Aid Formula Research Articles

Impacts of Efficiency Targeting in School Aid on School District Efficiency, Student Performance, and Outcome Equity

Impacts of Efficiency Targeting in School Aid on School District Efficiency, Student Performance, and Outcome Equity

How to Design a State Education Aid Formula Using a Regression-based Estimate of the Cost-capacity Gap: The Case of Connecticut, USA

How to Design a State Education Aid Formula Using a Regression-based Estimate of the Cost-capacity Gap: The Case of Connecticut, USA

Structural Competency: A Framework for Racial Justice Intervention in Student Affairs Preparation and Practice

Higher education practices and policies are rooted in racism and imperialism. This causes physical and emotional harm to BIPOC students. Yet, student affairs practitioners and higher education leaders struggle to stay conscious of the relationships between macro structures of oppression and their deleterious educational, economic, health, and social consequences, when it comes time to assess, understand, and intervene in campus crises and racialized violence. Borrowing from the medical field, this paper offers “structural competency” as a framework for student affairs education and practice toward supporting practitioners prepared to mitigate systemic racism and to identify the social determinants of inequity. Structural competency in student affairs means having the capacity to understand and take actions toward addressing the root causes of BIPOC students’ marginalization in historically white campus contexts. It requires deep attention to how these causes—polices, institutional norms, infrastructures, and the hegemonic beliefs embedded in our economic, social, and political systems—interact with students’ lived experiences on campus. Guided by a Critical Race Theory lens, structural competency moves us toward confronting the downstream consequences of upstream decisions such as admissions standards that disenfranchise BIPOC students, or how the federal financial aid formula fails to account for equity in home ownership which disproportionately harms Black families for the benefit of white ones, because of antiblack U.S. policies such as redlining, making college less accessible for BIPOC students. This paper argues that such a structural competency framework and mindset in policy and practice is crucial for higher education leaders confronting systemic institutional policies that have a cumulative and ongoing oppressive impact on BIPOC students.

Optimal Need-Based Financial Aid

We study the optimal design of student financial aid as a function of parental income. We derive optimal financial aid formulas in a general model. We estimate a model of selection into college for...

Reforming Connecticut’s Education Aid Formula to Achieve Equity and Adequacy across School Districts

Connecticut’s public K–12 education system relies heavily on local funding, resulting in substantial disparities between affluent districts and low-income districts with a large proportion of socioeconomically disadvantaged students who are more costly to educate. Despite recent improvements, the existing state aid formula has been criticized for failing to provide sufficient funding to districts with the fewest resources and the highest education costs. To help improve state aid distribution, this report estimates a “cost-capacity gap,” which measures the difference between a district’s education cost and revenue capacity and uses it as an indicator of the district’s need for state education aid. The report proposes a series of state aid formulas based on the gap measure that Connecticut policymakers may use to improve equity and adequacy in education funding. Through rigorous statistical analysis of recent data, this report measures each school district’s education cost and revenue capacity based on factors that are outside the direct control of local officials at any given point in time. The cost factors include, among others, the percentage of school-age children from families living in poverty and the percentage of students living in single-parent or non-family households. The revenue capacity estimate for each district is based mostly on taxable property wealth. The analysis shows large disparities in the cost-capacity gap across the state. While districts with larger gaps, on average, receive more per-pupil state aid under the current formula compared with smaller-gap districts, the largest-gap districts still receive less aid than they need to close their cost-capacity gaps. As a result, inequity and inadequacy remain in the state’s education finance system. The policy simulations show that the gap-based formulas introduced in this report address funding inequity and inadequacy more effectively than the existing formula does. Some of these new formulas incorporate tools intended to enhance their appeal to state legislators whose communities do not have large cost-capacity gaps. These tools include minimum and maximum levels of per-pupil state aid and a hold-harmless provision. However, a gap-based formula that contains any of these tools would fail to fully eliminate funding inequity and inadequacy and require a larger state aid pool than would be needed otherwise.

