The Education Gadfly Weekly

Right on schedule, district officials, driven by self-interest, are airing their grievances over Governor Kasich’s school-funding proposal. Media outlets are encouraging the “winners and losers” storyline by showing funding increases and decreases for the districts in their areas.

As the policy debate on school funding gets heated—and leaves others “puzzled”—we offer three key points to help clear the air.

Point #1: The amount of overall public funding for districts is often very generous—which would be a surprise to many taxpayers.

To hear some groups tell it, public schools are grossly “underfunded.” But according to the National Center for Education Statistics, Ohio spent $13,063 per student in 2010–11—significantly more than the national average ($11,948 per student).[1] Some Ohio districts spend more than others, of course, reflecting differences in operating conditions, tax bases, and student needs. According to the Ohio Department of Education’s Cupp Report, Ohio school districts spent anywhere from just over $6,000 per student to $20,000 per student in 2012–13. These statistics include all three major streams of public funding for schools—local, state, and federal funds.

Interestingly, surveys find that the public routinely underestimates the amount spent on education. A 2014 poll conducted by Education Next/PEPG asked respondents to estimate their district’s expenditures: On average, respondents guessed $6,490 per student; but in reality, their districts spent nearly twice as much. Accurate information about districts’ spending is paramount, and deliberate mis-reporting is utterly appalling. Ohioans are best served when they check out credible sources like the Cupp Reports, their district report cards, or their districts’ financial statements.

Point #2: The state funding formula provides more aid to districts with the greatest need—as it should.

The funding formula is the lever that Ohio uses to drive state funding to districts with the greatest need. Like most states, Ohio allocates the bulk of state funds to districts via the equivalent of block grants, which are based on a formula. In Ohio, the key variables that determine the amount of state aid are a district’s property values and household incomes—crucial indicators of whether residents can amply support schools through local contributions. Meanwhile, Ohio’s funding formula also recognizes the enrollment of a district, as well as the fact that some districts have more special-needs students who require additional support.

Overall, the state’s funding formula is a sensible arrangement (although one could imagine alternate ways of allocating aid, such as driving funds to schools directly, without a district pass-through). While funding changes can create the illusion of “winner” and “loser” districts, in reality, they are due to the nature of the formula itself (and any changes made to it—Governor Kasich’s funding proposal tweaks the formula, but on the whole, it is largely similar to the formula used in FY 2014 and FY15). And rightly so: Ohio’s formula recognizes that districts fluctuate over time; student enrollment changes, along with the mix of students, and so does a district’s wealth.

The measure of a successful funding formula isn’t whether each and every district receives the same number of dollars. Rather, an effective formula ensures that limited state funds are fairly allocated to those in the greatest need. In the end, there are rational reasons why some districts receive more or less state aid in one budget cycle versus another.

Point #3: Funding caps and guarantees “short-circuit” the formula—and they should be ushered out.

For years, Ohio’s funding policy has included a wrinkle that distorts the foundation funding formula: caps and guarantees. Ohio’s budget director Timothy Keen told the House Finance Committee in testimony earlier this month that the “guarantee short-circuits the formula.” He’s absolutely right. But what are these caps and guarantees?

Guarantees (a.k.a. “temporary transitional aid”) set a binding floor on how much a district receives through the funding formula. It’s something like the minimum wage. In the case of Ohio’s current funding formula, the guarantee floor is based on districts’ prior-year foundation funding amount. Consequently, districts are ensured that they won’t receive less state funding than the previous year.

Consider a district that lost one hundred students in the last two years. Holding other factors constant, such a district would probably lose state aid under the foundation formula (as it should), and it might be a fairly significant amount. But the guarantee effectively picks up the tab on the lost state aid associated with enrollment losses. Thus, in this case, the state helps to fund “phantom students.” So while the guarantee can protect districts from the fiscal pain of enrollment decline, it also ignores the logic behind the state’s own funding formula and, worse still, shields districts from having to make hard decisions.

Caps are the opposite of the guarantee. They fix a ceiling on how much a district’s foundation funding can increase year over year. It’s like rent control, which sets a ceiling on the price a landlord may charge. Under Ohio’s district funding formula, a district with a growing enrollment, for example, might be entitled to a big state-funding increase. But the cap limits that increase in funding, effectively depriving districts of funding for students they educate.[2]

The overall fiscal effect of the guarantees and caps: In the 2014 fiscal year, Ohio allocated more than $187 million in guarantee funds to two hundred Ohio districts while denying $893 million to 341 districts because of the cap.

