The Challenges and Unintended Consequences of Using Expenditures to Determine Title I Comparability

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1 The Challenges and Unintended Consequences of Using Expenditures to Determine Title I Comparability June

2 NSBA s Comparability Survey Report June 2013 PURPOSE In the 112 th Congress, the Senate Health, Education, and Pensions Committee (HELP) adopted a bill to reauthorize the Elementary and Secondary Education Act (ESEA). The bill included a provision to change the current method that school districts use to demonstrate they are allocating a comparable level of resources to Title I schools and non Title I schools alike. Specifically, the Senate provision would require local school districts to show that they spend no less at each Title I school as determined by the combined state and local per pupil expenditures for personnel and non personnel than they do at the average non Title I schools in the district. NSBA supports the concept of comparability and believes it is important to ensure that Title I schools receive comparable educational support. With the expectation that the Senate provision would be reintroduced in the 113 th Congress, NSBA conducted a survey of local school districts in 2012 to determine the bill s potential effectiveness in achieving that goal 1. Nearly 300 local school officials from 17 states responded based on self identification as urban, suburban or rural school districts and enrollment size. The draft of this report was subsequently reviewed and commented upon by 28 central office administrators from 22 states, including Title I administrators and school business officials 2. NSBA 1 The Senate Health, Education, Labor and Pensions (HELP) Committee reintroduced the comparability provision in June, 2013 which would also allow school districts to adopt a different expenditure based method of an equal or higher standard, but it would have to be developed before the reauthorization is enacted and approved by the Secretary of Education. It s not clear what standard ED would require and not practical to expect states to develop an alternative prior to the enactment of the legislation. 2 NSBA wishes to acknowledge the support from state school boards associations and the Association of School Business Officials International to identify reviewers for this paper. 2

3 also wishes to acknowledge the contribution of the National School Boards Action Center to this report 3. The findings in this paper regarding the implementation of an expenditure based comparability system confirm what the Government Accountability Office found in a January 2011 report, although that study (GAO ) focused primarily on teacher cost issues, while this report has a much broader scope by examining personnel and non personnel expenditures 4. School board members and district officials who either responded to NSBA s survey or commented on the draft report indicated that the Senate provision would pose significant accounting and operational difficulties for school districts. Moreover, they identified substantial flaws in the use of per pupil expenditures as a gauge of comparability of services as presented in the bill. Respondents also expressed concern that the provision could produce unintended negative consequences for both Title I and non Title I schools in many school districts. Based on these findings, further research to address many of the questions raised in this report is recommended, as is the consideration of other options that could provide a more direct path to achieving comparability for Title I schools. BACKGROUND The purpose of comparability, which has been part of ESEA since its early days, is to ensure that the level of services a school district provides to its Title I schools is comparable to that of its other schools. Indeed, federal funding is contingent upon achieving that result through several measures that current law and regulations require school districts to use. Districts can demonstrate comparability through student to staff or salary to student ratios between Title I and non Title I schools, or submit a written assurance that they have: 3 NSBAC in coordination with the National School Boards Association advocates at the federal and national levels for the advancement of public education, local school board leadership, and excellence and equity in our nation s public schools. 4 Elementary and Secondary Education Act Potential Effects of Changing Comparability Requirements, (Government Accountability Office, January 2011). 3

4 a) A district wide salary schedule b) A policy to ensure equivalence among schools in teachers, administrators and other staff; and c) A policy to ensure equivalence among schools in the provision of curriculum materials and instructional supplies In other words, given the significant impact teachers have on student learning and districts budgets faculty allocations have been used as a proxy for determining comparability of services. Critics argue that the current approach is inadequate because student teacher ratios fail to recognize that new teachers are not only less experienced but cost less than veteran educators. Yet, research has shown beginning teachers are typically assigned to the most challenging schools. Hence, Title I schools are potentially getting relatively less support both on a staffing level (less experienced and effective teachers) and on a funding level since newer teachers require less money. The Senate bill seeks to overcome these and other resource disparities by replacing the current comparability provision with one that requires per pupil expenditures at each Title I school to be no less than the average per pupil expenditures at the district s non Title I schools. This would include expenditures for both personnel and non personnel items, including presumably such costs as transportation, school meals, and building maintenance. But the Senate bill does exclude state or local spending on special needs students, English language learners, and capital outlays from its comparability calculation. While the goal certainly from a compliance standpoint is to achieve comparability during the school year, the Senate provision would allow school districts to provide the state with a plan for how they will rectify any deficiency in the following year. In sum, the Senate bill moves the standard from requiring a comparability of services among Title I and non Title I schools, as measured by the number of teachers and instructional supplies, to a standard that measures exact budget equality of dollars at Title I schools and compares them to the average of non Title I schools. In doing so, the bill is also establishing a federal requirement approaching schoolbased budgeting, including its specific components, as a condition for federal Title I funding. 4