How to Design a State Education Aid Formula That is Equitable, Adequate, and Politically Feasible: The Case of Connecticut

After being sued for inequity and inadequacy in school funding, many states have reformed their education aid policies. Using Connecticut as an example, this paper shows how to design a state education aid formula that can effectively address funding inequity and inadequacy while taking political feasibility into account. It first develops a measure of the gap between education cost and revenue capacity, both of which are estimated using school district characteristics that are outside the direct control of local officials at any given point in time. It then uses each district’s cost-capacity gap to evaluate the state’s existing education aid distribution. This paper shows that while larger-gap districts, on average, receive greater amounts of state aid per pupil under Connecticut’s existing distributions, significant inequity and inadequacy remain. This paper proposes, as a potential solution, a gap-based formula that allocates state aid to close the cost-capacity gaps. The formula includes tools such as minimum and maximum levels of aid to increase its political appeal. The research method and the formula design that this paper presents are sufficiently general and flexible to be adapted easily and applied to other states.

Racial and Socioeconomic Test-Score Gaps in New England Metropolitan Areas: State School Aid and Poverty Segregation

Test-score data show that both low-income and racial-minority children score lower, on average, on states’ elementary-school accountability tests compared with higher-income children or white children. While different levels of scholastic achievement depend on a host of influences, such test-score gaps point toward unequal educational opportunity as a potentially important contributor. This report explores the relationship between racial and socioeconomic test-score gaps in New England metropolitan areas and two factors associated with unequal opportunity in education: state equalizing school-aid formulas and geographic segregation of low-income students. The underlying methods do not allow a strict causal interpretation; however, both aspects are strongly related to test-score gaps, with poverty segregation between school districts especially important in New England. The report first explores the degree to which state school aid is progressive, that is, distributed disproportionately to districts with high fractions of students living in poverty; more progressive distributions are associated with smaller test-score gaps in high-poverty metropolitan areas. All U.S. states distribute some state revenue to support local school districts, but the extent to which such aid is focused on districts with greater concentrations of poverty varies considerably. The relationships estimated in the empirical analysis suggest that New England metro areas with high average district poverty in states with more progressive aid distributions, such as Springfield, Massachusetts, should see somewhat smaller racial and socioeconomic test-score gaps than metro areas with lower district poverty in states with less progressive school aid, such as Burlington, Vermont; that predicted difference in white-Black test-score gaps amounts to about one-quarter of the actual difference between Springfield’s gap and Burlington’s gap. The second factor explored is poverty segregation; test-score gaps are larger in metropolitan areas where, compared with white children or higher-income children, minority children or low-income children go to school with, or are in school districts with, more students from low-income families. Partly because school districts (and cities and towns) are relatively small geographically in New England, poverty segregation in the region’s metropolitan areas is most pronounced between districts, not between schools within school districts. The sizes of the estimated relationships suggest that metro areas with the highest between-district poverty segregation, such as Bridgeport-Stamford-Norwalk, Connecticut, should have markedly larger test-score gaps than metro areas with moderate poverty segregation between districts, such as Manchester-Nashua, New Hampshire; those predicted differences amount to 60 percent to 90 percent of the actual test-score gap differences between the Bridgeport and Manchester metro areas. States can alter either or both of these factors via policy changes. States set the terms—and thereby the progressivity—of school-aid policy. Many states include cost adjustments in their aid formulas to offset some of the additional costs of educating students from low-income families, and some recent proposals (such as for Connecticut) or policy changes (such as in Massachusetts) involve more closely targeting state equalizing aid to high-poverty districts. State policy levers regarding between-district poverty segregation are less direct and potentially more controversial. Nonetheless, statewide affordable housing policies, such as those in Massachusetts and Rhode Island, if applied more comprehensively, might reduce concentrations of poverty and provide more low-income families access to the higher-quality schools in low-poverty suburban districts.

Audiologists’ preferences in programming cochlear implants: A preliminary report

Background: There is little data available addressing how clinical audiologists handle cochlear implant (CI) programming between device manufacturers and make decisions on related services, particularly in the United States. Objectives: This study sought to understand the techniques and settings professionals use with their patients, how they approach bimodal fitting, which tests they use to evaluate patient and device performance, and their overall preferences of (re)habilitative options. Methods: A questionnaire was developed and distributed to CI audiologists throughout the United States electronically. Results: All respondents reported either always or almost always using Cochlear’s default signal processing strategy in contrast to the 64% reported for Med-El and 40% for Advanced Bionics. A trend of less use of electrically evoked stapedial reflex threshold (eSRT) than electrically evoked compound action potentials (eCAP) for objective measures was revealed. Higher likelihood of performing speech recognition tests in quiet than in noise was revealed. Preferences for bimodal fitting trend toward using a partner company’s hearing aid, although preferences were comparable in adopting four types of hearing aid formulas surveyed in the questionnaire. Conclusions: These data confirm high variability among audiologists’ CI programming practices, and documenting these differences is an important step to understanding how to best treat patients.

