Why More Money Will Not Solve America's Education Crisis

Total federal, state, and local spending for education, both public and private, reached an estimated $389 billion during the 1999-2000 academic year.¹ In inflation-adjusted dollars, this means that America is paying over 72 percent more today than it did in 1980. Yet academic achievement scores for students in elementary and secondary school do not reflect a similar increase. In fact, over the past 20 years, scores have remained flat, according to the nation's report card on education published by the National Center for Education Statistics.² America's students are also lagging behind many of their international peers.³ If America could spend its way out of this education malaise, it would have done so. What is needed is sound education reform, a new approach that--as President George W. Bush puts it--"leaves no child behind."

As education legislation reauthorizing some of the federal government's key programs (S. 1 and H.R. 1) moves toward conference committee,⁴ Members of Congress should recognize the mounting evidence that spending even more on the same programs will do little to change the status quo and raise achievement. The data and findings from research over the past 30 years on achievement, education programs, and spending trends continue to demonstrate that spending more money on the same programs, is simply not effective. Consider:

• Total expenditures by the U.S. Department of Education for all K-12 students have nearly doubled, in constant dollars, just since the 1980s, from $14.8 billion to $27.1 billion;⁵ but

• Reading and math scores on the National Assessment of Educational Progress (NAEP) have changed relatively little over that same period, despite the enormous increases in spending at the federal, state, and local levels. Last year, for example, some 68 percent of 4th graders still could not read at a proficient level.⁶

Only structural reform--well beyond that which is likely to emerge from Congress this year--will improve the nation's schools.

Last year, Congress appropriated $18.7 billion for federal education programs under the Elementary and Secondary Education Act (ESEA);⁷ this year, the budget agreement (H. Con. Res. 83) accommodates the President's request for a substantial 11.5 percent increase in spending. H.R. 1, the House bill to reauthorize the ESEA that was passed on May 23, 2001, calls for spending over $23 billion in FY 2002. As of June 6, the Senate has added over $10 billion in amendments to its base $28 billion ESEA bill (S. 1), which is still under consideration. After six years, the authorization level would grow to over $78 billion annually. Until the Senate passes S. 1, the level of spending may grow even higher.

Members of Congress are in a bidding war to see who can spend the most money in a misguided contest that is diverting attention from true education reform. Funding old programs that fail to serve all children, especially poor children, does not demonstrate a commitment to education; rather, it reveals a commitment to the status quo. Instead of raising the price tag for education, Congress should support reforms that demonstrate responsible stewardship of taxpayers' money.

Funded programs should be required to demonstrate success, especially among disadvantaged children, before receiving additional funds from Congress or their state or local districts. Only successful programs and schools should receive funding through appropriations or through school choice initiatives. Enabling parents to move their children from schools repeatedly shown to be failing to schools that can meet their children's educational needs would mean that successful institutions--not their failing counterparts--would be rewarded for their competency.

In addition to adding a choice component to the bill, House and Senate conferees should include regulatory flexibility combined with rigorous accountability. Such a provision would enable reform-minded state leaders to administer their federal education program dollars as they see best to raise achievement among their student populations. In exchange for flexibility, the states should be required to sign a contractual agreement specifying how their plans would increase achievement, and then be held accountable for achieving those results. Combining choice and accountability is the best way to ensure that no child is left behind.

FOCUS FUNDING ON RESULTS

Instead of using a scattershot approach and funding every program in the hope that something will work, Congress should adopt a results-oriented approach. Currently, both ESEA reauthorization bills making their way to conference committee (H.R. 1 and S. 1) employ a conflicting approach: On one hand, they call for measurable results, reporting, and consequences for success or failure; on the other, they authorize unprecedented spending on programs that have yet to demonstrate their effectiveness in terms of achievement. From the multibillion-dollar Title I program to the multimillion-dollar programs for the arts, bilingual education, technology, and other initiatives, few programs, if any, can boast a solid track record of improving achievement.²⁰

Rather than merely reauthorizing old programs, the House and Senate conferees should incorporate flexibility in the education spending bill to enable reform-minded state leaders to administer program funds as they see best to raise achievement. In exchange for this flexibility, the states should be required to sign a performance agreement with the U.S. Department of Education that spells out how their plans would increase academic achievement for all students across the socioeconomic spectrum.