5 The Senate provision raises the following questions: 1. Operationally, how will the provision impact local school districts? 2. What will be the educational impact? 3. Are there better approaches? METHODOLOGY In addressing the operational and educational questions, NSBA asked local school officials to comment and/or rate the degree of ease or difficulty (1 being easiest, 5 being most difficult) that their school districts would experience in meeting the Senate s proposed comparability requirements in the following areas: Teachers/Personnel Transportation Building size and efficiency Upgrades and replacements (such as technology) Food/cafeteria services Grant funding (from federal, state or foundations) Central office support The findings for each of these categories are presented below along with comments from the field and NSBA. While NSBA s survey asked school officials to comment on building size and efficiency, grant funding, and central office support, it did not ask for a numerical rating of those factors. Analysis, conclusions, and recommendations follow the findings. FINDINGS OVERALL When asked to consider the implementation of all of the factors mentioned in this survey, one half to 87.5 percent of educators rated the Senate provision as difficult depending on the type of district they came from. A majority (56 percent) of all respondents (including school board members, Title I and other administrators) specifically identified personnel as a problematic area to comply with under the Senate bill. 5

6 Table 1: Percentages of school districts rated as difficult in equalizing the per pupil expenditures in all combined areas listed in the methodology section under Senate s proposed comparability requirements % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 61.60% All issues combined 49.90% 65.50% 87.50% Urban Rural Suburban Student enrollment 25,001 & over Overall, NSBA s survey showed that the Senate s proposed comparability requirements would be particularly challenging for districts that serve more than 25,000 students. These districts are more likely to face difficulty in equalizing the per pupil expenditures in personnel costs (e.g. teacher salaries). At the same time, while the scale of challenges may not be as great in smaller districts, officials there anticipated problems complying with the proposed comparability measure because they have fewer resources and hence less flexibility. Although size does matter, so does the relative proportion of Title I schools to non Title I schools. School districts that have an imbalance in the ratio of Title I schools to non Title I schools will face greater difficulty in equalizing resources across the system. For example, equalizing the expenditures of a district with two Title I schools and one non Title I school will pose different challenges than a district with one Title I school and four non Title I schools. Respondents also raised concerns over: The availability of software to score the proposed requirements 6

7 Accounting for central office staff who serve schools, especially those who serve multiple schools or who manage federal grants with local resources Meeting comparability for charter schools that may have a different budgetary level, student service requirements, or outside sources of revenue Accounting for any outside revenue sources, such as grants, contributions, or foundation funds to traditional public schools Generally, school district officials commented that the Senate provision did not recognize the difficulty in compiling school by school expenditures. One chief financial officer from Alabama noted that I know of no district in each of the three states I ve been that has enough accounting staff to extract a per pupil cost based on the factors (required in the Senate proposal). The GAO study on teacher costs also noted the financial and operational challenges of tracking expenditures at the school building level. FINDINGS BY ISSUE AREA The following highlights each of the issues above along with ratings, comments from the field and NSBA. Per pupil expenditures for Teachers/Personnel Rating The overwhelming majority of survey respondents ranked personnel related per pupil expenditures as the most difficult to reconcile, rating it a three or higher on the scale. Participants were asked how difficult it would be to resolve the disparity from a Title I school that is staffed by the least experienced teachers, which would have the effect of lowering spending relative to the average non Title I school. About 64 percent of urban and suburban school districts said it would be moderately to extremely difficult to achieve, while 85 percent of large districts (those with 25,000+ enrollments) expressed the same concern. 7

