process of social participation that students develop for learning and making meaning.  Her theory combines four essential components:  

Meaning:  a way of talking about our (changing) ability – individually and collectively – to experience our life and the world as meaningful.  Practice: a way of talking about the shared historical and social resources, frameworks, and perspectives that can sustain mutual engagement in action.  Community:  a way of talking about the social configurations in which our enterprises are defined as worth pursuing and our participation is recognizable as competence.  Identity:  a way of talking about how learning changes who we are and creates personal histories of becoming in the context of our communities.  (Wenger, 2008, p. 5) 

Rubin (2003, pp. 540-541) reports that the social dynamics in the “academically and racially heterogeneous classrooms,” which are not based on ability grouping …

were complex and mediated by notions of race, class, and academic competence that were forged in the larger school context.  For students, small groups often proved to be sites of tension and discomfort where fractures of race and class come to the fore.  This article describes how students enacted, or brought to life, the teaching practices of the detracked core program, reshaping them from the teachers’ original intentions.  Sometimes the result was a reiteration of the very inequalities that detracking was designed to address.  (Rubin 2003, p. 541) 

Like tracking, detracking is no panacea. Although detracking may have alleviated many of the shortcomings and group-based inequalities associated with tracking, it seems to have created its own inequities and ills of which the “bad split” is an example Rubin (2003, p. 550).  Perhaps one of the causal factors for the lack of challenge reported by students in my experience is the heterogeneous grouping within each class of students of all levels of ability in the same classroom with the same teacher at the same time.  It is likely that no matter how well qualified is the teacher; however, not even a teacher highly trained in differentiated instruction can overcome the problems of heterogeneous grouping.  It is profoundly difficult to differentiate instruction well enough within a classroom of 25 or more students so that all students benefit equally.  Rubin (2003, p. 556) reflects on this concept when she discusses the students’ priorities for their small work groups in the detracked classroom:  

In contrast to the value that teachers placed on balancing the membership of small groups for racial and academic diversity, students’ concerns about group membership were far more personal and pragmatic.  Students wanted group members who were academically competent, fun to be with, motivating, and respectful.  Many of these attributes were in conflict with the criteria that teachers used when configuring small groups.  (Rubin, 2003, p. 556) 

This fundamental desire on the part of all students to be among peers “who were academically competent, fun to be with, motivating, and respectful” regardless of racial, ethnic, or socio-economic class membership in my experience forces the top students to enroll in Advanced Placement or Honors courses so that their skill levels can be stretched while those students at the other end of the continuum who are generally those with the most severe needs seek remedial assistance. 

Tracking, on the other hand, is the grouping of students according to their level of ability in the same classroom with the same teacher at the same time.  Tracking may reflect the reality that students are not all alike.  Indeed, each student is unique and he/she learns in different ways, at different rates and performs best at varying degrees of course content difficulty.  Grouping classes according to ability may enable teachers to customize instruction so that the entire class not only learns more but also performs at a higher level of achievement.  Moreover, those students at the polar opposite ends of the ability continuum are not disenfranchised.  All students in every grade should be able to raise their achievement levels. 

The fundamental problem with tracking has been one of discriminatory implementation.  But no student should be locked into any track especially one that is lacking in proper content and challenge for that student.  Indeed, all students must be given the opportunity not only to improve their ability but also to advance to a higher level when they have demonstrated such improvement.  Tracking can be most effective when it enables students to benefit from rigorous teaching and is flexible based on the student’s unique abilities.  The reason why tracking and detracking fail to meet the educational needs and priorities of all students is found within the lack of proper classroom capacity.  Because schools too often especially those in urban school districts lack the physical space in which to teach a much wider range of ability groups, schools are faced with a dichotomous choice between tracking and detracking.  

Although I will present my alternative to the current dichotomous choice between tracking and detracking toward the end of this paper, the lack of proper classroom capacity has not always been the reason why all students could not learn and advance based on their unique abilities and time line.  As I recall from our week two readings, Mehan (1992) discussed how school psychologists were instrumental in determining not only the number of students classified as “mentally retarded” but also which students qualified for what is now referred to as special education.  But what is most interesting is that the term “retarded” or “mentally retarded” originated during the late nineteenth and early twentieth centuries when our nation was transitioning from one-room schoolhouses (i.e., one classroom for all students was the proper classroom capacity) to age-graded schools which occurred most dramatically in urban areas when large numbers of rural farm families moved to cities.  

