I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Thursday, July 10, 2014

New Report on the Consequences of Inadequately Funded Schools

Yesterday, the Education Law Center released a report they commissioned from yours truly about the consequences of inadequately funding school districts.

"Shortchanging New Jersey Students: How Inadequate Funding Has Led to Reduced Staff and Growing Disparities in the State’s Public Schools" is a look at how students are affected when the state refuses to meet its obligations and give schools the resources they need to succeed. As usual, I'll try to explain here, in layman's terms, what's going on in this report.

But first: many thanks to Dr. Danielle Farrie, Research Director at ELC, who was my collaborator on this report. Danielle was the one who calculated the adequacy rates for the districts we looked at, guided my thinking, and contributed much to the final text. And thanks also to Dr. Bruce Baker, who, as always, was an invaluable resource.

If there's a central issue in education funding today, it's "adequacy." A common mistake of those not deeply engaged in issues of education financing is to substitute "equity" for "adequacy" -- but they are not the same. Here's Bruce and Preston Green's explanation of the difference:
"Equity conceptions deal primarily with variations or relative differences in educational resources, processes, and outcomes across children, whereas adequacy conceptions attempt to address in more absolute terms, how much funding, how many resources, or what quality of educational outcomes are sufficient to meet state constitutional mandates."
This is a big, complicated topic, but maybe we can boil it down to this -- a famous cartoon I've edited:

Again, I'm way oversimplifying here ("equity" above should probably really be "horizontal equity," but that's a long discussion...), but the main point is this: adequacy has to do with whether or not a school district has what it needs to get the job done. In New Jersey, as in other states, there is a formula that the state uses to determine whether a district has enough funding: the School Funding Reform Act, or SFRA.

SFRA is predicated on the idea that you need to get more resources to students who need them more, in order to make sure all students have an "adequate" education (Don't get thrown by the word "adequate" -- it doesn't mean, in this context, "so-so" or "mediocre." A better synonym might be "sufficient.").

The state gives more aid to districts that need it based on the numbers of children who are "at-risk" (which we measure by whether they qualify for free or reduced-price lunch, a proxy measure for economic disadvantage), are Limited English Proficient, or have special education needs (emotional disabilities, cognitive disabilities, physical disabilities, speech impairments, autism, etc.). The premise -- supported by a ton of research -- is that these children cost more to educate because they need more individualized instruction and specialized programs. Makes sense, right?

Well, not to many politicians -- including Chris Christie. Under his reign, the number of districts that have not received adequate funding (and remember: the funding level is written into law) has skyrocketed. School districts across the state have been shortchanged about $4.5 billion since Christie took office. Here's a look at how many students have been affected:

Just about half of the public school students in New Jersey are in an inadequately funded school district. The "deeply inadequate" districts are those that are more than 20% under their adequacy targets, set by SFRA.

Now, the "money doesn't matter" crowd likes to pretend that this really isn't important. Somehow, all that extra money is being wasted and there's all this abuse and the schools that serve more of the children who need more resources have more than enough to get by. Never mind that many of the inadequately funded schools are in school districts that are relatively more affluent: if you look above, you'll see many "non-Abbott" districts -- the ones that have District Factor Group (DFG) of CD or higher -- actually don't get the funding that they need.

No, the argument goes, adequacy isn't nearly as important as things like teacher tenure. This is, of course, transparently absurd, but never mind: it has become the pseudo-intellectual cover under which politicians like Christie have ignored the law and underfunded schools.

Now, what we really haven't been able to do much until now (at least in New Jersey) is use data to see if there are specific consequences to underfunding schools. Yes, we can look at per pupil spending figures -- but what are the classroom-level consequences when you underfund a school district? What exactly changes in a child's school experience that can be traced back to inadequate funding?

This report is one attempt to find an answer. Here's what we did:

New Jersey tracks every certificated educator in the state in a yearly file that is based on data submitted by the individual schools districts. These staffing files give the name, salary, education, experience, race, and gender of everyone who works in a school and holds a New Jersey education certification.