Educational resources and student achievement: Evidence from the Save Harmless provision in New York State

A long-standing debate in the economics of education literature is whether increasing educational resources moves the needle on student achievement. Education finance reformers advocate delivering extra resources to disadvantaged school districts to close academic achievement gaps, but their efforts are subject to criticism from skeptics who believe that extra resources do not actually improve performance. This study leverages variation in per-pupil expenditures from a specific provision of the state aid formula in New York State that allows districts to maintain prior levels of total state aid even as their student enrollment declines. We uncover achievement gains of approximately 0.047 standard deviations in math and 0.042 standard deviations in English corresponding to $1000 in additional per-pupil spending. This study strengthens the case that school resources matter, and that sustained financial investments can help districts maintain and improve quality of public education.

No Time for College? An Investigation of Time Poverty and Parenthood

ABSTRACTPostsecondary outcomes are significantly worse for student parents even though they earn higher GPA’s on average. This study used institutional records and survey data from a large urban U.S. university to explore whether time poverty explains this trend. The results of regression and KHB decomposition analysis reveal that students with preschool-aged children have a significantly lower quantity and quality of time for college than comparable peers with older or no children, and that time spent on childcare is the primary reason for this difference. Both quantity and quality of time for education had a significant direct effect on college persistence and credit accumulation, even when controlling for other factors. Thus, greater availability of convenient and affordable childcare (e.g. increased on-campus childcare, revised financial aid formulas that include more accurate estimates of childcare costs) would likely lead to better college outcomes for students with young children.

Outcome-based grants-in-aid to local school districts: how to apply them and analyze their impacts on fiscal and outcome equity

This paper investigates whether an outcome-based school aid formula could improve fiscal and outcome equity significantly more than a typical aid formula would. When outcome-based formula is applied to foundation aid, fiscal and outcome equity deteriorates compared to Ohio's recent aid formula. However, when it is applied to power-equalizing aid, the latter improves fiscal and outcome equity more significantly than both foundation aid and Ohio's recent aid formula do. This paper further shows how to apply them to real-world cases. The lessons from this paper can be easily applied to similar grant systems with standardized test scores.

Evaluating the recession’s impact on state school finance systems

The Great Recession’s effect on state school finance systems was unlike previous downturns in the early 1990s and early 2000s in that it a) involved a greater loss of taxable income in many states, thus greater loss to state general fund revenues, b) also involved a substantial collapse of housing markets and related reduction or at least leveling of growth of taxable property wealth, c) but also involved a substantive infusion of federal “fiscal stabilization” aid to be used to fill holes in state general aid formulas. The goal of this study is to evaluate the effects of the recession on equity of state school funding systems with respect to child poverty concentrations. Using school district level panel data from 1993 to 2011, we evaluate the interplay between local, state and federal source revenues through the course of the recent recession by comparison with the less severe economic downturn of the early 2000s. Then using state level estimates of elasticities between revenue and spending measures and district poverty rates, we estimate whether changes in the distribution of state, local or federal revenue contribute most to changes in overall equity of current spending and whether those contributions changed during the recent recession.

School Finance and Learning: Are We Leveraging State Aid to Get All We Can Out of It?

After spending some twenty-five years working on schoolfinancefortheNewYorkStateEducationDepartment,Ihadtheopportunitytoworkoneducationreform for the State of Nevada. As Deputy Superintendent for Business and Support Services, I oversaw state aid to school districts, information technology, audit services, and child nutrition. I also served as Education Department liaison to the 77th session of the Nevada Legislature. Although my sojourn in Nevada, lasting little more than a year, was brief compared with my work in New York, the experience gave me perspective on how two states were implementing school finance and reform. Recent reforms in both states were driven in large part by the federal Race to the Top competition, but the approaches to reform were quite different. Key features of the education environment in Nevada—basic student services and a strong inclination against raising taxes—worked to keep school spending low, the sixth lowestschoolspendinginthenationat$8,419perpupil. New York State, in contrast, is a large-enrollment, highspending, and high-taxing state. Consequently, spending per pupil on education is among the highest in the nation, at $16,239 per pupil. 1 In 2011, the state reached the breaking point, however, and enacted laws to limit growth into the future for education revenues raised from the property tax and distributed as state aid to school districts.

