Commentary: Closing the School Gap

If no child is to be left behind, we must overhaul funding

By William C. Symonds

Half a century after the U.S. Supreme Court struck down racial segregation in education, it's now economic segregation that plagues the nation's public schools. From Chicago to Baltimore and beyond, children in leafy suburbs benefit from better teachers, nicer facilities, and more resources than do kids in poor city neighborhoods. Spending discrepancies are one reason that, by the eighth grade, poor students are three years behind middle-class children in reading and math, according to the Education Trust, a nonprofit group in Washington, D.C. No wonder well-heeled students are seven times as likely to earn a college degree. Disparities among the states are even greater: Connecticut and Wisconsin spend 50% more per student than California and Mississippi, even after adjusting for regional cost differences.

The nation faces mounting pressure from several quarters to close these funding gaps. For more than two decades, lawsuits to equalize school funding have been wending their way through the courts in 44 states. So far, the plaintiffs have scored victories in about half the states, forcing legislatures to increase funding for poor schools. The movement received a boost in January when President George W. Bush signed the No Child Left Behind Act. Its aim: to ensure that, by 2014, all American students can pass tests showing they have reached standards of proficiency drawn up by each state.

But this lofty goal will remain a dream without an overhaul of the anachronistic approach the U.S. currently takes to school financing. The system, set up in the 19th century when the country had no federal income tax, is still largely funded by local property taxes that allow rich communities to spend more than their poorer counterparts.

Redesigning the system will require at least three major reforms. First, states must define exactly what resources the schools in low-income areas need to reach the state's standards. This approach, known as adequacy, is already being adopted by several states.

Steps two and three are more challenging: getting states to offset inadequate local taxes by funneling funds to low-income schools; and tapping Washington to help equalize the tremendous discrepancies among the states. "Among industrialized nations, the U.S. is unique in having an educational system that provides the least resources for students with the greatest needs," says Michael A. Rebell, executive director of the Campaign for Fiscal Equity Inc., which sued New York State on behalf of New York City schools.

The concept of funding adequacy evolved after numerous state court battles over inequities between rich and poor districts. Although many courts found the differences to be illegal, equal- funding solutions often created as many problems as they attempted to solve. The adequacy notion developed after states began drawing up their own education standards. Courts then started forcing states to ensure that every district had funds to meet the standard. The Kentucky Supreme Court was among the first to embrace the approach--in 1989, it ruled that the state would have to create an entirely new structure to provide more resources to poor Appalachian districts. Mississippi, Ohio, and Wyoming, among others, have since embarked on adequacy reforms.

In practice, though, adequacy may actually turn out to mean spending more on poor kids than on the rich. This May, after a study of Maryland's sub-par schools, the state moved to lift education spending by some 75% by 2008, with much of the new money earmarked for disadvantaged students. The decision came after a state commission estimated that it would cost more than twice what's spent on the average child to meet the needs of low-income and learning-disabled kids, as well as those with limited English skills. It turns out, says John Augenblick, a leading adequacy expert who advised the commission, that "we have to spend a lot more in low-income areas."

Finding the extra money is hard. If it's politically impossible to raise enough funds by boosting property taxes, then the next step is the state legislature. Nationally, states pay 46% of the cost of schools--about the same as local communities--with federal funds making up the rest. But to fund its new law, Maryland needs to dun taxpayers across the state an extra $1.3 billion a year. So state taxes will jump to about half of the average school district's funds, up from 41% today. It's a big shift away from locally generated revenue--one that the courts have been increasingly demanding nationally. "Property taxes are terrific at getting people to pay attention to their local schools, but they could not be worse for redistributing money between rich and poor districts," says Caroline M. Hoxby, a Harvard University professor who specializes in the economics of education.

Progress on better funding mechanisms hasn't spread quickly. Ohio has spent years battling the state Supreme Court's order to spend $1 billion to fix a system it found to be unconstitutional. Meanwhile, some schools in Columbus hold class in temporary trailers; wealthier schools enjoy beautiful facilities and extras such as musical instruments.

Similarly, efforts to rebuild New York City's painfully deficient schools were dealt a setback in June. An appellate court ruled that the state constitution required the city to provide no more than an 8th-grade education. Although the decision may be reversed by the state's highest court, city kids are meanwhile stuck with a system that suffers from overcrowding, inexperienced teachers, and abysmal facilities.

Perhaps the most difficult step will be to equalize funding across the 50 states. Bush's education act raises Washington's annual school spending by $7 billion, to $26 billion. But putting all state education spending on the same footing could cost as much as $40 billion extra a year, according to Allan Odden, an education policy professor at the University of Wisconsin.

To be sure, more money doesn't guarantee improved performance. Spending in the District of Columbia, for example, is among the nation's highest, yet the results are among the worst. Extra funds can be squandered if not targeted to real reforms, such as smaller classes.

Right now is hardly a good time to talk about extra money, given yawning federal and state deficits. But just as separate-but-equal schools held back generations of black children, so too will today's funding inequities hold back poor children--a disproportionate number of whom are nonwhite. Other countries avoid such problems by funding schools from the national level. The U.S. won't follow suit. But without sweeping change, performance will continue to depend as much on where children live as on their ability and effort.

Symonds writes about education issues from Boston.

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