Being “retarded” meant being too old for one’s grade or that “retardation” meant that the rural farm immigrant student took more than one year to complete a grade in his/her new age-graded school.  There was no concept of “retardation” in one-room schoolhouses because students regularly took time off from school to perform farm work returning once crops were planted or harvested to complete their studies and this was much more common for young rural male students.  Students simply returned to their respective in one-room schoolhouses and resumed their studies at the point at which they left.  The individual completion model of schooling employed in one-room schoolhouses was neither limited to nor a function of aged-based time slots.  The concept of “mental retardation” or “retardation,” therefore, is a tragic product of one of the earliest school reform movements.  That is, the nationwide adaptation of age-graded schools which could be perceived perhaps as a form of the “conscious organization of students into academically and racially heterogeneous classrooms” (Rubin, 2003, p. 540). 

Why do American students especially those in middle school and high school seem to lag behind those of other nations?  Mathematics provides a possible insight.  Perhaps it is because American students may not learn as much mathematics as do their international counterparts.  Compared to other nations where mathematics proficiency is rather high such asJapanandGermany, American students do not seem to study the same amount of geometry, algebra, and trigonometry.  Because the students of other nations attend more higher level math classes earlier in their school life, they are able also to study more and achieve greater proficiency in science courses especially physics including Advanced Placement physics.  When these factors are combined with the fact that most American school districts have either detracked or have maintained tracking, the mathematics education gap could widen. 

I will now address a rather thought provoking question:  “Is there another way to provide classroom instruction rather than through tracking, detracking, or a lowest common denominator (LCD) approach?”  Although the answer is yes, economic constraints on school facilities and staffing levels have created the dichotomous choice between tracking and detracking.  That is, the limitations of school facilities especially classroom space dictate the choice of either teaching students grouped according to ability or grouped within the same number of classrooms per school and taught in an LCD approach.  I argue that students suffer adverse educational consequences under either scenario. 

The “other way” is to cut the Gordian knot which bottleneck’s any alternative approach.  That is, to find a way in which to fund our schools without treating school funding as a zero-sum game in which, for example, if urban districts gain financial aid then their gain is or is perceived to be offset by an equal loss on the part of rural or suburban districts.  This lack of Pareto efficiency creates perpetual conflict among different districts, regions, and student populations which ultimately levels down the quality of education for all students but particularly for those that are at-risk and disadvantaged.  

My proposal to cut the Gordian knot of educational finance so as to provide the proper number and smaller sized classrooms necessary for increasing student achievement is to require the state and federal governments to fully fund all education mandates in advance of their implementation at the school level.  For example, in terms of special education and 504 Plan students, the state and federal governments would each pay their full share of their special education mandates such that no residual cost of special education is paid by any local school district.  Moreover, the state and federal governments would pay the fully allocated student cost and these monies would fully fund the student wherever he/she attended school regardless of geography. 

State issued budget caps, such asNew Jersey’s 2% cap, force local school districts to fund the unfunded portion of mandates which means that the typical district is regularly forced to cut non-mandate protected programs and services (i.e., regular education) to make up the difference.  This leads to conflicts among special and regular education parents primarily at the local level not to mention NCLB financial and operational penalties.  My proposal, however, would solve this problem.  Fully funding of all mandates would include but not be limited to those students who qualify for special education, free or reduced price lunches (i.e., poverty-level and economically challenged), LEP and ELL, and those from racial and ethnic minorities who have unique academic challenges.  This would lead to a massive increase of funding to urban and low income districts but without necessarily penalizing suburban and rural districts. 

ThePatersonpublic schools serve as an excellent example.  Paterson’s student enrollment is approximately 33,000, of which two-thirds qualify for special education while the other students generally qualify for free or reduced price lunches (i.e., poverty-level and economically challenged), LEP and ELL, and those from racial and ethnic minorities who have unique academic challenges.  Although I have not performed a weighted student cost analysis, I estimate thatPaterson might qualify for almost 100% state and federal funding of all of its students’ fully loaded costs if their state and federal aid was based on my model.   

