LOCAL SCHOOL DISTRICTS
The Growth of Non-Instructional Spending
Attempting to pinpoint the source of inefficiency in public schools, many observers blame the dwindling share of total expenditures devoted to in-class instruction. Former Secretary of Education William Bennett, for example, articulates this argument in writing,
Too much money has been diverted from the classroom; a smaller share of the
school dollar is now being spent on classroom instruction than at any time in
recent history. It should be the basic goal of the education reform movement to
reverse this trend toward administrative bloat and to reduce the scale of the
bureaucratic "blob" draining our school resources.[1]
Bennett's contention that bureaucratic spending is growing at the expense of instructional spending is indisputable. Nationwide, the non-teaching bureaucracy grew 500 percent between 1960 and 1984, while the number of teachers rose only 57 percent.[2] In addition, numerous analyses of educational spending in the 1990s confirm that throughout the U.S., public schools spend a disturbingly a small percentage of their funds on classroom teaching. Five such studies, covering New York City, Milwaukee, Indianapolis, and the states of Wisconsin and Indiana, find that an average of 33 percent of total K-12 budgets actually make it into the classroom.[3]
Many of the districts drawing scrutiny appear to have exceedingly large administrative structures. A 1987 review of Chicago public schools, for instance, revealed that 3,300 people are employed by central administration departments. At the same time, the Catholic Archdiocese in the city employed only 36, though it served a student population 40 percent the size. A similar situation exists in New York City, where 6,000 administrators work for the public schools, while only 25 can be found in Catholic system, which is patronized by one-fourth the number of students.[4] The large group of public school administrators, moreover, also appears to be well compensated in comparison to their counterparts in other fields. Employees such as secretaries, food service personnel and janitors typically earn much higher - by 50 to 100 percent - salaries than employees in similar private sector positions.[5]
Need for a More Complete Explanation
Though such facts serve to generate concern about how educational funds are spent, appreciating them is only a first step in addressing the broader problem of inefficiency (the fact that expenditures have risen, but performance has not) in the public school system. While administrative growth to the detriment of the classroom has been harmful, it does not appear that this trend has been the main source of overall cost growth. Major components of the fast-growing "non-instructional" category do, on closer examination, relate to instruction. Examples of this are support staff, materials, and fixed charges, such as staff retirement and health benefit costs. When costs strictly attributable to central administration are isolated, from 1960 to 1980, they remained a constant 5 percent of total costs.[6] Factors other than administrative costs, thus, must have even more to do with total education cost growth. Consequently, when attempting to discover the roots of school inefficiency, it is critical to look at a number of factors in addition to administrative expansion.
In order to get a complete picture of the how schools can become more efficient, one needs to examine not simply budget summaries revealing the proportion of spending in each category, but complete school district budgets. Such a full picture enables one to go beyond arguments over the appropriateness of the amounts of money spent inside and outside the classroom. One can assess the prudence of all expenditures, bureaucratic or otherwise, and attempt to determine the extent to which they improve the educational outcomes of students. With this framework it will also be possible to make specific recommendations to local school districts for measures they can implement to increase efficiency.
Case Study of the Waco Independent School District: Introduction
It is with these aims that this report will analyze the operations of the Waco Independent School District (Waco) in Waco, Texas. Although it is hard to generalize findings from one school district to another, the lessons learned in Waco will often apply to districts around the nation. Moreover, Waco is a good sample district to examine for a number of reasons. It has recently implemented the Coopers & Lybrand Financial Analysis Model (FAM) software, which classifies district expenses in a standard set of categories and presents financial information in a more business-like format than districts generally produce (Appendix IV-A). The program also creates hundreds of different reports, on figures such as spending by educational program (i.e., vocational, bilingual, etc.) or the budgets of individual schools. In addition, with 16,111 pupils, Waco is an average-sized district, and with a $5,823 per pupil expenditure, it spends close to the national mean on its students. Finally, located in the center of the city, Waco is an urban school district with a diverse student population. However, while allowing insight into many of the problems confronted by urban districts, Waco is still not as large and complex as districts like New York City or Chicago.
The performance of Waco's students indicates that the district needs to take steps to increase the effectiveness of its educational program (Appendix IV-B). Only 39 percent of students passed all three sections of the Texas Assessment of Academic Skills (TAAS), a state-administered examination that sets minimum reading, writing, and math competency levels for Texas students, in the 1996-97 academic year. The state's overall passage rate in the previous year was 67 percent. (Waco must be commended, however, for improving this statistic by ten percentage points in the past four years.) Just 35 percent of Waco's students took the SAT, scoring an average of 935; 29% of them exceeded the state's goal of 1000.[7]
A glance at Waco's budget reveals that the district has the same problem as many others in the U.S., for only half of its $93 million budget is devoted to instruction, with 43 percent going to teachers, 3 percent to teachers' aides, and 4 percent going to materials (Appendix IV-C). Another 12 percent goes to instructional support, including counseling and curriculum development. The remainder of the budget is consumed by operations, debt service, and school and district management. With almost 200 employees, or approximately 80 for every student, the central administration appears to be fairly large (Appendix IV-D).
