Last week, I wrote that “I’m not one of those people who believe that “money doesn’t matter” in education. That’s absurd; money matters a great deal, and there are plenty of schools that don’t get their fair share.” Ken DeRosa responded by saying:
The “money doesn’t matter” meme is not as absurd as Kevin is suggesting, provided that it’s qualified with “at today’s funding levels.” At today’s funding levels, money doesn’t matter. The correlation between school expenditures and student performance is very low to non-existent. The fact that some schools “don’t get their fair share” is irrelevant. The important question is whether schools are getting sufficient funding to educate their students. No one knows the answer to that question. What I do know is that many schools with low funding outperform many schools with much higher funding.
There are several issues here that need unpacking, so let me take them in turn. First, any claims that money doesn’t matter in education, at current spending levels or otherwise, have to overcome some obvious and very powerful commonsense arguments to the contrary. There is, for example, a long-established multi-billion dollar private market for K-12 education characterized by significant price variance. Here in DC you can spend a relatively modest amount of money to send your kids to Catholic school or several times that for tony private academies. Presumably the people forking over $31,428 per year (!) for St. Albans aren’t idiots who are getting ripped off, but rather smart, well-educated consumers who are getting something for their money besides just peer effects.
More generally, it’s common to see per-student spending differences of two-to-one or more in most states. In fact, Ken cites some examples in his post. Imagine you’re the parent of a student in one of the schools on the good side of that ratio. You pick up the paper one morning and read that your local school district budget will be slashed by 50% next year, bringing it down to the level of the lowest-spending districts in your state. Do you (A) Panic, on the grounds that this will have a devastating effect on your child’s education; or (B) Say to yourself “Well, a meta-analysis of multivariate school funding /outcome analyses reveals inconsistent results and small r-square values, so I’m sure little Johnny will be fine,” and go back to drinking your coffee?
You also can’t determine “sufficient” funding for a given school district without considering funding for other school districts, because most school funding is used to purchase teachers for whom districts compete. Virginia, for example, has a state school funding formula whereby school districts are required to raise enough local property tax money to meet a “foundation”–read, “sufficient”–funding level. For nearby Fairfax County, that amount is $631 million (Fairfax is the 13th largest school district in America). Fairfax then voluntarily raises another $729 million, which it uses to attract good teachers, which makes people want to live in Fairfax, which leads to high property values, which is one of the reasons Fairfax is able to raise an extra three-quarters of a billion dollars per year for education in the first place. The point being, in a competitive labor market there’s no absolute amount of money schools need to provide a good education–if they get much less than everyone else, they are, by definition, screwed.
That said, it’s reasonable to believe that schools are insufficiently sensitive to differences in resources. When you give them more money, performance doesn’t improve as much as it should. I think this is the proper conclusion to draw from the numbers and studies Ken cites. The real question, then, is what are the implications of this? My take is that (A) We need to pursue policies designed to increase resource sensitivity and do a better job with the money we have, which include but aren’t limited to well-designed accountability systems and various reforms involving teacher recruitment, compensation, school leadership, etc. and (B) Any significant new infusions of dollars from court orders, political initiatives, etc., have to be seen as rare opportunities to leverage the reforms needed to increase efficiency, resource sensitivity, etc. Both taxpayers and schoolchildren deserve more than they’re getting from school money today.
What I don’t believe is that resource insensitivity is an argument against fixing gross inequities in school funding levels. If you’ve got a school system suffering from the double whammy of not enough money, badly spent, the best reform strategy is, per above, one that combines new resources with systemic reform. The problem with the “money doesn’t matter” formulation is that it’s been hijacked by privatizers and anti-government zealots (to be clear, I’m not putting Ken in this camp) who use it as an excuse to promote reckless tax cuts and disinvestment in public education. (For more on these issues, see this interview that I conducted with economist Eric Hanushek a couple of years ago.)