In terms of property taxes,New Jerseyshould eliminate county government which is duplicative and a source of corruption asConnecticutdid in 1960.  Eliminating this unnecessary layer of county government would not only save New Jersey over $6.3 billion annually in property taxes so as to provide more funds for our schools and alleviate the property tax burden so that districts would be much more likely to vote to increase school budgets but also eliminate the rationale for any state imposed budget caps (i.e., 2% cap) as well as other restrictions. 

The incremental funds made available through the full funding of all state and federal education mandates plus the elimination of county government should be readily applied to designing and retrofitting our schools with the flexible classroom capacity necessary to successfully approximate the instruction of very small groups of students in smaller class sizes.  This would provide the foundation for “another way” that is based on neither tracking nor detracking!  Rubin (2003, p. 568) echoes the essence of my model by stating, “Larger changes in school structure can address this issue as well, such as creating smaller schools-within schools that would explicitly foster community among diverse students.”  

References 

Mehan, H. (2000). Beneath the skin and between the ears:  A case study in the politics of representation. In B. Levinson et al. (Eds,), Schooling the symbolic animal:  Social and cultural dimensions of education (259-279).Lanham,MD:  Rowman & Littlefield, Inc. 

Rubin, B. C. (2003). Unpacking detracking:  When progressive pedagogy meets students’ social worlds. American Educational Research Journal 40(2):  539-573. 

Wenger, E. (1998). Communities of practice:  Learning, meaning and identity.Cambridge:  CambridgeUniversity Press.

Creating Self-Governing Independent Public Schools

Our public schools must be given the choice of becoming self-governing so that they can be free to provide a top quality educational system.  A self-governing public school district is free of state control as well as federal intervention.  Therefore, it would be independent of the state system but remain a public school district serving the same local community rather than a charter school or a private school or a school run in full or in part by a private company.  While public school districts could elect to stay within the state system and continue to abide by all mandates, all districts should be given the opportunity to legally opt out.  The ability to opt for self-governance would be supported by legislation.  

 

Self-governance would provide public schools with the authority to improve education consistent with the priorities of their local school communities as well as the flexibility to innovate rather than be forced to march in lock-step to the state’s one size fits all mandates.  Public schools choosing to opt out would be independent public schools free of all state mandates except for perhaps reporting test results but they would also forgo all state aid.  Opting out of the state system would restore decision-making to the local school district level.  Because decisions guiding the operations of self-governing schools would no longer be made largely at the county or state level, parents, teachers, school administrators, boards of education, and local taxpayers would be better able to shape the quality of education which their students receive in their local schools. 

 

A public school district would become self-governing when a simple majority of the registered district voters who voted in a district-wide vote approved of the change.  While these votes would comply with the laws governing ballot procedures, campaigns and elections, they would be held in April so as to provide sufficient lead time to convert to self-governance by July 1, the beginning of the new fiscal year.  Once the district community voted to authorize the school district to become self-governing, it would be governed solely by its board of education.  Board of education members would be chosen from among the registered voters in the school district.  Municipal, county, state and federal governments would no longer play any role in the governance or management of self-governing school districts.  Therefore, boards of school estimate would no longer have any role vis-à-vis appointed boards of education. 

 

Local property tax levies rather than tuition would continue to be the primary source of funding for self-governing public school districts.  Still, these districts would be eligible to receive appropriate state or federal grants.  The annual operating budget and debt authorizations for a self-governing public school district would be decided by its board of education rather than be subject to district-wide public votes.  Indeed, this would be consistent with the fact that the annual operating budgets of municipal, county, state and federal governments are not subject to approval through a vote of their respective electorates.   

 

Becoming self-governing would enable a school district to operate more efficiently and cost-effectively through the exercise of many new choices.  A self-governing school district would be free to choose whether to have unions.  If it chooses to be union-free, it would be no longer subject to such legislative restrictions as the New Jersey Employer-Employee Relations Act which is commonly referred to as the “PERC law” (Strassman, Vogt and Wary, 1991.)  If the district elected not to have unions, then all union contracts such as those with its teachers would be dissolved and renegotiated once the district became self-governing. 