8 Table 2: Percentages of school districts rated as difficult in equalizing the per pupil expenditures in personnel under Senate s proposed comparability requirements. Personnel (salary) 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 64.30% 51.70% 64.40% 85.10% Urban Rural Suburban Student enrollment 25,001 & over Comments from the Field Most respondents indicated that collective bargaining agreements made it very difficult, if not impossible, to involuntarily reassign teachers in order to achieve equity between Title I and non Title I schools. And the current financial situation most districts find themselves in does not enable them to offer monetary incentives. District officials also expressed concern that involuntary transfers could negatively impact teacher retention, especially in urban districts where more convenient and financially rewarding suburban options are available. By requiring personnel spending at Title I schools be no less than the district average for non Title I schools, the Senate provision assumes that highly compensated teachers (i.e., more experienced teachers) are necessarily more effective than lower paid newer ones. Many respondents pointed out that this assumption is overstated, noting that some of their most effective teachers are newer/younger teachers. One administrator stated that younger teachers tend to be more willing to make the changes needed to improve their teaching practice. It was also noted that the conditions that may enable a teacher (new or seasoned) to reach a certain level of effectiveness in one school may not exist in the 8

9 school to which that person is transferred. These points were also highlighted in the GAO study, which suggested the proposed comparability requirement could result in simply transferring teachers among Title I schools. Because of the Senate provision s underlying assumption and the premium it will place on teacher transfers district officials said their ability to put together the most effective teams for students would be hamstrung. In this regard, several educators pointed out that the salary schedule alone does not necessarily equate with the training, leadership, technological skills, or pedagogical practices that a teacher acquires to be effective, generally, and in specific learning environments. Further, the proposed system does not recognize issues such as salary differentials that occur when experienced teachers transfer into the school system and are assigned to a Title I school at a lower level on the salary schedule than the level they reached in their previous school system. One district official from California summed up by stating that randomly moving teachers because of their salary schedule placement to satisfy a federal quota would not benefit the education of our students. Another district administrator from Colorado pointed out that class size could significantly alter the calculation of per pupil expenditures. For example, she said a difference of two to three students (per class) can make an eight to 10 percent difference in per pupil expenditures while having an insignificant impact on delivery of educational services. The class size discrepancies in her district are primarily due to the inability to combine grade levels effectively at small, rural schools, she added. A deputy superintendent from California agreed that basing comparability on dollars spent per pupil is misleading because class size can change and benefit packages can vary materially from employee to employee. NSBA Comment Consistent with the above judgments by local school officials, research has shown that teacher longevity does not necessarily correspond with teacher effectiveness, thus it should not be the unqualified measure of personnel comparability as presented in the Senate bill. In fact, teacher effectiveness tends to level off after a decade in the field, according to a 2010 study from the Program of Education Policy 9

10 and Governance at Harvard University 5. The point is, while research does show that teachers become increasingly more effective in their first five years, it cannot be said that those who have 20 or 30 years of experience will increase their effectiveness relative to their salary increases and according to the Harvard study their effectiveness is likely to decline in later years. Yet, the full cost of longer serving teachers must be factored into the calculation of budget equality under the Senate provision. In calculating personnel expenditures, the question is also raised whether the focus is on salaries alone or also on other aspects of compensation such as health care, pensions, sabbaticals, maternity leave, etc. If the latter items are included, it should be noted that variations occur in how states and local school districts account for these items. For example, if pensions are funded through a state system totally separate from a school district s funding, are they included in the calculations? If a teacher is on maternity or sabbatical leave would that aspect of compensation be factored into the calculation even though the teacher is not providing education services to her school? Further, there could be some disconnect in determining comparability when calculating health insurance. For instance, younger teachers who might be more prominent in Title I schools, are likely to have lower employer paid premiums because they are on individual health plans; whereas older teachers may be on family plans. Yet other teachers may have no health care costs because they opt to be on spousal plans perhaps in another school. Likewise, pension costs could pose accounting challenges as well as comparability questions. For example, how should older personnel who are both salaried and receiving a public pension be accounted for? Will districts that match voluntary employee contributions have to factor the district s contributions into the comparability equation? In some states pension programs have been modified for incoming personnel due to the financial inability of the state and local level to continue funding the costs and future liabilities of those plans. Despite that lack of funding, will school districts have to raise the money or reassign personnel to provide the resources needed to offset any pension or health insurance based comparability disparities? 5 Matthew M. Chingos & Paul E. Peterson, It s Easier to Pick a Good Teacher Than to Train One: Familiar and New Results on the Correlates of Teacher Effectiveness, (Program on Education Policy and Governance, Harvard University, June 2010). 10