That only half of the Waco budget is goes to instruction is cause for concern. While excessive bureaucracy is indeed a problem in Waco, however, it is joined with a set of other fundamental operating procedures that should be altered in order to increase the efficiency of the district. Before discussing each recommendation, they are summarized below:
(1) Introduce incentives for cost savings into the budgeting process
(2) Commit to a well-defined and coherent K-12 curriculum plan
(3) Consolidate curriculum development responsibilities
(4) Eliminate other duplicative operations and excessive expenditures
(5) Target low student-teacher ratios only where they have an impact
(6) Redesign the district bonus pay system
(7) Create competition between schools
(8) Promote school-level decision-making
(9) Help minimize the variety of school responsibilities
(10) Streamline academic subject offerings
(1) Introduce incentives for cost savings into the budgeting process
Before examining Waco's budget, it is first useful to understand the process by which it is developed. The budget is formed over a year-long period during which campuses set strategic plans and make formal funding requests. Upon receipt of the proposals, district level officials determine how much is allocated to each campus and administrative unit. A crucial step never taken during this process, however, is an attempt by district officials to objectively determine appropriate levels of spending, for individual schools or for the district as a whole.
In fact, when asked the question, "How much does it take to educate a student in your district?" Carter Scherff, Associate Superintendent for Business and Support Services for Waco, replied that the question does not have an answer. The amount available from state and local sources, and other minor grants, he said, determines how much can be spent.[8] The content of this response is significant because it reveals that budgeting in the district is a resource-driven practice. The district will fund the schools and its central office to the greatest extent possible, subject only to the amount of money available.
This approach to budgeting is by no means limited to Waco. At a presentation to school administrators at the Texas Education Agency`s (TEA) Midwinter Conference on Education, two finance officials from school districts near San Antonio outlined the procedure by which budgets are customarily created in Texas. One presenter stated that when reviewing funding proposals from schools, he wants to "fund everything," but that the sum of incoming revenues often makes this impossible.[9] Conspicuously absent from the presentation was any mention of fiscal discipline, for the sake of taxpayers or for the sake of maximizing the educational outcomes of the dollars spent. Little effort, it seems, is made to analyze the campus funding proposals on their merits alone. Only occasionally do the district financial planners mention concerns over community resistance to property taxes. When they do, their attitude is more aptly characterized as abstract fear rather than intent to reduce costs to a specific target.
Not surprisingly, a lack of fiscal discipline appears to be a systemic flaw in primary and secondary school system throughout the nation. "Today school reforms are often sold on the basis of prospective benefits alone," argues Eric Hanushek, "Costs are not considered, nor are costs or benefits systematically measured after the programs are put in place."[10] One piece of evidence of that supports his contention is what happened to the size of school bureaucracies during the 1970s. Despite the fact that the school-age population "dropped significantly," administrative staff remained essentially the same.[11] The size of the system tends to be as big as big as tax revenues will allow.
The only mechanism in Waco and other school districts for controlling costs is the political process. As promulgated by the Texas Education Code, school district budgets are subject to public hearing. The school board officials who vote on the budget and the property tax rate, moreover, are elected officials. For several reasons, though, this system is ill-suited for the role of encouraging fiscal conservatism. First, school board meetings and local elections gain the interest of few citizens and are attended by even fewer. Part of the reason for this phenomenon is also the second drawback of the political process; that is, the issues considered by the school board are typically ones that the education community, with years of experience in the classroom and a background in educational research, is best equipped to deal with. It is they who should, at the very least, take the lead in making difficult decisions about how a fixed amount of resources can be most effectively spent.
The final reason for the implausibility of effective public involvement in the budgeting process is that school district budgets, as many studying them will attest, are difficult to interpret and understand (Appendix IV-E). Approximately five hundred pages long, the Waco budget is broken down by function (such as instruction) and program (such as bilingual education), but one must have an accompanying guide from the TEA in order to interpret the numeric codes for each classification. The individual budgets for schools and administrative departments resemble transaction journals more closely than budgets, and what is meant by certain expense categories is often hard to comprehend. One of the most common expenditures is for Supplies and Furniture, but this entry could apply to items as diverse as new desks for teachers or reading materials for students. Occasionally an entry for Capital Outlay appears, but no elaboration accompanies it. Waco's implementation of the FAM software does significantly improve the presentation of the budget, making it read more like a corporate financial statement, and this fact will eventually serve to better facilitate public review.
Although Waco and other districts are putting forth effort to make public oversight more powerful, it is nonetheless the case that school systems offer "virtually no rewards for those who do things more efficiently." Any pressures school districts feel to cut costs are usually more than outweighed by calls from the political left to spend more on education.[12] Only when the budgeting process is reformed, so that expenses are scrutinized in attempt to reduce spending to the minimum level necessary for a given level of performance, will public schools begin to see a better return on investment.
