School reforms revive decades-old debate on impact of money on education outcomes


Louis Freedberg

The dramatic transformation of how California’s schools are funded is raising one of the most complex and challenging questions on the education policy landscape: Will additional money improve student academic outcomes?

The debate has been raging for decades – at least back to the landmark 1966 Coleman Report, a massive study headed by sociologist James Coleman for the U.S. Office of Education, which concluded that external factors such as parental income and education and resources in the home had a far greater impact on student achievement than levels of funding and any number of school programs.

The new funding plan championed by Gov. Jerry Brown and approved by the Legislature last summer will funnel additional money to school districts and charter schools based on the number of low-income students, English learners and foster children they serve. The extra funds are based on the argument that it costs more money to educate children from disadvantaged backgrounds, and with additional support, students will in the long run do better.

However, the school funding plan does not specify where or how districts must spend their funds. In fact, a central feature of the plan is to give school districts unprecedented local control over the money they receive from the state, in the belief that they know better than Sacramento what approaches will work best for their children.

The pressure will now be on those school districts to show that the infusion of funds will contribute to better academic outcomes.

Relieved of numerous state mandates known as “categorical programs,” school districts now have  greater freedom to decide how to spend additional state funds they will receive.  They will have a choice to spend their funds in any number of ways, such as expanding preschool classes, reducing K-3 class sizes, hiring more counselors or teacher aides, repairing aging buildings, giving cost-of-living increases to teachers, or rehiring staff laid off during the brutal budget cuts they were forced to make over the past five years.

However, research shows there is a complex, and uncertain, relationship between how much money a district, school or state spends and how well their students do on standardized tests. The most comprehensive and well-regarded study of school finance in California, called Getting Down to Facts, headed by Stanford University professor Susanna Loeb, concluded that “the relationship between dollars and student achievement in California is so uncertain that it cannot be used to gauge the potential effect of resources on student outcomes.”

The Getting Down to Facts project furthermore said there was “essentially no relationship” between how much California spent on its students and a school’s Academic Performance Index, which until now has been the main way schools’ effectiveness in improving academic outcomes has been measured. “If additional dollars were inserted in the current system, there would be no reason to expect substantial increases in student outcomes related to state goals,” Loeb and her colleagues concluded in their 2007 paper.

On the other hand, Rutgers University Professor Bruce Baker, in a 2012 paper titled Revisiting the Age Old Question: Does Money Matter in Education? published by the Albert Shanker Institute contends that “on average, aggregate measures of per pupil spending are positively associated with improved or higher student outcomes.”

Another Stanford professor Linda Darling-Hammond also argues that money does make a difference. Research, she says, shows clearly that “more equitable allocations of school resources could substantially reduce the failure rates of students of color and low-income students on the high-stakes measures that states have chosen to hold students and schools accountable.”

But in her 2010 book The Flat World and Education: How America’s Commitment to Equity Will Determine Our Future, Darling-Hammond acknowledged that “not all kinds of spending improves student achievement.” Rather, it must be targeted in areas that research shows have the greatest impact on student achievement – ensuring that they have effective teachers. Citing a University of Chicago report that looked at 60 studies, Darling-Hammond, who is also chair of the California Commission on Teacher Credentialing, noted that “spending on teacher education was found to be the most productive investment for schools, outstripping the effect of teacher experience and reduced pupil-teacher ratios.”

As local educators try to figure out how best to spend the funds at their disposal, it would make sense for them to look at what investments the most compelling research shows will result in the best academic outcomes and target their funds accordingly.

It is up to those who who know the research best – education researchers themselves – to sift through the research and provide guidance to local districts about what investments of funds are likely to yield the greatest educational returns. This will be critically important information not only for local school leaders, but also for parents, school personnel and community members who have been given an expanded role in providing input to school boards on how to spend the additional state funds they will receive.

For these latest reforms to work, a key will be to target funds where they will make the most difference – rather than spend them in a scattershot fashion in the hope that they will produce results, with no guarantees of success.

Filed under: Commentary, Local Control Funding Formula, School Finance



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9 Responses to “School reforms revive decades-old debate on impact of money on education outcomes”

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  1. Andrew on Dec 5, 2013 at 6:14 am12/5/2013 6:14 am

    • 000

    Good analysis, EL.

    If I spend more money on my cars, will automotive outcomes be improved?

    What ultimate answer do you want? I can give you any ultimate blanket “yes” or “no” answer you want and back it up. Spending money to fix the broken windshield won’t increase 0-60 acceleration stats. It will improve safety.

    Whether spending money improves automotive outcomes depends on what I spend the money on. Depends on what outcomes I am looking at, and testing. MPG? MPH? Reliability? Comfort? Appearance? Acceleration? Handling? Safety and crashworthiness? Some are hard to test objectively. Depends on what car I have. How much deferred maintenance it has and how it was maintained. Depends on how much potential for improvement it has. How much maintenance it needs. Depends on the(yes)innate mechanical aptitude of the mechanic I’ve hired and also how well he was trained, how experienced he is, how overworked he is, and whether he is on the verge of quitting. And how easily he is replaced and with whom, and how readily his replacement can come up to speed.

    Bottom line is that I am going to have to spend a certain basic minimum of money if I want safe, comfortable reliable transportation that gets me where I want to go and if I don’t spend enough, I won’t get to go reliably and comfortably, if at all. And if I want higher automotive performance, I am going to have to spend more money and spend it wisely. Nobody seems to question these basic premises with cars. Why do they question them with kids? Are kids less complex?