11 Certainly the need for additional funding can be overcome by reassigning teachers to achieve a more balanced mix of new and more experienced teachers within a district. In practice, however, this would be challenging given the collective bargaining issues previously discussed. This then raises the question whether the imprecise correlation of these costs to student achievement justifies a system that would be burdensome to score, difficult to administer, and potentially damaging to schools that have seasoned teachers, yet need more, not less support. As one district administrator from California put it: If the concern is less skilled teaching, then provide funding and require specific types of training for these teachers young and old. Non Teaching Costs The Senate bill also requires school by school calculations for operational costs beyond teacher compensation. These items, such as transportation, building maintenance, and cafeteria service can vary among schools with little or no impact on student learning. Others may involve instructional and non instructional upgrades or replacements that are cycled into schools over a period of years rather than funded for all schools in one year. Some items may not be currently accounted for at all, such as the additional amount of central office staff time that may result in under reporting the funding that supports the most challenging Title I schools. According to the National Center for Education Statistics (NCES), in FY 2010 non capital student support services comprised about $4,100 of the average $10,652 per pupil expenditures 6. Of that amount, about $3,000 or about 30 percent went toward general administration, school administration and operations, maintenance, transportation, food services and other functions 7. The paragraphs below break down non personnel costs by category. In considering the merits and impact of each category it is also important to keep the aggregate of all the categories in mind. 6 Revenues and Expenditures for Public Elementary and Secondary Education: School Year (Fiscal Year 2010), (U.S. Department of Education National Center for Education Statistics, November 2012). 7 While the category of student support services includes personnel such as social workers, it also includes speech therapists and other personnel that support students with disabilities, and therefore was excluded from calculating the 30 percent figure. 11

12 Transportation Rating Transportation costs can have a significant impact on comparability calculations since they involve such non capital expenditures as drivers, fuel, maintenance, personnel, and facility operations. Almost half (44 percent) of large school districts (with an enrollment of over 25,000) indicated transportation as an area of difficulty (a rating of 3 or higher) in meeting the Senate s proposed comparability requirements. About one third of the urban and suburban school districts rated this as a difficult area to comply with. Comments from the Field A number of respondents pointed out that in some school districts, all or nearly all students walk to a Title I school, while students attending non Title I schools were typically bused. As a result, significant cost variances will arise that are unrelated to the education students receive. Similarly, districts that encompass both sparsely populated areas and concentrated housing tracts can experience huge variations among schools in transportation costs. Even further variances in transportation costs can occur when a local school transports students on behalf of a magnet, charter, or non public school. One Tennessee educator pointed out that while some school systems operate their own full fledged transportation service, others outsource it to local and regional companies (this could result in comparability related accounting requirements for that company). Clearly there are circumstances germane to each system that would have to be taken into account if comparability extends to transportation, he said. Likewise, the age and condition of buses assigned to schools can cause significant differences in their cost of repairs and maintenance but don t impact education in the classroom. NSBA Comment According to the NCES, public education spent, on average, $443 per pupil on transportation in FY 2010 and $22 billion collectively. Twenty states spent at least $100 more per pupil, with the highest being New York ($942), New Jersey ($887) and West Virginia ($830). About 55 percent of all students are 12