Thirty-Seven and Counting: How Has AEFP Evolved from Its Origins?

It has been a busy time for the Association of Education Finance and Policy (AEFP). Over the past few years the association has acquired a new name, a new journal, and many new members. The 2012 annual conference, convened in Boston last March, proved to be the largest conference in the association’s thirty-seven-year history, with 556 members in attendance. The theme, selected by incoming president Deborah Cunningham, was “Education Finance, Policy, and Practice: The Role of Evidence in a Dynamic World,” which underscores the contemporary challenge to the association: how to apply an increasing abundance of information and sophisticated analytical tools to produce the evidence needed to guide decision making by educational policy makers and practitioners. The Boston meeting was notable not only for the number in attendance. The unique qualities and strengths of the association were in clear display: papers of unusual methodological rigor; an interdisciplinary mix of academics from the social sciences, public policy schools, and colleges of education; educational finance professionals, policy analysts, and practitioners, a mix rarely found in the same place; and sessions addressing today’s hot topics as well as issues that have endured over the years. Having said this, all indications are that AEFP is what it has always been: a small, diverse group of people tackling some really big problems. Of particular note was a trend that has been growing for years but has clearly come into full flower: the large

The Fiscal Impact of Potential Local-Option Taxes in Massachusetts

Municipal governments in Massachusetts have experienced difficulties raising adequate revenues to meet their expenditure needs. Responding to these challenges, policymakers have been investigating additional revenue sources for municipalities, such as new local-option taxes. Using a Representative Tax System approach and new data, this paper examines the impact of local-option taxes on meals, general sales, income, and payroll on revenue-raising capacity of Massachusetts municipalities.This paper shows that new local-option taxes would help municipalities generate considerable additional revenues from untapped sources. However, revenue capacity from new local-option taxes is not evenly distributed across municipalities. Local-option tax capacity is concentrated in Boston suburbs and resort areas in eastern Massachusetts. On average, large cities would benefit more from local sales, meals, and payroll taxes than smaller towns. High-income, property-rich municipalities would gain more local-option tax capacity than low-income, property-poor municipalities. Local-option taxes also do not compensate municipalities in proportion to their loss of state aid dollars in FY 2009.Local-option taxes are likely to exacerbate fiscal disparities, because municipalities with low existing revenue-raising capacity often lack the tax bases for new local-option taxes. Policymakers could consider increasing equalizing state aid to offset these fiscal disparities. If more aid is not forthcoming, this paper proposes that the state change aid formulas to reflect differences across municipalities in local-option tax capacity, and to better target fiscally distressed communities. These strategies - explored in the Massachusetts context - could also be useful in other states.

Financing Higher Standards in Public Education: The Importance of Accounting for Educational Costs

Performance standards have been at the center of recent debates on educational reform. Many states have implemented new performance standards, often based on student test scores, and a district's state aid is sometimes linked to its success in meeting the standards. This focus on performance is designed primarily to promote better student achievement by holding schools accountable. However, a school's performance is influence not only by the actions of its administrators and teachers but also by factors outside its control, such as the nature of its student body. Thus, a focus on performance is inevitably unfair, especially to cities, unless it accounts for the impact on performance of factors outside the control of school officials. To be fair, school report cards and performance-based state aid systems must distinguish between poor performance based on external factors and on school inefficiency. Many state aid systems have taken one step in this direction by compensating districts with low wealth, a factor over which they have no control. However, school district performance is also influenced by the cost of education, which varies widely from district to district based on local wage rates, student characteristics, and other external factors. Existing state aid formulas either ignore these factors altogether or else use ad hoc corrections, such as weighted pupil counts, that account for them partially at best. In this policy brief, we explain why a performance focus and educational cost indexes must go hand in hand, discuss alternative methods for estimating educational cost indexes, and show how these cost indexes can be incorporated into a performance-based state aid program. We show, using data from New York State, that controlling for costs in the design of school aid formulas is crucial to enable central cities to reach educational adequacy standards.

