School Finance

New data will reveal which schools are winners — and losers — in the school funding fight

PHOTO: Alan Petersime

This story was originally published in the Educated Reporter, a blog from the Education Writers Association. It is a report from the National Seminar of the Education Writers Association.

There are few debates in education as fraught or as important as the fight over how much money to spend on schools — and where to spend it.

Whether a school has the cash to pay for such things as smaller class sizes, extra mental health staff or music instruction depends on decisions made by elected officials at every level of government, from the U.S. House and Senate to local school boards.

Most experts agree that it takes more money to educate students in poverty — including kids who may grapple with trauma in their homes or communities and need more support when they are in school. But in many places across the country, schools that primarily serve low-income families are actually getting less money than schools with more affluent populations.

‘The Promise of Equality’

“How can we fulfill the promise of equality of opportunity in an environment where we know that the students who need the most are getting the least?” said former U.S. Secretary of Education John King, who spoke earlier this month at the National Seminar of the Education Writers Association. “They get less access to resources. They get less access to advanced coursework. They get less access to well-prepared, well-supported teachers.”

But is it a matter of providing resources or requiring accountability and competition? Lawyer Rocco Testani suggested that costly lawsuits don’t solve equity problems but holding school districts accountable and providing competition does.

He compared Florida, which hasn’t substantially increased its school funding, to New York, which has. Testani argues that Florida’s low-cost accountability provisions, as well as strong choice options, led to stronger improvements on the National Assessment for Educational Progress than New York’s.

Funding inequities are evident at the federal level. The largest K-12 funding stream at the U.S. Department of Education is Title I, which is designed to help schools and districts that serve high numbers of poor students. But the formula the government uses to distribute the money does not necessarily send it to the highest need districts, said Nora Gordon of Georgetown University. In fact, affluent districts can rake in federal dollars.

That’s because Title I, funded at more than $15 billion for fiscal 2017, has more than one goal, she said. In addition to redistributing money to poor schools, it is also one of the few tools the federal government has to pressure local districts to change their policies. As a result, almost every district gets some money from Title I. (In addition, the wide distribution of Title I, which reaches virtually every congressional district, has helped to ensure political support.)

Using Title I Aid as a Carrot

“If the federal government wants to get states to do stuff, it needs to have a carrot,” Gordon said. “Title I is that carrot.”

Within states, districts that serve the highest income areas have long had better financed schools because education is often paid in part through local property taxes and wealthy municipalities have higher property values. But over the last several decades, a movement to make school funding more logical and equitable has slowly swept the country.

Beginning with a 1989 Kentucky court case, many states have been changing their funding formulas to send more money to low-income districts, said Diane Schanzenbach, a professor at Northwestern University professor and the director of the Hamilton Project at the Brookings Institution. Since then, spending across the country has increased dramatically.

That policy change has allowed researchers to study a perennial question in education: Whether increasing funding improves schools. In a recent study, Schanzenbach and her colleagues looked at how that infusion of money impacted test scores. They found that when states spent more on schools in low-income districts, the gap in test scores between high- and low-income districts closed.

While many states have changed their funding models to direct more money to poor school districts, there are still gaps in funding within districts, Schanzenbach said. “The bad news is that we found this policy also has pretty limited reach.”

She added, “Although this closes the gaps in funding and test scores between rich and poor districts, it does not do a good job of doing the same across rich and poor students.”

Schanzenbach noted that some districts that serve large numbers of low-income families still may have some schools with a lot of middle class and more affluent families. And money may not flow equally to all of those schools.

The policy of changing state funding formulas “seems to be too blunt to actually get more resources to low-income kids,” Schanzenbach said.

Local funding decisions made at the school board level can lead schools with affluent, politically savvy families to get more money than neighboring schools that serve more low-income families and students of color.

“If you are spending more on one school in a district, you are spending less on another,” said Marguerite Roza of the Edunomics Lab at Georgetown University.

The ‘Motherload’ of New Data

But in many states and communities, information on how much each school receives isn’t publicly available, said Roza. Sometimes schools serving a lot of low-income families get less money. Sometimes they get more. And sometimes there is little rhyme or reason to funding patterns that have developed over years. But Roza added, parents and community members don’t know how the pie is divided because spending decisions often are not transparent or public.

That’s about to change, said Roza. The federal Every Student Succeeds Act (a rewrite of the No Child Left Behind Act) requires districts to report spending by school. That data should start to become available in 2019, she said. Once each school’s budget becomes public, families might put more pressure on districts to give their school its fair share.

