Chapter 1
Misconceptions
about School Finance
The Truth Is…
Education has
never been a
high prestige,
high paying
profession in the
United States.
Teaching has always been a
difficult, demanding, and
poorly resourced profession
that swayed in local, state,
(and increasingly since the
1980s) national political
winds. Education’s “Good
old days” never existed
beyond the founding
fathers’ dreams.
Federal Involvement in
Education has been
Supportive
• Public education’s importance to our
national agenda and economy makes it
a logical political focus
• Federal involvement in schools,
however, is largely subject to
political winds
American Public Education
is Big Business*
1999-2000:
Operating budgets of all
public K-12 education
totaled more than
$373 billion.
Employing approximately
3,000,000 teachers.
Also, in Fall 2001:
1.6 million
administrators,
counselors,
paraprofessionals,
or support staff.
53.2 million public
school students.
* U.S Department of Education, National Center for Education Statistics, “Revenues and Expenditures
for Public Elementary and Secondary Education: School Year 1999-2000.”
http://www.policyalmanac.org/educationa/archive/doe_education_spending.shtml.
American Public Education
is Big Business
• K-12= 4.3% GDP*
• K-16 = 7.1% GDP
*GDP = Gross Domestic Product – the total output produced within a
country during a year.
If Public Education Were a
National Company, in 2001…
With 4.6 million employees,
public education has
5 X’s MORE than those
working for GM, GE, &
IBM
COMBINED!!!
[1] U.S Department of Education, National Center for Education Statistics, “Revenues and Expenditures
for Public Elementary and Secondary Education: School Year 1999-2000.”
http://www.policyalmanac.org/educationa/archive/doe_education_spending.shtml.
Education-Bashing Has
Become Fashionable
The data show that American schools
have never been asked to do more with
fewer resources under a higher level of
public scrutiny – and with a higher level
of expectations – than any other time in
our history*.
*Bracey, G. Setting the Record Straight: Responses to Misconceptions About Public
Education in the United States. ASCD, Alexandria, 1997 and Berliner, D., Biddle, B. The
Manufactured Crisis: Myths, Fraud, and Attack on America’s Public Schools, 1995, Longman,
New York.
The “Good Old Days”?
1950:
33% of US population
were high school
graduates
12.6% AfricanAmerican Males
14.7% African-American
Females
Few special needs
students
TODAY:
All students
More diverse
students –
Ability
Race
Ethnicity
Special Needs
Low SES
And so on….
5 Misconceptions About
Education Finance:
1.
2.
3.
4.
5.
Our country spends more on education than
any other country.
Education costs have recently skyrocketed.
Spending more money on education does not
mean better student achievement results.
Education salaries are high in relation to other
similarly trained professions.
Education today employs too many
administrators.
MISCONCEPTION #1 – THE UNITED STATES SPENDS
MORE ON EDUCATION THAN ANY OTHER COUNTRY.
This is not true for
public education (K
through grade 12).
It is only true if you
look at total dollars
spent including
higher education.
Placing “Dollars”
Into a Cultural Context
Figure 1.1 - Educational Expenditures per Student in Relation to GDP per Capita,
by Level of Education for Selected OECD Countries: 1998
What Should Be Said…
Comparing total
dollars spent on
education without
equalizing dollars
for cost of living is
not comparing
“apples to apples”.
To Compare
“Apples” to “Apples”
Examine not the actual dollar amounts
spent for education on a per pupil basis,
but the percent those dollars represent
as a portion of the entire country’s
economy.
Equalizing Currency
GNP – Gross National
Product: The total
value at current
market prices of all
goods and services
that a country
produces during a
year.
GDP – Gross Domestic
Product: The total
value of all output by
all factors owned by
the country
regardless of where
the production takes
place.
Understanding
Spending in Its Relative Place
• Examine not the actual
dollar amounts spent for
education on a per pupil
basis, but the percent
those dollars represent as
a portion of the entire
country’s economy
• Another way to
equalize dollars
and make
reasonable
international
comparisons
Relative Standards
of Living
To compare U.S.
dollars to the
equivalent currency
in Mexico, Poland,
Hungary, and the
Czech Republic
(see next slide)
would be inaccurate
and inappropriate.
