The federal role in improving educational productivity
How Congress Can Reauthorize the Elementary and Secondary Education Act to Address Costs as well as Effectiveness

The Federal Role in Improving Educational Productivity
The Federal Role in Improving Educational Productivity
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Introduction and summary

Although it is difficult to recall in these partisan times, the 2001 reauthorization by Congress of the Elementary and Secondary Education Act was enacted with overwhelming support from both Democrats and Republicans. The bipartisan backing of the reauthorized law, known as the No Child Left Behind Act, reflected a broad consensus among federal policymakers that schools should be held accountable for their success in improving student achievement—and that Title I of ESEA provided an appropriate vehicle for requiring states to do so. The law required that states, as a condition for receiving federal aid through Title I, establish uniform standards in math and reading, test all students annually in grades three to eight and at least once in high school to ensure that those standards were being met, and intervene in schools and districts failing to make adequate progress toward the goal of universal student proficiency by 2014.1

Over the past decade, of course, these new accountability mandates have been subjected to a withering array of criticism, much of it focused on the specific ways they measure student achievement and the success (or lack thereof) of schools
in improving it. While opponents of standardized testing and of federal involvement in kindergarten-through-12th grade education exploit these critiques in an attempt to undermine support for the law, observers sympathetic with the goal of
enhanced accountability for American schools share many of their concerns.

Credible evidence now confirms that the new Title I accountability requirements have improved the math achievement of American students.2 Even so, a new consensus has rightly emerged on the urgency of revising the law’s performance metrics.

But much less discussed is the law’s inattention to what is likely to be the defining issue for the American education system for the foreseeable future—the need to boost the productivity of school spending. Productivity in the education sector
refers to the level of student achievement states and school districts produce for each dollar they spend. While Title I of ESEA now ensures that detailed information on student achievement is available to the public from school report cards and online information sources, accurate and timely data on education spending remains difficult, if not impossible, to obtain. The law implicitly defines success in terms of outcomes produced without taking into account the level of resources expended during produce production.

With few exceptions, states and school districts have likewise paid scant attention to the issue of spending productivity. And the education research community often evaluates policies based solely on their success in improving outcomes, ignoring cost considerations altogether.3

This long-standing neglect of productivity in elementary and secondary school education is especially problematic at the present moment. All indications are that our public schools will need to become more efficient even if we are to maintain current levels of student performance. The fiscal pressures facing school districts in the aftermath of the 2008-09 financial crisis—already strong despite the flow of temporary federal stimulus funds—are poised to intensify as that funding recedes in fiscal year 2012 beginning this coming October.

Indeed, more than 30 states have already cut education outlays since the start of the Great Recession of 2007-2009, the fiscal consequences of which continue to wreak havoc on most state and local governments. And the Center for Budget and Policy Priorities reports that “2012 is shaping up as states’ most difficult budget year on record.” 4 The local tax revenues on which many school districts depend are projected to decline for several years as property valuations incorporate the full extent of the housing market’s collapse. Over the long run, the rising cost of entitlement programs threatens to place competing demands on budgets at all levels of American government.

In short, the current imperative in American education is to do more with less. As U.S. Secretary of Education Arne Duncan explained in a recent speech, “The alternative is to simply end up doing less with less. This is fundamentally unacceptable.”5 This paper argues that the federal government can and should play a limited but important role in helping the nation address the challenge of improving the productivity of education spending. It reviews the two dominant approaches to federal regulation of elementary and secondary education in our country—so-called input regulation and test-based accountability—and then demonstrates why neither can be expected to boost spending productivity. It concludes by calling for a new approach organized around the following recommendations:

• Promote transparency about the level of spending throughout the American education system
• Support research on cost-effective ways to improve student outcomes
• Encourage the development of new education delivery models that have the potential to reduce costs
• Consider cost-effectiveness in funding decisions and jettison programs with outdated rationales or weak evidence of effectiveness

The long-awaited reauthorization of ESEA provides a welcome opportunity for Congress to accomplish each of these goals.

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