Governor Kasich’s budget proposal makes some adjustments to reduce the effect of caps and guarantees. The projected result of the governor’s plan would allocate roughly $165 million in guarantee funding while withholding $588 million to districts via caps in FY 2016. The projected fiscal effect of caps and guarantees would decline even more in FY 2017. The legislature should support the governor’s effort to phase out the cap and guarantee—or better yet, it could take even more aggressive steps. If they were removed, policymakers would get a clearer idea of whether the formula is working as intended, which may better ensure the fair allocation of state aid.

So there you have it. Let’s take a break from the school funding rhetoric and keep these three simple ideas about school funding in mind: (1) Ohioans invest quite a lot in public schools when all funding streams—state, local, federal—are considered; (2) Ohio’s funding formula drives state funding to districts that need it most; and (3) Ohio’s cap-and-guarantee policy continues to circumvent the funding formula.

With all the attention that’s focused on teachers, principals must feel like the neglected stepchild of education reform. Evaluations, tenure, and the lackluster performance of teacher prep programs are all hot reform topics, and there’s no shortage of books and articles that obsess over all things teacher-relate. But what about principals? School leaders are responsible for nearly everything that happens in a school—from creating a positive culture and tracking data to evaluating instruction and hiring (or sometimes firing) the teachers who most affect student outcomes.

Research points to the challenges of recruiting and selecting effective principals. Most principals are chosen from employees who already work for the district. This isn’t a problem per se, except that districts often do a poor job of building skills in and smoothing the transition for those they select. Add to that the other hallmarks of the job, such as high pressure and low compensation, and it’s easy to understand why it’s so hard to find great talent.

This bleak picture begs the question: Is anyone doing it right?

A recent piece in Education Week looks at KIPP's principal training, which boasts “real-world practice” for its participants. One of KIPP’s six programs, the Fisher Fellowship, is a yearlong residency that includes an intensive summer workshop, one-on-one coaching with experienced leaders, and the opportunity to spend a year visiting high-performing schools across the country. Fellows receive salaries and benefits, allowing them to focus their time and energy solely on their training. In addition, our D.C. office recently posted the last piece in a fantastic series by John Chubb that examined how to build better school leaders. He focused on six exemplary alternative principal leadership development programs that boast objective evidence of their effectiveness. KIPP's leadership development programs are on the list, along with New Leaders, Building Excellent Schools, Denver’s Get Smart Schools, New York City’s Aspiring Principals Program and the University of Illinois at Chicago’s Urban Education Leadership Program.

If alternative programs and departments of education in other states can take up the mantle of improving school leadership, why can’t Ohio do it too? Why aren’t there highly effective principal leadership development programs in the Buckeye state?

As it turns out, Ohio is stirring itself to act. One emerging program is the Cleveland Metropolitan School District’s Aspiring Principals Academy (APA), which was established in partnership with New York City’s Aspiring Principals Program (one of the programs discussed in Chubb’s series). Like KIPP’s Fisher Fellowship, APA participants take part in a yearlong program and school-based residency under the mentorship of a current principal. Participants receive a salary ($75,000) and benefits and are eligible for an Ohio Alternative Principal License. They also commit to serving five years in Cleveland Metropolitan Schools. APA is currently in its first year; its inaugural cohort is composed of ten participants, six of whom are from Ohio. What makes this program promising is its affiliation with the NYC Leadership Academy, which is backed by data that shows its principals positively impact student achievement. Furthermore, the program’s evaluation method is pass/fail, meaning that participants are required to meet “rigorous performance standards” in order to progress through each phase of the program.

A second program is called BRIGHT New Leaders for Ohio Schools. Authorized and funded through the Ohio legislature, it’s a partnership between the Ohio Business Roundtable, the Ohio Department of Education, and Ohio State’s Fisher College of Business. BRIGHT intends to place the leaders it trains in high-poverty, low-performing schools, but technically only requires fellows to serve two years as a principal of any public school in Ohio. Just like APA, a BRIGHT fellowship is a full-time, yearlong residency within an Ohio public school that pays a stipend ($2,500 a month) and leads to Ohio principal certification. Participation in BRIGHT, however, has the added bonus of a fully paid MBA from Ohio State. As a result, fellows work with a principal and a business leader mentor to develop their leadership skills. BRIGHT is accepting applications now for its first cohort, which begins work in June 2015.

While APA and BRIGHT are still in their infancy, and data on their effectiveness is a ways off, it’s encouraging that the Buckeye State has taken an interest in the selection and development of principals. Teachers are a key factor in student achievement, but we can’t forget that principals often directly and indirectly influence teachers, school culture, and even the students themselves. 

