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How Smaller Class Size Affects Student Achievement: A Literature Review of the STAR project and other studies

Monday, December 20th, 2010

Introduction

Research concentrating on class size is important because the findings have largely concluded that smaller class size leads to increases in student achievement, helps to close the minority-majority achievement gap, and has several other long lasting benefits. This paper reviews the literature concerning the research into three major experiments concentrating on the relationship between smaller class sizes and student achievement. The review explores not only the methodology of different approaches to class size reduction as well as the benefits of smaller class sizes but also the range of conclusions drawn on the relationship between smaller class sizes and student achievement including those that are supportive as well as critical plus the need for additional research. The three major class size reduction initiatives are:

Student-Teacher Achievement Ratio (STAR) project
Student Achievement Guarantee in Education (SAGE) project
California Class Size Reduction Program (CSRP)

The literature concerning the different approaches used to evaluate the impact of smaller class size on student achievement in each of the three class size reduction initiatives is reviewed including STAR’s use of a randomized, longitudinal experiment, SAGE’s targeting of students in low income or poverty level school districts, and California’s statewide implementation. The design, findings, and limitations of each of these studies are evaluated as discussed in the literature.

Although this review focuses on the three major class size reduction initiatives, the landmark STAR project not only set the standard against which other studies have been evaluated but also caused other class size reduction initiatives to be undertaken including Wisconsin’s SAGE project and California’s CSRP to try to replicate its results. The landmark STAR project is the leading longitudinal class size reduction experiment conducted over ten years in Tennessee to determine not only the relationship between smaller class sizes and student achievement but also the long term effects. Tennessee’s STAR project, Wisconsin’s SAGE project, and California CSRP’s are the largest class size reduction initiatives making their conclusions some of the most credible.

Although a majority of the body of research on the effectiveness of class size has found that smaller class size improves student achievement including Finn and Achilles (1999), Konstantopoulos (2009), and Schanzenbach (2007) and many small class size advocates promote a nationwide application, this conclusion has its critics. Critics such as Hedges, Laine, and Greenwald (1994), Hoxby (2000), Prais (1996), Hanushek (1989), and Hanushek (1996) contend that class size reduction programs are either too expensive, create certified teacher shortages, create classroom shortages, or have flaws in their methodology and, therefore, different and more cost effective ways of improving student achievement should be considered. The research that shares this perspective of class size reduction programs is reviewed. The paper concludes with a review of the literature that provides insights into the possible underlying reasons as to why small class improves student achievement.

A large portion of the class size reduction research has not only demonstrated that when qualified teachers teach students in smaller class sizes the students in the smaller classes learn more and according to Finn, Fulton, Nye, and Zaharias (1992), Konstantopoulos and Chung (2009), and Finn and Achilles (1999) these students retain this advantage over other students who attend larger classes but also shown how smaller class sizes help to significantly close the achievement gap among minority and majority students. According to Nye, Hedges, and Konstantopoulos (2000a), Konstantopoulos (2009), and Schanzenbach (2007) smaller class size seems not only to increase achievement for all students but also to benefit most those students who are minorities, eligible to receive free or reduced-price lunches, or attend urban schools in low income districts.

Krueger and Whitmore (2001) identified a number of other small class size benefits for at-risk students including how small class sizes narrow the achievement gap, reduce grade retention, decrease behavioral problems, reduce truancy, and increase graduation rates. While Fletcher (2009) found evidence of increased participation in high school sports, extracurricular activities, honors, and advanced placement courses among students who attended smaller class sizes during kindergarten through third grade, he did not find evidence of higher rates of attending college.

In terms of this literature review, however, it is important to understand two essential elements of the STAR, SAGE, and California CSRP class size reduction initiatives. First, these three major initiatives were not specifically designed to determine how smaller class size improved student achievement but rather to determine whether smaller class size improved student achievement. Second, it is important to distinguish between what is meant by class size and a student-teacher ratio. Class size is the number of students a teacher instructs in a classroom at a point in time. A student-teacher ratio is different because it is a school’s total student enrollment divided by the number of its full time teachers.

Student-Teacher Achievement Ratio (STAR) project

The leading experiment is the landmark longitudinal class size reduction initiative conducted over ten years in Tennessee to determine not only the relationship between smaller class sizes and student achievement but also the long term effects called the STAR project. The STAR project focused on the impact of smaller class size in kindergarten through third grade. Along with Wisconsin’s SAGE project and California’s CSRP, the STAR project is one of the few very large scale class size experiments making its data some of the most widely studied.

Glass and Smith (1979) performed a meta-analysis of the major class size reduction experiments to determine the relationship between class size and student achievement which helped to establish the foundation for the STAR project. Glass and Smith (1979) focused primarily on comparisons of student performance in class sizes of less than 15 versus classes with more than 20 students and concluded that smaller class size tended to improve student achievement significantly. Although Slavin (1989) found a less significant relationship between class size and student achievement when he analyzed Glass and Smith’s study, many evaluations of the STAR project’s findings were consistent with those of Glass and Smith. Also, Slavin (1989) argued that class size reduction projects such as STAR are too expensive relative to the degree of improvement in student achievement and that less expensive methods of improving student achievement should be considered. In another meta-analysis, Hedges et al. (1994) concluded that the larger is the scale of the class size reduction experiment the greater is the expense.

Three Phases

The STAR project was conducted in three phases. The first phase, following a similar two year initiative conducted on a much smaller scale in which class sizes were reduced from 25 to 18 in grades kindergarten through second grade in a small number of Indiana schools called Project Prime Time, was performed over four years. In Project Prime Time, Finn and Achilles (1990) found that students in smaller classes scored higher on standardized tests, had fewer behavioral problems, and performed at higher levels in mathematics and reading than those in larger classes. Because Project Prime Time did not randomly assign students to treatment groups, it was criticized for a lack of internal validity by many researchers including Blatchford, Goldstein, and Mortimore (1998), Goldstein and Blatchford (1998), and Grissmer (1999). Project Prime Time’s lack of randomization highlighted the need for a large scale randomized experiment to evaluate the impact of small class size on student achievement which led ultimately to the STAR project. Konstantopoulos (2009) and Finn and Achilles (1990) found that the STAR project showed students in smaller class sizes from kindergarten through third grade demonstrated significantly improved achievement as compared to those in larger classes after four years of the experiment. Konstantopoulos (2009), however, focused more on the impact of the teacher particularly on poverty level, minority, and female students in the STAR project and found that the teacher had the most impact on improving the achievement of students coming from poverty level homes with minimal effects on minority and female students.

STAR’s second phase, a three year observational study called the Lasting Benefits Study, found that the benefits of smaller class sizes continued into the later grades. In terms of the Lasting Benefits Study, Achilles, Nye, Zaharias, and Fulton (1993), Konstantopoulos and Chung (2009), Finn et al. (1992), Finn and Achilles (1999), Nye, Hedges, and Konstantopoulos (2001a), and Konstantopoulos (2009) concluded that even after the students returned to larger classes in the fourth through eighth grades those students who had attended smaller class sizes for their first three or four years maintained an advantage over students who had attended the larger classes from kindergarten through third grade. Finn, Gerber, Achilles, and Boyd-Zaharias (2001) found that the benefits of smaller class sizes from kindergarten through third grade were significant and lasted throughout high school.

Although Konstantopoulos and Chung (2009) found evidence that the duration of the benefits was a function of the number of years a student attended smaller classes and that the benefits lasted beyond eighth grade, Fletcher (2009) found that the benefits of smaller class size diminished with time. Still, Nye, Hedges, and Konstantopoulos (2001b) found that the duration of the benefits of smaller classes lasted beyond ninth grade. The students who attended smaller class sizes in kindergarten through third grade, therefore, continued to outperform those who had attended larger classes according to most researchers. Major assessments of the Lasting Benefits Study including those conducted by Nye, Hedges, and Konstantopoulos (2000b), Konstantopoulos and Chung (2009), and Finn and Achilles (1999) supported STAR’s earlier findings that minority students benefited the most from having smaller class sizes.

The STAR project’s third phase, called Project Challenge, was conducted over three years and placed all of the kindergarten through third grade students of Tennessee’s 17 most economically challenged school districts into small classes. Nye, Hedges, and Konstantopoulos (1999) assessed Project Challenge and found improvements in student achievement similar to those of the STAR project’s first phase. As a result of having smaller class sizes, Nye, Achilles, Zaharias, and Fulton (1993) concluded that the students in these 17 districts had raised their performance levels for reading and mathematics.

But unlike Project Prime Time which was attacked because the students were not randomly assigned, Krueger (1999) and Schanzenbach (2007) explained how the STAR project was a randomized experiment of kindergarten through third grade class size conducted in Tennessee. In the STAR project, the researchers used random assignment of the students and teachers to control the treatment. The researchers compared the students’ performance on the post treatment status on the dependent variable using statistical analyses of student test results. Because the researchers used random assignment, the statistically significant differences that they found enabled them to conclude that the effect of having students in smaller class sizes was the cause of the higher achievement levels which assured them that the effect was real. That is, researchers such as Finn and Achilles (1990) and Finn and Achilles (1999) were able to conclude that the treatment caused the differences in effect and that the results were internally valid because the project’s use of random assignment had eliminated other possible explanations for experiment’s outcomes.

Finn et al. (2001), Finn and Achilles (1990), Finn and Achilles (1999), and Schanzenbach (2007) explained how the STAR project’s use of randomization was likely to lead to internally valid results because it only manipulated class size and excluded other factors from influencing the selection and assignment of students into treatment and control groups. Thus, any significant differences in performance among the different groups would be a function of the difference in class size. Both standardized and curriculum based tests including the Stanford Achievement Test and the Tennessee Basic Skills First Test were employed to determine the performance of approximately 11,600 students in inner city, suburban, urban, and rural school districts in STAR’s three phases. The tests assessed the students’ reading, mathematics, and basic study skills.

Public schools statewide were invited to volunteer for the project based on their ability and willingness to follow the experiment’s protocol according to Finn et al. (2001), Schanzenbach (2007), Finn and Achilles (1990), and Finn and Achilles (1999). The 76 schools that were selected to participate represented all areas of the state as well as all of the state’s ethnic and racial groups. While teachers were randomly assigned by grade to classes of one of three different sizes so that they were not able to choose their classrooms, the students were randomly assigned to either the treatment group or one of two control groups, a no treatment group or an alternative treatment group, so that each class was composed of a roughly equivalent student population according to Krueger (1999) and Nye et al. (1993).

Schanzenbach (2007), Nye et al. 1993), Finn and Achilles (1990), and Finn and Achilles (1999) explained how students were randomly assigned by grade to classes of one of three different sizes:

Treatment group: Class size of 13 to 17 students
Control groups:
- No treatment group: Regular class size of 22 to 25 students
- Alternative treatment group: Regular class size of 22 to 25 students plus a teacher’s aid

Each year students were assessed and their performance was compared to the performance of students in the other groups according to their grade level, school district location, socioeconomic status, ethnicity, race, gender, and number of years of participation in the experiment.

Findings

Most researchers seem to share the view advanced by Konstantopoulos (2009), Finn and Achilles (1990), Nye et al. (1999), Schanzenbach (2007), and Word, Johnston, Bain, and Fulton (1994) that the STAR project found that as class size was reduced student achievement improved. These researchers found the STAR project demonstrated that students, who were enrolled in small classes beginning with kindergarten and continuing through third grade, were significantly more likely than their counterparts who attended larger classes, to:

Demonstrate better reading and mathematics skills
Complete more advanced mathematics, science, and English courses
Complete high school
Graduate high school on time
Graduate high school with honors
Reduce truancy
Reduce grade retention
Decrease behavioral problems

Also, teachers of the smaller classes in grades kindergarten through third grade reported that they spent more time teaching, provided more individualized or differentiated instruction, had more interactions per child, and were better able to minimize disruptive student behavior as reported by Addonizio and Phelps (2000), Achilles et al. (1993), and Cooper (1989).

