The Center for Public School Renewal

NOTE: Published in slightly different form as "Money Does Indeed Matter in Education" by The Detroit News, 6/4/98.

Original Title:
Throwing Money at Schools
by Barry McGhan

We often hear the claim that "You can't solve education's problems by just throwing money at them." Is this true, wishful thinking, or just political trash-talk?

First, let's agree that some connection between performance and remuneration should exist in all areas--including education. It might be best if things worked as they do in pro sports, where the top players command the highest salaries. However, this gleaming meritocratic ideal may be beyond our grasp in anything that resembles real life. For example, reports on corporations sometimes show CEO's making out like bandits, while stockholders take a bath.

Second, there seems to be a kernel of truth to the "can't throw money" claim. For example, some districts have low per-pupil expenditures and high student achievement, while others have the opposite. But, how meaningful is this?

Administrative overhead varies between districts and is usually not parsed out in such comparisons. School districts--often major employers in communities--spend money on many things outside the classroom, sometimes as much as 30 to 40% of the budget. Clearly, if we're going to throw money, we should know who's catching it.

Other non-instructional economic factors play a role. For example, it may be more expensive to live in the Detroit area than the U.P. So, southeastern Michigan teachers are offered more for their services. At best, the comparison of per-pupil expenditures and test results among districts only suggests that money may not tell the whole story.

Another way we supposedly know spending money does not provide a guaranteed solution to school problems is through sophisticated statistical analyses. These studies--going back as far as the 1966 Coleman Report--tell us that education costs are not strongly related, statistically, to education results. The Detroit News recently plowed this same ground in a series called "Testing Our Schools." The News found, again, that money issues (e.g., teacher salaries, class size, and per-pupil spending) did not seem related to MEAP scores.

What does this "truth" about the apparent disconnection between expenditures and test results mean?

To some, it means spending should stay the same or decline. After all, the thinking goes, parochial schools get by on $2000 or so per student per year. This simplistic viewpoint usually appeals to people with an axe to grind--anti-union or anti-tax types, among others.

I'm not sure how low these folks think public schools should go. Should we pay teachers what day-care workers receive? For that kind of money, it will be hard to get people with college degrees. Perhaps public school teachers should get about the same salary as private school teachers. This view fails to consider the market forces that affect teaching.

Teachers and prospective teachers sell their services in a national market affected by the presence of unions here and there; funding inequities that enable some schools to pay more than others; working conditions that make some schools tougher to teach in than others; public and private employers, etc.

In Economics 101 we learned that difficult work should command higher pay and draw more skilled workers. If so, then teaching in public schools--burdened as they are with regulations, and serving all students--should pay more than private school teaching, where the clientele is easily controlled. Similarly, urban districts with security problems should pay more for teachers than peaceful rural districts. Such non-instructional circumstances explain why costs are not well matched with test results.

To others, if money doesn't matter, then we needn't worry about leveling out inequities between schools. They think, "Why take money away from wealthy districts when it might not help that much anyway?" This view probably plays better in places like Bloomfield Hills than Flint. Actually the argument cuts both ways. If money doesn't matter, then why not make things more equitable among schools across the state? At least then our financial system for schooling would conform to the evidence we have for achievement.

To some, the disconnect between expenditures and achievement offers a message of hope. This seemed to be the message of the News series mentioned above--that schools with below-average resources can, through teamwork, still do things to improve student achievement. It's good to know that success in the face of adversity is possible, but this message also could be an excuse for allowing inequities to persist. Wealthy districts are now organizing to regain some funding they've lost under Proposition A. They don't think money doesn't matter. Nor do we see posh private schools rushing to reduce tuition by creating larger classes.

Of course money matters in education. Only those who have less than their share are being asked to make do. I hope they won't stand for it.


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