“This is the motherload of new financial data,” said Roza. “It will change everything.”

money matters

Why Gov. Hickenlooper wants to give some Colorado charter schools $5.5 million

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

If Mike Epke, principal of the New America School in Thornton, had a larger budget, he would like to spend it on technical training and intervention programs for his students.

He would buy more grade-level and age appropriate books for the empty shelves in his school’s library, and provide his teachers with a modest raise. If he could really make the dollars stretch, he’d hire additional teacher aides to help students learning with disabilities.

“These are students who have not had all the opportunities other students have had,” the charter school principal said, describing his 400 high school students who are mostly Hispanic and come from low-income homes.

A $5.5 million budget request from Gov. John Hickenlooper, a Democrat, could help Epke make some of those dreams a reality.

The seven-figure ask is part of Hickenlooper’s proposed budget that he sent to lawmakers earlier this month. The money would go to state-approved charter schools in an effort to close a funding gap lawmakers tried to eliminate in a landmark funding bill passed in the waning days of the 2017 state legislative session.

Funding charter schools, which receive tax dollars but operate independently of the traditional school district system, is a contentious issue in many states. Charter schools in Colorado have enjoyed bipartisan support, but the 2017 debate over how to fund them hit on thorny issues, especially the state’s constitutional guarantee of local control of schools.

The legislation that ultimately passed, which had broad bipartisan support but faced fierce opposition from some Democrats, requires school districts by 2020 to equitably share voter-approved local tax increases — known as mill levy overrides — with the charter schools they approved.

The bill also created a system for lawmakers to send more money to charter schools, like New America in Thornton, that are governed by the state, rather than a local school district.

Unlike district-approved charter schools, which were always eligible to receive a portion of local tax increases, state-approved charter schools haven’t had access to that revenue.

Terry Croy Lewis, executive director of the Charter School Institute, or CSI, the state organization that approves charter schools, said it is critical lawmakers complete the work they started in 2017 by boosting funding to her schools.

“It’s a significant amount of money,” she said. “To not have that equity for our schools, it’s extremely concerning.”

CSI authorizes 41 different charters schools that enrolled nearly 17,000 students last school year. That’s comparable to both the Brighton and Thompson school districts, according to state data.

Hickenlooper’s request would be a small step toward closing the $18 million gap between state-approved charter schools and what district-run charter schools are projected to receive starting in 2020, CSI officials said.

“Gov. Hickenlooper believes that working to make school funding as fair as possible is important,” Jacque Montgomery, Hickenlooper’s spokeswoman, said in a statement. “This is the next step in making sure that is true for more children.”

If lawmakers approve Hickenlooper’s request, the New Legacy charter school in Aurora would receive about $580 more per student in the 2018-19 school year.

Jennifer Douglas, the school’s principal, said she would put that money toward teacher salaries and training — especially in the school’s early education center.

“As a small school, serving students with complex needs, it is challenging and we need to tap into every dollar we can,” she said.

The three-year old school in Aurora serves both teen mothers and their toddlers. Before the school opened, Douglas sent in her charter application to both the Aurora school board and CSI. Both approved her charter application, but because at the time her school would receive greater access to federal dollars through CSI, Douglas asked to be governed by the state.

Douglas said that her preferred solution to close the funding gap would be to see local tax increases follow students, regardless of school type or governance model. Until that day, she said, lawmakers must “ensure that schools have the resources they need to take care of the students in our state and give them the education they deserve.”

For Hickenlooper’s request to become a reality, it must first be approved by the legislature’s budget committee and then by both chambers. In a hyper-partisan election year, nothing is a guarantee, but it appears Hickenlooper’s proposal won’t face the same fight that the 2017 charter school funding bill encountered.

State Rep. Jovan Melton, an Aurora Democrat who helped lead the charge against the charter school funding bill, said he was likely going to support Hickenlooper’s proposal.

“You almost have to do it to be in alignment with the law,” Melton said. “I don’t think with a good conscious I could vote against it. I’m probably going to hold my nose and vote yes.”

Payment dispute

Fired testing company seeks $25.3 million for work on TNReady’s bumpy rollout

PHOTO: TN.gov

Tennessee officials won’t talk about the state’s ongoing dispute with the testing company it fired last year, but the company’s president is.

Henry Scherich

Henry Scherich says Tennessee owes Measurement Inc. $25.3 million for services associated with TNReady, the state’s new standardized test for its public schools. That’s nearly a quarter of the company’s five-year, $108 million contract with the state, which Tennessee officials canceled after technical problems roiled the test’s 2016 rollout.