Finn and Achilles (1990) summarized the STAR project’s findings as to how the treatment group, the group with a class size of 13 to 17 students, had higher levels of performance than the students in either of the controls groups who attended larger classes of 22 to 25 students. Finn and Achilles (1999) found statistically significant improvements in student achievement not only among those students who attended smaller classes from kindergarten through third grade but also among those who attended smaller classes for less than four years even if the student had a smaller class size for only one or two years. While Finn and Achilles (1990) found long lasting benefits of smaller classes, Krueger and Whitmore (2001) compared ninth grade students who had had at least one year of smaller class sizes from kindergarten through third grade with their ninth grade counterparts who had attended larger class sizes and found that those ninth grade students who had attended small classes performed better in mathematics. Also, Finn and Achilles (1999) stated that based on their assessment of the STAR project the treatment group improved at almost twice the rate as that which was extrapolated from Glass and Smith’s (1979) meta-analysis.

Nye et al. (2000b) and Nye et al. (2001a) further explained that the improvements in student achievement for those students in the treatment group were significant throughout the kindergarten through third grades but the most significant differences in performance versus the control groups were identified during the first two years of school. That is, the more years a student attended smaller classes the greater was his/her improvement in performance. Hanushek (1999a) and Hanushek (1999b), however, found less significant findings in his evaluations of the STAR project which led him to question the project’s implementation methodology including whether the STAR project used random assignment throughout the entire experiment due to the impact of attrition and how new students were introduced to the experiment. The lack of research into how attrition reduced the experiment’s random assignment and, therefore, affected the findings of the STAR project is reflected by a corresponding gap in the literature.

Research on the relationship between smaller class sizes and student achievement has demonstrated how smaller class sizes help to significantly close the achievement gap among minority and majority students. Although Word et al. (1994) found that the students in the treatment group outperformed the corresponding students in the control groups, minority students gained more than other students. Achilles et al. (1993), Konstantopoulos (2009), Nye et al. (1993), Konstantopoulos and Chung (2009), and Nye, Hedges, and Konstantopoulos (2004) echo the findings of Word et al. (1994) that smaller class size not only increased achievement for all students but also benefited most those students who are minorities, eligible to receive free or reduced-price lunches, or attend urban schools in low income districts. Krueger and Whitmore (2001), however, were more specific in concluding that for these at-risk students, small class sizes narrowed the achievement gap, reduced grade retention, decreased behavioral problems, reduced truancy, and increased graduation rates. But Fletcher (2009) did not find the same level of significance for Krueger and Whitmore’s (2001) results.

Word et al. (1994) found that minority, low income, and urban students achieved their most significant improvements during the first two years of having smaller class size rather than building cumulatively every year for four years. But Konstantopoulos (2009), Nye et al. (2001b), Konstantopoulos and Chung (2009), and Nye et al. (2004) found the most significant improvements for students spending four years in the experiment. Finn et al. (2001), however, found significant short term as well as intermediate term gains that continued through high school especially for minority students which seemed to combine the conclusions of Word et al. (1994) with those of Konstantopoulos (2009), Nye et al. (2001b), Konstantopoulos and Chung (2009), and Nye et al. (2004).

Among the researchers discussing the long term impact of smaller class size on student achievement, Achilles et al. (1993), Finn and Achilles (1999), Nye et al. (2001b), Konstantopoulos and Chung (2009), Nye et al. (2001a), and Nye et al. (1999) are at the forefront of those concluding that students in the smaller class sizes retained their advantage over other students who attended larger classes when students returned to larger classes beginning in fourth grade. Moreover, these researchers found that the advantages of smaller class size continued generally throughout high school. Konstantopoulos and Chung (2009) found that all students who attended smaller classes continued to outperform those students who had attended larger classes in mathematics, language arts, and science tests through eighth grade. Echoing Konstantopoulos and Chung (2009), Nye et al. (2001b) found that students who attended smaller classes continued to outperform those students who had attended larger classes in mathematics, language arts, and science tests through ninth grade. Nye et al. (2000a), Word et al. (1994), Nye et al. (2004), and Nye et al. (1999) also found that while minority, low income, and urban students who attended smaller classes achieved more significant gains than their majority student counterparts during the STAR experiment, these differences in achievement continued throughout high school although the differences narrowed over time.

Limitations

The STAR project was the longest longitudinal randomized experiment concentrating on the impact of smaller class size on student achievement and many researchers agreed with its conclusion of a significant internally valid relationship. A number of researchers, however, including Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), Goldstein and Blatchford (1998), Hoxby (2000), Prais (1996), and Mitchell, Beach, and Baduruk (1991) raised questions or challenged certain aspects of the project.

Although Hoxby (2000), Prais (1996), Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), and Mitchell et al. (1991) acknowledged that students and teachers were randomly assigned to the treatment groups’ classrooms, they faulted the experiment for its lack of information concerning the actual process through which the STAR project assigned teachers to classrooms and whether the STAR project tried to control for any differences in teacher quality. These researchers criticized the STAR project’s random assignment because of the ways in which teacher attitudes and behaviors as well as student expectations for achievement may have been influenced by their assignment to treatment groups. That is, these researchers argued that because the teachers and students understood the class size to which they were assigned, their attitudes and expectations based on their assignment may have influenced the outcome of the experiment.

Hanushek and Raymond (2005), Hanushek’s (1999a), and Hanushek’s (1999b) challenges concerning whether the STAR project actually proved a direct and causal relationship between smaller class size and corresponding increases in student achievement, however, seems to have been based on an inappropriate comparison. That is, Hanushek seems to have confused the definitions of class size and student-teacher ratio. The STAR project concentrated on determining a causal effect between reductions in class sizes and corresponding increases in student achievement based on class size which is defined as the number of students a teacher instructs in a classroom at a point in time. Hanushek based his analysis on student-teacher ratios instead of class sizes and a student-teacher ratio differs significantly from what is meant by class size because it is a school’s total student enrollment divided by the number of its full time teachers. Hanushek’s use of student-teacher ratios seems to have undermined his argument.

Schanzenbach (2007), Word et al. (1994), Finn and Achilles (1990), and Finn and Achilles (1999) reported how teachers and students were randomly assigned by grade level to classes of one of three different sizes including the treatment group of 13 to 17 students, a no treatment group of 22 to 25 students, and alternative treatment group of 22 to 25 students plus a teacher’s aid. But critics including Hoxby (2000), Prais (1996), Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), and Mitchell et al. (1991) concluded that if the STAR project had been more of a parametric experiment then the project could have used many more and different class sizes instead of such a small number of groups which would have most likely led to the discovery of key break points. The importance of a parametric experiment is that it facilitates the identification of those specific class sizes or break points at which the marginal benefit of adding one more student equals the marginal cost of adding the incremental student and where if one more student were to be added then the marginal cost would exceed the marginal benefit. That is, it identifies the specific number of students in a class for which student achievement is maximized and if an incremental student were to be added then the incremental gain in student achievement would not be as significant. Using a parametric experimental design, therefore, could have enabled the STAR project to possibly determine the optimal class size for maximizing student achievement according to some of the experiment’s critics.

Although researchers such as Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), Goldstein and Blatchford (1998), Hoxby (2000), Prais (1996), and Mitchell et al. (1991) concluded that the STAR project’s findings are difficult to generalize because of its use of just one treatment group and two control groups when using more and different treatment and control groups would have better, these critics raised additional questions concerning whether the experiment’s findings are internally valid. Goldstein and Blatchford (1998), Hanushek (1999a), Hanushek (1999b), and Hanushek and Raymond (2005) in particular criticized the STAR project because of the attrition it experienced. These critics questioned the experiment’s validity because they reported that only 48% of all students remained in the experiment for four years who entered the experiment starting in kindergarten and how the new students that replaced those who dropped out were selected and assigned was unknown. The STAR project’s validity is challenged by these critics because its randomization was reduced during the experiment.

Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), Goldstein and Blatchford (1998), Hoxby (2000), Prais (1996), and Mitchell et al. (1991) enlarged their critique by determining that the replacement students were not assessed properly for such factors as preexisting differences in academic achievement upon entering the experiment. They also determined that test scores were lower among the dropouts than for those students who remained in study. In addition, certain students were shifted among the control groups in the second year of the study to balance the control group classes for racial and gender differences which led these critics to conclude that the STAR project’s results may be less significant. Hanushek and Raymond (2005), Hanushek (1999a), Hanushek (1999b), Goldstein and Blatchford (1998), Hoxby (2000), Prais (1996), and Mitchell et al. (1991) generally concluded that selection bias might have been a factor as a result of the attrition from the treatment and control groups as well as the movement of students among the control groups.

Student Achievement Guarantee in Education (SAGE) project

Wisconsin’s SAGE project attempted to replicate the findings of the STAR project. But in contrast to STAR, the SAGE project implemented a statewide class size reduction initiative to determine the relationship between smaller class sizes and student achievement as well as the long term effects of smaller classes that targeted students from disadvantaged homes. Molnar, Smith, Zahorik, Palmer, Halbach, and Ehrle (1999) reported that SAGE was a five year class size reduction experiment begun in the 1996-1997 school year to improve student achievement among students in low income or poverty level school districts by reducing class size in these schools to no more than 15. The SAGE program was phased in over three years with kindergarten and first grade in the first year, second grade in the second year, and third grade in the third year. Although only low income school districts were included initially in the experiment, by 2000 all other school districts could apply to the program.

Molnar, Smith, and Zahorik (2000) and Molnar et al. (1999) reported that the SAGE project reduced kindergarten through third grade class sizes only in schools referred to as SAGE schools in one of the following ways depending on the configuration of the classroom:

A single classroom with a class size of 15
A shared space classroom with a temporary wall dividing the classroom into two classrooms or sections with each classroom or section having 15 students
A dual teacher classroom in which two teachers taught 30 students
A “floating teacher” classroom of 16 to 20 students except during reading, language arts, and mathematics classes when a second teacher was added

Non-SAGE schools maintained existing larger class sizes.

Although non-SAGE comparison schools were not paired or linked with SAGE schools, the non-SAGE comparison schools were located within the same school district. Although the non-SAGE comparison schools had larger or what were considered to be more traditional class sizes for the respective school district, the non-SAGE comparison schools were similar in terms of their grade levels, enrollment, socioeconomic status, ethnicity, race, and gender. But Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) challenged the validity of the comparisons among class sizes of 15 in SAGE schools with class sizes in non-SAGE schools that varied greatly in contrast to the STAR project that limited its comparison of a treatment group class size of 13 to 17 students with a control group class size of 22 to 25 students.

Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) criticized how the four different configurations of a class size of 15 within the SAGE schools were incorrectly considered to be the same for comparison purposes with class sizes in non-SAGE schools. The lack of research into how the four different configurations of class size used within the SAGE schools not only were significantly different from one another but also affected the outcomes of the SAGE project is reflected by a corresponding gap in the literature.

Although reducing class sizes to 15 was the major component of SAGE, the project had three other features. Molnar et al. (1999) reported that a second component was the implementation of a rigorous curriculum that met state standards in every SAGE school. The third component of SAGE was the implementation of an educator and staff professional development program. The fourth component of SAGE was the implementation of what was called the lighted schoolhouse program. Molnar et al. (1999) and Graue and Oen (2009) explained that the lighted schoolhouse program included before and after school programs. But Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) criticized how the simultaneous implementation of three other components besides class size reduction might have affected SAGE’s outcomes. The lack of research into how the implementation of these four components might have affected the outcomes of the SAGE project is reflected by a corresponding gap in the literature.

Molnar et al. (1999) reported that SAGE used a quasi-experimental design with a treatment group and a control group that were pretested and posttested. SAGE used pretest scores to try to determine and reduce selection bias. Also, Webb, Meyer, Gamoran, and Jianbin (2004) reported that comparisons of kindergarten through third graders’ test scores on the Comprehensive Test of Basic Skills (CTBS) in SAGE and non-SAGE schools were controlled for family income, racial composition, and ethnicity.