These files also have a really important bit of info attached to each name: a job code, which tells us exactly what that person's function is within their school. I, for example, am listed as a "2100": "Music Comprehensive." This is very valuable, because we can get a good sense of the programs that are offered and the depth of those programs by comparing the "student load"-- the number of students per teacher -- for teachers in each department within a school district.

Imagine, for example, a district that had one music teacher for every 350 students, versus one for every 500 students. We'd be right to think that the district with more music teachers per student would have a richer music program with more course offerings, because the music teachers would be spread less thinly than the district with fewer music teachers per student. In other words: if I only have to teach 350 students, rather than 500, I'm going to be able to offer more music classroom time, a deeper music curriculum, and more course options.

So let's see how this works out. We'll start just by looking at the overall student-teacher ratios for districts that are adequately, inadequately, and deeply inadequately funded.

There are three things to notice here: first, the teachers in the inadequately funded districts had a greater student load than teachers in the adequately funded districts going back to just before Christie took office. In other words, the students in inadequately funded districts had fewer teachers working with them even before the cuts in state aid started.

Second: all students -- even those in adequately funded districts -- had fewer teachers by the time we got to the end of Christie's first term. The teacher load has increased across the board as the state has pulled back from full funding of SFRA.

Third, and perhaps most important: the student-teacher ratio gap between adequately and inadequately funded districts has increased during the Christie administration. As much as kids in adequately funded districts were getting left behind before Christie took office, things have become even worse.

(One caution: don't read this thinking it represents class sizes. We're talking all certificated staff here: principals, guidance counselors, nurses, speech therapists, etc. Many important people who work in schools aren't classroom teachers.)

So, how does this affect specific programs and course offerings? Well, using the job codes, we can break out different types of educators, and see how their teaching loads have changed based on whether or not they are in an adequately or inadequately funded district. I have several examples in the report, but here's one I think is particularly instructive:

Everyone these days talks about STEM -- Science, Technology, Engineering, and Mathematics -- education. According to the powers-that-be, it's the key to retaining our competitive edge over the rest of the world. But look at what's happened: New Jersey's inadequately funded districts were already behind on deploying more STEM teachers into their schools -- and the gap between them and adequately funded districts has grown worse. If you teach STEM in an adequately funded district, your student load has barely changed; not so if you teach in a deeply inadequately funded district.

And it doesn't stop at STEM. Here's a look at the differences in student loads in curricular areas that are outside of the "core" subjects:

Art, music, and PE teachers in inadequately funded districts have significantly higher student loads than teachers in adequately funded districts. Think about that a bit as it relates to college admissions: don't the elite colleges look for well-rounded students who have significant experiences in the arts and athletics? Doesn't the kid who has an extensive sculpture portfolio stand a better chance of getting into an Ivy League school as a pre-med major than the one who doesn't, all other factors being equal? Don't more PE teachers likely translate into more coaches of interscholastic sports, which means more teams, more choices, and more chances to build up a college resume?

Here's another:

As I say in the report, elite colleges often require the study of a foreign languages as a pre-requiste for admission. Who has a better chance of studying a variety of languages and taking AP-level courses: a student in a district where each foreign language teacher averages a load of 425 students, or a load of 288?

As for the nurses and counselors: while inadequately funded districts are in all DFGs, the deeply inadequately funded districts tend to be the less-affluent ones. So we're stretching our counselors and school nurses thinner in the districts that have more students in economic disadvantage -- and those are the students who actually need those services the most.

As they say: read the whole thing. The takeaway is this: money really does matter. When you do not provide a school district with adequate resources, there are real and meaningful deficits in the education of that districts's students.

I understand that we have many priorities in this state, including the pensions, our infrastructure, property tax relief for the middle-class, and overall tax relief for the working poor. But adequate school funding has got to be a priority as well. Despite the denials of some, we can't give kids an adequate and equitable education until we start giving their schools the resources they need to get the job done.

Again, thanks to ELC for the opportunity to do this report. Undoubtedly, there will be more to come on this topic over the next year - stay tuned.


Giuseppe said...