So far, the state has paid the Durham, North Carolina-based company about $545,000 for its services, representing about 2 percent of the total bill, according to a claim recently obtained by Chalkbeat.

Measurement Inc. filed the claim with the state in February in an effort to get the rest of the money that it says it’s owed. Since then, lawyers for both sides have been in discussions, and the company filed a lawsuit in June with the Tennessee Claims Commission. The commission has directed the State Department of Education to respond to the complaint by Nov. 30.

“We’re moving forward,” Scherich told Chalkbeat when asked about the status of the talks. “… We’re simply asking to be paid for the services we provided.”

Education Commissioner Candice McQueen declined last week to discuss the dispute, which she called “an ongoing pending lawsuit.” A spokesman for the attorney general’s office also declined to comment on Monday.

Scherich said he and other company officials have not been called to Nashville for hearings or depositions.

“Our lawyers and the state’s lawyers are still skirmishing each other,” he said. “…They argue about lots of things. It’s kind of like we’re establishing the ground rules for how this process is going to proceed.”

PHOTO: Grace Tatter
Education Commissioner Candice McQueen announced the firing of Measurement Inc. and the suspensions of most testing in April 2016.

Tennessee’s dramatic testing failure started on Feb. 8, 2016, when students logged on during the first morning of testing and were unable to load TNReady off the new online platform developed by Measurement Inc. The fallout culminated several months later when McQueen fired the company and canceled testing altogether for grades 3-8. In between were months of delays after McQueen instructed districts to revert to paper-and-pencil materials that would be provided by Measurement Inc. under the terms of their contract. Many of those materials never arrived.

The company’s claim suggests that the state was hasty in its decision to cancel online testing and therefore shares blame for a year of incomplete testing.

The Tennessee Department of Education “unilaterally and unjustifiably ordered the cancellation of all statewide electronic testing that occurred on February 8, 2016, following a transitory slowdown of network services that morning,” the claim says.

(In an exclusive interview with Chalkbeat the day before his company was fired, Scherich said Measurement Inc.’s online platform did not have enough servers for the 48,000 students who logged on that first day — a problem that he said could have been fixed eventually.)

The claim also charges that McQueen’s subsequent order to substitute paper test materials was “unnecessary and irresponsible” and impossible to meet because of the logistical challenge of printing and distributing them statewide in a matter of weeks.

In her letter terminating the state’s contracts with Measurement Inc., McQueen describes daily problems with the company’s online platform in the months leading up to the botched launch. “This was not just a testing day hiccup; the online platform failed to function on day one of testing,” she wrote.

McQueen said those experiences contributed to her department’s conclusion that Measurement Inc. was unable to provide a reliable, consistent online platform and left her with no option but to order paper and pencil tests. She also cited the company’s failure to meet its own paper test delivery deadlines for her ultimate decision to terminate the contracts and suspend testing.

The last sentence of the four-page termination letter says the state would “work with (Measurement Inc.) to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date after liquidated damages have been assessed.”

In addition to its invoices for work under the contract, Scherich said his company is owed another $400,000 for delivering test-related materials to the state after its contract was ended.

“We didn’t want to be a company that stood in the way of the programs of the state of Tennessee, so we provided all the information they requested,” Scherich said. “We were told we would be paid, we provided the information, and then we’ve not been paid.”

Founded in 1980, Measurement Inc. had been doing testing-related work for Tennessee for more than a decade before being awarded the 2014 TNReady contract, its biggest job ever. The company had a fast deadline — only a year — to create the state’s test for grades 3-11 math and English language arts after a vote months earlier by the legislature prompted Tennessee to pull out of PARCC, a consortium of other states with a shared Common Core-aligned assessment.

Scherich said the loss of the TNReady contract was “a major hit” for his company, but that Measurement Inc. has paid every employee and subcontractor who worked on the project. “We have had to go into debt to keep ourselves viable while we wait for this situation with Tennessee to be resolved,” he said, adding that the company continues to do work in about 20 other states.

To pursue its claim, Measurement Inc. has hired the Tennessee law firm of Lewis, Thomason, King, Krieg & Waldrop, which has offices in Nashville and Knoxville.

“I’m sure we’ll work out something amicable with the state over time,” he said. “I’m an optimistic person. But I think our lawyers and their lawyers will have to have a lot of negotiations.”

Below are Measurement Inc.’s claim against the state, and the state’s letter terminating its contracts with the company.

Editor’s note: This story has been updated with details about the claim’s status.