 

Free of outside governmental intrusion such as the No Child Left Behind (NCLB) Act, the district also would be free to determine its teacher licensing requirements including training, education and experience.  Because the district would no longer be subject to the New Jersey Core Curriculum Content Standards (CCCS,) it would be free to develop and determine its own curriculum.  The district also would be free to determine whether or not to offer special education because the Individuals with Disabilities in Education Act (IDEA) and state special education requirements would no longer apply.  If the district chooses to provide special education, then it would have sole discretion over what level and kinds of special education it offered.  

 

A self-governing public school district would be held harmless from frivolous lawsuits through its enabling legislation.  This would help to greatly minimize escalating legal expenses.  Law suits filed against the district would be heard first by one of several newly created arbitration panels.  Arbitration panel members would be appointed by a newly created state-wide association of self-governing public school districts. 

 

By changing to self-governance, a school district would be able to cut unnecessary expenses through the elimination of special education-based lawsuits with the ever increasing costs arising from such litigation.  As parents have become more knowledgeable about what constitutes special education programs and services, they have increased their demands to have their children receive not only more intensive services as well as increasing their children’s classification but also more placements in private schools which have resulted in more parents suing school districts for these additional benefits.  New Jersey’s legal system, however, operates according to a fee shifting principle in which a school district losing in an administrative court not only must pay all of the judgment costs but also all of the plaintiff’s legal costs including those for their attorneys and expert witnesses regardless of the length of the trial. 

 

Litigation for special education proceedings often takes longer than civil law suits which increase legal fees and court costs.  In addition, there is the cost resulting from the amount of time required of teachers, child study teams and administrators to appear in court rather than in school.  While school districts do settle a number of cases rather than run the risk of potentially more expensive outcomes, these settlements fuel the cost of providing special education.  Holding New Jersey school districts harmless from such law suits would be another way in which to enable school districts to allocate more of their scarce resources to student instruction.

 

The ever increasing cost of unfunded and under funded mandates is not only forcing school districts to cut regular education programs and, therefore, leveling down student achievement but also increasing property taxes.  But New Jersey’s public school districts can no longer afford to pay for these unfunded and under funded mandates because most school districts are forced to spend disproportionately more to meet the requirements of these mandates than these districts receive in total state and federal financial aid.  If local school districts opted for self-governance, therefore, they would eliminate the excessive financial and administrative burdens imposed by the county, state and federal governments. 

 

Opting for self-governance would increase the financial resources available for the classroom because it would be much more cost effective for local school districts to provide educational programs and services without the administrative burden of state requirements.  The funds that are currently used for regulatory compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.  Changing our state’s educational system in this way would not only improve the quality of education but also increase property taxpayers’ return on investment.  But Trenton continues to blame school districts for property tax increases rather than take responsibility for their role in keeping property taxes high.  Instead of fully funding their mandates to reduce the property tax burden which drives up the cost of public education, Trenton focuses largely on constricting school district funding, budgets, operations and the independence of local school districts.   

 

The state’s flawed approach is demonstrated in the new funding formula as contained in the New Jersey School Funding Reform Act (SFRA) of 2008 as well as its predecessor the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA,) which caused higher property taxes and cuts in regular education.  Dr. Reock, Rutgers University Professor Emeritus, studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year and reached a profound conclusion (Reock, 2007.) 

 

Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.”  Instead of fully funding the CEIFA school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates.  The shortfall was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts, and $188 in Abbott districts. 

 

The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection.  State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.)  Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid. 

 

The CEIFA funding shortfall also caused serious imbalances between local school districts; and the imbalance widened under SFRA.  State aid reductions and the ever increasing unfunded state mandates force districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.   

 

As part of his statement of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.”  He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.”  The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall. 

 

Creating state-wide self-governing public school districts free of state control is the solution that will lead to a top quality, cost-effective educational system while Trenton continues to force local school districts to pay for its under-funded and unfunded mandates that unnecessarily increase the cost of providing education and drive up property taxes.  By forcing school districts to divert necessary resources to paying for the escalating costs of the State of New Jersey’s mandates rather than investing these scarce resources in the classroom where they are needed most, the State of New Jersey harms the quality of education.  Local school districts, therefore, would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on their educational investment if they became self-governing by opting out of the state system. 