Such a provision is part of the President's No Child Left Behind plan. "Charter states" and "charter districts," as they are called by the President, would enter into their own five-year contractual agreement with the Secretary of Education that establishes specific and rigorous goals for achievement. In exchange, they would receive full administrative flexibility over how to spend their federal education dollars. Students in a charter state would have to reach the specific academic achievement goals listed in the agreement, or the state would face the loss of funding and its charter status.

States could employ research-based methods to raise academic achievement for all students. They also could cut through the hundreds of pages of red tape that have accumulated over the past 30 years. Each federal education program has its own prescriptive rules, regulations, and paperwork--including an estimated 20,000 pages of application forms that states currently must fill out.²¹ Such a provision would substantially reduce that number. States would be able to focus resources and personnel on raising achievement rather than on administration and paperwork.

A charter states provision was included in the Academic Achievement for All Act (H.R. 2300), which the House passed in October 1999, and the Senate Health, Education, Labor, and Pensions Committee included such a provision in its ESEA reauthorization bill. This year, however, the provision was stripped from the original House ESEA reauthorization bill (H.R. 1), and only a weakened version remains in the Senate bill (S. 1). A robust charter states provision should be crafted in conference to give reform-minded states the option to innovate to raise academic achievement among their student populations.²² If other education reforms are substantially weakened or eliminated from the ESEA legislation, the charter states provision will be the only avenue for change.

House-Senate conferees should also consider reviving the President's school choice demonstration program, which had been included in the original H.R. 1 bill this year.²³ Demonstration programs that target disadvantaged children in failing schools would enable policymakers and educators to see what works best.

A mounting body of research shows that:

1. School choice raises achievement regardless of socioeconomic background. After taking into consideration a variety of family background and other socioeconomic characteristics, researchers have found that private school children nationwide continue to surpass their public school peers on achievement tests.²⁴

2. The increased competition from choice spurs traditional public schools to reform to improve achievement.²⁵ Florida's "A-Plus" program, for example, puts schools on a "failing" list if they do not succeed in educating their students. If the school continues to receive a failing grade, students can leave, making use of the state's voucher program. Failing schools have responded to this pressure; according to Manhattan Institute Senior Fellow Jay P. Greene, "Failing schools that faced the prospect of vouchers made improvements that were nearly twice as large as the gains displayed by other schools in the state."²⁶

Such findings supporting school choice intrigue many in the policy and academic communities. Even the National Research Council, commissioned by the Clinton Administration to study school choice, recommended that the government fund a "large-scale" experiment to study the effects of choice on student performance.²⁷

3. Public schools gain additional funds to spend on their own students. A recent study found that the average private school tuition nationwide was $3,116--less than half of the average per-pupil expenditures at public schools. Further, a full 67 percent of all private elementary and secondary schools charge $2,500 or less. The average expenditure per public school student was $6,857.²⁸ School choice reforms that enable some students to attend private school do not drain funds from public schools, but rather leave behind some of the per-pupil funds, which can then be used on public school students. As the Cato Institute recently estimated, choice programs in the form of an Arizona-like tax credit, which helps low-income students move from public to private schools, may yield billions in savings to states and school districts.²⁹

With many public schools continuing to receive failing grades and many choice experiments receiving good reviews, even The Washington Post has expressed its support for a choice demonstration program. In an April 28 editorial, it stated that

experiments in helping make private school an option for poor students in failed public schools are worth a try. There is no denying that years of attempted reform, particularly in urban areas, have produced dismal results. The students who are able to do so have fled from those situations; those who have no alternatives suffer terrible consequences. On this, as on other education issues, the ability of the federal government to solve the problem is limited, because the bulk of the money and the decision-making rests at the local level. But if lawmakers truly aim to help children rather than to protect the system and the adults who run it, they ought not shy away from reasonable efforts to test potential remedies, including competition.³⁰