Findings

The results of the SAGE project largely confirmed the findings of the STAR project. Molnar et al. (1999) concluded that students who attended small classes beginning with kindergarten and continuing through third grade significantly improved their academic achievement and that the benefits were greater for students from low income or poverty level families in the SAGE project. Students scored higher on the CTBS in reading, language arts, and mathematics tests as well as the overall CTBS results in SAGE schools than the students in their non-SAGE schools counterparts. Webb et al. reported that the favorable outcome based on socioeconomic status was significant because the SAGE project was designed to target students in low income school districts.

The increases in achievement for minority students were also greater than those of their majority counterparts which were among the findings that the SAGE project shared with the STAR project. While Molnar et al. (2000), Graue and Oen (2009), and Molnar et al. (1999) found improvements in student achievement during each of the four years, Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) differed in finding that first graders in SAGE schools had lower pretest but higher posttest scores than their non-SAGE counterparts and that the most significant increases in achievement were made in the first year even though Grissmer (1999) reported that the gains continued beyond third grade.

Cooper (1989), Molnar et al. (2000), Graue and Oen (2009), and Molnar et al. (1999) found increased student attention and teacher concentration on individual students as a result of smaller class size similar to the STAR project’s results as reported by Schanzenbach (2007), Finn and Achilles (1990), Finn and Achilles (1999), and Addonizio and Phelps (2000). These researches reported that teachers of the smaller classes in grades kindergarten through third grade reported that they spent more time educating, provided more differentiated instruction, had more interactions per child, and were better able to minimize disruptive student behavior. But Graue, Raucher, and Sherfinski (2009) concluded that the increases in student achievement were largely due to the combination of students having smaller class sizes with increased student attention and teacher concentration on individual students.

Limitations

Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) criticized the SAGE project primarily because SAGE used a quasi-experimental design in which the teachers and students were not randomly assigned. These researchers criticized SAGE for not employing matched pair SAGE and non-SAGE comparison schools. Also, classroom composition changed annually in both the SAGE and non-SAGE schools. These critics concluded that the SAGE project suffered from potential selection bias which reduced its internal validity because how school districts decided whether a school would be a SAGE school was unknown and the method of selecting students for smaller class sizes within SAGE schools was unknown. Blatchford et al. (1998) and Goldstein and Blatchford (1998) concluded that SAGE schools might have had favorable predisposition for treatment and that SAGE schools’ possible favorable predisposition might have biased outcomes so that the treatment seemed more effective. The SAGE project, unlike STAR, performed no long term evaluation beyond fourth grade of the effect of class size reduction.

Blatchford et al. (1998), Goldstein and Blatchford (1998), and Grissmer (1999) criticized the SAGE project because the three other components besides class size reduction of the SAGE project, including the rigorous curriculum that met state standards, professional development program, and lighted schoolhouse program, were not uniformly implemented. The extent to which these three factors may have contributed to study’s outcomes is unknown which makes it unclear if class size reduction by itself caused the outcomes.

California Class Size Reduction Program (CSRP)

The California CSRP attempted to replicate the findings of the STAR project through what remains as the largest class size reduction initiative. But in contrast to the STAR project, the California CSRP implemented a statewide class size reduction initiative to determine the relationship between smaller class sizes and student achievement which was phased in over four years but was not longitudinal. Stecher and Borhnstedt (2000) and Mitchell and Mitchell (1999) reported that the California CSRP used a quasi-experimental design to study the impact of smaller class sizes on student achievement using two nonrandomized comparison groups but no control group. The first nonrandomized comparison group or what was considered to be the smaller or reduced class used a class size of not more than 20 students while the second or larger class used a class size of more than 20 students. Student achievement was measured using the Stanford Achievement Tests for reading, language arts, and mathematics.

Findings

Although the results of the California CSRP were largely consistent with the findings of the STAR project, the impact of smaller class size on student achievement across all groups and especially in terms of closing the minority-majority achievement gap was considered to be not as significant. While Stecher and Borhnstedt (2000) found some increases in student achievement, they faulted the initiative’s quasi-experimental design which used two treatment groups but no control group for preventing significant conclusions from being drawn on the relationship of smaller class size and student achievement. Also, Stecher and Borhnstedt (2000) could not determine how a class size of 20 was determined to be the pivot point.

When Mitchell and Mitchell (1999) assessed the California CSRP, they controlled for a student’s family income, gender, racial composition, and ethnicity. Mitchell and Mitchell (1999) concluded that there were small but significant increases in student achievement across different groups once they controlled for these factors. Mitchell and Mitchell (1999) also concluded that they could not rule out the possibility that other factors in addition to smaller class size could have led to the increases in student achievement which echoed the findings of Stecher and Borhnstedt (2000).

The findings of the STAR and SAGE projects were echoed by Stecher and Borhnstedt (2000), Mitchell and Mitchell (1999), Jepsen and Rivkin (2009), and Funkhouser (2009) in their assessment of the California CSRP when they found increased student attention and teacher concentration on individual students as a result of smaller class size. These researches reported that teachers of the smaller classes in grades kindergarten through third grade reported that they spent more time teaching, provided more differentiated instruction especially for mathematics and language arts, had more interactions per child, and were better able to minimize disruptive student behavior.

But Jepsen and Rivkin (2009) found that the large scale of the California CSRP led to a shortage of certified teachers statewide that was most acute in low income school districts. Many schools serving at-risk and low income students, therefore, had a disproportionate number of teachers who were not certified, lacked previous teaching experience, or had an emergency teacher certification. This degradation of teacher qualifications may have offset some of the increases in student achievement that would otherwise have occurred especially in low income schools according to Jepsen and Rivkin (2009). Also, Funkhouser (2009) concluded that the increases in student achievement might have been not only more significant but also more readily attributed to smaller class sizes if it were not for other programs such as a revised statewide curriculum, more standardized testing, and new statewide student grade advancement standards that were implemented simultaneously.

Limitations

Mitchell and Mitchell (1999) and Stecher and Borhnstedt (2000) found that the California CSRP differed from the STAR project. The California CSRP differed from the STAR project because its large scale caused the initiative to become extremely expensive particularly in terms of increased aggregate school spending for more teachers and additional classroom facilities. Although Mitchell and Mitchell (1999) and Stecher and Borhnstedt (2000) concluded that the relatively small increases in student achievement were due at least in part to the reduction of class size, they faulted the California CSRP’s quasi-experimental design primarily because it employed two nonrandomized comparison groups but no control group, did not define why having class sizes of either less or more than twenty students was the basis for the treatment groups, and performed no pretesting. Also, Mitchell and Mitchell (1999) and Stecher and Borhnstedt (2000) faulted the California CSRP for not explaining how students were assigned to the treatment groups. This led critics to conclude that the California CSRP suffered from a history threat to internal validity.

Mitchell and Mitchell (1999) and Stecher and Borhnstedt (2000) found that California schools typically had class sizes of approximately 30 students before the implementation of the California CSRP. Because there was no pretest, these critics reported that it can not be determined if student performance improved with the posttest because no comparison could be made. This led them to conclude that the initiative’s use of treatment groups that were either below or above 20 students resulted in classes that were closer in size to the larger classes of the STAR project which might have caused smaller increases in student achievement than were found in the STAR project. In conclusion, Mitchell and Mitchell (1999), Jepsen and Rivkin (2009), and Stecher and Borhnstedt (2000) could not determine if the smaller increases in student achievement than those that were found in the STAR project were a function of using larger treatment groups than those of the STAR project or other factors such as the program’s quasi-experimental design, shortage of certified teachers, and the simultaneous implementation of other statewide educational programs. The California CSRP, therefore, did not replicate the STAR project which was a controlled randomized longitudinal experiment.

Questions for Future Research

Although the majority of the class size research, including Tennessee’s STAR project, Wisconsin’s SAGE project, and California’s CSRP, has largely concluded that smaller class size leads to increases in student achievement, helps to close the minority-majority achievement gap, and has several other long lasting benefits, it not only demonstrates the need for more and different kinds of research but also raises questions. How long should a student remain in a reduced class size before returning to a class of regular size? One question is whether the increases in student achievement resulting from class size reduction initiatives are maximized in the earlier grades such as kindergarten through third grade or whether class size reductions in subsequent grades perhaps through high school would generate similar gains. If it could be proven that incremental increases in student achievement resulted from reducing class sizes from kindergarten through high school, would school districts be able to raise the necessary funds to pay for the additional teachers, support personnel, classrooms, and other facilities?

Do the benefits of smaller classes persist or diminish over time? Future studies could investigate the extent to which increases in student achievement continue into later grades, whether the gains diminish over time, and the points at which the increases in achievement begin to diminish. If the research proved that the increases in student achievement are maximized from kindergarten through third grade but begin to decline significantly thereafter, then the benefits of smaller classes might be not generalizable to higher grade levels and implementing class size reductions from fourth grade through high school might not be as cost effective.

What is the optimal class size for maximizing student achievement? The smaller class sizes in the STAR project were 13 to 17 students while the larger class sizes were 22 to 25 students. While the SAGE project used smaller class sizes of 15 or less and a variety of larger ones, the California CSRP used class sizes of less than 20 as well as various class sizes of more than 20. Although smaller class size has been found to result in increases in student achievement, the optimal class size is not well defined. Also, future research could focus on whether smaller class size affects different groups differently. Future research could investigate the extent to which different groups such as students who are poor performers, come from low income families, members of a minority group, or English language learners might require different class sizes to maximize their achievement.

Although studies, including the STAR project, SAGE project, and California CSRP, have determined that class size reduction initiatives led to increases in student achievement, more research is needed to determine what other factors might contribute to increases in student achievement besides smaller class size. Research could be performed to determine the impact of having highly qualified teachers teach students in smaller classes. This factor may have influenced the outcomes of the California CSRP in which the lack of certified teachers may have significantly offset the benefits of smaller class size. Additional research could be conducted to determine the impact that different state teacher education, training, and certification requirements have on the ability of teachers in different states to influence student achievement. It would be helpful to learn through future research what unique teaching methods are best suited for small as well as large class sizes and how to train teachers to use these methods effectively in the classroom.

This review reveals that certain essential elements of smaller class sizes merit more research including the nature of small class sizes and whether the small class size effect is a start-up or one-time phenomenon. In terms of the nature of class size, a number of questions were raised by this review. Are there inherent advantages of smallness or having a smaller size for student achievement? That is, research could try to determine if smaller class sizes have certain contextual advantages over larger class sizes.

Another subject for future research is to determine the extent to which the small class size effect is a one-time or start-up phenomenon. Class size initiatives have concentrated primarily on evaluating the possible linkage to how students perform in kindergarten through third grade. Research is needed to determine whether smaller class sizes may work best because students are young and have just entered school. Researchers, therefore, must account for the fact that the smaller class size effect can not be separated from a student’s age. Also, it is possible that class size reductions realize the most significant increases in student achievement during the early grades because students are just beginning the school socialization process. One way to assess the possible start-up phenomenon would be to conduct class size reduction initiatives in the fourth through twelfth grades and compare the results to those from class size reduction initiatives from kindergarten through third grade.

Conclusion

The review of the literature concerning the research into three major experiments that concentrated on the relationship between smaller class sizes and student achievement, STAR project, SAGE project, and California CSRP, demonstrates that having a smaller class size not only increases student achievement but also helps to significantly minimize the achievement gap among different groups of students and has several other long lasting benefits. While the apparent advantages of smallness or small class size in improving student achievement may not be surprising to educators, administrators, students, and parents as well as to the many researchers who share this view, this literature review finds support for more research to address the challenges raised by the critics of the major experiments of the relationship between smaller class sizes and student achievement.

Having fewer students in the classroom enables the teacher to dedicate more time to each child. Consequently, students pay more attention to class work and participate more in academics. Because the students are more involved with their studies they learn more and behave better. The literature, therefore, is consistent with the conclusion that test scores are significantly higher for students who attend small classes. Based primarily upon the findings of the STAR project as well as the SAGE project and California CSRP, the overall conclusion in the literature that having a smaller class size increases student achievement seems to outweigh the doubts that students taught in small classes enjoy significant and lasting educational advantages especially minority and low income students.

