Performance Pressure and Resource Allocation in Ohio

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February 2008
Shelley De Wys, Melissa Bowen, Allison Demeritt, Jacob E. Adams, Jr

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SFRP Working Paper 27

New accountability systems require that states and districts accomplish something never accomplished before—ensuring that all students meet state standards. To explore how these heightened state and national performance expectations have altered educational resource decisions, the School Finance Redesign Project (SFRP) conducted interviews of state, district, and school leaders in four states, asking these leaders about their efforts to improve student performance and the constraints they face in implementing improvement reforms. This report presents the findings of state, district, and school interviews conducted in Ohio State.

Our interviews indicate that school and district administrators and state policymakers do indeed feel pressure to improve student performance, especially for historically neglected and disadvantaged students, and they are responding to these accountability pressures by directing their attention and resources toward ensuring that all students achieve standards. Local administrators have responded to these pressures by focusing resources on enhancing the capacity and motivation of students, teachers, and principals and by aligning resource use with system goals. Efforts to improve the capacity and motivation of students include increasing instructional time by providing prekindergarten, longer school days and year, and more time on core subjects; improving the learning environment by reducing class size, changing schedules and school models, and providing non-academic services; improving instructional rigor; and enhancing learning through individualized attention. Efforts to improve the motivation and capacity of teachers include conducting embedded professional development activities chosen on the basis of proven effectiveness, alignment with standards and assessments, and identified needs; promoting collaboration and peer-to-peer learning; adopting more rigorous performance evaluations; and initiating limited use of incentives. Similarly, districts are providing professional development to principals focused on developing instructional leaders, and some districts are implementing financial incentives for principals tied to school performance. Finally, district and school administrators are attempting to align components of the education and finance systems. For instance, districts are attempting to focus resources on areas of need and align curriculum with standards. Districts are also trying to improve the decisionmaking process through strategic planning, the use of data, best practices, and evaluations of resource use.

While these efforts represent progress, local administrators reported a number of constraints to aligning resource use with goals and subsequently bringing all students to standard. First, student demographics—including the problems associated with poverty—pose formidable challenges to bringing all students to standard. Second, activities designed to improve instruction are hampered by inequitable, unstable, and often inadequate funding resulting from foundation funding determined by residual budgeting and the interaction of Ohio property tax limitations (HB 920) and Ohio State funding mechanisms (phantom revenue). Third, reform activities are also significantly impacted by union contract terms and conditions, historical perceptions of what schools and classrooms should look like, and lack of teacher and administrator capacity. While cultural change in the education community is happening, it is slow. Teacher and union preferences strongly influence resource decisions at every level of the system and at times prevent officials from doing what they believe is best for students. Fourth, administrators are only beginning to view effective resource use as the optimization of all possible educational expenditures to maximize student performance for a given cost. And those that are attempting to take actions consistent with this view often lack sufficient data and established practices to identify effective uses. In addition, most administrators view salary costs as immutable; therefore, given that salaries consume a large portion of district budgets, reform efforts are funded on the margins, primarily through restricted and unstable grant and philanthropic funds. Meanwhile, administrators’ efforts to strategically use such funds are hindered by grant rules and restrictions.

At the state level, officials voiced many concerns that mirrored those of district-level respondents. State officials mentioned a lack of capacity among educators and administrators, constraints on reform activities imposed by union power and local collective bargaining agreements, and a need to determine “what works” (incorporating the ideas of value-added assessment), disseminate this information, and support districts’ efforts to implement reforms to the extent possible. State officials noted that the judicial challenges have been ineffective at ameliorating inequitable, unstable, and inadequate education funding in Ohio, which were associated with HB 920, phantom revenue, and residual budgeting. While state officials provided examples, and a review of the history of education reform in Ohio provides several more, of the various education reforms and supports the state has implemented over the years to improve resource use and student performance, it appears that they have implemented such reforms in spite of, rather than in concert with, education finance reform. While the various judicial decisions and the Governor’s Blue Ribbon task force temporarily raised the hopes for finance reform, it appears that the legislature is unable or unwilling to overcome historical precedent and tackle ingrained political divisions to create substantive change. The inability of court mandates and task forces to move the legislature to action on key issues of education finance begs the question of how and when real change will eventually occur.

In sum, our interviews indicate that while district- and state-level leaders have made significant strides in attempting to improve the quality of education in Ohio through various education reforms, the legislature has failed to make commensurate progress regarding the equity, adequacy, and stability of education finance. Our interviews indicate that some districts have adequate resources, while others do not. Many districts’ financial situations rest precariously on maintenance of the tax base and passage of the next levy. And too often, reforms and interventions take place on the margins of education spending. Meanwhile, coherent and strategic resource use is limited by lack of capacity, lack of information on “what works,” and data and tools to determine effective resource use, and the current system’s complex funding streams, rules, and reporting requirements. In addition, certain reforms fall victim to the opposition of powerful teachers unions. Our findings shed light on the problems that ground-level administrators and policymakers face in implementing educational change within the current finance system and illustrate why progress is slow, despite these well-intentioned efforts. Our findings also make clear that Ohio policymakers and legislators cannot continue to view education finance discussions as unproductive distractions divorced from the work of education reform; instead they must attend to the system’s structural problems if they are to reach the objective of bringing all students to standard. We hope that the findings of this and other SFRP reports will encourage policymakers, practitioners, and the public to overcome historical precedents, partisan politics, and resistance to change in order to create an educational system that truly makes student achievement the ultimate goal.