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Studies Compare School Funding, Student Achievement

May 19, 2011
SHSU Media Contact: Jennifer Gauntt

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Slate and Jones

As the Texas Legislature prepares to vote on a budget that could cut billions of dollars in public education funding, studies by Sam Houston State education professors find that these actions could prove the idiom a “penny-wise, pound-foolish.”

Educational leadership and counseling professor John R. Slate and associate professor Timothy B. Jones examined instructional expenditure ratios in relation to student achievement for four reports, finding the relationship between funding and achievements affects a school's ability to reduce the achievement gaps, while minority populations, including lower socioeconomic populations, “stand to lose the most.” Doctoral student Maureen Cullen contributed to one study.

They did so by examining the idea of a “65 Percent Rule,” first advocated by Overstock.com founder Patrick Byrne who in 2005 suggested that schools reallocate their resources to increase classroom spending from 61.5 percent of the weighted average daily attendance money given to them by the state to 65 percent, according to Jones, a school finance expert who served as a fiscal officer before becoming a professor.

“It was the notion that of the money sent to school districts, 65 percent of it should be spent on instruction, and instruction as very narrowly defined by the National Center for Education Statistics,” Slate said, adding that this included only the teacher and things directly related to the classroom.

The idea found favor after Byrne discussed the method on ABC News with commentator George Will.

“Within literally months, 18 states had adopted 65 percent rules,” Jones said. “In our state, Gov. Perry didn’t wait to have it adopted; he issued an executive order to implement it. But the thing of it was that there was not any research to say that there was any relationship between the 65 percent and school improvement.

“Byrne’s big idea about the political process was that we don’t need more money in education, we just need to spend more of our money on instruction,” Jones said. "He arbitrarily said 65 percent seems to be a good number, so let’s just spend 65 percent of the money that they’re allocated on instruction in every school and every school district and then we’ll have tons more money to give teachers raises.”

This was not only problematic in that it excluded support services such as counseling and libraries that aid in the instructional process, but implied that school districts had plenty of money but were just wasteful with it, according to Slate.

In an effort to lend credibility to Byrne’s rule, a Standard and Poor’s study was conducted within a year of its adoption, solely sampling student performance nationwide based on various state assessments and finding that there was “absolutely no relationship between 65 percent and high standard performance based on school assessments,” Jones said.

Jones and a colleague at Texas A&M Commerce, Wayne Bingham, replicated the study, utilizing Texas Assessment of Knowledge and Skills test results for every school district in the state, as well as SAT scores, and found that the 65 Percent Rule didn’t hold much bearing when it came to standard performance, he said.

When Slate became involved in the project, he began asking if there was actually a “line of demarcation” for a percentage of money spent that would impact student achievement.

“Then he added another really important element in my view, because it fits into all the Closing the Gaps legislation, and that is if there is a differing percentage over one ethnicity over another or socioeconomic status over another or any one of a number of at-risk-associated population, and the picture started to change,” Jones said.

Using the same data as in Jones’s study, the two disaggregated the student population, examining populations on racial groups, college readiness, TAKS scores and charter school expenditures.

“We formed three groups based on how they spent their instructional expenditures,” Slate said. “We had a group of school districts that did spend 65 percent or above; we had a group that was close, within 5 percent; then we had a large group of school districts that were under the 65 percent figure. How they can do that when the state mandate was 65 percent, I don’t know, but they did.

“It turns out that at some percentages, all populations suffer,” he said. “We saw that at the 65 percent, but we really saw it at the 60 percent level. For the districts that fell below 60 percent, it didn’t matter what population you came from, you were more likely to perform lower than those that were above 60.”

This, perhaps, is why the rule was repealed in Texas in 2009, according to Slate.

“The achievement gap is very, very strong between those groups,” he said. “In Texas we have accountability ratings—Exemplary, for the best, to Academically Unacceptable—and the Academically Unacceptable school districts, for the most part, had the lowest instructional expenditures ratio average. Exemplary school districts spent more money on instructional expenditures. Below 60 percent, there were real issues; above 60 percent, is better; above 65, what we found, was even better.”

“The interesting part of that, too, is that had the original impetus, using all of the journalistic power that George Will commands, been 60 percent, this would have changed the Standard and Poor’s study and it could very well have made a huge policy impact on at least a dozen states because it does look like 60 percent holds up pretty well,” Jones said. “In fact, the districts that we looked at below that 60 percent tell a pretty compelling story.”

This is also true of charter schools, part of a third study Slate conducted, whose “averages were much less than 65 percent and their achievement scores were, in every case, lower than the traditional schools,” he said.

Jones continued that because charter schools can’t levy taxes and have fewer funds to work with when considering overhead costs traditional schools aren’t faced with, he doesn’t “know how mathematically they can get the 65 percent and still have the lights on.”

Slate said they are not trying to imply through these studies that school districts are mismanaging or wasting money but want to show that the percentage of a budget spent on instructional expenditures does matter.

“Areas such as counseling or libraries are important because without sufficient support services you’re likely to have increased drop-out rate and other issues,” Slate said. “If counseling and library functions were included, we might actually have more evidence that 70 percent would be a minimum, but we don’t really know because they are related to instruction but aren’t included in the data available.”

Jones said he thinks “if policy-makers understood these data better, as opposed to seeing cutting education as a political hot-button issue, the last thing we would be cutting is money funneled to teachers, because teachers are the biggest expenditure in that formula under instruction.”

These massive funding cuts could complicate the matter further.

While Slate and Jones recommended that school districts not spending at least 60 percent in instructional expenditures reexamine their budgets, that figure is based on the amount of money districts currently receive, and if cuts are enacted that figure could increase to 70 or 75 percent in order to have the same effect, Slate said.

“We have some real concerns about the total amount of dollars the school would receive,” Slate said. “The academic achievement gap, which is already very evident now, could increase (with decrease of funds based on legislative action). In Texas, with Caucasians no longer being the majority, and as we get more minorities not being college ready and not graduating high school, there’s an economic issue.”

Because of the complicated nature of Texas’s funding formulas, or where the state appropriates money, it is difficult for anyone to understand the issues that surround them, which isn’t good for anybody, Jones said.

“We want to have funding formulas that reflect the difference in variations in that cost. It’s more expensive to educate a child in a school that is built in an expensive area because everything about the building is more expensive than it is someone in rural, east Texas,” he said. “Bigger isn’t necessarily cheaper; small schools are the most expensive to operate.”

“All of those things factor into what we call WADA, weighted average daily attendance, because all of those things count if you really want to realistically be able to compare what it costs to educate a child in Conroe versus Amarillo or an urban environment versus a rural environment,” Jones continued. “Transportation in West Texas, for example, is astronomical. It is not at all unusual for a child to have a 60-mile bus ride a day. Add to that a 71-passenger bus, at these gas prices, running every day, with fewer passengers because the students are more sporadically located, and you can just imagine what it would cost to fuel them. There are kids in urban areas who have an hour ride every day. All of those things affect what it costs to educate.”

But both maintain that not educating students is a lot more expensive, particularly when you consider that today the state of Texas pays $88,000 a year to incarcerate a juvenile, compared to the average $8,500 a year it costs to educate them.

“Just look at how much educating we could do for far less money than the state pays to incarcerate them,” Jones said.


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