Educational Expenditures per
Student in Relation to GDP per
Capita
Figure 1.1 - Educational Expenditures per Student in Relation to GDP per Capita,
by Level of Education for Selected OECD Countries: 1998
U.S. Education Spending is Comparable*
to Other “First World” Countries’ Spending
*Without the RED boxes which represent post-secondary (college) education.
Comparing International
Spending: Salary Differences
• Unless these dollars
are equalized to
account for a
relative standard of
living, the
comparisons will not
be valid
• Variations in costs of
living in different
countries
• National vs. local
salary schedules
• Local wealth in
suburban, urban &
rural communities
• Geographic location
It is Important to Remember…
Virtually no other
country provides a
free and appropriate
education to all of its
children from
kindergarten through
grade 12 and from
ages two to twentytwo for students with
special needs.
That alone will
increase the
average spending
per student on a per
capita basis in
comparison with
other countries.
Education Finance in a
Cultural Context
U.S. GDP is far
ahead of most other
countries. This
indicates that our
relative wealth and
standard of living is
high in relation to
the other OECD
nations.
U.S. education
spending is not
commensurate with
our relative wealth.
The US Makes an “Average
Effort” to Finance Education
• The United States
spends approximately
5.1% of its gross
domestic product on
education
• We rank 10th among
seventeen “First World”
OECD countries listed
with the data
These 17 countries’
mean education
expenditure is 5.4%.
% of GDP Spent on Education
France – 6 %
Japan - 4.2%
U.S. - 5.1%
United Kingdom - 4.9%
Sweden - 8%
Canada - 5.7%
Mexico - 4.2%
A Positive Correlation Between
GDP per Capita & Education
Wealthier countries
tend to spend more
on primary,
secondary, &
postsecondary
students than do
less wealthy
countries.
1998, OECD Members
Elementary, per pupil
Secondary, per pupil
Switzerland
$9348
Denmark $6713
USA $6043
USA $7767
Poland $1438
Mexico $863
As Measured by GDP,
The U.S. is among the lowest spenders
for secondary education. Our
financial effort is relatively
low while our financial
capacity is
very high.
US Does NOT Spend More
• U.S. spending on K-
12 education in
equalized dollars is
less than that of
sixteen other
industrialized
countries
• An equalized
comparison would
show that in terms
of wealth, as
measured by GDP,
our spending places
us 10th – below the
average – of 17
OECD countries.
MISCONCEPTION #2 –EDUCATION COSTS
HAVE SKYROCKETED WHILE TEST
SCORES HAVE GONE DOWN
Education Costs Are Up
Because Enrollments Are Up
• U.S. education costs in
real and constant
dollars have increased,
but so have
enrollments
• We have also
decreased class size,
resulting in an increase
in teachers and
subsequently, costs
Teacher Salaries in Real
Dollars Have Increased
Salary scales pay teachers for years of
service and earning advance degrees.
In constant dollars, however, their
salary’s purchasing power is almost flat.
Greater Variance In
Students’ Needs Costs More
 1975, Education for all
Handicapped Children Act
 From the 1976 school year until the
1999 school year, public schools served
an additional 2.5 million special
education students
Special Needs Students
The lower
student/teacher ratio
and additional
resources required
to appropriately
educate special
needs students
necessarily requires
larger expenditures.
Special Education Costs
In 1988, it cost $2500
to educate each regular education
pupil while it cost $17,600
to educate each
special education pupil.
Bracey, G.W. (1991, October) “Why Can’t They Be Like We Were?” Phi Delta Kappan 73 (2): 104117, p. 112.
Special Needs Students Served
as a % of Enrollment
 1976-77
 1980-81
 1989-90
 1994-95
 1999-00
3.6
4.1
4.6
5.3
6.1
million
million
million
million
million
8.32%
10.14%
11.32%
12.19%
13.22%
Test Scores are NOT Declining
SAT scores have
NOT declined
during a period
of increased
expenditures.
In High-Scoring SAT States,
Virtually No One Takes the SAT
State
% of 1993 HS Seniors taking SAT
• Iowa
5%
• North Dakota
6%
• South Dakota
5%
• Utah
4%
• Montana
10%
• New Jersey
76%
Looking at Test Scores
& Expenses
Making judgments
about the inverse
relationship between
money input &
student
achievement output
is simply invalid.