JJ, thanks for all the incredible work and advocacy you do for public education in NJ and nationally. As regards the people who say that money doesn't matter, we're already throwing too much money at education, the real problem is mediocre and bad teachers, blah, blah, blah. These are the same people who say that cutting taxes (especially on the job creationists) increases revenues. It's that old trickle down malarkey. Krugman and many other economists have debunked that zombie myth. If you cut taxes on the rich and the big corporations then revenues go down and services have to be cut and the middle class and the rest of the 99% have to make up for the lost revenues.

Duke said...

Thx, G. I really appreciate your encouragement!

StateAidGuy said...

I like how you discussed underaided non-Abbott districts, but I am disappointed by how you missed the appalling aid disparities in NJ school funding and failed to make a distinction between districts that are underfunded because of a lack of state aid and districts that are underfunded as a result of a refusal to accept higher taxes.

The outrageous fact about NJ's school aid is that there are so many examples of wealthier districts receiving more aid, often dramatically more aid, than poorer districts. The amount of aid districts receive has little to do with their contemporary needs - the amount of aid a district receives depends on what its needs were a generation ago. As a specific consequence of this exurban and rural districts get as much state aid as districts that are 2-3 DFGs below them.

The follow examples are random and yet representative:

- Hamilton Township (DFG FG, 11,000 students) in Mercer county gets $73 million in state aid. Clark, Bergenfield, Dumont, Fort Lee, Hasbrouck Heights, Maywood, New Milford, Northvale, Rochelle Park, Wood Ridge, Nutley combined (all DFG FG, 24,000 students) get$27.5 million.

- Marlboro gets (DFG I, 5200 students) gets $11.5 million in state aid. Berkeley Heights, Springfield, Scotch Plains-Fanwood, Cranford, Mountainside, and Westfield combined (DFG FG-I, 21,000 students) get $10.8 million.

- Hillsborough (DFG I, 7,200 students) gets $24.9 million. South Orange-Maplewood, West Orange, and Edison combined (DFG GH-I 28,000 students)get $26.8 million.

- West Windsor-Plainsboro (DFG J, 9800 students) gets $7.3 million. Livingston, Glen Ridge, Verona, Oakland, and Summit combined (all DFG I, 18,700 students) only get $7.1 million.

Exurban districts even get double the per student funding of districts that are 2-3 Factor Groups below them.

- Old Bridge (DFG FG, 9,000 students) gets $44.5 million. Clifton and Bloomfield (DFG CD and DE, 18,000 students) combined get $46.7million. Aid per student for these districts is $5,013 for Old Bridge and $2,262 and $3,286, respectively, for Clifton and Bloomfield, even though Clifton and Bloomfield's financial resources are smaller.

- Jefferson Township (DFG GH, 3,400 students) gets $15.8 million. Hackensack, Lyndhurst, and Garwood combined (DFG CD-DE, 8,400 students) only get $15.1 million.

The problems aren’t only with outer suburban overfunding. Gentrified cities also do extremely well. Hoboken is not a typical New Jersey district, but it exemplifies how the amount of aid a district receives does not change with its changes in wealth.
-Hoboken has $11.1 billion in property valuation but only 2639 students, so $4.17 million in valuation per student. This is over double the per student valuation per student of wealthy towns like Millburn have and double the per student valuation of big retail towns like Paramus. Hoboken’s per capita income is also nearly $70,000 a year, which is about the same as Summit’s.

Despite having extremely high property wealth and income, Hoboken gets $10,712,191 in K-12 aid, or $4,120 per student (not counting the$9.7 million for pre-K).

Your ELC piece also does not recognize that sometimes underfunding is the result of a reluctance to accept taxes and not inadequate aid. Greenwich, DFG I, gets over $7300 per pupil, and is the best aided district in DFG I. Greenwich's valuation per student is $780,000, which is not extraordinarily high, but is higher than average.

Brooklawn is an even WORSE EXAMPLE. Brooklawn has not had a school tax increase since 2001 even though its school tax levy is the state's minimum.


Duke said...

SAG: first, thanks for your extensive and well-informed reply. A few things:

1) In my defense: this was not supposed to be a comprehensive report on state aid and adequacy. I only looked at one aspect of the topic; obviously, there are many other factors to consider. But I was changed with doing an under-20-page report on this one subject.

