Texas school finance reforms need to focus on equity

David S. Knight is the associate director of the Center for Education Research and policy Studies at the University of Texas El Paso. 
The Texas legislature is facing a crossroads. Last year, the State Supreme Court ruled that the school finance system barely met the minimum requirements outlined in the state constitution. The court’s decision described the system as antiquated, overly complex, and in need of “transformational, top-to-bottom reforms.” Since then, the U.S. Department of Education audited the Texas Education Agency and found Texas schools were reducing costs by systematically delaying and denying students from special education services.
Texas legislators have important decisions to make about the state’s commitment to public education. Beginning in January 2019, the 86th State Legislature will decide how much state funding will be allocated to K-12 public schools, and whether to make the system more equitable. Research shows that the state’s schools are substantially underfunded and that the state’s finance system is one of the least equitable in the country.
These important decisions facing Texas state legislators come at a time when research on school finance is undergoing a dramatic shift.
Scholars have long debated whether increasing school funding leads to improvements in student outcomes. Since the Coleman Report of 1966, which found that family background was the strongest predictor of student outcomes, many studies have found that school resources have little impact on outcomes.
But researchers now acknowledge that these studies were flawed. Most of the prior school finance research was based on correlations between spending levels and short-term student outcomes such as test scores. Several economists made a career out of running regression equations to show that school resources were not well correlated with outcomes.
Unfortunately, these simple correlational studies were never able to disentangle cause from effect. States might send slightly more funding to low-performing districts, but if that money is insufficient for driving any real change in educational practices, then a simple analysis would conclude that additional funding doesn’t matter. In other words, poor performance caused some states to target modest (but ultimately inadequate) increases in funding. When outcomes failed to improve after minor increases in funding, researchers concluded that increasing funding does not lead to improvement.
However, a new approach to school finance research goes well beyond these correlational studies. A set of new studies looks at what happened after states made court-ordered school finance reforms that substantially increased funding. While states have continued to enact court-ordered school finance reforms, many of the major reforms took place in the 1970s and 1980s. The new school finance studies draw on previously unavailable data that follow students born in the 1950s, ’60s, and ’70s into adulthood.
By examining external shocks to school funding, rather than simple differences in funding across districts, researchers can decipher what actually happens when states significantly increase funding levels.
The results of these studies are astounding, and remarkably consistent. Students who attend school districts that experience dramatic increases in state funding for a number of years score better on state tests, are more likely to graduate high school and attend college, earn higher wages as adults, and are less likely to live in poverty. A similar set of studies shows that reductions in funding following the Great Recession harmed teacher labor markets and reduced test scores and high school graduation rates. All of these studies find that increases in funding primarily benefit high-poverty schools and districts.
Why is funding so important for schools? Most of a school district’s budget – about 80 cents of every dollar – goes to salaries. Competitive teacher salaries allow districts to attract and retain a high-quality teacher workforce. Hiring additional teachers allows schools to create reasonable class sizes. Additional special education teachers provide needed supports for students with special needs. Elective teachers allow schools to expand curricular offerings to include career and technical education courses and the arts. Non-instructional personnel, such as school nurses and counselors, provide important services for students who may have physical or mental health needs. Academic counselors help ensure students are taking the right courses to support college and career readiness.
Texas legislators can no long ignore the new reality in school finance. Large sustained increases in school funding targeted to high-poverty districts advances educational and social justice. Moreover, these investments pay off in the long run. Recommendations for how to improve the system are readily available. The Center for Education Research and Policy Studies, where I work, has recommended a set of sensible reforms to the state’s school finance system. Moak, Casey & Associates, a school finance consulting firm, has offered similar recommendations.
Whether the state passes comprehensive school finance reform now, or delays policy changes until the next legislative session, will affect Texas students and families for years to come.