Money Talks: School Finance 101


Notes from the Backpack

Episode 15 │Money Talks: School Finance 101

Tuesday, March 31, 2020

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Bonus Episode

Friday, June 4, 2020

As school districts plan for an unprecedented back-to-school season, money is particularly tight. We invited Dr. Marguerite Roza, our guest from Education Finance 101: Money Talks, back to the show to give us an update. She shares what's currently happening in the world of education finance and how families can advocate for their child's needs.



Show Notes

Dr. Marguerite Roza

When you ask school administrators for smaller class sizes or more school counselors and after school programs, we  often hear a common refrain, “There’s no money for that.” So how much money is there exactly and what is it being spent on? We spoke with Dr. Marguerite Roza, Director of the Edunomics Lab to learn about the mystery of education finance. She offers practical guidance on how families can stay informed about their school district’s financial decisions and how they can advocate for the priorities they care most about.


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Like this episode? Share your thoughts with us via social media @NationalPTA, using #BackpackNotes. Be sure to visit NotesFromTheBackpack.com for more resources from this episode.



Transcript


LaWanda: Welcome back to another episode of Notes from the Backpack, a PTA podcast. I'm your cohost LaWanda Toney, Director of Strategic Communications at National PTA.

Helen: And I'm Helen Westmoreland, Director of Family Engagement at National PTA, and today we're going to talk about school budgets. Is there any money? Where does the money come from? Who decides how it's spent?

Many parents have these exact same questions but don't know who to ask. Today we're going to discuss ways families just like yours can stay in the know and how you can have a say in your school's budget decisions.

LaWanda: As a parent, I know how important this topic is because it impacts our children and their education so much. I've also seen firsthand how it's common for parents to hear a school say, that's a great idea, but we just don't have the money for it. And often some schools are relying on PTAs and other parent groups to help close the gaps through fundraisers, but is that really the right solution?

Today's guest is going to help us figure it all out.

Helen: We are thrilled to welcome Dr. Marguerite Roza, Research Professor and the Director of the Edunomics Lab. The Edunomics Lab is a research center focused on exploring education finance decisions to better inform policy and practice. She is also the author of Educational Economics: Where Does School Funds Go? She has previously served as the Senior Economic Advisor to the Bill and Melinda Gates Foundation and currently teaches as part of the Certificate in Education Finance program at Georgetown University.

Welcome, Dr. Roza. We're so glad that you could speak with us today.

Marguerite: Thank you for having me.

Helen: So, before we get started, could you tell our listeners a little bit about yourself and how did you decide to become a researcher focused on education finance of all things?

Marguerite: It's every child's dream to grow up and be a re, researcher focused on education finance. I know that.

So, well, I started off actually in the US Navy, teaching thermodynamics. That was a long time ago. But I was more fascinated with teaching in education and went back to graduate school and had a quantitative background and, just became curious about the money side of public education.

And, so you know, two and a half decades later, here I am, running a research center that we started, called the Edunomics Lab that focuses on all things education finance. But does so from the lens of kind of the bottom up, what sort of, how are resources applied and used, for students in classrooms and schools? And then how do we trace that back to the decisions at the district and the state and the federal government that all sort of, you know, resulted in those patterns?

Helen: Excellent. Thank you for sharing. And for our listeners who might be sort of unfamiliar with this territory, why should they care about what's going on in school budgets at that bottom up level and education finance in general?

Marguerite: Well. for any parent who puts their five-year-old in public schools and, that child spends the next 13 years in public education, well, more than $100,000 will be spent on that individual child by the time they graduate. Typically, actually on average in today's dollars would be closer to $150,000. And those are resources that are brought to bear per student, and applied in ways that are designed to help students learn and be more successful in life.

And a lot of decisions go into deciding how to spend those dollars and I think that's why parents should care.

LaWanda: Got it. So Dr. Roza, we want to start with a little bit of school budgets 101. where can a parent find their school's budget?

Marguerite: Well, I would say, first of all, that's not what you look for.