The review of the literature concerning the research into three major experiments of the relationship between smaller class sizes and student achievement suggests that the social context of smaller class size may have a favorable influence on student performance. That is, there may be inherent advantages of smallness that foster a greater of sense of community than is possible in larger class sizes. Smaller class sizes, therefore, may generate what Fischel (2002, p. 5) defines as classroom based “community specific social capital” which contributes to improving student performance. Fischel (2002, p. 2) cites Boozer and Rouse’s (2001) assessment of how “bigger classes (more student-consumers) do detract, at plausible margins, from the education of others” in his assessment of the adverse impact of larger class sizes on student performance. Small class sizes, therefore, seem to generate increases in student achievement that are inversely related to their size.

Smaller class size may improve student achievement because of its social ecology. The provision of education through small class sizes in which the students and teachers are able to get to know and understand one another better may facilitate increases in student achievement while according to Fischel (2002, p. 1) it “reduces the transaction costs of the provision of true local public goods such as education” by increasing graduation rates and reducing truancy. The communal capital of smaller class sizes, therefore, generates more frequent and meaningful face-to-face student-teacher interactions. These more frequent one-on-one student-teacher interactions may create an improved learning process in which student performance improves as a result of smaller class size. Increases in student achievement, therefore, may be a function of the social ecology of smaller class size.

References

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Nye, B. A., Hedges, L. V., & Konstantopoulos, S. (2000b). The effects of small classes on academic achievement: The results of the Tennessee class size experiment. American Educational Research Journal, 37(1), 123-151.

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Nye, B. A., Hedges, L. V., & Konstantopoulos, S. (2001b). The long-term effects of small classes in early grades: Lasting benefits of mathematics achievement at grade 9. Journal of Experimental Education, 69, 245-257.

Nye, B. A., Hedges, L. V., & Konstantopoulos, S. (2004). Do minorities experience larger lasting benefits from small classes? Journal of Educational Research, 98, 94-100.

Prais, S. J. (1996). Class size and learning: The Tennessee experiment – what follows? Oxford Review of Education, 22(4), 399-414.

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Stecher, B. M. & Borhnstedt, G. W. (2000). Class size reductions in California: The 1998-99 evaluation findings. Sacramento, California: California Department of Education.

Webb, N. L., Meyer, R. H., Gamoran, A., & Jianbin, F. (2004). Participation in the Student Achievement Guarantee in Education (SAGE) Program and performance on state assessments at grade 3 and grade 4 for three cohorts of students. Milwaukee, Wisconsin: Wisconsin Center for Education and Research.

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Tags:California Class Size Reduction Project, class size, Fischel, Hanushek, increasing student achievement, Indiana Project Prime Time, SAGE, small class sizes, STAR, Tennessee STAR, Wisconsin SAGE
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Glen Ridge: Creating an Autonomous Public School District

Wednesday, July 14th, 2010

Whether to Secede?

Unfunded state and federal mandates are strangling the Glen Ridge Public Schools as well as traditional public school districts nationwide. Unfunded mandates drive school district budgetary deficits, property tax increases, operational restrictions, and educational program and service reductions. When the costs and consequences of these mandates are combined with a statewide 2.0% tax and expenditure limit (TEL) or cap, the Glen Ridge school district is compelled to consider whether (Read, 2010) “to effectively secede from New Jersey’s public school system.”

Glen Ridge along with the majority of New Jersey’s public school districts can no longer afford to pay for state and federal unfunded and under funded mandates because the district is forced to spend disproportionately more to meet the requirements of these mandates than it receives in total state and federal financial aid. This creates a budgetary deficit. Making up for this mandate-created deficit annually forces Glen Ridge to make extremely difficult choices. The challenges involved in the budgetary decision making process were exacerbated when the Glen Ridge school district along with dozens of others statewide lost all of its state financial aid. Moreover, the state of New Jersey’s imposition of a 2.0% TEL further constrains the district’s financial outlook.

While the state and federal governments force Glen Ridge to fully fund the unfunded portion of their mandates, Glen Ridge must make up for the mandate deficit and balance its budget annually. There are, however, only two kinds of programs and services offered by our public schools: those that are mandate protected and those that are not mandate protected. The Glen Ridge school district like public schools nationwide, therefore, must choose between cutting non-mandate protected programs and services or raising property taxes.

Unfunded Mandates Drive Budgetary Deficits

When a school district experiencing increases in mandate-driven uncontrollable expenses becomes limited by a 2.0% TEL, it must cut expenses even more severely to stay within the cap. There is no exemption for the ever increasing costs of the state’s special education mandates included within Governor Christie’s 2.0% TEL (Maxwell, 2010,) for example. Public school districts, therefore, must allocate scarce financial and human resources to pay for the unfunded portion of mandates and spend disproportionate administrative time on external reporting. A school district spends less time and money on core educational programs and services as a result.

Because traditional public school districts such as Glen Ridge are required to fund the unfunded portion of all state and federal mandates over which it has no control, state and federal mandates drive the overwhelming majority of the district’s expenditures and, hence, property tax levies. Cuts to state aid or especially the elimination of state educational aid as is the case for Glen Ridge may force a traditional public school district to increase class sizes so as to minimize its expenditures for teachers and aides. But this will lead to lower test scores and likely No Child Left Behind Act (NCLB) operational and financial penalties.

Reduced or zero state aid particularly when combined with a 2.0% TEL, therefore, gives a school district only one course of action: hold property tax increases within the state imposed percentage point limit while simultaneously cutting non-mandate protected programs and services but fully funding the unfunded portion of all mandates. That is, cutting regular education. The ultimate irony is that property taxes could be slashed nationwide especially those funding our public schools and there would be no need for TELs, if the state and federal governments would just fully fund all of their mandates!

A Question of Autonomy

Trenton continues to blame school districts such as Glen Ridge for their property tax and expenditure increases rather than take responsibility for its role in forcing district budgets to increasingly higher levels. Instead of fully funding its mandates which drive up the cost of public education, Trenton focuses largely on constricting the funding, budgets, operations, and independence of local school districts. Given these state imposed burdens, costs, and constraints are most likely to become even more severe, what should a public school district do?

How could Glen Ridge restructure its educational system such that the district would not only enable its public schools to increase the property taxpayers’ return on their investment but also greatly improve the quality of education while holding their schools accountable to these standards? The question of how to achieve the proper level of autonomy, therefore, is the challenge confronting the Glen Ridge Public Schools.

What is autonomy? Autonomy, in its most fundamental form, means that a school district is free to develop, design, and implement its own budget. The budget is the financial representation of the district’s educational plan; therefore, the district must have full authority to acquire and allocate the financial and human resources necessary to providing those educational programs and services that fully meet the needs and priorities of the school district. Indeed, if something is not in a school district’s budget, it will not be in any classroom! This requires gaining control over all of a public school district’s financial, operational, pedagogical, curricular, and administrative functions so that the district is ultimately able to provide an academically rigorous learning environment that maximizes student achievement.

Options for Autonomy

To achieve the proper level of autonomy for its school district, Glen Ridge is considering a number of options including (Read, 2010) “converting some or all of the four schools in the 1,932 student district to charter or private schools.” The purpose of any conversion is to implement a new governance structure that will operate with much greater autonomy from state and federal mandates than the Glen Ridge school district currently enjoys. Whatever form this new governance structure may take; it should provide the basis for financial soundness, operational flexibility, educational innovation, student achievement, and maximizing the taxpayers’ return on their investment in their local public schools, all of which are currently constrained by state control.

Although (Read, 2010) “New Jersey will allow a public school to become a charter school if 51 percent of the teaching staff and parents sign a petition for it, according to the New Jersey School Boards Association. That has never happened.” The privatization concept is also being considered for which Dr. Bruce Baker, Associate Professor of Education at Rutgers University’s Graduate School of Education (Read, 2010,) stated that, “There are precedents in municipalities in Vermont and Maine. The towns raise tax dollars to send high school students to a private school.” Another alternative is to transform the district into a set of private schools operated either by a locally elected board of education or by a private for-profit firm.

Plank and Smith (2008) report that in the wake of Hurricane Katrina, “the Louisiana legislature created a Recovery School District” within which the “state intends to reopen most of New Orleans schools as charter schools, pioneering what stands to become the nation’s first all-chartered public school system.” New York City has expanded its Empowerment Schools program (Plank & Smith, 2008.) Chicago has implemented a more complex program (Plank & Smith, 2008) by “replacing up to 100 low performing schools” which can be operated as “district performance schools, charter schools or as contract schools.”

But would any of the aforementioned options provide the proper autonomy such that Glen Ridge would gain control over its operating budget and, thereby, have the ability to provide a top quality education that meets the needs and priorities of the district rather than objectives set remotely in Trenton? Glen Ridge should strive for the kind of governance structure that is worth the effort, if it is to confront the many challenges to achieving the proper kind of autonomy. How, then, should Glen Ridge restructure its educational system?

Autonomy and Self-Governance

To achieve the proper autonomy, Glen Ridge could reinvent itself by becoming an entirely unique version of a local public school district that is autonomous self-governing, self-funding, and as free as possible from state as well as federal mandates. As an autonomous school district, Glen Ridge would eliminate the excessive financial and administrative burdens imposed by state mandates. It would be much more cost effective and efficient for the district to provide educational programs and services without the administrative burden of state requirements. Self-governance would increase the financial resources available for the classroom because the funds that are currently used for compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.

Self-governance would empower the school district to improve the quality of education in ways more consistent with the priorities of the local community rather than state mandates. Finding ways to legally opt out of the state system perhaps through a state sanctioned voter approved referendum would restore full decision-making authority to the local level. Because decisions guiding the operations of Glen Ridge’s self-governing school district would no longer be made largely at the state level, parents, teachers, administrators, the board of education, and local taxpayers would be better able not only to shape the quality of education provided in the local schools but also to hold their local schools accountable for this outcome. In this context, the conversion could be considered as achieving (Plank & Smith, 2008) “autonomy for accountability.”

Becoming an Autonomous Self-Governing School District

An autonomous self-governing school district would be independent of the state system but would remain a public school district serving the same local community rather than a confederation of charter schools, private schools or schools run in full or in part by a private company. But in return for the ability to become autonomous and, therefore, free from state mandates, a self-governing school district would forgo all state aid! Self-governance would provide a public school district with the authority necessary to improve education consistent with the priorities of its local school community as well as the flexibility to innovate rather than be forced to march in lock-step to the state’s one size fits all mandates that fit no district. Opting out of the state system would restore full decision-making authority to the school district.

Once the process leading to independence is approved by the state, a public school district could possibly become self-governing when a majority of the registered district voters who voted in a district-wide vote approved of the change. While these votes would comply with the laws governing ballot procedures, campaigns, and elections, they would be held in April so as to provide sufficient lead time to convert to self-governance by July 1, the beginning of the new fiscal year. Once the district community voted to authorize the school district to become self-governing, it would be governed solely by its board of education without oversight from the County Executive Superintendent, Board of School Estimate or municipal government. Board of education members would continue to be chosen from among the registered voters in the school district.

Local property tax levies rather than tuition would continue to be the primary source of funding for a self-governing public school district. An autonomous district would be eligible to receive appropriate state or federal grants. The annual operating budget would be decided by its board of education rather than be subject to district-wide public votes so as to be consistent with the annual budget approval process for municipal and county governments which are not subject to approval through a vote of their respective electorates. Alternatively, the annual operating budget would be subject to voter approval should municipal and county government budgets be similarly submitted for public votes.

Taxpayers can vote on their local school district budgets in all but a handful of towns but no taxpayer is able to vote on the budget of his/her municipal or county government despite the fact that these two levels of government are funded almost entirely by local property taxes. Because taxpayers can vote on school budgets, they can hold their school systems accountable but without a corresponding vote on municipal and particularly county government budgets taxpayers can not hold these levels of government accountable. This is one of the chief reasons why county government costs New Jersey’s taxpayers more than $6.1 billion annually!

Taxpayers choose the local public school district that best meets their needs and one that will contribute to their property values by exercising true Tieboutian choice (Tiebout, 1956) and voting with their feet. But taxpayers vote not only with their feet but also on school district operating budgets, capital projects, and board of education members. Through the exercise of these votes, taxpayers control the quality of education provided by their local schools as well as the level of property taxes levied. Their collective decisions lead to a Pareto efficient allocation of local public education.