Alternatives for introducing such reforms are numerous. Property tax limits can be lowered in order to force districts to keep per pupil expenditures down. In Waco, property taxes rose to $1.42 from $1.30 in 1992, and have stayed at that level ever since (Appendix IV-F).[13] Absent some external pressure, it appears likely that it would be difficult to motivate Waco and districts like it to reduce property taxes. In addition, measures could be adopted that would limit staffing levels in both schools and district administrations. Perhaps the best idea of all is to adopt market-based incentives, such as voucher plans, that allow parents to choose among a group of public and private schools. Such a measure would force public schools to compete for students, the retention of whom would be critical for two reasons. First, in order to continue qualifying for the same levels of state funding, schools would have to keep their enrollments constant. Furthermore, they would need to justify the level of local property taxes to the taxpayers with the fact that they, as opposed to a private school or a school in another district, are educating their children. It seems inevitable that at the core of the public school effort to retain students in an environment of school choice, especially as their revenues might start declining immediately, would be to make themselves more efficient, ensuring that every dollar spent goes toward the best available educational resource.
(2) Make a Long-Term Commitment to a K-12 Curriculum Plan
Closely related to the topic of budgeting is the process by which curriculum programs are evaluated. Programs are the particular strategies schools adopt to pursue academic goals, such as the Success-for-All program for reading instruction. When learning about budgeting in public schools, one is surprised to learn about the prominence of programming issues. Throughout each academic year, school and district officials conduct research that leads them to select certain programs for use in the next year. Almost always, these programs involve new costs, for items such as materials and staff training. It is ultimately up to the district to decide which programs receive funding and are allowed to go forward.
The reason one - especially someone unfamiliar with the education profession - might be surprised at the significance of the programming decisions is that one typically conceives of K-12 curriculum, particularly reading and math, to be a fairly simple matter, with the key ingredients to student success being dedicated teachers and diligent students. The emphasis on choosing and switching between programs might appear misguided and unfocused, as compared with a strategy of selecting and staying with one program that has a history of success.
Indeed, frequent shifting between programs often presents problems. Deborah Rosenfield of Coopers & Lybrand, who works with school districts on consulting projects and on implementation of FAM software, affirms that many districts suffer from "programitis," the continual stacking of new programs on top of others with which schools have become unsatisfied. It is an affliction that is both financially burdensome to the district and an indication of schools not exhibiting a coherent instructional strategy. Eric Hanushek further argues that the programitis phenomenon is widespread, as
benefits of new plans are often assumed rather than systematically measured, and little effort is made to compare the potential net benefits of programs competing for limited resources. Bad programs are allowed to continue, siphoning off resources that could be productively employed to improve student performance.[14]
A similar attitude led Kalman Hettleman, a former Baltimore school board member, to recommend to Baltimore's city schools that they stop piling up innovations and adopt "a coherent core curriculum with detailed lesson plans and stick to it."[15] In Waco, Dr. Rudy Lopez, Principal of University High School, shared his frustration with program changes. He expressed hope that the district could form a comprehensive K-12 plan that promotes smooth transitions for students going from grade to grade, and, he also emphasized, that it be maintained by the district.[16]
While Dr. Lopez wishes for such a shift and while Waco does test, pilot, and adopt a large number of different programs, the district is improving the process by which it evaluates new initiatives, in attempt to spend curriculum development resources in the most effective way. Through its School Improvement Services division, Waco employs a group of analysts whose sole job is to study and evaluate different academic programs. The group publishes a compendium entitled What Works that recommends a large number of effective programs. Each evaluation specifies the evidence that the program promotes academic success as well as the costs of adoption (Appendix IV-G).
The mission of What Works is spelled out in the introduction, and it is directly in line with what school districts need to be doing: "improving system efficiency - becoming more clinical or precise in the investment of resources to ensure the maximum benefit of student achievement." With What Works, Waco school officials are able to choose from many options different strategies for improving the performance of students, with the knowledge that the programs have been successful elsewhere in the district.
In addition to spotlighting successful programs (that schools can use if they are able to include it in their budgets), the School Improvement division also works as an effective screening tool for new program ideas. If a principal wants to experiment with a new technique, he or she must submit an application to for a pilot project. This can be approved for no more than three years, with continuation during that period contingent upon annual evaluations. If evidence shows at the end of the three years a record of achieving the desired outcomes, the program can be included in What Works, and other campuses can begin to replicate it.
School districts should benchmark Waco's attempt to share information on successful programs in order to maximize the effectiveness of their curricula. It is vital that they exhibit a healthy balance of committing, on the one hand, to a curriculum plan that is endorsed by a consensus of the schools and that promotes smooth transitions between grade levels and schools. On the other hand, districts should remain flexible, open to experimenting with new programs that show evidence of improving student learning.
(3) Redefine and Consolidate Curriculum Development Responsibilities
While evaluation systems are critical, it is important to note that their benefits do not come without significant costs. In Waco, for example, the Office of the Associate Superintendent for School Improvement has a proposed 1996-97 budget of $222,600, including $160,000 for salaries, $20,000 for consultants, $15,000 for unspecified fees and dues, and $6,500 for travel.[17] While the What Works manual is certainly a valuable, necessary resource, one is right to question whether it is worth a sum of money that could pay for five or six additional teachers, or a hundred new computers - every year. Effective information sharing must occur, but at a reasonable cost.
One might further question the cost of program evaluation after realizing the expense tied to other district departments who are purportedly engaged in curriculum development at the same time. Along with School Improvement is the Director of Curriculum's office, which adds another $148,300 to the bill. Moreover, several academic departments have a director or coordinator's office, including Special Ed/Special Programs, Bilingual Ed, Fine Arts, School and Community Relations, Elementary Operations, Career and Technology, Alternative Programs, Math and Gifted and Talented. While these entities have numerous managerial responsibilities, it is fair to conclude that at least one of them should be to evaluate the educational programs offered in their areas.
