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Does money matter in education? In a word, yes.

I have never understood the disagreement over whether money matters in education.

Top private schools – the ones that cater to the children of highly educated parents – charge tuition two to three times higher than the average per pupil spending at the local public schools. And these private schools serve students with every possible learning advantage, kids nurtured to excel from the first sonogram. The elite schools charge $17,000 to $25,000 a year in tuition and hit parents up for donations on a regular basis.

There are some schools that become missions for those who work there, so a lot of unpaid labor doesn't get reflected in the spending ledgers. I am not sure schools -- or any entity --can rely on a model of funding that counts on noblesse oblige.

Despite some restored state funding, Georgia schools remain at a deficit overall. As the Georgia Budget & Policy institute documents, the latest state budget still calls $166 million in austerity cuts to public schools, forcing at least 40 districts to continue to furlough teachers. "Our schools are still trying to escape the recession shadow," says GBPI Deputy Director of Policy Tim Sweeney.

And school districts are still shouldering $400 million in health insurance costs for non-certified employees after the state stopped paying the bill in 2012. That is not likely to change as the AJC's James Salzer reported:

Deal announced 3 percent pay raises last week, the largest state-funded increases teachers have seen since before the recession. What he didn't mention is that the bill for health insurance for noncertified employees such as bus drivers and cafeteria workers is going up again, likely costing school districts almost $61 million annually if the increase is approved by lawmakers.

That comes on top of a $100 million increase for districts this year to pay for coverage for more than 20,000 part-time school workers and their dependents. Deal had proposed to cut insurance for those part-time school employees, even though part-time state legislators are covered by the State Health Benefit Plan.

With that background, I am sharing the executive summary of the Albert Shanker Institute's updated “Does Money Matter in Education?” report by Rutgers professor Bruce Baker. In the report, Baker reviews the relationship between K-12 education spending and academic outcomes.

Before I get to the summary, I want to first feature an excerpt from the report itself that speaks to the performance pay debate underway in Georgia. This is from a long section of the report that deals with the debate over teacher salary structures.

To summarize, despite all the uproar about paying teachers based on experience and education, and its misinterpretations in the context of the “Does money matter?” debate, this line of argument misses the point. To whatever degree teacher pay matters in attracting high-quality educators into the profession and retaining them, it’s less about how they are paid than how much. Furthermore, the average salaries of the teaching profession, with respect to other labor market opportunities, can substantively affect the quality of entrants to the teaching profession, applicants to preparation programs and student outcomes. Diminishing resources for schools can constrain salaries and reduce the quality of the labor supply. Further, salary differentials between schools and districts might help to recruit or retain teachers in high-need settings. In other words, resources used for teacher quality matter.

Now, here is the executive summary:

This second edition policy brief revisits the long and storied literature on whether money matters in providing a quality education. It includes research released since the original brief in 2012 and covers a handful of additional topics. Increasingly, political rhetoric adheres to the unfounded certainty that money doesn’t make a difference in education, and that reduced funding is unlikely to harm educational quality. Such proclamations have even been used to justify large cuts to education budgets over the past few years. These positions, however, have little basis in the empirical research on the relationship between funding and school quality.

Does money Matter? Yes. On average, aggregate measures of per-pupil spending are positively associated with improved or higher student outcomes. The size of this effect is larger in some studies than in others, and, in some cases, additional funding appears to matter more for some students than for others.

Clearly, there are other factors that may moderate the influence of funding on student outcomes, such as how that money is spent. In other words, money must be spent wisely to yield benefits. But, on balance, in direct tests of the relationship between financial resources and student outcomes, money matters.

Do schooling resources that cost money matter? Yes. Schooling resources that cost money, including smaller class sizes, additional supports, early childhood programs and more competitive teacher compensation (permitting schools and districts to recruit and retain a higher-quality teacher workforce), are positively associated with student outcomes. Again, in some cases, those effects are larger than in others, and there is also variation
 by student population and other contextual variables. On the whole, however, the things that cost money benefit students, and there is scarce evidence that there are more cost-effective alternatives.

Do state school finance reforms matter? 
Yes. Sustained improvements to the level and distribution of funding across local public school districts can lead to improvements in the level and distribution of student outcomes. While money alone may not be the answer, more equitable and adequate allocation of financial inputs to schooling provide a necessary underlying condition for improving the equity and adequacy of outcomes. The available evidence suggests that appropriate combinations of more adequate funding with more accountability for its use may be most promising.

While there may in fact be better and more efficient ways to leverage the education dollar toward improved student outcomes, we do know the following:

•Many of the ways in which schools currently spend money do improve student outcomes.

•When schools have more money, they have greater opportunity to spend productively. When they don’t, they can’t.

•Arguments that across-the-board budget cuts will not hurt outcomes are completely unfounded.

In short, money matters, resources that cost money matter, and a more equitable distribution of school funding can improve outcomes. Policymakers would be well-advised to rely on high-quality research to guide the critical choices they make regarding school finance.


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About the Author

Maureen Downey has written editorials and opinion pieces about local, state and federal education policy since the 1990s.