13 bused annually 8 and the variance between the non capital cost of bused and non bused students is close to $900 per pupil. Since transportation is a significant operational cost, factoring transportation into comparability can become an equalization distortion in districts because of the unique circumstance of each school regarding the number of students who are bused or who walk to schools as well as the geographical differences. In sum, variances in transportation costs depend on many factors that have nothing to do with achieving equal resources for student learning. Upgrades and Replacements (such as non capital technology) Rating Overall, one fourth of the school districts responded said it would be difficult to meet the proposed comparability requirements in upgrading and/or replacing technology and other equipment and infrastructure to be paid from their operating budgets. More than one third of suburban districts (36 percent) rated this issue as difficult. The challenge is more pronounced among school districts with a student enrollment of over 25,000, with 55 percent of these districts rating this item as difficult (a rating of 3 or higher). Comment from the Field Most educators stated that the reason for the difficulty is that these projects tend to be scheduled on a multi year cycle for different schools and are based on their needs, or factors like the age of their technology. The costs would be too large if all Title I and non Title I schools are upgraded at the same time. There will always be what seems to be a funding disparity in any given year, a school district administrator from North Carolina said. NSBA Comment Ironically, if a Title I school is first in line to receive a major upgrade, the school district may fail to meet comparability requirements in subsequent years, as non Title I schools are cycled in. 8 Digest of Education Statistics 2011, (U.S. Department of Education, National Center for Education Statistics, 2012). 13

14 Food Services Rating Forty percent of the large school districts rated food services as moderately to extremely difficult (a rating of 3 or higher) for meeting the proposed comparability requirements. About one third of urban and one third of suburban districts surveyed gave the same ratings. Comments from the Field Participants responded that food service costs are not part of their school level budgets, and therefore not currently factored into their school based accounting systems. Districts officials expressed concern that if a school is subsidized by the district because of the nature of its food service program or mix of students, factoring those costs into comparability could come at the expense of its education program relative to those schools that aren t subsidized. For example, in North Carolina, the majority of school districts have to subsidize their food service programs with local funds. This then creates difficulties based on breakfast and lunch participations on a school to school basis along with the (federal) free and reduced lunch status, a district administrator from North Carolina said. The most likely scenario is that non Title I schools will require more local funds because of this. NSBA Comment Assuming that the Senate bill would require factoring food services into the calculation of per pupil expenditures, significant variations could occur based on the relative number of students who participate in school breakfast and lunches (and type of school lunch served) that are subsidized by the school district. Some school districts seek to achieve cost efficiency by having some schools absorb costs associated with preparing school meals that are then transported to other schools that would not, therefore, need to bear the cost of operating a full kitchen. Factoring food service into comparability would result in more accounting costs and could produce counter productive results in Title I schools. The NCES report showed that state expenditures on food services were $405 per pupil in FY 2010, with seven states spending at least $100 or more per pupil than the average. 14

15 Table 3: Percentages of school districts rated as difficult in equalizing the per pupil expenditures in such areas such food services, transportation and upgrades/replacements for schools under Senate s proposed comparability requirements. Food services Transportation Upgrades/replacements 60.00% 54.60% 50.00% 40.00% 30.00% 31.40% 35.30% 42.10% 24.90% 30.60% 33.40% 32.10% 47.10% 40% 44.40% 20.00% 20% 10.00% 0.00% Urban Rural Suburban Student enrollment 25,001 & over Building Size and Efficiency Comments from the Field Respondents pointed out that a school s size and enrollment numbers could impact how much it spends per student. For example, larger campuses, both in terms of square footage and students served, may require more staff and resources than a smaller campus. We have schools that vary greatly in size and the cost per pupil fluctuates with school size rather than Title I vs. non Title I school, said a district official from Arkansas. Further, a new school is likely to cost less to operate and maintain than an older facility which as a structure, may actually have less to offer in the way of education value to students. Why then reduce the budget that an older building needs in order to meet the comparability requirement? NSBA Comment Factors such as the age, design, energy efficiency, use of school buildings for non instructional services for students can also make a difference in the amount of resources needed for utilities and building and 15

16 grounds maintenance. Yet, their inclusion in the comparability calculation can result in two Title I schools with the same educational needs having different educational resources available to them. Grant Funding (federal, state or foundation grants) Comments from the Field Respondents said that scoring school based grant funds could be a challenge, if included in the calculations under the Senate s proposed requirements. It would create what seems to be a funding difference from the school district s budget, since many of the grants would flow through the district s budget, said a district official from North Carolina. As a result, it would place a burden on local funding to level per pupil amounts. This will discourage districts from applying for grants, he added. NSBA Comment For some districts, the acquisition of a grant to one Title I school for a new education program or to enhance building security may cause it to reduce its educational programming in other areas in order to free up funding for another Title I school even to overcome expenditure disparities, such as transportation, that are unrelated to education. A significant grant to a non Title I school can be particularly challenging in a small school district if the impact cannot be spread out across several schools in calculating the average expenditures for the district s non Title I schools as a whole. The proposed comparability provision would appear to chill the interest or benefit in obtaining federal, state or foundation grants for some schools and school districts. Central Office Support Comments from the Field Most district officials report they do not currently include central office support/resources into their comparability calculations. Some said they distribute district resources equally among schools. Others indicated that their accounting systems are not set up for those purposes and questioned how they could realistically apportion numerous employees time over multiple sites. The effort and time it would take to track and report the deployment of central office resources could be overwhelming, said a 16