We do not have a
level playing field
because of the
vastly different
student populations
taking (or not taking)
this particular
college admissions
test.
PLUS, SAT Scores are NOT
Decreasing!
On the SAT from 1991 to 2001,
all* ethnic groups showed
an increase from 3 to 20 points
on Math and a 2 to 21 point
increase in Verbal.
* Only Mexican Americans showed a 1 point drop in Math and a 3 point drop in Verbal.
SAT Scores are
Increasing !
The average increase for
all college-bound seniors was
a 14-point increase in Math &
a 7-point increase in Verbal.
.
SAT Scores Went Up Between
1991 & 2001
In spite of the fact
that minorities
traditionally score
lower than white
students, they
consisted of more
than 1/3 of all SAT
takers in the class
of 2001.
Statistical Issues Confuse
SAT Results
 Converting to scaled
 Miss 1 question on
scores can confuse
the general public
 One incorrect
answer can account
for about 10-scaled
score points on the
test
the Verbal part &
lose 50 scale points
for that one error,
earning a score of
750 rather than 800
Achievement scores are
NOT going down
To a case, where states have
implemented high-stakes testing
programs, test scores have increased,
especially for disadvantaged and
minority students.
SAT’s History Helps Explain the
Change in Scores Over Time
The SAT began in
1926 as a way to
distinguish among
applicants for
selective colleges.
Norms were
established on 8,040
students entering
private colleges,
mostly in the
Northeast; students
were 98% white, 60%
male, 40% attended
private high schools.
Other Achievement
Scores Increasing
Likewise, the National Assessment of
Educational Progress (NAEP – “The
Nation’s Report Card”) scores from 1971
to 1999 (latest data available
at the time of writing) show
that student scores are
increasing.
Data: NAEP 1998
Effective Teaching &
Minority Achievement
• Grade 8 Writing:
• Grade 8 Writing:
– African American
students:
– 146 points – Texas
– 121 points – Arkansas
– Latino students:
**A 25-point difference
worth 2 ½ years of
learning.
** A 40 point difference
worth 3-4 years of
learning.
– 146 points – Virginia
– 106 points – Mississippi
Haycock, Jerald, & Huang, 2001. “Closing the Gap: Done in a Decade.”
Thinking K-16, 5 (2). Washington, DC: The Education Trust (Spring 2001):3-22.
Increasing NAEP Scores
1971 – 1999 Average Student Reading
Proficiency by Age:
1971
1999
Change
9 year olds
207.6
211.7
4.1 pts.
13 year olds 255.2
259.4
4.2
17 year olds 285.2
287.8
2.6
Test Scores Do NOT Compare
“Apples with Apples”
 US has open public education for all
students, including special needs.
 US does not track students into early career
decisions and apprenticeships and out of
college preparatory education.
 All US students can be tested.
 Tests’ contents do not closely match what
most students learn in U.S. classrooms*.
Other Cultural Differences that
Impact Test Results
European & Asian
students have a longer
school day (average 6
hours to our 5.2 hours)
& school year (200 to
225 days compared to
our 178 days).
Many European
nations have a
national education
system (& a consistent
school finance
structure).
Cultural Differences
Impact Test Results
A growing underclass & at-risk
population present in U.S. public schools:
40% Free & Reduced Price Lunch
More than 50% of American
students live with a single head of household
American students average 3.5 hours of TV viewing
A less stable and experienced U.S. teaching force
for neediest students
Differences in National Education
Spending Are Misleading
Educational costs in
the U.S. may be so
variable as to
insufficiently support
many of the neediest
students, leaving
them less prepared
to perform well on
rigorous tests.
• The variance ranges
from a high of more
than $9,500 per pupil in
the four highest
spending states to a low
of between $4,001 to
$4,500 per pupil in Utah
• Comparisons within
states frequently show
even greater variance
than state comparisons
Unequal Spending
Within States
Wealthier school
districts usually
outspend poorer
school districts by
a wide margin.
The poorer school
districts tend to be
the urban poor and
the isolated rural
districts with great
demands and few
available
resources.
In Sum,Test Scores
& Costs are Up
As seen, education
costs in real dollars
have increased over
the past several
decades, but,
contrary to popular
argument, test
scores have not
uniformly declined.