2) While your comparisons are well-worth considering, the "needs" under SFRA are determined by student characteristics -- but that, obviously, is different than state aid. The ability of a district to raise the funds needed to educate its students, I believe, is the issue you are addressing here. Again, it's an issue that is well-worth addressing.

3) I don't have figures in front of me (largely because the state stopped reporting Special Education percentages in databases - I have to enter them by hand, which is a nightmare), so I can't say if this is relevant in any of the examples you use. But if Marlboro is DFG-I, but has many more SpecEd or LEP kids than the other districts you mention (again, this is a hypothetical - I don't know), that would justify a difference in SFRA adequacy.

4) But, again, that's different from the ability to raise funds locally to pay for schooling. Let's take Hoboken: no doubt, the property valuation has soared there, but that doesn't mean the school district has the ability to collect taxes on that valuation. I've often heard "fair funding" advocates like Senator Doherty use Hoboken as an example; however, state law, tax exemptions, etc. can impair a district's ability to collect money for schools.

5) Also: Summit HS's free & reduce-price lunch population is 14.4%; Hoboken HS's is 80.9% (not a good direct comparison, I think, b/c HHS goes grades 7-12 (I think), but still...). So Hoboken has the highest highs, driving up its income, but also the lowest lows. Summit, I'm figuring, isn't nearly as heterogeneous. And, of course, the SFRA formula is going to drive more money to HHS than SHS -- as it should.

6) All that said: I agree that the issue of unequal distribution of state aid, based on both student characteristics and the ability to raise local funds, is well worth exploring. And I have little doubt some districts are unfairly rewarded or punished.

Again, thanks for this comment. Much to consider here.

StateAidGuy said...

(Part 1)


I’m sorry if I seemed frustrated in my last post, it’s just that when even NJ’s education aid experts, including Bruce Baker, Danielle Farrie of the ELC, Chris Jones of the NJSBA, and education journalists neglect the issue of gross aid disparities I begin to lose hope in ever seeing the problem fixed. To my huge disappointment, there is a tendency to present NJ’s aid formula “SFRA” and NJ’s aid distribution as the same thing, when this is completely not the case.

NJ is totally “off formula.” By “off formula” I don’t mean that SFRA is underfunded, I mean that some districts get as little as 10% of their (uncapped) SFRA aid and some districts get as much as 400% of their (uncapped) aid. I also mean that every single aid stream is messed up and has an irrational distribution, where some districts (usually exurban) get many times more aid than districts that are economic peers or even inferiors. (Even streams that you might think would be applied rationally, like Security Aid, are not.)

I’ll take apart the Marlboro example.

You referred to Marlboro possibly having more at-risk students than the districts I compared it to and therefore suggested that Marlboro’s superior aid could be justified.

This is not the case. 1% of Marlboro students are classified as LEP and only 4% are FRL eligible. I do not know what percentage of Marlboro students are in special ed, but special ed classification isn’t supposed to determine aid amount, since special ed classification is subjective.

The districts I compared Marlboro to have similar or higher percentages of at-risk students, ranging from 2% to 9% FRL-eligible. The clustering is even tighter for LEP students, with all the districts in the 1% range. Springfield, FYI, is in DFG GH, not DFG I.

Marlboro is is at the upper end of the comp districts in property wealth. Marlboro has $1.3 million in valuation per student. Berkeley Heights has $1.16 million in valuation per student, Cranford has $1 million, Westfield has $1.15 million, Springfield has $1.17 million, and Scotch Plains-Fanwood only has $900,000 per student. Only Mountainside’s valuation per student is higher, at $1.5 million per student.

Marlboro’s per capita income is $50,500, which puts it in the middle in income. (Total Income is 50% of the Local Fair Share contribution). Westfield’s is $63,500. Berkeley Heights’ per capita income is about $56,700. Springfield’s is $46,400. Cranford’s is $48,000. Mountainside’s is $52,800. Scotch Plains-Fanwood’s (weighted) per capita income is $50,200.

If NJ had a rational aid distribution Marlboro would get about the same as the Union County districts I compared it to. The fact that Marlboro gets 4-5 times more per student is ridiculous, should be widely disseminated, and should be criticized. The fact that the disparity would be greater if Springfield did not get $460,000 in Interdistrict Choice Aid should be noted as well.