 

 _______________________________

References

Hu, W., (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006. 

Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06,” Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf  

Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf

Strassman, E. R., Vogt, K. R., and Wary, C. S., (1991). The Public Employment Relations Law, Trenton, New Jersey: New Jersey School Boards Association.    

 

 

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Our Schools are not Factories

Public schools are not businesses.  Furthermore, no business could succeed let alone survive if it had to abide by the same rules and restrictions that apply to our schools especially in New Jersey.  The successful processes by which schools educate students and factories manufacture products are as different as they can be.  Because students and schools can vary widely across every dimension, it is harmful to apply business principles that assume the efficiency of a one size fits all mold.  Still, this does not seem to stop those reformers who promote a simple business-based remedy for what they believe are the shortcomings of our schools.  

 

It seems, however, as though our schools are in the middle of a period during which the chorus from the business community and policymakers is calling for reform.  In their view, the educational system is not producing what they believe to be the desired product or outcome.  Not surprisingly, the remedy offered by these reformers is consistent with business models that have worked well in the private sector such as for increasing manufacturing output, but ignores the complexities of improving public education.    

 

The business model proposed for improving education as well as reducing its cost is the application of standard business principles and processes to our schools including mass standardization, assembly line manufacturing methods, cost-benefit analysis, return on investment (ROI), and a for-profit orientation.  It seems as if those who advocate this business model for schools believe that the mission of education is to prepare students for the world of work in ways similar to those required for manufacturing a product ready to be sold in the marketplace.  In this view, the students are the inputs who are manufactured by the teachers, who are supervised in turn by the school administrators according to the rules and regulations as legislated by the county, state and federal governments. 

 

While the use of this kind of business model may have a profitable history of manufacturing production, it falls short when it comes to educating students to become fully functioning members of society.  Therefore, it is essential to understand not only why our schools are not the same as factories but also why business-based remedies will not ultimately lead to the improved performance of our schools.  Once this is understood, perhaps policymakers, legislators, and governmental administrators alike will be better able to make decisions using the proper framework. 

 

In a demonstration of not only why schools can not be businesses but also why attempts to treat them as if they were seem to result in a leveling-down of education, Cuban (2004) concludes that the application of an industrial model would be counterproductive.  Cuban examines the viewpoints of many of those who advocate for trying to transform schools into manufacturing facilities to prove his argument.  He provides some pertinent examples of the industrial model rationale including a quote by Cubberley (1916), “Our schools are in a sense, factories in which the raw products (children) are to be shaped and fashioned into products to meet the various demands of life” (p. 338).  He also quotes a former Secretary of Education (Paige, 2003), “Henry Ford created a world-class company, a leader in its industry.  More important, Ford would not have survived the competition had it not been for an emphasis on results.  We must view education the same way.  Good schools do operate like a business.  They care about outcomes, routinely assess quality, and measure the needs of the children they serve” (p. 12). 

 

The concept of lean manufacturing is also being increasingly promoted for use by public schools.  McClung argues that such an application is neither cost effective nor sound because of the extreme heterogeneity of students in terms of nearly every characteristic.  According to McClung (2008), “Lean manufacturing concentrates on reducing costs by standardizing processes and raw materials.  This minimizes waste, including wasted time.  Any variation in raw materials or processing requires adjustments to achieve the same output at a consistent cost.”  But “lean manufacturing has little tolerance for variation in any aspect of the process, whether it is the skill of workers, the schedule, the tools, or (especially) the raw materials.  In fact, the principles of lean manufacturing call for strong controls over the raw materials that are accepted into the process.  If variations in raw materials are tightly controlled, then the manufacturing processes can be easily optimized to provide consistently high quality outputs—at a price much below the cost of less efficient manufacturing methods.  If we look at raw materials as student background, process as teaching methods, and output as graduates, the analogy would be that every variation in student background or teaching methodology requires adjustments in cost in order to produce consistent graduates” (p. 2). 

