ESSA’s Financial “Sleeper Provision” Reminds Us ESSA is about Equity

Blogs, Letters & Testimonials

December 14, 2017

By Dana Laurens


Round two of the Every Student Succeeds Act (ESSA) state plan reviews is well underway at the U.S. Department of Education (ED), but one little known provision of the now not-so-new ESSA law has yet to be implemented. Beginning next school year, states are required to publicly report actual per-pupil spending by school. Currently, most district report cards misrepresent school-level spending by using district-wide data, particularly average teacher salaries that vary greatly from school to school.

While we do not know the specifics of per-pupil spending at every school, what we do know generally is that spending inequities between schools, within districts are both underreported and underemphasized. Using data from reporting requirements contained in President Obama’s American Reinvestment and Recovery (aka “the stimulus”), a study by the Center for American Progress (CAP) concluded:

  • — “Schools with 90 percent or more students of color spend a full $733 less per student per year than schools with 90 percent or more white students;”
  • — “An average school would see an annual increase of $443,000 in state and local spending if it were brought up to the same per-pupil spending level as those schools with very few nonwhite students. This is enough to pay the average salary for 12  additional first-year teachers or nine veteran teachers.”—
  • “The traditional explanation—that variation in schools’ per-pupil spending stems almost entirely from different property-tax bases between school districts—is inaccurate. In fact, approximately 40 percent of variation in per-pupil spending occurs within school districts.”
  • “When veteran teachers elect to move to low-need schools in richer, whiter neighborhoods, they bring higher salaries to those schools. New teachers who tend to start out in high-need schools, serving many students of color and poor students, earn comparatively low salaries. This leads to significantly lower per-pupil spending in the schools with the highest concentrations of nonwhite students.”

An important step for state and local advocates and stakeholders at this point is to ensure that the per-pupil spending reporting requirements under ESSA are done in an accurate and timely fashion. School finance expert, Marguerite Roza, and her team at Georgetown’s Edunomics Lab have been interviewing districts across the country and helping state education agencies (SEAs) get ready to meet ESSA’s financial reporting requirement when it takes effect next year. Currently 28 SEAs and 17 local education agencies (LEAs) are part of a Financial Transparency Working Group hosted virtually by the Edunomics Lab. Below are 7 of Roza’s recommendations for state-level advocates.

  1. Have your SEA join the Financial Transparency Working Group if it hasn’t already.
  2. Schedule a meeting with all departments at the SEA who will be involved in the financial transparency data system (IT, Finance, Communications, etc.) to discuss and set priorities.
  3. Communicate to LEAs about the new reporting requirement.
  4. Request data from a subset of LEAs to examine current site-level accounting procedures at the local level.
  5. Run analyses using existing federal data on a few districts.
  6. Establish a working group of stakeholders.
  7. Request a one-on-one phone consultation with Edunomics Team.

These data should then form the basis for action at the state and local level to remediate within-district inequities in per-pupil spending. Further policy recommendations can be gleaned from districts that have replaced funding formulas based on staffing allocations with weighted student funding formulas and student based budgeting (SBB). Under these approaches, funds follow the individual student rather than individual teachers, and students whose circumstances warrant additional resources (e.g., low-income students, English Language Learners, and/or students with disabilities) attract a higher amount of per-pupil dollars. These plans look different from district to district.