In addition to overlap within the district administration, it also appears that schools do a significant amount of curriculum development on their own. When asked if the curriculum strategies being pursued at University High resulted from district curriculum development, Dr. Lopez replied that they did not. Instead, he relies on his own ideas, which he generates by reading educational research and collaborating with faculty. He said that if he were to wait for the district to produce research, opportunities for progress on his campus would be lost. Thus, while the duplication of efforts within the district administration suggests some amount of inefficiency, the fact that at least one campus prefers to do its own curriculum development suggests that the central apparatus itself is even less effective. The total cost of central program and curriculum development is over $2.8 million, more than the total expenditures of 22 of the 26 schools in the district. That total includes much of the total payments to educational consultants, working for both the district and individual schools, which exceeded $1.4 million in 1996.
The questionable efficiency of the curriculum development operations in Waco suggests the broader question of why, when school districts face very similar challenges in educating students, is information not readily shared between them, particularly with the help of state and federal agencies. If every district in Texas spent the same amount per pupil as Waco on curriculum development ($174), Texas, with 3.7 million students, would spend $643 million per year. This sounds like a staggering amount (it is actually only 2.9% of the $22 billion Texas spends each year for K-12 schools), especially for a service that, to many, might not seem like an indispensable part of an education system. However, if every district did indeed possess the personnel and infrastructure to conduct curriculum development, it would not be surprising if that much cost is incurred every year.
If assessment could be done more centrally, with one large What Works manual being produced in the state of Texas, for example, enormous cost savings could result. The department publishing such a document might not need to be much larger than the one in Waco, since approximately the same sets of programs would be considered by both. It would simply have to field more requests for information and compile larger sets of data. Costs could range from several million to perhaps over ten million, but they would never approach $643 million. Moreover, the recommendations of this more central department would be more reliable, as data on performance in response to programs would thus be taken from a larger sample, and a more complete evaluation of programs would be permitted. Consistent with this logic, one of Eric Hanushek's primary recommendations for reforming K-12 education is that state governments should assume a role where they "promote and encourage local experimentation…and help produce and disseminate information about new programs and their results."[18]
The federal government could also fill a role in this area. In Redesigning Schools, Kenneth Wilson and Bennett Daviss criticize the poor job done by the Department of Education in disseminating information about educational research. Though it already conducts program evaluations and is in the optimal position to serve as a repository for data on best practices, its sole mechanism for sharing findings is the National Diffusion Network, a $15 million agency that can afford only one staff member per state to work with school districts on program evaluation and adoption. Instead of $15 million, the authors contend that the school system should spend closer to $1.6 billion on simply disseminating information on good programs, further arguing that the cost will be "easily" be exceeded by savings on remedial instruction that would not have to be provided with a more reliable set of programs.[19]
Thus, the federal and state governments should start to play a more prominent role in curriculum development, an area where the broader scope of the institutions could prove to be a real advantage. Schools in districts like Waco would benefit as the entire education system became more efficient. Ignoring for a moment the potential for system-wide consolidation of efforts, however, Waco should take steps now to reduce the size of its curriculum development system by allowing schools and academic departments to take on primary responsibilities.
(4) Eliminate Other Repetitive Operations and Excessive Expenditures
Curriculum development is not the only area where duplication of efforts is occurring in the district. A parental involvement program in the central office, for instance, consumes over $250,000 per year, including $175,000 for salary and benefits, $17,000 for supplies, and $6,000 for travel. Another $102,000 of the budget is allocated to the Coordinator of School and Community Relations Office. At the same time, it is clear that campuses undertake their own parent- and community-driven initiatives. University High has a position created exclusively for these purposes. Moreover, it is quite logical that the most effective center of parent involvement is the campus, where the parents' children go to school, as opposed to the district, with which the family has little or no contact.
In addition to the overlapping functions, it is also possible to point to other areas where the size of the central office could be reduced. Expenditures in certain categories appear to be unnecessarily high. Travel, already seen to be a component of other administrative departments, turns out to be associated with nearly every cost center in the budget. In total, it consumes $685,000 per year in the district, allocated to two separate categories, Employee Travel and Travel Allowance, though the difference between the two is not explained in the budget.
Another questionable outlay is for copier rental. An expense in many departments and schools, copier rental costs the district $450,000 each year. If teachers instead made copies at Kinko's for 3 cents each, they could make over 900 copies per student per year, certainly more than K-12 students commonly receive, with the same amount of funding. The implication is that the district has too many copiers on hand, and that they are used too little. The district also spends $110,000 per year on Fees and Dues.
All three of these dubious items exceed other, more education-related areas. Library books and media, for example, account for only $94,000 of the budget. $1.4 million is spent on technology costing over $500 (such as computers), an amount just slightly higher than the sum of travel and copier rental expenses, and about as much as total payments to educational consultants. Misappropriation of funds appears to be a frustrating problem throughout the nation's school system. Ceil Jensen, a high school teacher at Rochester Adams High in Rochester, MI, who has designed several renowned technology-driven courses, had the following to say: "I have seen too many dollars spent buying cell phones and laptops, etc., setting up `office' for mid-level administrators in temporary federal/state programs." She concludes that districts and schools could benefit themselves greatly by spending more conservatively and sending a maximum of available funds to the classroom.[20] It further stands to reason that as part of a budgeting process that focuses on maximizing efficiency, Waco and other school districts should strive to shrink non-academic expenditures to the lowest possible levels. They should also avoid funding areas that duplicate the efforts of other departments or individual schools.