StateAidGuy said...

To further demonstrate the absurdity of the aid distribution let’s look in detail at Equalization Aid.

Equalization Aid is the largest aid stream and the one that is most dependent on local resources and the number of at risk students.

Hillsborough’s valuation per student is $830,000 and its per capita income is $43k. 8% of Hillsborough students are FRL eligble and 2% are ELLs. Bloomfield’s valuation per student is $664,000 and per capita income is $30k. Bloomfield's students are 35% FRL eligible and 3% are ELLs. Yet Hillsborough receives $19,274,266 in Equalization Aid - about $2,600 per student, whereas Bloomfield receives $15,125,042 - about $2,300 per student.

Marlboro (again) has more $1.3 million in valuation per student and a per capita income of over $50,000. Only 4% of Marlboro students are FRL eligible and 1% are ELLs. West Orange, on the other hand, has $861,000 in valuation per student, with a per capita income of $43,000 "at risk" students. WO's students are 36% FRL eligible and 4% are ELLs. Yet Marlboro receives $6,247,588s ($1160 per student) in Equalization Aid while West Orange receives $1,793,898 (only $260 per student.)

Old Bridge has $760,000 in valuation per student and a per capita income of $37k. 25% are FRL-eligible and 3% are ELLs. Clifton has more valuation per student, $816,000 but a lower per capita income of $29k. 48% of Clifton students are FRL-eligible and 5% are ELLs.

Old Bridge gets $36,867,100 in Equalization Aid, or $4089 per student. Clifton gets $17,684,735 in Equalization Aid, or $1550 per student.

Old Bridge's Equalization Aid alone per student is almost double what Clifton's total education aid per student is.

(What's even worse is that some of these districts that get lots of Equalization Aid also get lots of Adjustment Aid.

Marlboro gets $533k in Adjustment Aid and $560k in Additional Adjustment Aid!
Old Bridge gets $437k in Additional Adjustment Aid.
Hillsborough gets $406 in Additional Adjustment Aid.

Equalization Aid is the most important aid stream and the one that is most dependent on wealth and needs. If we are this off-formula with Equalization Aid alone we really need to work for change.)

StateAidGuy said...

Re: Hoboken

You are right, Hoboken students don’t have the wealth of the general Hoboken population. What’s relevant about Hoboken’s $70,000 a year per capita income is that per capita income (or total income, technically) is supposed to be 50% of the calculation of Local Fair Share, so the very high per capita income combined with the astronomical property wealth mean that Hoboken’s Local Fair Share is very high.

The point isn’t that Hoboken shouldn’t have a high Adequacy Budget, the point is that Hoboken’s local resources are more than enough for Hoboken to educate its students without tapping into large state aid and taking that money away from needier districts. When Belleville has less than $3 billion in valuation and has to pay $35 million in local school taxes and Hoboken has $9.6 billion in valuation and only has to pay $38 million in local school taxes something is wrong.

Hoboken is the most overaided large district in NJ, so Sen Doherty and any othe critic can legitimately use it as an example of the problems of the aid distribution. However, Hoboken is not a good example of Abbott overaiding because Hoboken gets much less K-12 aid than the other Abbotts.

Half of Hoboken’s aid package comes from Adjustment Aid. Another quarter comes from Interdistrict Choice Aid. What Hoboken’s large Adjustment Aid stream illustrates is how backward-looking the aid distribution is and how aid depends more on how much aid a district got in the past than its contemporary needs. What the large Choice Aid stream illustrates is how Choice money goes to districts that have spare capacity, lower needs, and can therefore take in more students. It also makes the Hoboken BOE look hypocritical because Hoboken does to Jersey City what Hoboken’s charter schools do to the Hoboken district schools.

There are political, not legal or economic reasons, for Hoboken not to be able to increase its local tax levy. Some districts struggle with the 2% cap, but not Hoboken. Even in the era of the 2% cap Hoboken skipped school tax increases two years in a row.


My conclusion is: don’t believe the Myth of SFRA! SFRA does not determine how aid is distributed in New Jersey!

(Be measured in how much you blame Christie too, since the aid distribution was crazy before he became governor.)