Increased costs are
associated with
increased
enrollments, lowered
student/teacher
ratios, higher teacher
salaries, & the extra
learning needs that
more diverse
students bring to
school.
MISCONCEPTION #3 -SPENDING MORE
MONEY ON EDUCATION DOES NOT MEAN
BETTER ACHIEVEMENT RESULTS
Money Matters!
 Hiring quality teachers
 Decreasing class size
 Improving facilities
 Having adequate
resources & support services
 Providing up-to-date equipment
Spent Correctly, Money Makes
a Big Difference in Student
Achievement
• An Alabama
Department of
Education study, for
example, showed a
positive relationship
between money spent
and student
achievement*
• A Harvard study
showed money spent
to reduce class size
and to hire
experienced teachers
resulted in increased
student test scores**
Critics Argue That Money is
Not Related to Achievement
• The Coleman Report (1966) said
schools had minor impact on students’
learning apart from what children
brought from their family backgrounds
• Educationally-speaking, the rich would
get richer and the poor would learn but
never as much as their more affluent
classmates
The Coleman Report
This naïve belief –
seeming logical at the
time and well before
1990s research data on
teaching effectiveness
appeared – greatly
influenced the public
culture about schools’
effectiveness.
$$$$ and Achievement
For many, this was a
rationalization not to
spend more for
schools in lower
socio-economic
areas because it
would simply do no
good.
$$$$ and Achievement
Larry Hedges and
others* reexamined
Hanushek’s data
and found, instead,
overwhelming
evidence that
school funding had
a positive impact on
student
achievement.
Hedges stated that if
a school district
spent $500 more per
pupil wisely,
students would gain
an average of 25
percentile points
more on
achievement tests .
Evidence That $$$ Increases
Student Achievement
%ile Difference in 10th Grade.
Students’ Scores:
Effective Teachers
top 1/3 best teachers
Ineffective Teachers
lowest 1/3 teachers
Sept. ….Same Scores in Reading & Math…..
June
Above national
median
No growth
Haycock, K. “Good Teaching Matters… A Lot,” Thinking K-16,
3 (2), Washington, D.C: The Education Trust (Summer 1998).:
13
Evidence That $$$ Increases
Student Achievement
35%ile Difference in
Students’ Reading Scores:
Effective Teachers
Ineffective Teachers
(For 3 consecutive years)
• Grade 4
• Grade 5
• Grade 6
59%ile
60%ile
76%ile
42%ile
(similar study found a 49%ile point difference in Math)
Archer, J. (1998, February 18). Students’ fortune rests with assigned teacher. Education Week. Cited in
Haycock, K. (Summer 1998). Good teaching matters. How well-qualified teachers can close the gap
Thinking K-16 Vol. 3. No. 2 1-14. [Online}. Washington, DC: The Education Trust. Available:
http://www.edtrust.org
11
Evidence That $$$ Increases
Student Achievement
50+%ile Difference in
Students’ Math Scores:
Effective Teachers
Ineffective Teachers
(For 3 consecutive years)
• Grade 4
• Grade 5
• Grade 6
no difference -- no difference
83%ile
29%ile
Sanders, W.L. and Rivers, J.C. (1996, November). Cumulative and residual
effects of teachers on future student academic achievement. Knoxville:
University of Tennessee, Tennessee Value Added Assessment System
(TVAAS).
12
$$$ and Achievement
A study of more than 1,000 school
districts finds that every additional dollar
spent on more qualified teacher nets
greater improvements in student
achievement than any other school
resource.*
Money Does Matter
“Wealthier districts
tend to spend more
on education, and
when all else is held
constant, districts
with lower spending
have lower test
scores.” *
Quality Teachers are Essential
to Quality Learning
At the state level, full
certification & a major
in the field of teaching
are the most significant
predictors of student
achievement while the
lack of certified
teachers is the best
predictor of a lack of
student achievement.*
Quality Teachers are Essential
to Quality Learning, cont.