(5) Target Low Student-Teacher Ratios Only Where They Have an Impact
While one can imagine large sums of money being saved from leaner curriculum development and administration, the amount the education system spends on those areas - and even on central system as a whole, for that matter - pales in comparison to what it spends on teachers. Waco spends $40.7 million of its $93 million budget on salaries and benefits for teachers each year; the next largest line item is facilities maintenance, on which $10 million is spent. With such a large amount of district funds going to teachers, it thus stands to reason that of the extraordinary increase in educational spending over the last several decades, a significant portion must be a result of higher spending on teachers.
This is exactly what has occurred. Though people often speculate that the decline in student performance has been a result of inadequate attention from teachers, it turns that their claim is hard to substantiate. Between 1960 and 1991, the nation's pupil-teacher ratio has dropped from 25.8:1 to 17.3:1. Despite the common perception, urban schools are not much more crowded - they have an average of 17.9 teachers for every student. In addition, another source of the higher spending on teachers is due to compensation growth. Teacher salaries have increased, after adjusting for inflation, from $24,339 to $35,243 over the past three decades, an increase of 45.5 percent.[21]
The contemporaneous growth in spending on teachers and decline in student performance suggests that decreasing the student teacher ratio is not an effective technique, and educational research lends further support to this idea. Eric Hanushek argues that "substantial evidence" shows that variation in student-teacher ratios does not strongly affect student performance.[22] Consequently, he argues that the practice of hiring more and more teachers is a prime example of inefficiency in the education system and serves to "directly lower the return on any educational investment."[23] Observation of school environments often confirms this. Stanley Litow, who oversees IBM's International Foundation and its new "Reinventing Education" program, recently acted as principal for a day at an elementary school in New York City. Though it is a small school with an average class size of 15, he observed, the school has the city's worst discipline record, and only 17 percent of the students read at grade level. These facts led Litow, who used to wholeheartedly believed in the need to reduce student-teacher ratios, to conclude instead that, "It isn't the size of the school or the size of the classes that makes for quality instruction."[24]
Finally, it is evident that many public school teachers do not maximize the effectiveness of the time they spend with students. A famous television exposé about Milwaukee public schools captured teachers on videotape reading newspapers during whole class periods (an offense for which, incidentally, teachers were able to avoid termination due to union intervention).[25] Evidence is more than just anecdotal, however. In an analysis of education systems in six nations, Ina Mullis found that 78 percent of U.S. math teachers allow their students to begin homework in class, a practice that is not followed elsewhere. Mullis argues, as many would agree, that getting an early start on homework is not the best use of instructional time. With teachers indicating through this practice that they have significant amounts of downtime during the day (in which they could be engaging in small group instruction), it is even more likely that adding staff to decrease student-teacher ratios will have little educational impact.
Officials in Waco tend to agree, holding the position that unless the ratio can be brought below 12:1, no impact will be made on student performance. Nevertheless, what has occurred on the national level appears to be occurring in Waco, as student-teacher ratios are lower at almost every school than the early 1990s national average. The mean student-teacher ratio in elementary and middle schools is 13.9:1, while the high school ratio is 16.5:1 (Appendix IV-H). These numbers are calculated using enrollment statistics, which in Waco significantly overstate the number of students actually in school on the average day (Appendix IV-I). In addition, one can appreciate an even greater adult presence in the schools by considering the size of the overall staff. The average elementary school has 8.8 staff members for each student, while elementary and high schools have 9.2 and 11.2, respectively.
Waco currently employs almost 1,100 teachers. If it attempted to increase its overall student-teacher ratio to 18:1 (about equal to the average of urban schools in the U.S.) from its current 14.7, the size of the faculty would shrink to 895. Since the average teacher earns approximately $40,000 per year in salary and benefits, this step could save the district $8.2 million per year. And decreasing the number of teachers is not the only possibility for decreasing the instructional staffing budget. Waco spends $3.1 million per year on instructional paraprofessionals, or teachers' aides, $1.7 million of which is devoted to elementary schools. However, the effectiveness of such personnel is a matter of considerable debate. When discussing reading instruction, which takes place primarily in the elementary schools, at least one educator criticizes the role of paraprofessionals. Cynthia G. Brown, Director of the Resource Center on Educational Equity, says paraprofessionals cause "expenditures that research indicates comforts teachers but doesn't result in improved student performance."[26]
If the district were able to make significant staff cuts in both areas, it would have a variety of options as to how it could apply the savings. First, it could simply decrease the size of its overall budget, saving taxpayers millions of dollars. By spending almost 10% less to achieve what should, evidence suggests, produce equivalent performance, the district would accomplish the praiseworthy task of making itself more efficient. Alternatively, the newly available funds could be applied to educational initiatives that are more likely to improve student outcomes. Schools could invest in technology and teacher training programs. They could also manage staffing more as it is handled in Japan. Japanese schools have roughly the same student-teacher ratio as their American counterparts, but the typical class is up to twice as large as those in the U.S.. The additional staffing exists for smaller classes in subjects that are more likely to benefit from small size.[27] Following this example, a Waco high school might increase the size of pre-Algebra classes that can accommodate more students without harming the students' learning experiences. Savings could be used to hire an engineer or university professor, on a part-time basis, to teach advanced science to a small number of students, who would, in this setting, truly benefit from closer interaction with a teacher.[28] On the whole, it appears that Waco has considerable potential to increase student-teacher ratios in order to free funds to devote to other purposes.