Locality is crucial for accountability. Because state policy makers especially as compared to the local board of education are more distant from those most affected by the state’s mandates, students, teachers, and schools, the impact of their mandates is more adverse on a public school district’s finances and the quality of education it provides. Our public schools, therefore, must be given the choice of becoming autonomous, self-governing, self-funding local public school districts free from state mandates so that they can be liberated to provide a top quality education while held being accountable to this standard by those who are the most capable of doing so, the school district’s taxpayers.

Optional Compliance

Many states pass legislation known as (Fix & Kenyon, 1990) “optional compliance” to force state government to fund its mandates. Optional compliance provides public school districts and (Fix & Kenyon, 1990) “units of local government the right not to comply with state mandates” and “can place added pressure on the legislature to fund the cost of mandates if it wishes to ensure that all local governments comply. This right of optional compliance, in effect, can give the local governments” and local school districts “new leverage in dealing with the state legislature to ensure that they do get funding. If they do not, they are under no obligation to carry out the mandate.”

Still, states often find ways to provide much less than full funding for mandates by circumventing optional compliance laws. States regularly restrict their obligation to reimburse the unfunded portion of mandates by (Fix & Kenyon, 1990) having a “narrow definition of what constitutes a mandate.” States often enable (Fix & Kenyon, 1990) “the legislature to exempt the state from providing funding under certain circumstances.” In addition, states often manipulate the labeling of the source of funds to minimize their payouts. Fix and Kenyon (1990) demonstrate that “funds are provided simply by earmarking some portion of what is considered local aid or general revenue sharing. If a state merely earmarks funds that area coming from another source as opposed to providing new funds, then the state is really not accomplishing the objective of mandate reimbursement.”

States also manipulate the timing of when local school districts receive funding rather than pay local schools districts in advance of the mandate’s implementation. Fix and Kenyon (1990) use California’s experience to demonstrate, “In California, however, funding is provided on a reimbursement basis; funding can occur long after the mandate is implemented.” School districts and “local governments carry out mandates, submit claims, and hope to get paid. In the meantime, they must carry out the mandate; they have no option.” This forces California’s public school districts to either borrow or cut regular education programs to fund the unfunded portion of mandates while hoping for full state reimbursement which does not include the refunding of any incurred interest expense.

Unfunded Mandates Force Cuts to Regular Education

While the State of New Jersey is increasingly mandating programs and services to be provided by the state’s public schools, its level of financial aid and the portion of the mandates for which it provides funding are declining rapidly. But public school districts have no control over many of the major cost drivers resulting from under funded mandates such as the expenses associated with increases in enrollment, transportation, legal actions, and the number as well as the mixture of special education students. The range of state and federal under funded mandates includes but is not limited to No Child Left Behind (NCLB,) Individuals with Disabilities in Education Act (IDEA,) Quality Single Accountability Continuum (QSAC,) Core Curriculum Content Standards (CCCS,) bilingual instruction, free and reduced price breakfasts and lunches, incremental state special education requirements, special education related law suits, biohazard training, radon testing, state and federal standardized testing as well as programs to prevent bullying, teasing, and taunting.

School districts are required by state and federal laws to provide the special education programs and services included in a student’s Individual Education Plan (IEP); therefore, special education budgets cannot be cut and the under-funded portion of special education’s costs must be made up from other budgetary sources. To offset the increased costs of under funded special education mandates, districts are increasingly forced to significantly reduce programs for regular education students because property tax increases have been limited largely through state legislation. Under funded state special education mandates not only have sharply increased the competition between regular and special education programs for funding within a school’s budget but also have created sharp divisions within a school’s community because they pit the parents of special and regular education students against each other in the fight for funding.

In 2005, New Jersey state aid covered less than one-third of state mandated special education programs and services while the federal IDEA is funded only at approximately five percent of its cost to local school districts nationwide. Since January 2008, special education financial aid has been further and significantly reduced for most districts statewide based on the new state funding formula that reduces a district’s special education aid calculation to the extent that its classification rate is above the state average. In addition, wealthy districts have been losing entitlement aid for at-risk children, particularly special education as these and other categorical financial aid funds are now subjected to the formula’s wealth-equalizing local share calculation.

All of this comes at a time when the costs for special education are skyrocketing. Increased costs for mandated preschool programs including intensive services for autistic students and lower special education student to teacher ratios are a major part of the problem. But more importantly there are also increasing numbers of costly out-of-district placements as well as parental lawsuits against public school districts for the purpose of obtaining private school placements for their children at the public’s expense.

New Jersey has the highest proportion of special education students in out-of-district placements as well as the fourth highest classification rate for special education eligibility in the country. Many of New Jersey’s school districts find that out-of-district placements can consume as much as 50% of the special education budget despite covering approximately ten percent of special education enrollment. The students placed in out-of-district schools tend to be the most expensive because they are usually the ones most in need of special education programs and services. Depending on the student’s disability, the annual cost of sending a student to an out-of-district private school can range from roughly $70,000 to over $250,000 especially for the most educationally and physically challenged students.

The legal costs arising from parental special education-based law suits are another major expense for schools. As parents have become more knowledgeable about what constitutes special education programs and services, they have increased their demands to have their children receive not only more intensive services as well as increasing their children’s classification but also more placements in private schools which have resulted in more parents suing school districts for these additional benefits.

New Jersey’s legal system operates according to a fee shifting principle in which a school district losing in an administrative court not only must pay all of the judgment costs but also all of the plaintiff’s legal costs including those for their attorneys and expert witnesses regardless of the length of the trial. Litigation for special education proceedings often takes longer than civil law suits; increasing both legal fees and court costs. There is the additional cost resulting from the amount of time required of teachers, child study teams, and administrators to appear in court rather than in school. While school districts do settle a number of cases rather than run the risk of potentially more expensive outcomes, these settlements fuel the cost of providing special education. Holding New Jersey school districts harmless from such law suits could be another way in which to enable school districts to allocate more of their scarce resources to student instruction.

The State of New Jersey requires special education programs for children with educational disabilities ages three to five, particularly autistic children. While the only difference for preschool aged children is the state requirement to have a speech pathologist on the child study team, the same IEP, evaluation, eligibility, due process, and least restrictive environment requirements apply for all special education students regardless of age. These mandated pre-school programs put an additional expense burden on local school districts as long as the mandates continue to come without the requisite funding from the state.

The special education students to teacher ratios are set by the State of New Jersey and they are, necessarily, lower than the student to teacher ratios for regular students. These staffing ratios are based primarily on the student’s IEP, classification, and intensity of services required. The student to teacher ratio for a class for children with the lowest level of disabilities having one teacher has a maximum of eight while the maximum is twelve for a class with one teacher and one aid. Although ratios usually range from four to seven depending on the severity of the student’s disability, class sizes exceeding six students require two aids in addition to the teacher.

Classes for children with autism and other profound cognitive disabilities are limited to a ratio of three to one. While providing a good education for students with special needs, without the requisite state funding for these mandated levels, the higher costs of such low student to teacher ratios are often offset by higher student to teacher ratios for regular education. Because smaller class sizes have been shown to improve learning for all students, the under-funded state mandates for special education can have a deleterious effect on regular student education.

When the State of New Jersey requires its public schools to pay for an ever increasing proportion of special education costs through its under funded mandates, the state is not only forcing property taxes to increase but also pressuring districts to find the missing funds by reducing the regular education budget. Such forced cuts to the regular education budget may cause school districts to reduce the number of regular education teachers which would result in much larger class sizes for regular education students. Larger class sizes have been shown to lead to lower test scores which make it more difficult for students to achieve adequate yearly progress (AYP) as required by NCLB. As a result, school districts are much more likely to be subjected to many of NCLB’s more stringent financial penalties. This further reduces the financial resources available to support quality education.

Unless the people of New Jersey wish to have not only higher property taxes but also a downward spiral in the quality of their public education, then the State of New Jersey should pay the full costs of its mandated school programs and services particularly special education. If all of New Jersey’s special education mandates were fully funded, the quality of the education of all of New Jersey’s public school students, both regular and special, would be the greatest beneficiary.

Conclusion The consequences of centralizing most of the control over the allocation of a school district’s financial and human resources at the state level gives rise to many unintended obstacles for local school districts. Chief among them is the contradictory challenge of trying to hold local school districts accountable to standards made remotely at the state level that do not reflect and often conflict with unique local educational requirements and priorities. As a result, when the state imposes a one-size-fits-all approach to local school district resource allocation, funds tend not to be used as efficiently as they could be under local control. School systems are more accountable when decision making over financial and human resources is made at the district level.

A local school district can improve student and school performance best when the district is empowered to allocate its financial and human resources according to its educational plan rather than being required to follow state directives. The school district would have all the tools it would need to hold its schools and students accountable because it could make real time decisions based on specific measurable performance goals for each school and student. The school district is the most qualified to continually calibrate local performance goals because only the school district can combine a keen understanding of local educational necessities with the timely and specific assessment of individual school and student achievement. State control is too remote which causes not only inappropriate delays but also decisions that tend to be inconsistent with the district’s educational plan.

In response to the shortcomings of the state dominated school system, Glen Ridge needs to adopt a new model for the control structure of its local school system that is largely free of state domination. Because a local school district’s control structure affects how all of the school system’s stakeholders combine to produce a quality education, Glen Ridge needs the most appropriate control structure that will provide the highest level of accountability. As a result, Glen Ridge might consider adopting a control structure that provides for maximum autonomy and self-governance.

What matters most in terms of maximizing autonomy and self-governance is that Glen Ridge employs the control structure that fosters the greatest public support for the maximum public funding of its autonomous public schools. Glen Ridge would be able to operate more cost-effectively with lower property taxes and earn a higher rate of return on its educational investment if it became an autonomous self-governing school district by opting out of the state system.

References

Fix, M. & Kenyon, D. A., (1990). Coping with Mandates: What are the Alternatives? Washington, D.C.: The Urban Institute Press.

Maxwell, L.A., (2010). N.J. Property Tax Cap Sparks Funding Concerns. Education Week, 29(36). Retrieved from http://www.edweek.org/ew/articles/2010/07/12/.

Plank, D. N. & Smith, B., (2008). Autonomous Schools: Theory, Evidence and Policy in The Handbook of Research in Education Finance and Policy, Ladd, H. F., & Fiske, E. B., (Editors) (402-424). New York, New York: Routledge Taylor & Francis Group.

Read, P., (2010, July 4). Glen Ridge Considers Big Change to Schools. The Star Ledger, pp. 1, 4.

Tiebout, C. M., (1956). A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

Tags:Autonomous public school districts, Blog, Charles Tiebout, optional compliance, property taxes, property taxes blog, School Finance Blog, school mandates blog, school reform, school reform blog, self-governing public school districts, Tieboutian choice, vote with their feet
Posted in academic outcomes, academic performance, accountability, Annual Yearly Progress (AYP), autonomy of schools, bigger is not better, Capitalization of school district quality, Charles Tiebout, charter, charter schools, class size, county government, County Property taxes, decision making, deregulation of schools, education, educational leadership, federal financial aid, home rule, IDEA, independent schools, innovation, Local Education Authority (LEA), local property taxes, mandates, New Jersey Core Curriculum Content Standards (CCCS), New Jersey Property taxes, New Jersey Quality Single Accountability Continuum (NJQSAC), NJQSAC, No Child Left Behind (NCLB) Act, No Child Left Behind Act, non-mandate protected programs, property taxes, public education, public finance, regular education, school finance, school funding, school governance, school performance, school reform, self-funding school districts, self-governance, state financial aid, state mandates, TELs, Uncategorized | No Comments »

TELs take their Toll on Education

Tuesday, June 29th, 2010

Tax and Expenditure Limits (TEL)

The major question confronting New Jersey’s educational system is most likely whether the state should implement a 2.5% cap on local public school districts’ annual operating budgets which is otherwise known as a tax and expenditure limit (TEL.) This question seems to arise from the most compelling issue facing public office holders, legislators, and policy makers as well as taxpayers statewide which is how to limit the amount and growth rate of New Jersey’s taxes especially its property taxes. Governor Christie’s answer is to implement a 2.5% TEL on local property taxes and expenditures similar to Massachusetts’ Proposition 2.5 or California’s Proposition 13.