 

Many business-based reformers also advocate for the use of cost-benefit analysis despite what seem to be some inherent contradictions.  Viadero (2008) summarizes the challenges associated with applying cost-benefit analysis to education and concludes, “What can make cost-benefit analyses controversial is deciding which costs and benefits to account for and what estimates to use.  The scholars contend their estimates are not out of the ordinary, but concede that no hard-and-fast rules exist in education for determining when an expense is or is not reasonable” (p. 5). 

 

To be sure, not everyone in the private sector argues in favor of treating schools as if they were businesses and some of those who do find themselves switching their stand.  One such example is reflected in the “epiphany” (Cuban, 2004) experienced by former CEO, Jamie Vollmer (2002), who had sought business-type reforms for schools but changed his mindset during a speech to a group of educators. 

 

“If I ran my business the way you people operate your schools, I wouldn’t be in business very long!”  I stood before an audience filled with outraged teachers who were becoming angrier by the minute.  My speech had entirely consumed their precious 90 minutes of in-service training.  Their initial icy glares had turned to restless agitation.  You could cut the hostility with a knife.

 

I represented a group of business people dedicated to improving public schools.  I was an executive at an ice cream company that became famous in the 1980’s when People magazine chose its blueberry flavor as the “Best Ice Cream in America.” 

 

I was convinced of two things.  First, public schools needed to change; they were archaic selecting and sorting mechanisms designed for the Industrial Age and out of step with the needs of our emerging “knowledge society.”  Second, educators were a major part of the problem:  they resisted change, hunkered down in their feathered nests, protected by tenure and shielded by a bureaucratic monopoly.  They needed to look to business.  We knew how to produce quality.  Zero defects!  Total quality management!  Continuous improvement! 

 

In retrospect, the speech was perfectly balanced—equal parts ignorance and arrogance.  As soon as I finished, a woman’s hand shot up … She began quietly.  “We are told sir, that you manage a company that makes good ice cream.”  I smugly replied, “Best ice cream in America, ma’am.”  “How nice,” she said.  “Is it rich and smooth?”  “Sixteen percent butterfat,” I crowed.  “Premium ingredients?” she inquired.  “Super premium!  Nothing but triple-A.”  I was on a roll.  I never saw the next line coming.

 

“Mr. Vollmer,” she said, leaning forward with a wicked eyebrow raised to the sky, “when you are standing on your receiving dock and you see an inferior shipment of blueberries arrive, what do you do?”  In the silence of that room, I could hear the trap snap.  I knew I was dead meat, but I wasn’t going to lie.  “I send them back.” 

 

“That’s right!” she barked, “and we can never send back our blueberries.  We take them big, small, rich, poor, gifted, exceptional, abused, frightened, confident, homeless, rude, and brilliant.  We take them with attention deficit disorder, junior rheumatoid arthritis, and English as their second language.  We take them all!  Every one!  And that, Mr. Vollmer, is why it’s not a business, it’s a school!”  In an explosion, all 290 teachers, principals, bus drivers, aids, custodians, and secretaries jumped to their feet and yelled, “Yeah!  Blueberries!  Blueberries!”

 

And so began my long transformation.  Since then, I have learned that a school is not a business.  Schools are unable to control the quality of their raw material, they are dependent upon the vagaries of politics for a reliable revenue stream, and they are constantly mauled by a howling horde of disparate, completing customer groups that would send the best CEO screaming into the night” (p. 42). 

 

 

Policymakers and legislators who seek to apply business principles and practices to schools and then analyze school as well as student performance on the basis of how well business-type goals are achieved, do not understand the complexities of the factors that combine to form a quality education.  In addition, there are a number of important variables for improving school and student performance.  For example, improving Annual Yearly Progress (AYP) involves many of the factors that are essential to quality education including but not limited to differentiated instruction, aligning curriculum with standards, student skill deficiency-based professional development, quality teachers, small class sizes, and engaged parents. 

 

Moreover, a school system’s ability to respond to ever changing conditions and to solve new problems as they arise should be also taken into account when assessing its quality.  Education transforms those who attend our schools so that they are better able to contribute meaningfully to society.  Therefore, in order for policymakers, legislators, and administrators to develop policies that will establish the proper framework for school-based decision making, it is essential to share an understanding of the unique nature of our public schools and why a school should not be treated as another business entity. 

