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What Do We Know About How Money Might Impact Student Outcomes?

“The interim school finance committee discussed shifting our school funding formula, but didn’t propose changes since there isn’t new funding in the system. What do we know about how money might impact student outcomes?”

Many conversations about student success often include a discussion of funding and spending.  As parents, community members, and taxpayers we often ask questions such as: How do schools spend their money?  Where does this money come from? How do these contribute to students’ success?

Studies continue to show that money does matter for student outcomes. Chalkbeat’s review last summer provides a good starting point for the most recent research.

Today, we want to explore the funding and spending in a few districts whose efforts to improve student achievement in English and language arts (ELA) has proven successful. Important to this discussion is an understanding of district demographics, per pupil spending, and funding sources. The four districts we will be highlighting today are: District 49 (Falcon), Strasburg, Elizabeth, and Academy 20.  These districts were chosen because they had levels of growth significantly above the state median for ELA. They also experienced significant growth for particular groups. Strasburg had a median growth percentile for English language learners of 80. While, Elizabeth had an overall growth percentile of 59, with Hispanic students achieving above that average at 62.5. Students identified as American Indian and Alaskan native had a median growth percentile of 59.5 at Academy 20. District 49 demonstrated particular success with Asian students having a median growth percentile of 63. Let’s examine how funding and spending may have contributed to the growth of students in these districts.

District District Overall MGP State Overall MGP Subgroup District Subgroup

MGP

State 

Subgroup MGP

Strasburg 53 50 ELL 80 50
Elizabeth 59 50 Hispanic 62.5 47
Academy 20 54 50 Am. Ind./AK Native 59.5 48
District 49 54 50 Asian 63 59

What are the sources of school funding? 

For most districts funding comes from a combination of local property taxes and state dollars.  The baseline tax rate is set by the state. The state funds the rest of the district’s budget that it is not able to collect through the local property taxes. This state portion, equates to roughly half of the budget for Strasburg, Elizabeth and Academy 20. Additionally, a district may raise more funds with a Mill levy override (MLO) to increase the tax rate for homeowners residing within the district. Another option is a bond redemption mill, which allows districts to obtain funds for large scale building projects. The latter options must be approved by voters.  Strasburg, Academy 20 and District 49 have all approved an MLO. District 49 is the only district of the four without a significant bond redemption mill. This state funding is calculated on a per pupil basis with adjustments made for certain situations such as high cost of living, district size, and students eligible for free lunch. District 49 for example has a relatively larger portion of its student population eligible for free lunch, which increases funding from the state. Once the money comes in schools must make decisions about how to spend those dollars to obtain the best outcomes for their students.

How does school funding impact student success?1The information in this section is from the state financial transparency website. The quality of this data has improved since its original conception in 2016. However, discrepancies of interpretations between districts may exist. Thus while our comparison uses the most recent available data, it is not a perfect system.

In the average school district, most of the money is spent on instruction and salaries.  This holds true for the four districts we are discussing. However, when you zoom in there are areas of spending that may contribute to success.  In the Strasburg schools, they spend $636 per student on athletics and activities. An enriching school environment with extracurricular activities can keep students engaged.  Both Elizabeth and Falcon spend over $500 per pupil on non-classroom student success, including guidance counselors and health services, meeting mental health needs allows students to focus more attention on their studies.   District leaders at Academy 20 have chosen to support their staff at a rate of $450 per pupil. By doing this they are investing in quality teachers and instructional technology. The spending choices of these districts could be contributors to their success.

While every district is unique, there is much to be gleaned from the policies of these and other high-achieving districts. For more about what makes a successful outlier, check out our forthcoming Outlier report.

Have a different question you want answered?