Recent Adequacy Studies

There is no question that school finance adequacy will drive funding decisions for schools in the foreseeable future. The questions facing policymakers in the five states in SEDL's region and across the United States involve how to best determine an adequate level of funding in their state, and then determine how to pay for it.

The first state to face this issue head on was Wyoming. Faced with a court order requiring the state to define a proper education and fund it, consultants developed the professional judgment model. They next estimated the resources needed to meet that state's mix of desired educational goods and services, and devised a funding model to provide funding for each school district. Maryland relied on a combination of approaches to determine adequacy. Several years ago, Maryland policymakers decided to link funding to what they expected districts to accomplish. In order to determine adequate funding, they used the professional judgment and the successful district approaches. Those approaches produced two different funding levels.

 Maryland policymakers used the lower of the two amounts for the foundation-level funding. They then created a second tier to give school districts the latitude to raise money to reach the second level. In 2002, the legislature voted to increase education spending by $1.3 billion per year to provide an adequate education for all children, phasing in the increase over a six-year period. They also hiked the tax on cigarettes by 34 cents a package to help generate revenue to support increased spending. The cigarette tax hike largely funds the first two years of increased spending, but critics are asking how the state expects to continue to pay for the increased spending beyond the first two years. For their part, Maryland policymakers' like so many others in the country-hope that a lack of money does not serve as an excuse for minimal improvement in student achievement. They are also keeping their fingers crossed for an improved economy to help fund the last four years of their plan.

The importance of looking at multiple approaches has become obvious. In Kentucky, at least three adequacy studies have been conducted. All three recommended increased spending for education, with the evidence-based approach calling for the smallest increase and the professional judgment panels recommending the highest levels of spending. In New York, a combination of the successful school district and professional judgment approaches is being used.

The professional judgment panels have been populated with individuals from school districts that were determined to meet successful school/district criteria. Throughout the process, tremendous energy and time has been devoted to seeking public input with hopes that this public involvement will help garner support for the model that emerges. Preliminary results released in February 2004 suggest that the state needs an additional $7 billion to meet the adequacy standard established by the professional judgment panels, and as much as $13,000 per student (2001-02 level) in large urban school districts like New York City.

Arkansas has recently completed an evidence-based study of school funding adequacy. In this study, the consultants worked closely with a Legislative Committee to develop a resource-based model for funding schools. Before accepting the model, two large professional judgment panels were employed to advise the Legislature and the consultants about the adequacy of the model to enable students to meet the state's proficiency standards. In addition to estimating the costs of providing an adequate education, the Arkansas study also addressed reform of the teacher compensation system. The initial recommendations of the Joint Legislative Committee on Education Adequacy included substantial increases in teacher salaries in exchange for movement to a knowledge- and skills-based compensation system for teachers. At the time of publication, the Arkansas Legislature had been meeting in special session for two months to put a new funding formula in place. Their lack of progress led to missing a court-imposed January 1, 2004 deadline, and caused the state's supreme court to appoint two special masters who are to make recommendations regarding what should be done next.

Louisiana policymakers conducted an adequacy study in 2000, using the successful school district approach. The state board of elementary and secondary education is now considering whether to update the study with more recent financial data. Policymakers in that state are interested in revising their minimum teacher salary schedule and in learning more about the association between school district funding and student performance.

In New Mexico, the Legislature has had initial discussions about conducting an adequacy study following the implementation of a new three-tiered licensure/compensation system for teachers. At the present time, legislation is under consideration to look at the cost of unfunded mandates, but no specific action has been taken yet.

In Oklahoma, a task force has been studying school funding issues, but to date the Legislature has not been able to reach agreement on whether or not to conduct an adequacy study.

Facing a new school finance lawsuit, Texas has recently begun a major cost function study while at the same time, a number of legislative committees, education interest groups, and other interested parties have established alternative studies or approaches. All of this is expected to come to a head early in 2004 when the studies are complete.

Next Page: What Does All this Mean for Policymakers?

Published in Insights on Educational Policy, Practice, and Research Number 16, March 2004, School Finance Adequacy: The State Role