In the 50-state study,
Linda DarlingHammond points out
that teacher
preparation accounts
for 40-60% of the
variance in student
achievement after
accounting for student
demographics.*
Summary of School Finance
Misconception #3
 Decreased class size has increased school
expenses; schools must hire more teachers
 While teachers’ salaries have increased,
controlled for inflation, they have
not increased significantly
 Many older teachers are now at the top of their
salary scales so their pay is higher (although it
doesn’t buy more than 30 years ago)
 We are now educating students with special
learning needs, requiring more resources
MISCONCEPTION #4 – EDUCATOR SALARIES
ARE HIGH IN COMPARISON WITH SIMILAR
PROFESSIONS
(same level training & responsibility)
The Truth About
Teachers’ Salaries
• Teachers in the United
States work a 200-day
contract – or ten months
(the same months
students are in school).
• Teacher work hours
include more than time
actually teaching in their
classrooms.
• Preparing lessons
• Delivering instruction
• Setting up laboratory or
•
•
•
•
other learning activities
Grading students’ papers
Working after school
tutoring students
Studying their own
professional development
Participating in school
improvement activities
The Truth About
Teachers’ Salaries
A study by the University of
Wisconsin – Milwaukee found that
U.S. teachers work an average of
10.25 hours per day. *
Linda Darling Hammond: teachers
work 10-12 hours a day.
That is 2 1/4 hours longer than the
average eight-hour workday.
With the 40 contract plus the 12.5
weeks worth of “overtime” equals
a work year of 52.5 weeks.
Cost Employment Index
for 2001
Benefits
Wages & Salaries
Education
147.7
149.5
All
Professionals
160.4
152
Private/
White Collar
167.4
153.8
Source: http://www.aft.org/research/survey01/figures/figure11.9.html
Similarly Prepared Professions Offer
More Than Teaching
Individuals with the same
education as teachers can
enter careers that:
 Pay more initially and
over their careers
 Offer periodic monetary
bonuses
 Provide better financial
and health benefits
 Receive other “perks”
that teachers do not get
Entry Level Salary
Comparisons
Engineering
Computer Science
Math/Statistician
Business Admin.
Accounting
Liberal Arts
Teaching
$
$
$
$
$
$
$
50,033
49,749
49,548
41,892
40,779
37,143
28,986
Source: http://www.aft.org/research/survey01/figures/figure III-4.html.
Changes in Salaries
1991-2002
% Increase in Salaries
Engineering
30%
Accounting
38%
Statistician
50%
Liberal Arts
28%
Teaching
19%
Source: http://www.aft.org/research/survey01/figures/figure II-4.html.
Principal Salaries
• Principals’ salaries have
been, on average, at
least 50% more than the
average teacher salaries
since the 1987-88
school year.
• The variance in
principals’ salaries
depends on the school’s
size and location (rural,
suburban, or urban).
Salaries for
administrators,
controlled for
inflation, have
increased only
6.8% in the 12
years between
1987-88 and
1999-2000.
MISCONCEPTION #5 – THERE ARE TOO
MANY SCHOOL ADMINISTRATORS
Too Many Administrators?
There are more
administrators per
student than existed
fifty years ago. In
comparison with
other industries,
however, education
is a managementlean organization.
Today’s Schools Have More Leadership
& Management Responsibilities
• Transportation
• School safety
• Observe & conference
with teachers
• School improvement
planning
• Meeting with parents &
community members
• Coordinating the
school’s standardized
testing
• Special Education:
Coordinating &
addressing the referral,
identification, annual &
triennial review
processes; discipline
procedures
School Staff Employed by
Area
Principals/AP’s
1949-50
43,000
1999-2000
133,000
% of Educators
1949-50
3.3%
% of Educators
1999-2000
2.4%
Pupils/Staff Ratio
1949-50
582/1
Pupils/Staff Ratio
1999-2000
352/1
Teachers TA’s
Guidance
914,000 ------2,907,000 621,000 96,000
70.3%
----
51.7%
11.1%
27.5/1
----
16/1
75/1
---1.7%
---490/1
Administrative “Blob”?
Central office personnel
account for only 1.6
percent of all staff in school
districts.
If they were all fired, the
resulting savings would
allow teachers a 5% salary
increase & class size
reduction of one student.*
Administrative Blob?, cont.
Building level school
administrators
supervise more than
twice the number of
personnel than do the
typical managers in
manufacturing and
almost four times the
number in public
administration.*
Conclusion to Chapter 1
School finance misconceptions are part
of the popular culture. In fact, education
finance is both the context and the
driver for many contemporary cultural
issues.