17 district official from Illinois. When we should be spending more time increasing teacher effectiveness and providing curricular and education leadership, we will instead be shortchanging our students due to the necessity of spending more time with dubious methods of proving that we are not shortchanging our students, he said. NSBA Comment The question here is not whether office staff time must be calculated but whether it is cost justified to do so, in order to demonstrate comparability and, if so, what kind of score keeping system would be satisfactory to track administrative time spent in specific schools. Small districts with limited central financial staff felt particularly challenged by this requirement. The staff to be scored could involve senior management, curriculum specialists, security personnel, librarian/media staff, health staff, among others whose days are divided serving multiple sites. COMBINED EFFECTS OF ALL AREAS When asked to look at the combined effect of the proposed Senate bill on all of the budget areas previously described and rate the overall difficulty in meeting these new comparability requirements, 88 percent of large school districts (student enrollments of 25,000+), 62 percent of urban districts and 66 percent of suburban districts indicated it would be moderately to very difficult to implement (see table 1). In sum, the great number of school district officials who commented on NSBA s survey said the Senate proposal would impose significant hardship in collecting and reporting such calculations which are built around faulty assumptions that do not help achieve educational comparability. We do not have the technology or manpower at this time to implement a building by building cost tracking system that would provide comparability information as requested by the proposed Senate amendment, a district official from Illinois said. How would we handle shared employees, shared costs and services, indirect expenses and non allocated expenses for starters? It would be a huge undertaking to do so. THE UNINTENDED CONSEQUENCES To meet the Senate requirements, school districts would be required to achieve a comparability of expenditures that is built around faulty assumptions (e.g. an absolute equation of years of 17

18 teaching/salary with effectiveness) or costs that are not germane to the quality of instruction among schools (e.g., transportation and building maintenance costs). The Senate provision also does not adequately allow for changed circumstances, problems based on school district size, funding for innovations for special projects, or accommodate for the unique needs of some schools, including social service and school safety programs, as well as resources from other local agencies. Consequently, to meet the requirements in this budgetary climate, a majority of the school districts, despite their schools characteristics, needs, and enrollment said that regardless of merit, they would likely have to reallocate funds from other Title I and non Title I schools in order to equalize their school to school per pupil expenditures. An assistant superintendent for finance and operations from Illinois commented that the proposed Senate model has so many expenses that do not really relate to the quality of the educational program or that would not necessarily be comparable among all schools from year to year, that the actual implementation of a comparability system would be fraught with problems. In fact, more than 90 percent of suburban school districts indicated they would have to shift resources from other schools sometimes other Title I schools to ensure all Title I schools are in compliance (see appendix). That reallocation could hurt some Title I schools because it would mean cutting educational programs and other services to offset relatively lower expenditures in other schools, even if the differences in expenditures are not tied to the quality of education. ANALYSIS The Senate comparability provision raises a number of other operational questions regarding its implementation, such as: How precise does the per pupil expenditure level between a Title I school and other schools have to be in order to be in compliance? Should there be some room for variance? Should there be a broader range of unforeseen circumstances during the school year than what the bill allows for which is currently limited to unforeseen changes in student enrollment or personnel? If so, what should they be? 18

