Professional Judgment Approach
In the professional judgment approach, a group of professional educators are brought together to identify the resources needed in a prototype school that, in their professional judgment, will enable its students to meet the state's proficiency standards. The educators are asked to describe the resources or inputs (the number of teachers and aides, the type of supplies, etc.) needed to achieve an adequate education. These experts are also asked to help identify the additional resources needed to provide an adequate education to special populations of students, such as English language learners and special education students. The costs of providing these resources for all schools in a state-including adjustments for different characteristics of schools and students-are then estimated to determine how much is needed to fund an adequate educational program statewide. Reliably estimating the costs of an adequate education depends on the composition of the team of experts and on the accuracy of their recommendations (Reschovsky & Imazeki, 2000, p. 4). A number of states, including Kentucky, Maine, Maryland, Montana, Nebraska, Oregon, South Carolina, Wisconsin, and Wyoming, have used the professional judgment approach.
The advantages of this approach are that it is easy to explain to the public and the resulting estimates are based on the judgments of professional educators with experience in educating students. The approach also makes it easy to adjust for local characteristics and issues such as special student needs and geographic price variations (Odden, 2003).
Without some parameters for the mix of resources to be established, however, the models generated by the professional judgment approach may be very expensive. Other disadvantages stem from the potential subjectiveness of the process. For example, it is impossible to ensure that the team members have no conflict of interest that would lead them to make judgments that could be advantageous in their own situations (National Research Council, 1999).
Successful School District Approach
A second option is the successful school district approach where policymakers study districts that have fulfilled state expectations. Spending levels in those districts are used to calculate a base cost for adequate spending per pupil-the cost of serving a student with no special needs. Adjustments for student and district characteristics are then made. The key to using this approach is being able to determine the differences in how unsuccessful districts and successful districts spend their money. This approach is easy to explain to the public and it makes intrinsic sense as a way to specify an adequate level of resources. However, problems can arise in setting the criteria for the sample of districts identified as successful. School finance consultant John Augenblick noted that in Ohio, where he conducted a study using this approach, only eight of the state's 612 districts met the established criteria, which analyzed both inputs and outcomes to determine successful districts. However, when only the criteria for outcomes were applied, 100 districts met the criteria (Augenblick, 2002).
According to Odden (2003), because atypical districts are usually eliminated when using this approach, the result is often based on average-sized nonmetropolitan districts that are demographically homogeneous and spend below the state average. Finally, the successful school district approach does not specify a way to make adjustments for characteristics of individual districts, leading to potential disagreements over how to meet the needs of many students.
Cost Function Approach
A third approach is the econometric or cost function approach, which relies on statistical analysis to determine what inputs are needed to produce a certain level of outcomes. In other words, the cost function attempts to estimate how much money would be needed to attain a certain level of student performance, while controlling for the characteristics of the district and its students. While this approach has a great deal of appeal among economists, it is difficult to explain to policymakers and the general public, and it becomes very complex mathematically due to the number of inputs. However, a number of important insights about relationships between inputs and outputs may be gleaned from cost function analyses. These insights can be used to inform policy and help determine the magnitude of adjustments for student and district characteristics.
A fourth method is the evidence based approach. It has been used in Arkansas, Kentucky, and New Jersey. As used today, the evidence-based approach relies on current educational research to identify the resources needed for a prototypical school to meet a state's student performance benchmarks. Once identified, those specifications are subject to the "professional judgment" of officials in that state to validate the research-based recommendations. Thus modified, the costs of the prototypical school designs are estimated and applied to the actual schools in that state. Adjustments are made for low-income children, children with disabilities, and children with limited English proficiency.
The major advantage of this approach is its reliance on the growing research base about what programs and models have been successful in improving student learning. It uses what we know about successful schools to develop a model that can be applied to all schools and districts in a state. Its major drawback lies in the extent that research-based models won't work in absolutely every situation. In other words, using the evidence based approach may not lead to models that will improve student performance in all situations-in reality a limitation that can be attributed to all four approaches.