LaWanda: Okay.

Marguerite: I think first of all, what, we don't really have generally speaking budgets by schools. First of all, you want to find out how much money is available for your student. The best way to do that, to find out how much was, is being spent on, on per student, on your school. Well, you didn't use to have that information. And only because of a federal law that got passed four years ago, are state's now releasing those figures.

The Edunomics Lab has a school spending data hub, and you could go straight there and click on your state and it will go back to your state's state agency website to the place where the data are reported. About half, a little more than half of the states have data out right now, and the rest will have data out by June. And you can enter your school and find out how much is spent per pupil, and you can look and see if that's higher or lower than other schools in your district.

And that matters because it's the district that decides how to divvy up district dollars across schools. So if you, if your school is maybe a high poverty school and it should be getting more resources per pupil than other maybe more affluent schools in your district, you can check and see if that's actually happening. Or maybe even if the reverse is happening. So those are, I think the first questions to ask.

Helen: That's good. And you, you mentioned that certain schools, might be getting more money than other schools. Could you give us a little bit of a sense of, sort of go a little bit deeper? What, what are some of those rules and where does that money come from?

Marguerite: So I think people are really confused about that. Sometimes even people who work in schools are confused about this. The, the way schools get money is to get money from their district and the district gets money predominantly from state and local sources.

The federal government's sort of a much smaller player when we talk about funding schools, it, the federal government spends maybe or contributes maybe 10% of the total in most districts.

So I think a lot of times people will see a story about a federal cut and think this will obliterate my school. And that's not correct. Generally speaking, schools are funded with state and local sources.

We also hear a lot that schools are funded by zip code, and that's shorthand for saying local property values matter. But it's not technically accurate. So in some States, if your district has higher property values, you might be able to collect more money. Most States now have some state mechanism to level that out. But once the money goes to the district, the district is the one that decides how to spend it. It's not the case that if your neighborhood has lower property values, then another neighborhood inside that district that you get less money, that that has nothing to do with your neighborhood’s property values. The district's the one that decided how to allocate those funds.

So when you look for budgets, you'll often find a district budget, but not budgets for individual schools.

Helen: Hmm.

LaWanda: As a parent, if you're looking at you, you've gone to look at the district budget, and then you're seeing a difference between districts of how money is allocated, what can you do or who do you ask the questions to?

Marguerite: So we often ask this question. Who decides how to spend all the money in public education? And we ask it actually, of policy makers and district leaders and principals and parents, and a lot of people sort of look around and say, does the Secretary of Ed do that? Actually, no.

Generally state legislatures don't either. The accurate answer, the technical answer is school boards do. And each school district generally speaking elects a school board, and that's the group that decides how to spend the money. The fascinating thing is that we can have a whole room full of school board members and they would shrug their shoulders and say, well, it's not me. And we say, no, it is you. You're the ones with the fiduciary responsibility to decide how we spend the money we have in public education.

And obviously the school board hires the superintendent, and the superintendent hires a chief financial officer, and they prepare budgets, but the school board signs them, and that's generally the spending moment.

There are of course, strings attached to lots of the dollars. Like the state might say, this is only money for transportation, or you have to have class sizes of this size or whatever, and those strings will affect spending. But the money goes into a bank account at a school district. And most school districts decide what, how much and how to pay the people they hire, who to hire, where to assign them to do their work, how many to hire. And that's the spending moment that districts are the ones that do that.

So if you are unhappy about how much, how much money your school got or what it got, you should complain to your school board. Now, if your school district has less money than the next district over, you should complain to the state.

Marguerite: That's sort of how this hierarchical model works. 

Helen: I'm curious, Dr. Roza, I'm going back to something you mentioned that some schools, depending on the student population, may have higher needs and therefore, whether it's through some of these, resources that might have, like you said, strings attached or otherwise they get more money and one thing we hear a lot, being National PTA is, you know, a parent might ask for, you know, we need new textbooks, or we need a computer lab, and they're told there isn't money for that. How do they figure out is there money for it or, and what the change mechanism is?