(6) Redesign the District Bonus Pay System
Though not apparent in Waco, another element of staffing strategy that school districts commonly embrace is encouraging teachers to obtain advanced degrees. "Virtually every teacher" in the U.S. is offered financial rewards for attending graduate school and higher salaries once they possess graduate degrees. Despite the appeal of the idea that more educated professionals make better teachers, data once again show school districts to be paying for something that, in general, does not affect the educational experience of students.[29] This appears to be true for two reasons. First, graduate programs, knowing that teachers are enrolled almost solely for the purpose of obtaining a degree - as opposed to wanting to develop a particular skill - are motivated to make curriculum easier. Moreover, the quality of the graduate program, and thus the degree to which it benefits a teacher's ability, almost never factors into future compensation or promotion decisions. The possession of the degree is the lone consideration.[30]
Just as the education system pays a premium for advanced degrees, they also reward experience in the classroom. Teachers in Waco are paid according to the minimum salary schedule of the TEA, which raises salaries for every year of service. The starting salary for teachers is $1,995 per month, and this sum increases 2 to 3 percent annually, up to $3,551 for a teacher with 20 years of experience.[31] Bonus pay, along with market forces that encourage districts to raise salaries above these levels, serve to make total salaries higher. The average compensation package in Waco, for example, is $40,000 per year.
While it is also an appealing notion that teachers be rewarded for years of service, it is not clear that the experience of a teacher has an impact on student learning. Many studies do confirm that the first few years of experience are very valuable for the teacher's effectiveness. However, studies focusing on subsequent years have yielded inconclusive results. Some of them actually show a decline in performance with more years of experience, due perhaps, as one researcher speculates, to a gradual loss of enthusiasm by the teacher.[32] To the extent that educational officials want to encourage teachers to improve their instructional abilities and the performance of students, they should offer alternative compensation systems that emphasize factors other than experience. A report from the National Commission on Teaching and America's future, issued in late 1996, included this change in its set of recommendations, proposing "pay plans that reward knowledge and skills," along with "high, mandatory standards."[33] Following this idea, Waco and other districts should attempt to tie compensation more to the developments and achievements of individual teachers.
Officials in Waco have been aware of the traditional ineffectiveness of incentives in teacher compensation and attempted to alleviate the problem by adopting a bonus pay plan in 1993. Accounting for nearly $2 million of the 1996-97 budget, the plan is a significant component of the district's payments to employees. Bonuses are based on the achievement of a large set of potential student and employee outcomes; the more outcomes achieved, the greater the bonus awarded. Payments range from 1.2 to 10 percent of the employee's salary, and they are awarded to entire campuses, or to the central office, in a uniform fashion. For example, one of the student outcomes is to have 90 percent of students passing the TAAS Reading test. If the students at University High can achieve this success rate, then all employees of this school are credited with one outcome. The more outcomes the school can achieve, the greater the bonus percentage for the school's employees. Other student outcomes include success in connection with TAAS writing and math, student attendance, and dropout rates.
One problem with this system is that it gives inadequate recognition to the performance of individual teachers. If one reading teacher does an outstanding job with his students, but two others prove to be less than satisfactory, making it impossible to reach the 90 percent TAAS passage rate, the first teacher would not be rewarded and could conceivably lose motivation to continue doing a good job. Furthermore, the fact that the system rewards all campus employees uniformly allows some employees to benefit even if they make insignificant contributions. Suppose, for instance, that reading, writing and math faculty do an excellent job and qualify the school for a 4 percent bonus. It could feasibly be, however, that an assistant principal at that school is doing a poor job. Not only would he benefit from the efforts of the faculty, but he would receive a greater total cash payment because his salary is higher. The final drawback of the campus incentive system is that for teachers to get a top-tier bonus (which would really make extra effort worthwhile), a lot of events have to occur. These include good performance in several subjects by the students, high attendance, and a low dropout rate. Employees also have individual commitments they must fulfill. Thus, the ultimate reward a teacher receives seems to be attributable less to his individual instructional skill than to a broad set of developments at the school over which, for the most part, he has little control. The district administration can qualify for bonus pay in much the same way as school employees. For TAAS scores to count as an outcome, 90 percent of all students in the district must pass, and attendance and dropout figures are similarly computed on a district-wide basis. However, the ability of these employees to influence final results is even smaller than that of school employees. Given the overall TAAS passage rates in Waco, moreover, the 90 percent goal must appear quite daunting.
