Q: Can Public Schools Really Do More With Less? + Report: “RETURN ON EDUCATIONAL INVESTMENT: A district-by-district evaluation of US educational productivity”

by Vivian Po, New America Media, Education Blog  | http://bit.ly/gsi8DJ

Posted: Apr 9, 2011

NAM EDITOR’S NOTE: As the U.S. economy continues to falter and states struggle to balance their budgets, cuts in education funding have become ubiquitous. Yet students face new pressures to remain competitive in the global market. Once again, the big question for reformers is: “Can schools do more with less?” To answer that question, NAM education reporter Vivian Po spoke with Ulrich Boser, author of a recent report by the Center for American Progress [SourceWatch]: “Return on Educational Investment: A district-by-district evaluation of US educational productivity.” [follows] The report, the first attempt to evaluate the productivity of almost every major school district in the country, found that some districts have spent their dollars more wisely than others—and most schools can improve their efficiency, if they try.

What does the report tell us?

We found that many school districts could boost student achievement without increasing spending if they used their money more productively. For example, an Arizona school district could see as much as a 36 percent boost in achievement if it increased its efficiency from the lowest level to the highest, with all else being equal. It is estimated that low productivity costs the nation’s school system as much as $175 billion a year. As a nation, we need to examine how school dollars are spent because more education spending will not automatically improve student outcomes. In more than half of the states included in our study, there was no clear relationship between spending and achievement after adjusting for other variables, such as cost of living and students in poverty.

Why does spending more not translate into higher achievement?

Inefficiencies are often buried deep within the operation of school systems. The problem might be large expenses on programs that do little to raise student achievement, or salaries that have little or nothing to do with the employee’s effectiveness. Our goal is to kick-start a national conversation about educational productivity and to identify districts that generate higher achievement per dollar spent.

Both the Los Angeles Unified School District and the San Diego City Unified School District educate more than 100,000 students and have around 60 percent students coming from low-income families. According to the most recent data available, from 2008, LAUSD spent $11,357 per student, about $1,000 more than SDUSD. However, San Diego’s students score consistently higher than Los Angeles’ students on state reading and math exams from elementary all the way through high school. In other words, San Diego appears to get a far better return on its investment than does Los Angeles.

After comparing different school districts nationwide, how much should we spend on each student to reach the highest efficiency?

We evaluated each district relative to the performance of other districts in the same state. There’s also wide variance among districts. California generally spends less on education per student than other states, and among the districts in the top third of achievement, there was a nearly $8,000 range in spending per student.

How much are we spending on ethnic minority students around the country?

We found that students from minority backgrounds are more likely to be enrolled in highly inefficient districts. Students who participated in subsidized lunch programs were 12 percent more likely to be enrolled in the nation’s least productive districts. For example, the least-efficient districts were far more likely to have larger percentages of black students—18 percent versus 5 percent—and Hispanic students, 14 percent versus 7 percent, than the most efficient ones. If these students are enrolled in districts that could spend their money more wisely, they could potentially have higher achievement.

Where are the less productive districts spending their money?

The most inefficient districts in the country devote an extra 3 percentage points of their budgets on average to administration, operations and other non-instructional expenditures. After adjusting for students in special programs and cost of living, the least productive districts spend almost $300 more per student than the average district on student and staff support, which includes expenditures on school libraries, media centers and guidance counselors. The least productive districts also spend over $350 more per student than the average district in administrative costs, including dollars spent on central services such as payroll.

With that said, the finding does not mean that high administrative costs cause low productivity. Our study was not able to figure out the exact cause of a district’s inefficiency.

How about programs that do not generate direct impact on scores, such as programs on mental heath or family intervention?

Our study looks only at reading and math test scores, an admittedly very narrow slice of what students need to know to succeed in college and the workplace. Just because something does not directly improve math and reading scores does not mean that it should be cut.

By comparing schools with similar demographics, have you found any silver bullets to increase school productivity?

There are no silver bullets when it comes to school reform. Even reform-minded school administrators often confuse merely novel techniques with successful ones. To increase productivity, school leaders will need to fundamentally reinvent the way that they do business and create an outcomes-based school culture that sets high goals—and gives employees the strategies to achieve them.

Are you suggesting that schools should be run like businesses?

We are not saying that schools should be run like businesses. Nor does our emphasis on productivity mean that we endorse unfettered market-based reforms, such as vouchers allowing parents to direct public funds to private schools. But transforming our schools will demand real change.

The development of academic standards makes it easier to evaluate productivity because all school systems within a state now work toward a common educational goal. The measures also allow educational management systems to better hold schools and districts accountable for their results.