Marguerite: Well, there's $14,000 on average per pupil. So if there's not money on it, it's because of choosing to spend it on something else. Almost all of what districts spend money on is labor. And people forget the labor is the predominant expense that we're paying. Salaries and benefits, and that's what's consuming 90% of this. And at any point, I think we've, we've sort of underappreciated the choices that districts make in how they spend the money.

So if they don't spend money on textbooks, it's because they're choosing to spend it on the $14,000 per pupil that they're choosing to spend it on labor or benefits. Sometimes retiree benefits. They might be choosing to spend it on athletics or on librarians or on social workers or on vice principals or things like that.

All of those are the tradeoffs. And, I think we, we often forget that the labor is where the money is going, and it may be the case that a district is saying we don't have money for that, but the more, the more correct answer would be we've decided to spend money on something else.

Helen: That's helpful. That's very helpful context.

LaWanda: Along those lines, sometimes, different parent groups like PTA may step in to close the gap, where they feel like there are things that the school may need and they create either fundraisers or find ways to get money from different communities. Businesses, et cetera, or do fundraisers to be able to support the things that may be missing from the budget that they feel like they need for their school.

Is that the right solution?

Marguerite: Well, I think we need to put those dollars into perspective. And we teach this in our Certificate in Ed Finance program. It's, we offer it at Georgetown and it's, you know, two days in person. We get people from all different types of policymakers down. Down even to parents and district leaders and principals and so on.

But that question usually comes up in the first hour. What about PTA money? That seems to throw everything off. And, we would say, well, take a look at it and see what it is per pupil. So if you have, for instance, a really successful auction and that auction raises about a hundred dollars per student, which would be a very successful auction in a potentially more affluent area that hundred dollars per student is in contrast to the $14,000 per student we're spending in public funds. So it's the less than 1%.

And, I think it, it attracts a disproportionate amount of attention. That extra little money that we raise. And I, I say little, not to be dismissive of it, but to say, if we're spending our time on that $100 per student, instead of spending our time looking at the $14,000 per student, we're missing the really big money.

Helen: There's a lot of conversation about sort of what's fair when it comes to how funding is distributed, even within a district from school to school. And we've heard this talked about in terms of equity. Having looked at data from school districts all across the country, do you feel like school funding is being distributed fairly based on student need and population, or do you think there's room for growth for us there?

Marguerite: I would say that over the last two decades, we've made a lot of progress. That doesn't mean we've remedied all the problems. There are still some places where there's progress to be made. When we look across the country, maybe 20 years ago, we had some, we call it gross inequities. You know, there are books written like Savage Inequalities that would have classrooms with 50 kids and you know, leaking roofs and things like that and no arts.

And our, our country is generally, and I don't say our country, but state by state, states have sort of stepped in and certainly done some work to level up. Meaning that we we tend not to have districts that are so short changed as they were 20 years ago. But that doesn't mean that we've also addressed the sort of top part of it.

Out there in some States like New York, there are the Scarsdale school districts of the, of the mix that are still able to raise even more than their peers. And for some people they'll say, fine, as long as we've raised the base and now everybody gets a more legitimate amount of money, then I don't really care about the Scarsdales. And others will say the Scarsdales of the world, that can draw down disproportionately more dollars or why our district can't hire teachers when their's pays that much more and so on. And I think both, both points are valid.

So, we do need to, I think in this next wave, spend some time thinking about districts. We did a lot of that work to create more equity across districts within states. And kind of took a blind eye to what happened once the money got to districts, and if you're in a mid-sized or larger  district, there may still be quite a few surprising and inequitable spending patterns within your district that no one's sort of paid attention to.

Helen: Hmm. Thank you. That's really interesting. I'm hearing from you that, parents should be looking at that.

Marguerite: They should be. Because sometimes schools cost a lot and they're still kind of lousy. We've, we've spent a lot of money on a school and we're not even getting much for it. In that case, the question is, how can we make that money matter more for students?

