School Finance Trends

FOCUS Do you believe that the federal government contributes sufficient support to public education in the United States? Explain your position.

With the passage of NCLB, the federal government became more involved with the state and local education agencies by taking an active role in implementing education policy. The law not only required that assessments be developed and administered, it also required that benchmarks for adequate yearly progress (AYP) be established to ensure that all students are proficient in meeting standards as measured by the assessments. Additionally, the achievement results were categorized by student ethnicity, family income, home language, and disability, and schools could only meet AYP when each of the student groups met AYP.36

Critics labeled NCLB an unfunded mandate because federal funding lagged behind states’ ability to cover the costs of developing and administering achievement tests, identifying criteria to determine highly qualified teachers, and other provisions of the act. This lack of funding was frustrating to school officials at both state and local levels, especially as schools’ budgets constricted during the economic downturn.37

The transition from the Bush administration to the Obama administration saw a shift in focus on a number of issues related to NCLB. The new administration believed that parts of the act were flawed and reforms were needed as work began on the reauthorization of the Elementary and Secondary Education Act (ESEA), which was to take place in 2007. Interestingly, due to Congressional inaction, the ESEA is still awaiting reauthorization in 2015. In the intervening years, the Obama White House pushed forward a number of initiatives and programs designed to reform federal education policy. During the global recession, the administration secured passage of the American Recovery and Reinvestment Act (ARRA) of 2009, which awarded $77 billion to strengthen elementary and secondary education and helped save jobs in school districts across the nation. Another initiative, Race to the Top (RTTT), a $4.35 billion competitive education grant, was designed to encourage states to make improvements in teacher effectiveness, improve achievement in low-performing schools, develop more rigorous standards and better assessments, and enhance data systems. The administration also granted greater flexibility in providing relief from certain provisions of NCLB in exchange for adopting college- and career-ready standards and new principal and teacher evaluations. Nineteen states received funding under the grant and thirty-four states modified state laws or policies to facilitate changes to address the federal emphasis. Additionally, forty-eight states worked together to develop the college- and careerready standards now known as the Common Core State Standards.38

8-4 School fInance trendS

Financial crises in education often make the headlines. For example, the recent national recession triggered large state-revenue shortfalls. Coupled with rising costs and enrollments, the loss of state revenue placed many local school districts in a bleak fiscal situation. Although such crises may have come and gone in the past with changes in the economy and in federal, state, and local budgets, we are still faced with several longlasting concerns about school finance. As we examine historical trends, keep in mind that educators today are being asked to show proof that they are spending public money wisely. To find out more about current school funding, see the Technology @ School box.

36The No Child Left Behind Act of 2001 at www2.ed.gov/policy/elsec/leg/esea02/index .html (February 8, 2015); and Mary Branham Dusenberry, “NCLB: Not as Easy as ABC,” State News (May 2007), pp. 19–23. 37Alyson Klein, “Focus Turns to Congress after High Court’s Denial of Challenge to NCLB Law,” Education Week (June 16, 2010), p. 24. 38“Race to the Top,” White House (n.d.) at www.whitehouse.gov/issues/education/k-12/race -to-the-top; “Reforming No Child Left Behind,” White House (n.d.) at www.whitehouse.gov /issues/education/k-12/reforming-no-child-left-behind; and “K–12 Education,” White House (n.d.) at www.whitehouse.gov/issues/education/k-12.