Employee behavior is also a focal point of the bonus plan, and the means by which employees achieve outcomes seems to be fraught with problems as well. First, of the $2 million bonus pool in the budget, almost $500,000 is already allocated to attendance incentives for the employees of specific departments. While employee attendance is definitely an important component of successfully managing a school district, it seems to be more appropriate that the district disincentivize absence more than it incentivize attendance. The other way employees can achieve outcomes is through staff development or service. Not only carrying the same problems as the student-driven incentives (e.g., rewarding the collective effort over which the individual has little influence), these measures also seem to be rewarding behavior that is indirectly related to student outcomes. For example, personnel can attend workshops on subjects such as telephone skills, "Managing Chance," or multicultural sensitivity.
One way Waco could make its incentive system more effective (and the $2 million more efficiently spent) would be to remove from staff development options such programs as these. In their place, the district could substitute programs focusing on curriculum development. Workshops, for example, could be held to present the most current research on the different programs offered in major subjects and to allow faculty to engage in strategic discussions. Thus, Waco would not only be focusing the efforts of faculty and staff on making instruction more effective, it could also potentially reduce the size of its curriculum development operations. Another way to improve the bonus system would be to eliminate employee attendance as an outcome and make it instead a minimum expectation. Finally, the plan should focus more on rewarding individual effort, so that employees can feel confident that hard work will be recognized with additional compensation, as opposed to making the bonus subject to an array of seemingly impossible-to-influence goals. The reviews of principals and fellow faculty members could be a major source of information on teacher performance.
It should not appear that effective bonus-based incentive programs are easy for schools to design. A recent survey of schools in Kentucky, which boasts the largest pay-for-performance system in K-12 education, revealed several factors that motivated administrators and teachers. Chief among them was fear of negative publicity about their school's performance, fear of termination, loss of autonomy, and personal pride. Conspicuously absent from this list is the actual cash bonus.[34] Waco could take this information as encouragement to add additional forms of recognition, such as offering more outstanding teacher awards. Most importantly, though, it can increase the efficacy of the current cash-based system by better aligning its incentives with specific educational goals.
(7) Create Competition Between the Schools
From Dr. Lopez at University High, it is clear that he and the rest of the school's employees are highly motivated, a fact which appears unrelated to the district bonus plan. Personally, Dr. Lopez feels great pressure and a sense of duty to ensure that his students receive the best education possible. His planning for the school is very deliberate. In explaining the budget, it is clear that every decision is tied logically to the three main goals of his school, improvements in math and reading, staff development, and parent involvement. He has taken the initiative to create writing and math labs stocked with computers and to wire library computers to the internet. He has done exhaustive research on the Texas economy and forged partnerships with businesses to increase the employment prospects of University's students. Finally, Dr. Lopez has taken it upon himself to view his school as in competition with others in the area, as he reports with pride that the net transfers into his school have risen from five to eighty during his tenure at the school.
The dedication of Dr. Lopez is visible to the other members of the staff. They are friendly and eager to explain their most recent efforts in fulfilling the school's goal of continuous improvement. It is clear that they are happy to be doing their jobs and driven to give their best to the school. However, it is also clear that their incentives are internally generated, from personal drive and the influence of the principal. While this system appears to work well for University High, it is difficult to replicate in other environments. Indeed, one gets the impression that if all principals were as rigorous and devoted as Dr. Lopez, the U.S. educational system would be in far better condition. Absent a guarantee of such internally generated incentives, however, it follows that incentives need to be generated in other ways, such as the market mechanisms of school choice. Such a system would in no way conflict with well-performing schools like University - Dr. Lopez says he would welcome such a system - but it would have the effect of more quickly forcing schools to improve themselves. Otherwise, it would be left to the slow-moving local political process to generate public demands for reform. Waco and other local school districts can to do little to create a voucher system (aside from facilitating intra-district transfers and supporting the movement politically). However, it is interesting to note that by observing the mechanics of schools and school districts (in addition to the budgeting process) one can be further convinced of the potential benefits of school choice programs.
(8) Promote School-Level Decision Making
While the fate of voucher plans will largely be decided by state and federal lawmakers, outside the control of Waco officials, the district does appear to be promoting efficiency in another way, by allowing principals to control decisions at the school level. Outside Waco, it is a common stance of district administrators to issue detailed regulations on the nature of instruction and school personnel, but they are almost always wasteful or destructive.[35] Such regulations cause inefficiencies in two ways, by requiring large time commitments on the part of district administrators, and by mandating choices that by virtue of their sheer generality are probably not in the best interests of many schools.
In the case of staffing, Waco sets only the number of positions each campus can establish. Positions can be allocated to faculty, staff or administration, with each category weighed differently according to the associated salary. In the case of faculty, personnel can be assigned to different subjects at the discretion of the school. This latitude has proved to be very effective for University High. With over 60 percent of its student body in the low socio-economic status classification and many students enrolled in special programs, it is vital to University to have the flexibility to assign its teaching staff in accordance with its unique priorities.
As one of the goals established by a consensus of University's staff is to increase parent involvement, the school has devoted one of its staff positions to a parent-community liaison. This individual runs an adopt-a-school program, which solicits corporate involvement, and directs a parental volunteer effort. Since educational research frequently points to the critical role of parent involvement, it is likely that this position will help to improve the educational performance of many students.