And like I said before, a lot of people spend a lot of time thinking about the private dollars or even the textbook money, and they've missed the point that we spend the money on all these people that are in the building.

So over the last four decades, we've added adults to schools at a much faster rate than we've added students. So we now have, you know, 128 adults per 1000 students. When you know, years and years ago, we, we had 60 or 70 adults per 1000 students. So those, those numbers are, are really going up. And that's where the money is.

So, we worried a lot about reading scores for years. We added reading coaches and we added more special ed staff and we added counselors and social workers and all sorts of positions. And the question is that we've come back and said, is it working? Are these positions able to realize those benefits for kids? Or do we need to rethink this a little bit? And that I think is going to be really important going forward.

So if we get parents to look at these budgets, I think they'll see these investments in labor as the investments in students, and that's a good thing.

Helen: You bring up a good point because I think one of the questions we've heard as we were starting to reach out and ask our network about this episode is sort of basic. Is there more money than there used to be or isn't there more money than there used to be? There's this sort of great debate happening about, you know, whether schools are under-resourced for what they need to do. Over resource for what they need to do. And how that compares to even the past decade. What's your perspective on that, Dr. Roza.

Marguerite: It's such a good question. Well we do have more money in schools than we used to, even after accounting for inflation. We've invested more in this country and some of those investments, like I mentioned, were about addressing these awful inequities that we had for years. Some of those investments have been in the form of services for students with disabilities. That was, those were some important investments. I think we've made some strong investments in the early grades and those have have proven to be successful, but, on, you know, on the whole of it, with these recent PISA scores going down, I think we're realizing our, we may not be getting as much for these new investments as we hoped.

So yes, there's more money in schools today than there was two decades ago, or three decades ago. And what people will say is, well, what's the right amount? And we'll say, well, how much do you have? And I guess what we're trying to point out is that there's not an empirical or scientific way to say the perfect number. But that different governments will have different priorities. And in one government, they may be saying, right now are our more important priority is to deal with mental health issues or to put more money into higher education. And and that means we can't concentrate as much for now in K-12. Another one, we'll say we're at the moment, we're trying to deal with a slowing economy or a workforce that's been laid off in our communities and our investments need to be in workforce retraining. And so you can see that priorities shift and change in different locations.

In our view, the better question is one of tradeoffs, of understanding what things cost and making choices, from cost equivalent tradeoffs. So we can spend money on X or we can spend money on Y, and which choice makes more sense for our community.

Helen: Hmm.

LaWanda: This may be a silly question, but I'm just thinking about it from a parent lens. If I pull the district or the school's budget, will I understand it? Will I clearly see how much we spend per student? Or will it look like Arabic to me? Because I, I want parents to feel empowered about going to find the resources and tools, but also being prepared when they see it, what to look for.

Marguerite: Such a good question. So, well, so the, the federal government is going to require that you say how much is spent per student at a school. That's what, that's like a single number, right? Is it $12,421 or is it $19,200 or whatever? So that number, I think people can understand. You'll go find it. It'll be a per pupil figure.

But if you look at the district's budget, I mean, it, it could be a 300 page document. And you're right, it can look really intimidating. It's very hard even for experts to find the critical numbers out of that.

You could say, I know how to read my budget, and then you go down and then the next one in the next state over and it doesn't look anything like yours. That's a problem. And one that we think districts should address.

But I think it's worth asking your school, what are the resources we have in our building? And not, not just the non-labor resources you need to ask for the labor resources and, and how, how are we deploying them? And I think principals should turn around and ask that from their districts too.

We did some research on this and asked principals how much money is spent all in on your school? And we heard numbers that were inaccurate. Things like a principal might say, oh in my school, we spend $42,000 all in. And we'd say, well, your own salary is higher than that.

Helen: Wow. So principals didn't even know how much is being spent.