Why should taxpayers allow the passage of legislation that would enable the state of New Jersey to limit a local school district’s ability to determine the amount of property taxes it levies as well as its level of expenditures? Voters currently have more control over their local school district’s property taxes than they have over any other form of taxation whether the tax is levied by their municipal, county, state or federal government. Why then should the state be able to set an arbitrary one-size-fits-all limit on the amount of property taxes local school districts can levy when property taxes are set according to local needs and priorities? Such a one-size-fits-all cap will fit no district because districts are unique.

All Local School District Property Taxes are Invested in the Host Municipality

All of a local school district’s property taxes remain and are invested in the schools of the host municipality so that the taxpayers benefit fully from the property taxes levied. County property taxes differ sharply from those levied to fund our public schools because they are redistributed to support an unaccountable, wasteful, and duplicative layer of government. This leads many researchers, most notably O’Sullivan, Sexton, and Sheffrin (2007,) to conclude that “local governments” and public school districts “must have access to a revenue source that they can adjust to meet varying demands.”

Funding our public schools through local property taxes is essential because county government siphons away crucial local property taxes and state governmental financial aid is unreliable. O’Sullivan, Sexton, and Sheffrin (2007) demonstrate that “the property tax can be administered by local government” and public school districts “with relatively little fear of its tax base migrating to other jurisdictions, thus providing local governments with the needed fiscal autonomy. The property tax has been the source of economic independence of local units of government” and local public school districts for generations.

Unfunded State and Federal Mandates Cause TELs to Cut Regular Education

There are only two kinds of programs and services offered by our public schools: those that are mandate protected and those that are non-mandate protected. Because school districts are forced by the state and federal governments to fully fund the unfunded portion of their mandates, public school districts must choose between cutting non-mandate protected programs and services or raising property taxes. School districts have no control over many of their major cost drivers such as the costs resulting from increases in unfunded mandates, enrollment, utilities, transportation, health insurance, legal actions, and the number as well as the mix of special education students. When a school district that is limited by a 2.5% TEL experiences increases in these uncontrollable expenses, it must cut expenses in other areas to stay within the cap.

One major fallacy in the cap advocacy argument is that local school districts are required to fund the unfunded portion of all state and federal mandates over which local school districts have no control. State and federal mandates drive the overwhelming majority of local school district expenditures and, hence, property tax levies. Property taxes could be slashed nationwide especially those funding our public schools and there would be no need for TELs, if the state and federal governments would just fully fund all of their mandates!

A TEL may force a typical school district to increase class sizes so as to minimize its expenditures for teachers and aides. But this will lead to lower test scores and likely No Child Left Behind (NCLB) operational and financial penalties. A TEL, therefore, gives a school district only one course of action: hold property tax increases within the state imposed percentage point limit while simultaneously cutting non-mandate protected programs and services but fully funding the unfunded portion of all mandates. That is, cutting regular education.

There is No Such Thing as a Free Lunch

Governor Christie along with the proponents of TELs purport that school districts will be become more financially responsible because of the state imposed limit on their expenditures and tax levies. TEL proponents argue that if school districts are left to their own devices, they would continue to spend and tax at ever increasing rates while the TEL’s implementation will force school districts to hold down expenditures and property taxes. TEL proponents seem to expect units of local government and our public schools to provide the same level of public goods and services if not a higher quality of education but at a lower price.

TEL proponents and policy makers disaffected by the seemingly ever increasing size and cost of public education assert that the TEL will lower property taxes and, therefore, make the provision of public education more efficient rather than cutting essential educational programs and services. Although most people realize there is no such thing as a “free lunch,” TEL advocates claim that school systems could provide at least the same quantity of education without lowering the quality of education because the TEL would compel districts to eliminate waste. But no TEL can guarantee that any school district will not cut non-mandate protected programs and services or regular education before eliminating any waste or inefficiency.

The passage of the major TEL’s, Proposition 2.5 in 1980 in Massachusetts and Proposition 13 in 1978 in California, shows how voters frustrated with state governmental inefficiency, waste, and overspending resorted to a cap which they perceived as the only means available to remedy their situation. Voters in both states believed prior to the vote that the imposition of the TEL would substantially eliminate inefficiency, waste, and overspending but it would do so without lowering the quality or quantity of public goods and services such as education. But once the TELs were imposed in Massachusetts and California, however, taxpayers acted “consistent with the (O’Sullivan, 2001) regret theory of tax limits” or buyers’ remorse.

The history of TELs, budgetary caps or even the wage and price controls imposed under former President Nixon demonstrates that placing arbitrary limits on revenues and expenditures results in a corresponding reduction in the quantity and quality of the public programs and services such as education provided by the TEL affected entity. Indeed, Downes and Figlio (2008) describe the TEL proponents who assert that “constitutional constraints like Proposition 13 could reduce the size of local governments and, at the same time, have little or no effect on the quality of public services provided” as seeking a “free lunch.”

Apples versus Oranges: Massachusetts’ Proposition 2.5 versus Governor Christie’s 2.5% Cap

Contrary to Governor Christie’s 2.5% cap proposal, Massachusetts imposed its 2.5% TEL during an economic boom and provided significant amounts of incremental state aid to school districts to make up for the loss of local property tax revenue. But New Jersey is mired in a deep recession with seemingly ever increasing state budget deficits which have already resulted in severe cuts to state educational aid. Because state aid is declining and no additional state financial aid is forthcoming to offset lost property tax revenues, school districts would be forced to cut non-mandate protected educational programs and services much more deeply than was experienced in Massachusetts.

State aid is unreliable. Massachusetts educational aid fluctuates while California has not complied with Proposition 98’s constitutional guarantees to provide state aid to local school districts to make up for the property tax revenues lost under Proposition 13. As a result of Proposition 13, California’s per pupil spending fell precipitously to an average of approximately $7,500 per pupil as compared to an average of $47,000 per inmate at its state penal institutions while its average class sizes became the second highest in the nation. Also, Massachusetts imposed its 2.5% cap during a period of declining student enrollment while New Jersey’s enrollment levels continue to increase. Hence, Massachusetts’ lower school district expenditures were largely offset by a much lower level of student enrollment which helped to greatly minimize the cuts to educational programs and services which would not be the case in New Jersey.

Taxpayers’ Expectations for TELs

New Jersey taxpayers generally seem to believe that much greater accountability, efficiency, and transparency at all levels of government will lead to lower spending and, hence, lower taxes. But voters do not want fewer public goods and services; just a much lower price for the public goods and services that they enjoy today. Government at all levels tends to overtax, taxpayers contend, because governments waste financial resources and are inefficient. Governor Christie’s 2.5% TEL, therefore, seems to be a tempting way to accomplish these goals.

In addition, Governor Christie’s 2.5% TEL lacks the flexibility for state and local governments as well as our public schools to respond appropriately to unforeseen circumstances or a declining economy. For instance, public schools tend to experience an increase of students transferring from private schools when the economy declines and parents are more challenged to find ways to pay for tuition in addition to property taxes. Governor Christie’s 2.5% cap proposal, therefore, can not guarantee that any level of government will operate at peak efficiency before cutting the public goods and services including education that they provide.

Governor Christie’s 2.5% cap proposal would enable the state to determine the budgetary and property tax policies of local governments and school districts through its state imposed limitations. If enacted, the 2.5% cap would lead, therefore, to increased centralization of educational funding along with its concomitant increased control over local school districts’ operations. The 2.5% TEL would lead to limitations on local school district expenditures and property tax levies which in turn would lower the quality of public education.

TELs’ Impact on Education and Student Achievement

TELs not only limit the amount of property tax revenue available to school districts but also and more importantly adversely impact how a typical school district provides educational programs and services. Downes and Figlio’s (1999a) findings explain how “the imposition of tax and expenditure limits results in the long-run reductions in the performance of public school students.” Students attending schools in TEL affected districts (Figlio, 1997; Downes, Dye, & McGuire, 1998; Downes & Figlio, 1999b) not only experienced much larger class sizes but also scored significantly lower on mathematics, language arts, and social studies standardized tests. When it comes to education, therefore, TELs lead to a reduction in the quantity as well as the quality of education, an increase in class sizes, and a leveling down of student achievement.

TELs seem to adversely impact student achievement disproportionately to the amount of property tax revenues lost or expenditures cut. Downes and Figlio (2008) conclude that TELs “lead to reductions in student outcomes that are far larger than might be expected given the changes in spending.” Possible explanations for this result include disproportionate cuts in instructional rather than administrative expenditures, higher student-teacher ratios, and a shift especially of the more talented students to private K to 12 schools. Because teacher salaries and benefits generally account for more than approximately 70% of a typical school district’s budget, it stands to reason that these expenses would be cut more severely. Reductions of teachers under the constraints of a TEL often lead to larger class sizes which when combined with the loss of regular educational programs and services tends to result in the transfer of many students especially the more gifted ones to private schools (Downes & Figlio, 2008.)

Conclusion

While Governor Christie aims to limit local public school districts’ property tax revenues and expenditures to no more than a 2.5% annual increase, this cap will most likely lead to a leveling-down of the quality of public education. Indeed, our nation’s two major TELs, California’s Proposition 13 and particularly Massachusetts’ Proposition 2.5 on which Governor Christie’s proposal is modeled, demonstrate the downside of such caps. These TELs (Fishel, 2001) destroyed the connection among local control, property taxes, school district budgets, educational quality, and taxpayer support because taxpayers essentially lost their ability to hold local school districts accountable to their goal of maximizing their property values.

The fundamental problem with trying to hold all of New Jersey’s public school districts’ property tax revenues and expenditures to annual increases not exceeding 2.5% is that it leads to a one-size-fits-all approach for education but one that fits no district. Baker, Green and Richards (2008) explain, “The local property tax empowers local voters to express what they want for their local public schools.” But when the artificial budgetary constraints of a TEL are imposed by the state, as Baker, Green and Richards (2008) conclude, “the political advantages of empowering local citizens and promoting competition and sorting among jurisdictions is lost.” Thus, the TEL leads to school district budgets that are incongruous with the needs and priorities of local school districts.

Governor Christie’s proposed reduction in local school district control over the levying of property taxes and determining the operating budget decreases local school district accountability and adversely affects public school quality. Because reductions of property tax revenues through the 2.5% TEL will reduce the level of local investment in the school district; the stake held by local taxpayers is similarly reduced. Fischel (2001) explains this using the motives of taxpayers without children in the public schools, “At the local level, they are willing to support, or at least not oppose, high levels of spending because better schools add to the value of their homes.” Through the imposition of a TEL, “At the state level, voters without children do not perceive such an offsetting benefit to their taxes.” Having a lowered sense of ownership in their schools, taxpayers become more complacent without local control over their school district’s property taxes. This causes a corresponding reduction in the level of accountability required by the stakeholders and, therefore, the quality of their public schools’ education declines.

But a TEL, such as Governor Christie’s 2.5% cap proposal, would destroy the Tieboutian equilibrium (Tiebout, 1956) enjoyed by local public school districts. It would do so by artificially limiting budgets below the levels congruent with the needs and priorities of local school districts. Because the quality of a taxpayer’s local public schools as well as his/her property taxes are capitalized in the value of their home, the consequence of Governor Christie’s 2.5% TEL would be to lower educational quality and, therefore, property values.

References

Baker, B. D., Green, P., & Richards, C. E., (2008). Financing Education Systems, Upper Saddle River, New Jersey: Pearson Education, Inc.

Downes, T. A. & Figlio, D. N., (1999a). Do Tax and Expenditure Limits Provide a Free Lunch? Evidence on the Link Between Limits and Public Sector Service Quality. National Tax Journal, 52, 113-128.

Downes, T. A. & Figlio, D. N., (1999b). Economic Inequality and the Provision of Schooling, Federal Reserve Bank of New York, Economic Policy Review, 5, 99-110.