19 Should they be based on the reasonableness of the circumstances? The Senate bill does enable school districts to overcome a comparability shortfall in a school without requiring the loss of Title I funds if the district provides a plan for rectifying the problem in the next year. But what is not clear, especially for large school districts, are the circumstances under which a year to year plan will suffice and when it will not. If simply having an annually updated plan is all that is required, then this raises the question of whether all of the effort to calculate comparability is justifiable compared to other options that might provide a better gauge of equity and produce better results. Further, to threaten districts that do not meet the proposed comparability requirement with the suspension of Title I funds hurt the very students the program intends to help. Clearly, the Senate provision must be supported by detailed Department of Education regulations that will hopefully address many of the issues raised in this paper. It leads to the question of how much more complex the accounting process will become for local school districts. In addition, will state departments of education have the capacity to review local comparability reports which in many states include hundreds of school districts and over a thousand schools? The GAO study noted the states inability to assess comparability under the current, and decidedly less complex, formula. Given today s economic realities, the new responsibilities that a forthcoming ESEA reauthorization bill may assign to states, along with the oversight and implementation that participating states must provide under the Education Department s NCLB waiver program, state capacity would need to be significantly increased. NSBA CONCLUSIONS AND RECOMMENDATIONS A major goal of the current comparability requirement is to ensure equity in the commitment of local resources to Title I schools. The Senate bill seeks to measure equity in terms of absolute budget equality based on assumptions that certain resources in a school for a given year are directly tied to student learning. However, ground level observations and empirical research do not support the notion that teacher longevity equates on a straight line with effectiveness. The Senate provision also requires budget equality based on cost variances among schools that are either not germane to learning or not in touch with how schools operate. Despite these flaws, the proposed requirements will involve considerable work for district staff and result in removing instructional resources from some schools including Title I schools in order to achieve fiscal parity with other schools. 19

20 When it comes to achieving comparability of teachers, there are other means to ensure that effective teachers are distributed equitably in Title I and high poverty schools. The Senate bill already has provisions that move in that direction, including a requirement relating to the equitable distribution of highly rated teachers based on more direct and accurate measures to determine effectiveness. It also retains the No Child Left Behind s highly qualified teacher provision which requires teachers to have a Bachelor s degree, state certification, and competency in the core subjects they teach. If the current method for assessing comparability must be replaced, it should be replaced by a system that results in more effective teachers through overall targeted professional development, mentoring and other supports to produce highly rated teachers, particularly with the financial assistance from programs like Title II. Therefore, NSBA recommends that Congress provide the funding needed to support the many components proposed in Title II of the Senate bill, with an emphasis on supporting weaker teachers in Title I schools. These components include: high quality teacher mentoring, training for analysis and use of student data, time for collaboration, professional development, team teaching, regular observation with timely feedback. The Senate bill also emphasizes support for states and school districts to develop teacher and principal evaluation systems and a process to ensure the equitable distribution of highly rated teachers among low performing schools regardless of salary and, hopefully through high priority professional development for non highly rated teachers. If teacher transfers must occur they should be based on that foundation rather than calculations of salary and non salary expenditures to define comparability. In addition, the Department of Education has initiated or proposed a wide range of programs aimed directly at raising student achievement, which, if brought through the legislative process, can be structured to strategically produce better outcomes academically and operationally than the redesign of comparability taken in the Senate bill. The Senate provision also paves the way for the federal government to create school based budgeting as a condition for receiving federal funds. The appropriateness of that direction as a federal function raises serious concerns that need to be fully addressed. 20

21 Therefore, NSBA recommends that the Senate comparability requirements not be adopted as proposed in favor of providing further study, and exploring other options including those suggested in this report, to determine if they would produce better outcomes than current law. 21

22 APPENDIX The following table compares the different types and sizes of districts based on their responses on how difficult it would be for them to equalize the per pupil expenditures in the respective areas to meet the Senate s proposed comparability requirements. It shows the percentages of districts that rated the respective areas as moderately difficult to extremely difficult (a rating of 3, 4 or 5 out of a scale of 1 to 5, with 5 being the most difficult). Urban Suburban Rural Student enrollment 25,001 & over Personnel (salary) 64.3% 64.4% 51.7% 85.1% Food services 31.4% 32.1% 24.9% 40% Transportation 35.3% 33.4% 20% 44.4% Upgrades/replacements 42.1% 47.1% 30.6% 54.6% All above issues combined 61.6% 65.5% 49.9% 87.5% Likely solution: increase budget s overall budget 13.8% 10.4% 26.7% 16.7% Likely solution: reallocate funds from other schools 86.2% 91.7% 73.3% 83.3% Number of responses 72 (26.5%) 84 (30.9%) 139 (51.1%) 47 (17.2%) 22