 

 

_______________________________

References

Cuban, L. (2004).  The Blackboard and the Bottom Line:  Why Schools Can’t Be Businesses, Cambridge, Massachusetts and London, England:  Harvard University Press. 

Cubberly, E. P. (1916).  Public School Administration.  Boston:  Houghton Mifflin. 

McClung, K. (2008). Lean Education. Teacher Magazine,  http://www.TeacherMagazine.org  April 9, 2008. 

Paige, R. (2003) Letter to the editor, New Yorker, October 6, 2003.   

Viadero, D. (2008). New Center Applies Cost-Benefit Analysis to Education Policies.  Education Week,  http://www.Edweek.org  April 8, 2008. 

Vollmer, J. R. (2002).  “The Blueberry Story,” Education Week, March 6, 2002. 

 

Allow Our Schools to Opt for Independence

To enable our public school districts to have the authority to improve education consistent with the needs of their local schools as well as have the necessary flexibility to innovate rather than march in lock-step to the state’s one size fits all mandates, local school districts should be empowered to opt out of the state system.  Public schools choosing to opt out would become independent public schools free of all state mandates except for perhaps reporting test results but they would also forgo all state aid.  Opting out of the state system would restore decision-making to the local school district level.  Because decisions guiding the operations of these schools would no longer be made largely at the county or state level, parents, teachers, school administrators and local taxpayers would be better able to shape the quality of education which their students receive in their local schools. 

 

Because the State of New Jersey forces most of its school districts to spend disproportionately more to meet the requirements of the state’s unfunded and under funded mandates than these districts receive in total state financial aid, if local districts opted out they would eliminate the excessive financial and administrative burdens imposed by the state.  This also would increase the financial resources available for the classroom because it would be much more cost effective for local school districts to provide educational programs and services without the administrative burden of state requirements.  The funds that are currently used for regulatory compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.  Changing our state’s educational system in this way would not only improve the quality of education but also increase property taxpayers’ return on investment. 

 

Rather than taking responsibility for its role in helping to create and foster the fundamental financial problems facing our educational system, Trenton seems to blame school districts for driving up property taxes.  Instead of fully funding their mandates driving up the cost of public education, their proposals to reduce the property tax burden focus largely on constricting school district funding, budgets, operations and the independence of local school districts. 

 

The state’s flawed approach is demonstrated in the new funding formula as contained in the New Jersey School Funding Reform Act (SFRA) of 2008 and its predecessor the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA,) which caused higher property taxes and cuts in regular education.  Dr. Reock, Rutgers University Professor Emeritus, studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year and reached a profound conclusion (Reock, 2007.)  Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.”  Instead of fully funding the CEIFA school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates.  The shortfall was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts, and $188 in Abbott districts. 

 

The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection.  State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.)  Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid. 

 

The CEIFA funding shortfall also caused serious imbalances between local school districts.  During the 2005-06 school year Abbott districts received approximately 58% of all state financial aid while educating only 23% of New Jersey’s K to 12 student enrollment.  This meant non-Abbott districts were educating 77% of New Jersey’s students with only 42% of state aid.  This imbalance has continued to widen under SFRA with Abbott aid increasing to approximately 60% of all state aid or $4.64 billion.  State aid reductions and the ever increasing unfunded state mandates force non-Abbott districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.    

 

As part of his state of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.”  He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.”  The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall. 

 

The fact that Trenton continues to force local school districts to pay for its under-funded and unfunded mandates that unnecessarily increase the cost of providing education and drive up property taxes is rather incomprehensible.  It is even more difficult to understand considering how our schools are suffering disproportionately from one of greatest financial crises ever to confront our nation.  Also, the State of New Jersey’s mandates harm the quality of education because they divert necessary resources to paying for the mandates’ costs rather than investing these scarce resources in the classroom where they are needed most.  Local school districts, therefore, would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on their educational investment if they opted out of the state system with its unfunded mandates. 

 

 

 _______________________________

References

Hu, W., (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006. 

Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06,” Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf  

Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf

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