Downes, T. A. & Figlio, D. N., (2008). Tax and Expenditure Limits, School Finance and School Quality in The Handbook of Research in Education Finance and Policy, Ladd, H. F., & Fiske, E. B., (Editors) (373-388). New York, New York: Routledge Taylor & Francis Group.

Downes, T. A., Dye, R. F., & McGuire, T. J., (1998). Do Limits Matter? Evidence on the Effects of Tax Limitations on Student Performance, The Journal of Urban Economics, 43, 401-417.

Figlio, D. N., (1997). Did the “Tax Revolt” Reduce School Performance?, The Journal of Public Economics, 65, 245-269.

Fischel, W., (2001). The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies, Cambridge, Massachusetts: Harvard University Press.

O’Sullivan, A., (2001). Limits on Local Property Taxation: The United States Experience in Property Taxation and Local Government Finance, Oates, W. E., (Editor) (177-200). Cambridge, Massachusetts: Lincoln Institute of Land Policy.

O’Sullivan, A., Sexton, T. A., & Sheffrin, S. M., (2007). Property Taxes and Tax Revolts: The Legacy of Proposition 13. Cambridge, Massachusetts: Cambridge University Press.

Tiebout, C. M., (1956). A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

Tags:Blog, budgets, California, Caps, centralization of funding, education, home rule, local control, locality, mandates, Massachusetts Proposition 2.5, Property Tax Levy, property taxes, property taxes blog, property values, Proposition 13, Proposition 98, public school districts, School Finance Blog, school reform and restructuring, state control, student performance, tax and expenditure limit blog, tax cap blog, TEL blog, TELs, unfunded state and federal mandates
Posted in academic performance, accountability, autonomy of schools, bigger is not better, board of education, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, class size, county government, County Property taxes, decision making, education, Eliminate County Government, enrollment, home rule, home values, homeownership, leveling down, Local Education Authority (LEA), local property taxes, local schools, mandates, New Jersey, New Jersey Property taxes, No Child Left Behind (NCLB) Act, No Child Left Behind Act, non-mandate protected programs, per pupil spending, property taxes, property values, public education, public finance, school finance, school funding, school governance, school performance, state financial aid, state mandates, student performance, student teacher ratios, Wallace Oates, William Fischel | No Comments »

Subtractive Education: New Jersey’s School Voucher Proposal

Saturday, May 8th, 2010

The State Legislature has introduced New Jersey Senate bill S1872 entitled the Opportunity Scholarship Act which would create a five year pilot program to provide scholarship donation tax credits that would be used to fund school vouchers for tuition assistance. This taxpayer funded voucher plan would enable children from low-income families to transfer from underperforming public schools to the public, private or religious school of their choice. But to finance these vouchers, S1872 would transfer $360 million of state funds largely to private and religious schools and from our state’s public schools that are already reeling from approximately $1.5 billion in state aid reductions.

The voucher plan would allow corporations to contribute to state run scholarship organizations or funds. These state run scholarship organizations or funds would then distribute the monies to private and religious schools or to out of district public schools in certain cases. The state treasury, however, would refund each corporate donor’s contribution in the form of dollar for dollar tax credits which would result in the taxpayer subsidizing 100% of the voucher program.

S1872 significantly increases not only the number of eligible students but also the kinds of schools eligible for vouchers. The bill would enable almost 280,000 students to qualify for vouchers. Students, however, would qualify for vouchers if they were merely residing in a school district with a chronically failing school and not just attending a failing school. Furthermore, students who are currently attending charter, private, and religious schools are also eligible for vouchers. S1872 would allocate $90 million of the scholarship’s funds strictly to students who are already attending private and religious schools. Moreover, this amount can increase by the amount of the $270 million allocated for current public school students residing in a school district with at least one failing school that goes unused.

Vouchers are routinely advertised as improving educational quality by creating a competitive model. But a voucher plan is a funding vehicle for schools rather than a means for improving schools. A voucher by itself does not contribute to helping our schools and students achieve because it provides no operational, curricular, programmatic, or facility improvement.

The benefits taxpayers derive from their local school district quality and property taxes are capitalized in their property values. The greater is the quality of the local school district, the greater is the taxpayer’s property value because the demand for quality education leads to a higher market price. As a result, taxpayers strive to protect and improve their property values by constantly evaluating the quality of their school district so as to maximize their property values and avoid the risks inherent with vouchers.

Vouchers, however, create overcrowding, congestion, and financial burdens for those school districts receiving voucher students particularly if these districts are unable to refuse voucher students for capacity reasons. These burdens deteriorate the quality of education and the level of student achievement in receiving districts. When a school district’s quality deteriorates or is expected to decline, taxpayers will usually vote with their feet. By voting with their feet, taxpayers in districts receiving voucher students are quite likely choose another public school district that best meets their needs and one that will contribute to their property values rather than one subject to the incremental burdens of voucher students.

Contrary to a voucher plan’s assertion that it will somehow create a “true” competitive model, a taxpayer’s choice of municipalities and, therefore, school districts, already reflects a home owner’s optimal asset allocation decision. Thus, the current model of school choice for the provision of education through local public school districts that does not involve vouchers results in a competitive marketplace that aligns taxpayer preferences with the quality of public education better than a voucher plan could ever hope to accomplish.

The provision of education through local public school districts in which all of students who live within the district attend its local public schools enables community members to get to know and understand one another. The public benefit of having children attend their local schools rather than schools in remote districts accrues, therefore, to students and parents alike. This “network of acquaintances” is defined by Fischel (2002) as “community-specific social capital.”

Community-specific social capital (Fischel, 2002) “facilitates collective action” and builds public support for the public funding of public education which “reduces the transaction costs of the provision of true local public goods such as education.” But vouchers would disperse students from their home towns and thereby reduce the communal capital of the local school district. Vouchers would also impose significant transportation costs on districts such as Summit which do not own or operate a fleet of buses.

Another major adverse impact of the voucher plan is its $8,000 cap on the annual amount for which voucher students could be compelled to pay to their chosen public, private or religious school. This would result in voucher payments not only falling short of average tuition charges at the overwhelming majority of public, private and religious schools as well as much further below average per pupil costs but also forcing many public, private and religious schools to close. The districts from which voucher students would transfer would suffer losses of state enrollment-based aid as well as a possible degradation of test scores which would lead to No Child Left Behind financial and operational penalties.

If the question is how to improve the quality of education statewide, then the answer is not found within the Opportunity Scholarship Act. We should oppose the passage of S1872 because it will adversely impact our students and schools statewide while exposing homeowners to the risks associated with vouchers. Taxpayers resemble investors because they want their major asset, their home, to appreciate in value. Home owners have a vested interest in the success of their local schools, therefore, because they strive to offset risks such as those posed by vouchers to their property’s value which can not be easily diversified.

References

Fischel, W. A., (2002). An Economic Case against Vouchers: Why Local Public Schools Are a Local Public Good, Dartmouth Economics Department Working Paper: Dartmouth College.

Tags:Vouchers
Posted in Capitalization of property taxes, Capitalization of school district quality, Community Specific Social Capital, education, educational leadership, home values, homeownership, local property taxes, local schools, New Jersey, New Jersey Property taxes, No Child Left Behind Act, Opportunity Scholarship Act, per pupil spending, property taxes, property values, public education, public finance, S1872, Scholarship donation tax credits, school finance, school funding, school governance, school performance, school reform, tuition, Vouchers, William Fischel | No Comments »

How New Jersey Senate bill S450 will Increase Administrative Costs and Property Taxes Statewide

Monday, March 15th, 2010

Passage of the pending New Jersey Senate bill, S450, would eliminate all local school administrators over the level of principal and establish the Executive County Superintendent as the official who will govern and operate all local public schools within each of the proposed consolidated countywide school districts. When former Governor Corzine signed the CORE Act (Assembly Bill A4 and Senate Bill S19) into law, he transformed the role of county superintendents of education from mere disseminators of state educational policies into powerful Executive County Superintendents of Schools. In so doing, the governor empowered each Executive County Superintendent to begin consolidating all schools into K to 12 districts and ultimately to consolidate all schools within one countywide organization.

By creating the office of Executive County Superintendent of Schools, New Jersey is moving to replicate the state of Maryland’s consolidated county school system model. First, the state of Maryland eliminated all local school officials beyond the level of principal. It then consolidated all of its local schools serving less than one million students statewide within one of the 24 countywide school districts in each county under an Executive County Superintendent.

Although Maryland abolished all school administrators above the level of principal from its local schools in the name of saving money, cutting administrative expenses and cutting property taxes, these small savings were overwhelmed by the ongoing costs of the office of the Executive County Superintendent of Schools with its ever increasing bureaucracy. The reason Maryland’s total statewide administrative costs increased rather than decreased as promised following the implementation of the consolidated county wide school district is that the Executive County Superintendent is not accountable to the voters and this enables him/her to increase staff largely without taxpayer input.

In New Jersey, the Executive County Superintendent also is appointed by the governor. He/she supervises, directs and manages the functions of the County Office of Education as a representative and subordinate of the New Jersey State Commissioner of Education. The Executive County Superintendent oversees all public school districts within his/her county. To accomplish these goals, each county superintendent is given a staff and a budget which are not subject to taxpayer input, approval or elections.

In Maryland, for example, the Montgomery County Department of Education by itself has an annual operating budget of approximately $2 billion with nearly 22,000 employees despite having a total student enrollment of less than 138,000. The office of the Executive County Superintendent of Schools for Montgomery County, therefore, employs roughly one administrator for every six of its students! Furthermore, the Montgomery County consolidated school district has more than three times the number of administrators per student than it does teachers! Contrary to what S450 purports, it will not provide for a more cost effective educational system rather it will increase costs especially administrative expenses. Indeed, states that have adopted this model or a similar model such as California have increased costs.

The implication behind Senate bill, S450, is that it would somehow save the taxpayers’ money and enable the state to have lower property taxes by eliminating administrators over the level of principal. Proponents even a suggest savings of $553 million. But Maryland’s total statewide administrative costs increased rather than decreased as promised following the implementation of its consolidated county wide school district. Indeed, the experience of such a control model in the state of Maryland contradicts the assumptions inherent in S450 based on its consolidated county school district control model for New Jersey.

Rather than add another bureaucracy, the most effective way to cut property taxes in New Jersey is to eliminate the tax burden imposed by county government. County government places a tremendous burden on New Jersey’s taxpayers especially as compared to those in Connecticut where county government was eliminated in 1960. New Jersey’s 21 counties combine to spend over $6.1 billion annually in property taxes, hold more than $5 billion in outstanding debt and have more than 44,000 employees. Indeed, just the three New Jersey counties of Union, Essex and Bergen together levy approximately $1.6 billion in annual property taxes.

The question facing New Jersey’s taxpayers is whether more money would be saved by eliminating county government or by adopting a consolidated county school district model as advocated by S450. The answer is rather straight forward. Saving $6.1 billion annually in property taxes by eliminating county government would be the best way to ease New Jersey’s tax burden rather than implementing S450 and hoping its unsubstantiated savings of approximately $553 million materialize.

Decentralization rather than centralization brings decision makers closer to the taxpayers and local priorities. Taxpayers have more of a stake in the success of their local school district rather than county districts. Indeed, separating the taxpayer from his/her ability to control and influence the operating budget and educational plan of his/her local school district cuts neither costs nor property taxes.

In these challenging economic times, every home owner wants to make sure their property taxes are as low as possible and are put to use where they can do the most good. Nowhere is this more necessary than in New Jersey, where it is imperative that all levels of government do not waste our scarce financial resources and cut taxes particularly property taxes. To accomplish this goal, it is imperative that New Jersey does not add another unaccountable bureaucracy which will increase administrative expenses and property taxes statewide as would result under S450 should it become law.