Faced with enormous budgetary shortfalls, Chicago Public Schools (CPS) voted in May 2013 to close forty-seven schools, one of the largest waves of school closings in U.S. history. Shortly thereafter, CPS adopted a policy aimed at relocating more than ten thousand displaced students into higher-performing CPS schools for the 2013—14 school year. The district called the schools that absorbed displaced students “welcoming schools.” This policy was supported by research showing that students affected by closure benefit academically if they land in a better school. The welcoming schools were all higher-performing on CPS’s internal measures of performance; they also received additional resources to ease the influx of new students (e.g., student safety and instructional supports). But how did the policy play out? Did displaced students actually enroll in their assigned welcoming school? According to University of Chicago researchers, 66 percent of displaced students enrolled in their welcoming school in fall 2013. Meanwhile, 25 percent of displaced students attended other neighborhood-based CPS schools, while 4 percent attended a charter and 4 percent attended a magnet school. An analysis of student records indicates that distance from home, building safety concerns, and residential mobility were all significant reasons why students did not attend their welcoming school. (Parent interviews also highlighted some of the issues in choosing a post-closure school.) The study does not report the academic results for CPS students post-closure. (Stay tuned for a new Fordham report in March on how Ohio students fare after closure.) Overall, CPS crafted a reasonable though not perfectly implemented policy for reassigning students to better schools. While Ohio’s district and charter sectors aren’t likely to have a mass closure on the scale of CPS, they could learn from Chicago’s experience—and even improve upon it.

Source: Marisa de la Torre, et al., School Closings in Chicago: Understanding Families’ Choices and Constraints for New School Enrollment (Chicago: University of Chicago Consortium on Chicago School Research, January 2015)

Cheers to Cardinal Schools in Geauga County. Experts in autism education have deemed the district an exemplar of best practices for inclusion and support. Their “model classrooms” were videotaped in action earlier this month, and the footage will be shared with educators across the state and the country. Of additional note: Cardinal is connected to two district merger proposals that would, if successful, bring their expertise directly to students with autism in three other county districts.

Jeers to the board, administration, and sponsor of Gateway Academy, a charter school in Franklin County. Last week, Ohio Auditor Dave Yost announced that the school’s financial records were “incomplete, unauditable and inexcusable.” Thankfully, annual audits of charter schools are mandated under law in Ohio, and sponsors are held accountable when those audits uncover a mire such as this.

Cheers to wider publicity for the EdChoice Scholarship voucher program, no matter how it happens. Dayton City Schools would rather hold students hostage than let thousands of eligible kids leave with a voucher due to the persistent poor performance of their schools. Fortunately for families, the Dayton Daily News covered the district’s determination in a lot of depth…including a full list of the eligible school buildings, information on the income-based voucher program, and a peek at the private schools accepting voucher students. Excellent publicity for EdChoice, we’d say.

Double cheers to new school models AND Ohio’s Straight-A Fund. While Geauga County dithers and debates over mergers (see above), a new STEM high school in the area is going full-steam-ahead to open this fall. The iSTEM Academy was jump-started by a winning Straight-A Fund application last year and will be open to all students in the area who are interested.

Jeers to the seemingly endless turmoil in Youngstown City Schools. Mayor John A. McNally, echoing the district superintendent, recently said that without parental involvement, there’d be no meaningful success in the city school system. Leaders of two community groups, which include district parents and grandparents, responded that they can easily get parents into school buildings but that the administration has no mechanism in place for those parents to meaningfully help. What Youngstown could really use is more solutions and less hotheaded rhetoric.

Greg Harris is Ohio state director for StudentsFirst.

Despite fierce efforts to derail the Ohio Teacher Evaluation System midway through its first year of implementation (the 2013–2014 academic year), it survived. Now the results are in, and preliminary analysis suggests that 90 percent of Ohio teachers fared well. More importantly, a cultural shift is underway that is pushing more principals to observe and interact with teachers—and placing far greater emphasis the impact of teachers on kids.

In December 2013, the Ohio Senate unanimously passed SB 229, which sought to exempt teachers rated in the top two categories (“Accomplished” or “Skilled”) from annual evaluations under the new Ohio Teacher Evaluation System (OTES). Proponents argued that by exempting the best teachers, schools could focus their energies on developing less effective teachers.

While the bill was reasonable on its face, a deeper look showed cause for concern. Historically, the vast majority of Ohio teachers had been rated in those top two tiers and would be exempted from evaluation if trends held. This promised a sharp reduction in annual OTES participation.

Such a reduction in participation would prove especially unfortunate in light of the fact that OTES represented the first time in Ohio history that teacher evaluation has been linked to student outcomes. Thus, a genuine effort to improve teacher quality in Ohio required the full participation of its teachers.

With this in mind, StudentsFirst Ohio worked to defeat the Senate legislation. Former House Education Chairman Gerald Stebelton emerged as a profile in courage in halting SB 229 and negotiating more sound alternatives that stuck with the driving principles of OTES: a teacher evaluation system based, in part, on how well teachers actually teach.