  2. el on Dec 4, 2013 at 1:33 pm12/4/2013 1:33 pm

    • 000

    I don’t think it’s any surprise that not all spending directly and immediately improves student achievement.

    That doesn’t mean that the spending wasn’t valuable or necessary.

    Replacing the roof before it leaks probably won’t improve student achievement. Replacing the roof after it has been leaking for a few years probably will.

    Thus, obviously, replacing the roof when it is merely at the end of its expected lifespan is a waste of money. Right?

    There is a whole host of necessary basics of school infrastructure that we’ve been shorting for years, not just in buildings but in things like librarians and counselors.

    And outcomes are more than the test scores… probably not all the studies listed here even mean the same thing by “student achievement.”

    If the student is scoring proficient at math, does it matter if that student went on to the community college and dropped out versus attending and graduating from MIT in terms of student outcome? As far as I know, no one is tracking that kind of information… and thus it’s probably not a coincidence that the staff position most tasked with that has been cut so ruthlessly from California schools.

    Yes, I want a great teacher in front of every classroom. Would be swell if the teaching profession was paid at a level commensurate with the skill we expect and the training and experience they collect. I suspect they’d also appreciate air-conditioned classrooms, adequate supplies, well-stocked libraries, clean and modernized buildings, and good aide support. Call me when we’ve funded schools at a level adequate to produce all this – then we can talk about whether “more” money would affect achievement.

  3. David Patterson on Dec 3, 2013 at 4:44 pm12/3/2013 4:44 pm

    • 000

    As I read Mr. Freedberg’s essay and the initial three comments I think the key question is a little different. He asks “Will additional money improve student academic outcomes?” I think the key question is “Are local school boards and superintendents, given new and substantial control over the use of the funds they receive, knowledgeable, wise, courageous and bold enough to use the funds and the autonomy in ways that improve student performance in their communities.”

    The danger of averages is at work here. Much educational research is hampered by the fact that circumstances and implementation matters. A certain policy, rule or program may, statewide, produce a range of impacts. The reality is that a policy, rule or program may allow/empower a district, a group of schools or even a single school in a community to be significantly more successful with the children they serve. However, many others, for reasons complicated and disparate may not be successful or even be harmed.

    Mr. Freedberg believes that it up to those who know the research best to provide guidance about what investments of funds are most likely to yield the greatest educational returns. I agree that this is important and valuable. However, the effectiveness of local vision and implementation is the missing ingredient. A much harder task is to address the stifling grip of the status quo and the lack of local commitment and courage to do better, one community at a time. In this new era of local control, how can communities get and empower their boards to be knowledgeable, wise, courageous and bold?

  4. Gary Ravani on Dec 3, 2013 at 3:21 pm12/3/2013 3:21 pm

    • 000

    I would suggest a misreading of Coleman here. He didn’t say school spending was not important. He said, of the various factors that are important, spending does not have the most impact on measured achievement.

    It is interesting that Coleman is always dragged out in these discussions (I do it myself). Coleman told Congress that a fundamental factor in the low achievement of poor and minority students was school segregation. His report touched off the busing movement and “white flight” from many school systems. Today, it is well established, schools are likely more segregated then they were in Colman’s time. We often here the misstatement of Coleman’s “assertions” about spending and how that might affect policy, but when it comes to doing something about segregation and how that should affect policy all you hear is the chirping of the crickets.

    If one reads Darling-Hammond’s “The Flat World…” closely there are any number of references to the importance of small class sizes to student achievement. And her reference to “teacher education” is not simply about teacher preparation or academic preparation it is about the ongoing need for high quality professional learning and the time to collaborate to make sense of how to implement best practices. Her statement: “We are not going to fire our way to Finland,” not only sums up what we should be doing, supporting teacher professional development, but what we should not be doing, finding new and easier ways to fire teachers.

    About the CA specific attempts at “reform” over the last decade or so I think the section title in her book (p. 146) captures it best: “The Case of California: Where Mismanagement Meets Aggressive Neglect.” SPI Tom Torlakson is doing much to reverse this trend, but he needs strong support.

  5. Paul Andersen on Dec 3, 2013 at 11:31 am12/3/2013 11:31 am

    • 000

    It’s like the old law of diminishing returns…A classroom of students with no teacher probably won’t perform that well. Give that classroom a teacher and they will perform better. Give them a teacher who is properly prepared and they may perform even better. But each incremental change does not have the impact that the initial change had. Each successive step has less and less impact and marginal impact begins to equate to marginal cost! We don’t get the same impact for the last dollars spent versus the first and furthermore to obtain an impact may require more dollars than usual!!


    • Julia Peacock on Dec 4, 2013 at 10:52 am12/4/2013 10:52 am

      • 000

      This point helps to explain why, when NCLB was first implemented, many districts saw great increases in test score performance, but in the years that followed, showed very little, if any improvement. The first jump had the most impact, but successive jumps were smaller and raised more questions than they did answers. Once many of the NCLB guidelines were implemented and working, whether you agree with the program as a whole or not, the progress leveled off.

  6. navigio on Dec 2, 2013 at 10:00 pm12/2/2013 10:00 pm

    • 000

    Interesting. If this is true, why did those more affluent school districts raise such a holler when Brown was going to divert more of their funding to poorer districts?


    • Paul Muench on Dec 2, 2013 at 11:47 pm12/2/2013 11:47 pm

      • 000

      If one feels that only the paranoid survive, then I guess it demands one be paranoid. Or possibly a thousand other reasons that have nothing to do with the outcomes we’ve measured so far.

    • el on Dec 4, 2013 at 11:04 am12/4/2013 11:04 am

      • 000

      I love you, navigio. :-)

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