Tags:Add new tag, consolidated county school districts, CORE Act, county government, countywide school districts, executive county superintendent, home rule, local control over schools, locality, Maryland's county school districts, New Jersey Property taxes, New Jersey Senate Bill S450, property taxes, S450
Posted in autonomy of schools, bigger is not better, board of education, Capitalization of property taxes, Capitalization of school district quality, county government, County Property taxes, county run school districts, county wide school districts, deregulation of schools, dumbing down, education, executive county superintendent, home rule, home values, homeownership, Local Education Authority (LEA), local property taxes, local schools, Maryland county run school districts model, New Jersey, New Jersey Commissioner of Education, New Jersey Property taxes, property taxes, property values, public education, public finance, regional schools, regionalization of schools, S450, school district consolidations, school district mergers, school finance, school funding, school governance, school performance, school reform, self-funding school districts, self-governance, tax base | No Comments »

The Charter School Advantage: Operating as a Deregulated Autonomous Public School

Sunday, June 28th, 2009

The proponents of charter schools (Newman, 1998) purport that charter schools are the answer to what ails our public school system. The rationale supporting how charter schools can provide an education that is superior in quality to that offered by conventional public schools is that they are deregulated autonomous public schools that are granted extreme freedom in how they choose to innovate, experiment, manage operations, “respond to their customers”, govern themselves and enroll as well as educate their students (Sugarman, 2002). “In return for this autonomy, charter schools usually are asked to demonstrate academic outcome results for their children, but that too is supposed to be measured without too much interference with the school’s independence” (Kemerer, 1999, cited in Sugarman, 2002). The core elements of a charter school’s success are its ability to function with autonomy and deregulation, both of which are regularly denied to conventional public schools. The solution to what ails our public school system, therefore, is to enable our traditional public schools to operate with the same degree of autonomy and deregulation as that granted to charter schools.

Charter schools are public schools that are funded primarily by local property taxes but are granted freedom from many state and federal mandates and restrictions so that they can provide innovative and cutting-edge teaching and learning. As a result, charter schools function independently from their host district’s board of education under a charter granted by the state (New Jersey Department of Education, 2001). According to the New Jersey Department of Education, as soon as the charter is approved by the Commissioner of Education, the school is governed by a board of trustees authorized by the State Board of Education and the charter school is thereby granted all the necessary powers to execute and implement its charter.

By agreeing to the contract with the state, a charter school receives public funding with significantly less regulation but it is also expected to provide a quality of education that exceeds that of a conventional public school. But despite their public school charter and property tax funding, charter schools operate independently of their local taxpayers’ input, feedback and control. “While charter schools emphasize that they are a new form of public schools, they are increasingly appearing and behaving like private schools” (Horn and Miron, 2000, cited in Bracey, 2002).

According to the New Jersey Department of Education, however, a charter school “must outline how the school will meet the New Jersey Core Curriculum Content Standards” and “Cross-Content Workplace Readiness Skills” plus all “teachers, administrators, and professional staff must have New Jersey State certification” (New Jersey Department of Education, 2005, cited in Bredehoft, 2005). While charter schools operate independently, the local board of education “must also provide transportation for charter school students residing in its district under the same terms and conditions for district students attending public schools” (Bredehoft, 2005). Also, “a charter school may operate within a ‘region of residence’, comprised of a district or multiple districts identified in the charter school’s application, and must have a physical residence in one of those districts” (New Jersey Department of Education, 2005, cited in Bredehoft, 2005).

A charter school is funded based on its enrollment primarily by the revenues it receives through its local board of education. According to the New Jersey Department of Education, the host district’s board of education must pay the charter school ninety percent of its average per pupil share of the annual operating budget for the specific grade level of each student (Bredehoft, 2005). Although charter schools can not charge tuition, they are eligible to receive federal and state funds. As a result, it seems as if funding is siphoned from the host public school district to the charter school without the direct or indirect approval of local taxpayers.

Because local property taxes as well as state and federal financial aid abide by a zero-sum process, all funds transferred from a conventional public school to a charter school result in a cut in funding that can not be recouped. A conventional public school must cut non-mandate protected programs and services such as regular education in order to make up for the lost revenues. In addition, because state and federal governments either under fund or do not fund their mandates, conventional public schools are forced to pay for these shortfalls while charter schools are often not subject to the same regulations or to the same extent as their host district.

Charter schools enjoy many other advantages over their conventional counterparts. Charter schools can limit their enrollment which enables them to have lower student-teacher ratios and forces conventional public schools to educate the majority of students in comparatively larger class sizes. Charter schools do not have to enroll students after the beginning of the school year which enables them to have much more stable enrollments than conventional public schools. The scarcity of unions and tenure in charter schools also represents another set of cost advantages.

The extent to which charter schools can limit the number of students who qualify for special education, are from low-income or poverty level families, or are English language learners (Levay, 2009) would force traditional public schools to educate a disproportionate number of these needy and at-risk students who are much more expensive to educate. Such a practice would minimize costs for the charter school in the district while it would correspondingly increase the public school district’s expenses. In discussing his study of Michigan’s charter schools Bracey (2002) concludes “And, perhaps most significant, the student bodies look more and more like private schools: Fewer minority and special needs students are enrolled.”

Unlike charter schools that can cap or otherwise more effectively limit their enrollment and, thereby, limit the cost of their raw materials, traditional public schools have to enroll all of the students in the district who wish to attend and, therefore, can not control the cost of their raw materials. This cost advantage in favor of charter schools is highlighted below in the “blueberry epiphany” (Cuban, 2004) experienced by former CEO, Mr. Jamie Vollmer, because as the woman from the audience responds to Mr. Vollmer “… we can never send back our blueberries. We take them all!” and, thus, traditional public schools can not control the quality of their raw materials.

“If I ran my business the way you people operate your schools, I wouldn’t be in business very long!” I stood before an audience filled with outraged teachers who were becoming angrier by the minute. My speech had entirely consumed their precious 90 minutes of in-service training. Their initial icy glares had turned to restless agitation. You could cut the hostility with a knife.

I represented a group of business people dedicated to improving public schools. I was an executive at an ice cream company that became famous in the 1980’s when People magazine chose its blueberry flavor as the “Best Ice Cream in America.”

I was convinced of two things. First, public schools needed to change; they were archaic selecting and sorting mechanisms designed for the Industrial Age and out of step with the needs of our emerging “knowledge society.” Second, educators were a major part of the problem: they resisted change, hunkered down in their feathered nests, protected by tenure and shielded by a bureaucratic monopoly. They needed to look to business. We knew how to produce quality. Zero defects! Total quality management! Continuous improvement!

In retrospect, the speech was perfectly balanced—equal parts ignorance and arrogance. As soon as I finished, a woman’s hand shot up … She began quietly. “We are told sir, that you manage a company that makes good ice cream.” I smugly replied, “Best ice cream in America, ma’am.” “How nice,” she said. “Is it rich and smooth?” “Sixteen percent butterfat,” I crowed. “Premium ingredients?” she inquired. “Super premium! Nothing but triple-A.” I was on a roll. I never saw the next line coming.

“Mr. Vollmer,” she said, leaning forward with a wicked eyebrow raised to the sky, “when you are standing on your receiving dock and you see an inferior shipment of blueberries arrive, what do you do?” In the silence of that room, I could hear the trap snap. I knew I was dead meat, but I wasn’t going to lie. “I send them back.”

“That’s right!” she barked, “and we can never send back our blueberries. We take them big, small, rich, poor, gifted, exceptional, abused, frightened, confident, homeless, rude, and brilliant. We take them with attention deficit disorder, junior rheumatoid arthritis, and English as their second language. We take them all! Every one! And that, Mr. Vollmer, is why it’s not a business, it’s a school!” In an explosion, all 290 teachers, principals, bus drivers, aids, custodians, and secretaries jumped to their feet and yelled, “Yeah! Blueberries! Blueberries!”

And so began my long transformation. Since then, I have learned that a school is not a business. Schools are unable to control the quality of their raw material, they are dependent upon the vagaries of politics for a reliable revenue stream, and they are constantly mauled by a howling horde of disparate, completing customer groups that would send the best CEO screaming into the night” (pp. 3-4).

Charter schools enroll students who would otherwise attend the local public schools thereby forcing traditional public school districts to cut educational programs and services correspondingly. But if a traditional school district lost a disproportionate number of students and terminated a proportionate number of teachers and aids, it would not be able to make up many of the operating expenses associated with those students who left to attend the local charter school. Charter schools, therefore, may seem to provide a higher quality of education than conventional public schools but only as a result of the revenue and cost advantages built into their charters.

Because the majority of state and federal financial aid is in some way related to enrollment levels, a public school district would stand to lose aid in direct proportion to the reduction in its enrollment caused by charter schools. This would force cuts to non-mandate protected programs such as regular education. The double whammy of reduced state and federal financial aid as well as forced cuts to regular education would be especially distressful for public school districts. Therefore, having local property taxes finance charter schools siphons away crucial revenues from traditional public schools.

The proponents of charter schools espouse their competition with traditional public schools as helping to improve the quality of public education. But charter schools serve only a fraction of the school community while diverting scarce funds from their host local school districts that educate the overwhelming majority of students. This unequal playing field levels down the quality of public education.

To date, the general public largely seems to have not fully understood that charter schools are neither traditional public schools nor the extent to which charter schools are publicly funded but without local taxpayer control. While such a misunderstanding might have resulted from the lack of resonance of charter schools on the general public’s radar screen, surely it will evaporate rapidly as President Obama and U. S. Secretary of Education, Arne Duncan, actively promote the development and expansion of charter schools nationwide (Maxwell, 2009). Once the public becomes more aware of the real definition of charter schools and the extent to which they are funded with local property taxes, there will most likely be many questions raised.

________________________

References

Bracey, G. W. (2002). The War Against America’s Public Schools: Privatizing Schools, Commercializing Education, Boston: Allyn and Bacon.

Bredehoft, J. M. (2005). New Jersey Charter Schools: History and Information, New Jersey Community Capital, 1(1), Retrieved from http://www.newjerseycommunitycapital.org.

Cuban, L. (2004). The Blackboard and the Bottom Line: Why Schools Can’t Be Businesses, Cambridge, Massachusetts and London, England: Harvard University Press.

Horn, J. and Miron, G. (2000). An Evaluation of the Michigan Charter School Initiative: Performance, Accountability, and Impact, Kalamazoo: The Evaluation Center, Western Michigan University.

Kemerer, F. R. (1999) School Choice Accountability in School Choice and Social Controversy, Sugarman, S. D. and Kemerer, F. R. (Editors), (174-211). Washington, D.C.: Brookings Institution Press.

Levay, W. J. (2009). Put the Public Back in “Public Charter School”, Edwise, Retrieved from http://www.edwize.org.

Maxwell, L. A. (2009). Obama’s Team Advocacy Boosts Charter Movement, Education Week, 28(35), 1, 24-25.

New Jersey Department of Education (2001). Charter School Evaluation Report, Retrieved from http://www.state.nj.us.

New Jersey Department of Education (2005). New Jersey Charter School Application 2005, Retrieved from http://www.nj.gov.

Newman, M. (1998). New Jersey Rejects Challenge to Charter School Program, The New York Times, April 2, 1998.

Sugarman, S. D. (2002). Charter School Funding Issues, Education Policy Analysis Archives, 10(34). Retrieved from http://www.epaa.asu.edu/epaa/v10n34.

Posted in academic outcomes, academic performance, Arne Duncan, at-risk students, autonomy of schools, board of education, cap on enrollment, charter, charter school application, charter schools, class size, contract, deregulation of schools, double whammy, education, educational leadership, ELL, English language learners, enrollment, experimentation, federal financial aid, IDEA, innovation, local property taxes, local schools, mandates, Michigan, minority students, needy students, New Jersey, New Jersey Commissioner of Education, New Jersey Core Curriculum Content Standards (CCCS), New Jersey Department of Education, New Jersey State certification, non-mandate protected programs, per pupil budget, per pupil spending, President Obama, property taxes, public finance, region of residence, regular education, school finance, school funding, school governance, school law, school performance, school reform, special education, State Board of Education, state financial aid, state mandates, student performance, student teacher ratios, tenure, tuition, U. S. Secretary of Education, unequal playing field, unions | No Comments »

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