University also runs a dropout prevention program that allows "credit-deficient" students to take courses on an accelerated basis, at their own pace and in a setting that promotes the use of technology. It is an ideal program for older students who have had problems in the school system but now want to earn a degree and acquire skills that will help them compete in the labor market. Aware of the presence of such a group of students, and with the ability to assign staff to support a program that serves it, University is fulfilling a real academic need of Waco students. Other districts should work to promote similar flexibility and autonomy on the part of school-level decision makers.
(9) Minimize the Diversity of School Programs and Encourage Charter Schools
While having designed these programs makes University a more effective school than it would otherwise be, the very fact that the school has to fulfill so many roles - both social and educational - cannot help but decrease its efficiency. It is very difficult to demand of a few top-level school officials like Dr. Lopez to be able to make good decisions in areas so diverse as calculus curriculum and education programs for teen parents. Not only are the school's leaders less than ideally suited for some of the roles, but additional staff also must be hired, often to work with a small number of students.
Providing direct evidence of the inefficiency of the special programs is difficult, partially because of the data available. Even with the FAM software, which can break down costs by program, Waco budget data does not include per-pupil expenditures on special programs like Career and Technology and Bilingual Education. Lacking this information makes it difficult to evaluate the performance of the programs and to conclude whether costs are justified by benefits.
Nonetheless, it is possible to observe practices of questionable efficiency in the way Waco addresses difficult-to-educate segments of its student body. Just as University High has had to develop numerous special programs, such as dropout prevention, parental education for teens, and in-school G.E.D., so too have other schools in the district. This consumes the time and effort of administrators and faculty. Moreover, as one might expect, central administration grows as a result. The Director of Special Education spends $1.4 million per year, while the Coordinator of Career and Technology education adds $76,000. Though it is difficult to reliably characterize the efficiency of these operations, one can envision ways that the associated educational goals might be accomplished at a smaller expense. For example, it seems that it would be effective if certain schools specialized in a set of remedial programs and had principals with backgrounds in running such schools. The existence of these schools would allow the district to be free of additional staff for curriculum design and enable other high school principals to focus on more narrowly-defined programs in their schools.
The rise of charter schools is permitting such efficiencies to be gained, for these schools are able to create their own educational mission and address the needs of specific groups of students. In Houston, the Raul Yzaguirre and George I. Sanchez charter schools serve middle and high school students, respectively, who have failed in previous years are labeled as "at-risk" of quitting school. Founded by leaders with years of experience with such students and who saw charter schools as a means of more successfully working with them, these schools are a testament to what student-oriented schools can accomplish. Students are instructed toward high school graduation, receive character development training, and have the opportunity to gain work experience with local businesses. Once habitually absent from school, students now attend at a 90 percent rate. Waco itself has just launched its first charter school, Waco Charter, at which all pupils are considered at-risk. This school could effectively help larger ones like University play fewer roles, allowing all schools to better fulfill student needs. Waco Charter school should serve as a model for future charter schools, each with their own unique mission, to emerge in the district.[36]
(10) Streamline Academic Subject Offerings
Just as many public schools find themselves playing a myriad of social roles, in the realm of academic instruction they typically offer a wide variety of subjects. At Johnston High School in Austin, for example, one can observe a student spending valuable school time in a photography class, while he is at the same time struggling to pass an algebra class he is retaking.[37] In Waco, curriculum is admittedly very "broad," with numerous subjects outside the core disciplines of reading and math available. Chicago schools, currently embarking upon a major reform effort, diagnose one of their core problems as "watered-down academic courses and electives" as opposed to "more rigorous requirements in English, mathematics, science, social studies and foreign languages."[38] Throughout the nation, in fact, the pattern is consistent. Fifty-nine percent of a student's school day is available for elective subjects, meaning that U.S. students spend about half as much time on core courses as those in Germany, France and Japan.[39]
Catholic schools, by contrast, have had great success in maintaining a very simple, focused curriculum. Such a strategy has had two positive effects. First, it has contributed to the demonstrably superior performance of Catholic school students on reading and mathematics exams. Second, it has been a significant reason why Catholic schools have been able to spend consistently less money than their public counterparts.[40] Since each school in a public district must hire additional teachers in order to offer their auxiliary subjects, it is not surprising that public school instruction is almost always more costly. Asked why Waco offers the peripheral subjects, Mr. Scherff replies that they provide an incentive for students to attend school. While schools obviously want to encourage regular attendance, this method seems to be costly and fit for subordination to other academic goals. The additional, more amusing classes should be offered only after it is clear that the school can provide outstanding instruction in the most critical areas. It should be the effort of Waco and other school districts to follow the private school model and concentrate their efforts on the most fundamental subjects.
Summary
The foregoing recommendations are ways that local school districts, and Waco in particular, can increase their efficiency. First, with more clearly-defined relationships between schools, the district administration, and the state education agency, local school districts can become more effective institutions. They achieve the same goal by also creating incentives that encourage teachers to put forth maximum effort and that motivate administrators to spend conservatively. Finally, by cutting out costs that do not serve to optimize student performance, they can move funds into areas where they are needed most. Through consistent attention to their efficiency, school districts can contribute significantly to the improvement of the U.S. education system as a whole. Federal and state governments can also play apart, as the next section will discuss.
CHAPTER 3: ENDNOTES