Now that we know that educational productivity varies from district to district, what should be done next?

We must know more about how well school systems are investing federal, state, and local taxpayer resources, and we hope this report launches a thoughtful conversation about educational efficiency. Policymakers should work with state and federal governments to spark a much-needed dialogue about ways for education systems to do more with less, hold superintendents and principals accountable for the productivity of their organizations. Currently, only two states, Florida and Texas, produce school-level productivity measures.

Education policymakers should also develop funding policies that direct money to students based on their needs, so that all schools and districts have an equal opportunity to succeed. Finally, states and districts should develop data systems that report reliable, high-quality information on school finance, operations, and outcomes.

REPORT: Return on Educational Investment: A district-by-district evaluation of U.S. educational productivity

by Ulrich Boser | Center for American Progress | January 2011

Summary of findings

• Many school districts could boost student achievement without increasing spending if they used their money more productively. An Arizona school district, for example, could see as much as a 36 percent boost in achievement if it increased its efficiency from the lowest level to the highest, all else being equal.
• Low productivity costs the nation’s school system as much as $175 billion a year. This figure is an estimate; our study does not capture everything that goes into creating an efficient district. But the approximate loss in capacity equals about 1 percent of the nation’s gross domestic product.
• Without controls on how additional school dollars are spent, more education spending will not automatically improve student outcomes. In more than half of the states included in our study, there was no clear relationship between spending and achievement after adjusting for other variables, such as cost of living and students in poverty. These findings are consistent with existing research:
• How a school system spends its dollars can be just as important as how much it spends, at least above some threshold level.
• Efficiency varies widely within states. Some districts spent thousands more per student to obtain the same broad level of academic achievement. After adjusting for factors outside of a district’s control, the range of spending among the districts scoring in the top third of achievement in California was nearly $8,000 per student.
• More than a million students are enrolled in highly inefficient districts. Over400 school districts around the country were rated highly inefficient on all three of our productivity metrics. These districts serve about 3 percent of the almost43 million students covered by our study.
• High-spending school systems are often inefficient. Our analysis showed that after accounting for factors outside of a district’s control, many high spending districts posted middling productivity results. For example, only 17percent of Florida’s districts in the top third in spending were also in the top third in achievement.
• Students from disadvantaged backgrounds are more likely to be enrolled in highly inefficient districts. Students who participated in subsidized lunch programs were 12 percentage points more likely to be enrolled in the nation’s least-productive districts, even after making allowances for the higher cost of educating lower-income students.
• Highly productive districts are focused on improving student outcomes. Resurveyed a sample of highly productive districts to learn more about their principles and practices. The districts that performed well on our metrics shared ada number of values and practices, including strong community support and a willingness to make tough choices.
• States and districts fail to evaluate the productivity of schools and districts. While the nation spends billions of dollars on education, only two states, Florida and Texas, currently provide annual school-level productivity evaluations, which report to the public how well funds are being spent at the local level.
• The quality of state and local education data is often poor. In many instances,key information on school spending and outcomes is not available or insufficiently rigorous, and this severely impedes the study of educational productivity. For instance, we did not have good enough data to control for certain cost factors, such as transportation. So a rural district with high busing costs might suffer in some of our metrics compared with a more densely populated district.
• The nation’s least-productive districts spend more on administration. The most inefficient districts in the country devote an extra 3 percentage points of their budgets on average to administration, operations, and other noninstructional expenditures.
• Some urban districts are far more productive than others. While our main results are limited to within-state comparisons, we were able to conduct a special cross-state analysis of urban districts that recently participated in a national achievement test. After adjusting for certain factors outside a district’s control,we found that some big-city school systems spend millions of dollars more than others—but get far lower results on math and reading tests.

Summary of recommendations

• Policymakers should promote educational efficiency. We hope this report launches a broad dialogue about educational productivity.
• Education policymakers should encourage further research in this area, as well as convene a national panel to recommend how state and federal governments can better support policies and programs that promote efficiency. States and districts must reform school management systems
• Education policymakers should create performance-focused management systems that are flexible on inputs and strict on outcomes. State and federal governments should also provide educators with the tools, technology, and training required to succeed with limited school dollars.
• Education leaders should encourage smarter, fairer approaches to school funding
• Education policymakers should develop funding policies that direct money to students based on their needs, so that all schools and districts have an equal opportunity to succeed. Federal policymakers should also continue to support competitive funding programs that create opportunities for reform and innovation.
• States and districts should report far more data on school performance
• States and districts should develop data systems that report reliable, high-quality information on educational outcomes, operations, and finance.

Full Report: Return on Educational Investment