A year later, our suspicions are confirmed: The ratios of teacher participation in OTES would have been seriously compromised had SB 229 been enacted. Indeed, according to recent Ohio Education Research Center (OERC) findings, approximately 90 percent of Ohio teachers rated in the top two categories. The vast majority of teachers would have been therefore exempted from annual evaluations in the coming years—hardly good for the integrity of the system.

While no new policy change is flawless, OTES in its first year appears to have given teachers more than a fair process. Most teachers would presumably agree that 10 percent of their colleagues are probably not effective. (OERC’s study rated 9 percent of teachers as “developing” and 1 percent as “ineffective.”)

OTES’ first-year outcomes hardly fit the rhetorical fury and fierce lobbying behind the campaign to pass SB 229. A MoveOn petition circulated by the Ohio Federation of Teachers, for example, cast efforts to modify SB 229 in the House as “needlessly engaging Ohio’s effective teachers,” and worse, “an extreme attack on educators.” And despite the sweat equity of the educators, non-profit organizations, and departmental staff who designed OTES (as well as legislation passed to implement the comprehensive new system) those who sought to defend its first-year implementation were miscast as villains.

In truth, the Ohio Teacher Evaluation System is not an attack on teachers. It is a thoughtful system created to evaluate teachers according to multiple measures. Approximately half of the evaluation is linked to a teacher’s impact on her pupils’ academic growth. The value-added measures, where they apply, are intended to ensure that all kids make academic progress from the beginning to the end of the school year, albeit with allowances for assessing student progress from their varying starting points. In other words, a student starting fourth grade at a first-grade reading level isn’t expected to make four years of academic progress in one year. The expectation is steady progress, not miracles.

The OERC findings reveal no difference in the lower-tier ratings for teachers who teach in subjects with value-added results (currently reading and math). Here, too, 90 percent of teachers are rated in the top two tiers, although the ratio of “skilled” to “accomplished” is greater than for those teacher who teach none or fewer value-added subjects. That said, nine of ten Ohio teachers fared just fine under the state’s new system of evaluation.

The OTES finding should have policy ramifications on the 10 percent. For example, Ohio currently allows teachers rated “developing” to be rated as such in perpetuity. State law should impose time limits if the developing teachers do not develop into effective teachers over a reasonable period of time. The 1 percent of teachers deemed “ineffective” should be ushered out of the profession more rapidly.

Hopefully, fear of (and fear mongering about) the new Ohio teacher evaluation system will subside and we will be able to refocus on its original intent: to annually evaluate, in multiple ways, a teacher’s effectiveness in the classroom. OTES is a tool that can help school districts refine their supports and interventions for their faculty with an emphasis on continuous improvement. OTES should now be embraced as a vehicle for ensuring a quality teacher in every Ohio classroom.

NCTQ has been tracking the health of the nation’s teacher pension systems annually since 2008. It was a bad year to start—the Great Recession was heading for its nadir—but surely in 2014 things are starting to look up, right? Not so much, say the authors of the latest edition of Doing the Math on Teacher Pensions. In 2014, the overall debt load of teacher pension funds in the fifty states and the District of Columbia reached $499 billion (an increase of more than $100 billion in just the last two years). An average of seventy cents of every dollar contributed to the systems goes toward paying off the accumulated debt rather than paying into upcoming benefit needs. The folks at NCTQ, while not above some “sky-is-falling” rhetoric, report on the status of seven reforms that they believe would help to avert the pension disaster that has been looming for years, including full portability of plans, reasonable contribution rates for employers and teachers, and fair eligibility rules. The overall average state grade for teacher pension policy in 2014 is a lowly C-. Mountains of debt, overly long vesting periods, backloaded benefits, and lack of portability were the main sticking points this year. One state received an F (Mississippi); one an A (Alaska). The latter squarely hits five of the seven reforms, making a sustained effort to pay down its accrued pension debt after shutting down its previously mired defined benefit plan. The news in Ohio is mostly good. The Buckeye State received a B-, earning unreserved kudos for allowing early retirees to take at least part of their employers’ contribution with them, as well as more qualified praise for uniform accrual of benefits for all teachers and retirement eligibility based on age alone. The qualification comes as a result of Ohio offering a number of pension plan options—defined benefit, defined contribution, and a hybrid plan. The latter two receive the praise despite low utilization, while the defined benefit plan (which is responsible for Ohio’s currently unfunded pension liabilities of $31.7 billion) drags down our overall grade. NCTQ urges states to adopt pension reforms that will trim such liabilities, allow benefits to accrue smoothly and fairly across the system, and give teachers maximum benefits for service.

SOURCE: “Doing the Math on Teacher Pensions: How to Protect Teachers and Taxpayers,” National Council on Teacher Quality (January 2015)