The Agony of American Education

How per-student funding can revolutionize public schools.

Imagine a city with authentic public school choice—a place where the location of your home doesn’t determine your child’s school. The first place that comes to mind probably is not San Francisco. But that city boasts one of the most robust school choice systems in the nation.

Caroline Grannan, a public school advocate and super-involved parent, lobbied hard to wear down the San Francisco school district back in 1996 and get her son William, then an incoming kindergartner, out of his assigned neighborhood school, Miraloma Elementary, and into a “more desirable” alternative school called Lakeshore. In 1996 Miraloma had low test scores and a low-income student body bused in from other neighborhoods; its middle-class neighbors shunned it. Lakeshore had a better reputation and higher student performance.

Once, Grannan remembers, it was conventional wisdom in San Francisco that there were only five decent public schools in the city; if you couldn’t get your child into one of them, it was time to move to the suburbs or to find a private academy. But a lot has changed since 1996. Today Grannan could send her child to any school within the city. What’s more, she would happily send her kids to Miraloma, one of many elementary schools in San Francisco that now attract eager middle-class clients. Miraloma has a new principal with a parent-friendly attitude, has begun to raise its test scores, and is more diversified. Families now feel secure taking advantage of Miraloma’s longstanding positive attributes, including its small size and its sheltered and attractive setting.

Grannan’s more recent experience with her children’s middle school also reflects how San Francisco schools have changed. Her son William just graduated from Aptos Middle School, and her daughter Anna started sixth grade there this year. This school is now in high demand, but in 1996 parents considered it dirty, dangerous, and academically weak. Today it offers enriched language, arts, and music programs, and its test scores continue to improve.

Grannan is more than just a concerned parent. She is a founding member of the San Francisco chapter of Parents for Public Schools, a PTA board member, and a prolific writer whose articles about local schools appear in the San Francisco Examiner and other publications. She has argued passionately against both vouchers and charter schools, and would wince to be portrayed as a partisan of school choice. Yet she has become an avid supporter of the San Francisco system and the benefits it brings to San Francisco families.

San Francisco is one of a handful of public school districts across the nation that mimic an education market. In these districts, the money follows the children, parents have the right to choose their children’s public schools and leave underperforming schools, and school principals and communities have the right to spend their school budgets in ways that make their schools more desirable to parents. As a result, the number of schools parents view as “acceptable” has increased greatly in the last several years. In Grannan’s words, “Parents who are willing to go beyond the highest-status schools can now easily find many more acceptable options, and can avoid the fight for a few coveted seats in the most prestigious schools.”

Decentralization Rules

Give credit to Arlene Ackerman, San Francisco’s superintendent of schools since 2000. Ackerman introduced the weighted student formula, pioneered in Edmonton, Alberta, in 1976, which allows money to follow students to the schools they choose while guaranteeing that schools with harder-to-educate kids (low-income students, language learners, low achievers) get more funds. Ackerman also introduced site-based budgeting, so that school communities, not the central office, determine how to spend their money. Finally, she worked to create a true open-enrollment student assignment system that gives parents the right to choose their children’s schools.

In San Francisco the weighted student formula gives each school a foundation allocation that covers the cost of a principal’s salary and a clerk’s salary. The rest of each school’s budget is allocated on a per student basis. There is a base amount for the “average student,” with additional money assigned based on individual student characteristics: grade level, English language skills, socioeconomic status, and special education needs. These weights are assigned as a percentage of the base funding. For example, a kindergartner would receive funding 1.33 times the base allocation, while a low-income kindergartner would receive an additional 0.09 percent of the base allocation. In 2005–06 San Francisco’s base allocation was $2,561. Therefore, the kindergartner would be worth $3,406, and the low-income kindergartner would generate an additional $230 for his school.

The more students a school attracts, the bigger the school’s budget. So public schools in San Francisco now have an incentive to differentiate themselves from one another. Every parent can look through an online catalog of niche schools that include Chinese, Spanish, and Tagalog language immersion schools, college preparatory schools, performing arts schools that collaborate with an urban ballet and symphony, schools specializing in math and technology, traditional neighborhood schools, and a year-round school based on multiple-intelligence theory. Each San Francisco public school is unique. The number of students, the school hours, the teaching style, and the program choices vary from site to site.

The pressure to attract children has produced not just a greater variety of unique schools but new school capacity based on the specific demands of parents. For example, as demand has exceeded the number of available seats the district has added more Chinese and Spanish dual-language immersion programs. The weighted formula ensures that schools have an incentive to recruit and serve students with learning disabilities, limited English proficiency, and other difficulties.

All this diversity is useless if parents don’t know about it, so schools have an incentive to market their programs as well. Much of the marketing is done through a local chapter of Parents for Public Schools. The district and the chapters host school enrollment fairs, and the schools offer parent tours throughout the school year. Parents can select up to seven schools on their enrollment application. In the 2005–06 school year 84 percent of parents received one of the schools they listed, with 63 percent receiving their first-choice school. More than 40 percent of the city’s children now attend schools outside their neighborhoods.

Decentralized school management is a growing trend in the United States. To date the weighted student formula has been implemented in Cincinnati, Houston, St. Paul, San Francisco, Seattle, and Oakland. This year a weaker version that does not include school choice is being implemented statewide in Hawaii, and pilot programs are underway in Boston, Chicago, and New York City.

By contrast, most districts in the United States use a staffing ratio model, in which the central office directs school sites to spend their resources in a particular way, through allocations of staff and a small supplies budget. For example, a school might be sent one teacher for every 28 students. This system gives individual institutions little control over their financial resources and personnel choices. Under the weighted student formula, each school site receives a budget denominated in dollars instead of positions and decides what staff and nonstaff items to purchase with that money.Oakland, which completed its first year of the weighted student formula in 2004–05, is taking the decentralized concept further than any district in the United States. Edmonton, San Francisco, and the others all charge each school not for the actual salary of each teacher but for “average teacher salaries” in the district. This means that, for the sake of school budgets, differences in teacher salaries are ignored; on paper, a first-year teacher costs the same as a 30-year veteran. This practice hides funding inequities within districts where more desirable schools are stacked with senior teachers and other institutions are staffed with less experienced instructors. In practice, schools with lower-paid teachers end up subsidizing schools with higher-paid teachers. In Oakland, by contrast, schools are charged the actual cost of their employees, so a school with more novice educators has more money left over to pay for training or supplies or even to hire another teacher and reduce class size—all of which could make a school more attractive to potential students.

Another way some districts go further than San Francisco is in the extent to which parents are allowed to choose their children’s schools. Edmonton’s system is particularly robust, allowing students to apply directly to any school in the system. Similarly, Cincinnati’s high school open enrollment system allows students to apply directly to 26 different high school programs on a first come, first served basis. Such systems stand in stark contrast to the form of choice embedded in the federal No Child Left Behind Act. Under federal law students in failing schools are guaranteed the right to transfer to a school that isn’t failing. But districts have not made a good-faith effort to implement public school choice. In New York City this year, for example, 11,000 kids applied to leave failing city schools, but only 2,250 city kids received one of their choices. Since the No Child Left Behind Act was passed, fewer than 2 percent of parents nationwide have used the law’s provisions to transfer their children to other public schools.

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