Education Funding in Massachusetts: The Effects of Aid Modifications on Vertical and Horizontal Equity

Public school funding in Massachusetts is based on foundation budget principles. However, funding formula modifications often create disparities between district foundation budgets and actual required spending levels. This study provides an in-depth look at Massachusetts' state aid formulas used between 2004 and 2009 and utilizes two approaches to measure the effects of aid modifications on vertical and horizontal equity. The first is a regression-based approach which compares the intended effects of student characteristics on foundation spending to the actual effects on required spending. The second approach measures equity directly for each school district and uses the Tobit estimation technique to examine the effects of student and district characteristics on the equity measure. Results indicate that district characteristics such as community wealth and regional school systems increase the likelihood of a district benefiting from aid modifications. Holding community characteristics constant, there is also evidence that districts with high proportions of low income elementary school students and/or English language learners benefit from overlay provisions as well.

Fixing New York's State Education Aid Dinosaur: A Proposal

York State provides aid to local schools through a confusing maze of aid programs that are, according to many commentators, unfair to the neediest school districts, often defined as those with many students who are poor or otherwise at risk. For example, York City, which, by any measure, is of the neediest districts, currently receives less aid per pupil than the average district in the state. On January 9, 2001, in the case of Campaign for Fiscal Equity vs. State of York (719 N.Y.S 2d 475, 150 Ed. Law Rep. 834), the York State Supreme Court brought new salience to this issue. In a strongly worded opinion, Justice Leland DeGrasse ruled that the current educational aid violates the state's constitutional requirement to provide a sound basic and needs to be reformed. Among other things, Justice DeGrasse labeled the failure to account for the needs of at-risk students one of the great failings of the State school financing system and declared that New York City does not receive State aid commensurate with the needs of its students. This policy brief proposes a new formula for distributing educational aid in York State, a formula designed to direct aid to the districts that, through no fault of their own, are in the greatest need of assistance. High-need districts are those with high educational costs or low property wealth. This policy brief begins by explaining why the cost of education varies from school district to the next. It then shows how variation in the cost of education across districts can be incorporated into a state education aid program that brings all districts up to some minimally adequate performance level. This approach is applied to York State. Specifically, I propose a new education aid formula for York State that would bring all the school districts up to an adequate performance defined with reference to the new Regents graduation standards. This policy brief also explores various ways to share the cost of this program between school districts and the state.

Does Springfield Receive its Fair Share of Municipal Aid? Implications for Aid Formula Reform in Massachusetts

This paper examines the distribution of unrestricted municipal aid in Massachusetts, which has been a major concern to civic leaders and elected officials of many communities, including Springfield. The paper develops a measure of the municipal fiscal gap indicating the relative need of municipalities for state aid. The analysis shows that in recent years, unrestricted municipal aid has not been distributed in proportion to the gap measure among the 10 largest cities in Massachusetts. For example, despite having the largest municipal gap, Springfield received almost the lowest per capita amount of Additional Assistance - a key component of municipal aid. This pattern is the result of deep and uneven aid cuts in the past that distorted the distribution of municipal aid. This paper therefore suggests that state government consider adopting a formula that provides more aid to communities facing larger municipal gaps. To avoid disrupting local budgets, the state could consider holding existing aid harmless, and using the gap-based formula to distribute new aid. The simulations show that if the state commits to reasonably large increases in municipal aid, this new approach can be both equalizing and beneficial to a majority of municipalities in the Commonwealth within a relatively short time period. The paper provides various formula evaluations and policy recommendations that could support efforts to reform state aid in Massachusetts.

Designing state aid formulas

AbstractThis paper designs a new equalization‐aid formula based on fiscal gaps of local communities. When states are in transition to a new local aid formula, the issue of whether and how to hold existing aid harmless poses a challenge. The authors show that some previous studies and the formulas derived from them give differential weights to existing and new aid in filling the gap and hence effectively treat communities receiving greater amounts of existing aid more favorably than communities receiving less or no existing aid. As a fairer alternative, the authors propose a new approach that considers existing and new aid as completely equivalent in filling the gap by focusing on the equalizing impact of combined (new and existing) aid. In addition, unlike most previous research that focuses only on a single year's new aid distribution, the authors simulate the dynamics of aid distributions over multiple years using Massachusetts data. They further provide and compare several possible methods by which state policymakers could direct extra aid dollars to communities with larger unfilled gaps in dollar terms. Although the proposed aid formula is designed for municipal aid and tailored to Massachusetts, the authors note that foundation aid formulas for education implicitly treat existing aid in the same way and suggest that the framework, principles, and policy recommendations might also be applicable to other states. © 2009 by the Association for Public Policy Analysis and Management.