Marguerite: Obviously the number you're quoting is your supply budget or your flex budget. And so you need to have the, the list of all the resources in the building, including those deployed for labor. And I think, I think parents should ask for them and feel free to weigh in.

If more parents were looking at the dollars deployed in their buildings, they would get better at knowing what trade-offs made sense. So, maybe the vice principal's leaving this year, that frees up $120,000. Do we want to forego a vice principal and think about maybe adding some stipend time to a bunch of our teachers, especially if we've had teacher turnover, a lot of teacher turnover and we're trying to keep teachers. But you can't propose those unless you know what things cost.

And what doesn't work for parents is to go in and demand more and more, more. It's actually how parents get a really bad name as a stakeholder group in school districts. You know, parents are demanding their school to have both a jazz program and a theater program and a music program, and a football program, and this, that and the other and smaller classes. And they want a counselor and they want... Like, that's not what works.

But if you come in and say, hey, I know that we have attrition in a position, maybe a librarian's leave leaving. We were thinking instead of re staffing that in the way we always have, perhaps we could use a few parent volunteers and an aid and free up some of that money for tutoring for kids

LaWanda: That's so great, Dr. Roza. Thank you for joining us today. I know that I've learned a lot personally, and I hope that our listeners feel more empowered to start asking questions and also looking at school budgets.

Marguerite: I don't think parents should not feel confident. We did research on what people thought was spent in schools. Parents often had a better sense of the money that was deployed then some of the people who worked in schools very often.

And that may be because all sorts of parents have familiarity with money and, and what things cost outside of schools. And those in schools don't have as much visibility in that in their job. So parents were better at predicting how much is spent on kids than teachers were.

Helen: Wow.

Marguerite: I think parents shouldn't feel like I'm entering this without enough information. Actually, on average parents, parents bring a lot of their own contextual information that really is valuable and important to the conversation.

LaWanda: Is there anything else that you would add that parents can start applying right away as it relates to understanding budgets.

Marguerite: I think parents can ask, whether the resources expended on behalf of their kids are working. That's a really important thing.

You know, this, these, these dollars are spent on behalf of students, and that can be easy for systems to forget. So if, if the students aren't realizing the value. Then it's not working. And it oftentimes what it takes to reset that decision is bottom-up pressure. A lot of times, districts will think everybody's happy with how this is going. And so we're going into labor negotiations and we're negotiating maybe with our teachers' union, and without any input from parents on what they're hoping to get out of that negotiation. Then the parent voice is lost.

And so, we think that that schools need to speak up more in decisions about resource use. And parents can weigh in, I think, really in a great way at their school level and encourage their own principals to weigh in on their behalf. And remember that it's school boards that decide how to spend the money, so if you're really unhappy with it, that's the moment it happens. Is at school board meetings.

LaWanda: Great. Are there any resources available for parents that you might suggest?

Marguerite: At edunomicslab.org, that's our research center website. There is a button about halfway down the page that says, take me to the School Spending Data Hub, and that will take you to a site that has a map of the United States, and you can click on any state and it will go directly to your state's data.

And if school finance and school money is something of real interest to you, we would encourage you to sign up for our, our certificate program. But our website has lots of resources for different stakeholder groups in engaging with those figures that they find.

LaWanda: Dr. Roza, are there any social media handles where our listeners can learn more about you and your work?

Marguerite: Yes, we have @Edunomics Lab and I have my own Twitter, @MargueriteRoza Twitter as well. So, recommend following those.

Helen: Great. Well, Dr. Roza, thank you so much again for joining us today. This has been a wonderful conversation with a lot of good takeaways. So I am thinking about tradeoffs and what that looks like, and we just want to thank you again for your time.

Marguerite: Well, thank you for having me. I appreciate it.

Helen: That wraps up today's episode, but before you go, be sure to check out our website, notesfromthebackpack.com so that you can stay in the know and learn more. And follow us on social @NationalPTA. Don't forget to use #backpack notes to be part of the conversation.

Thanks for tuning in.




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