Could school funding reform increase integration, test scores?

July 25, 2019

Ray Carter

The issue of forced busing as a tool of racial integration in public schools has burst out of its 1970's cocoon into this year’s Democratic presidential nomination process. But Matthew Ladner, senior research strategist for the Arizona Chamber Foundation, says officials can encourage integration without such heavy-handed tactics if they embrace open-enrollment policies and a robust charter-school sector—and base school funding on current-year student counts.

The latter policy is one where Oklahoma lags behind Arizona.

“There’s a way to get districts to voluntarily integrate,” Ladner said. “It’s to set the incentives correctly. Part of that is to do current-year funding.”

Most states, including Oklahoma, have laws requiring some level of open-enrollment in public schools, which allow students to transfer into a public school other than the one where their home is geographically located.

But many states also allow districts to decline to either participate in open enrollment or decline to accept transfer requests. (Oklahoma is in the latter group.) Such provisions can bar some students from leaving bad public schools for better districts. That fact was powerfully highlighted by a study released by the Thomas B. Fordham Institute that examined Ohio schools. It included a map of state school districts color-coded to reflect whether schools participated in open-enrollment policies.

That report found that few “affluent suburban districts permit open enrollment” in Ohio. While the adjoining urban districts “average 63 percent black and Hispanic students and have long struggled with low student achievement,” the “non-participating districts on their borders enroll far fewer minority youngsters (18 percent) and post some of the highest test scores in the state.”

“It may be, of course, that some of those districts have no room for more pupils; but we cannot avoid suspecting that a form of exclusion is also at work,” the report stated.

“Every single big urban district in Ohio is surrounded by districts who chose not to participate in open enrollment,” Ladner said. “If you can imagine Columbus, Columbus looks like a donut. It’s surrounded by districts who don’t participate in open enrollment. And you go a little further out, a little further away from the urban centers, kind of out in the next ring, and you start seeing different-colored districts, and those districts participate in open enrollment—but only with adjacent districts. So what is that telling us? It’s telling us that Columbus kids need not apply. And, quite frankly, this is what most of the country looks like.”

“When you add open enrollment, plus charter, plus private and home schools, a majority of Phoenix-area kids are not attending their zoned district school.” — Matthew Ladner, Arizona Chamber Foundation

It’s not known if, or to what degree, similar issues occur in Oklahoma.

Deven Carlson, associate director for education at the National Institute of Risk and Resilience at the University of Oklahoma, was an author of the Fordham report on open-transfer in Ohio. He said it is “difficult to do the type of work that we did in Ohio in Oklahoma” because of a lack of data.

“A lot of states, you can go to the state department of education’s website and readily find district participation indicators, you can find the number of transfers between districts—a lot of states just have that stuff listed on their website,” Carlson said. “And I haven’t come across that for Oklahoma.”

Carlson noted that even states that require schools to participate in open-enrollment “typically list a set of reasons that districts can refuse transfers,” and that individual school districts’ policies “meaningfully shape the options that students have.”

“You might think that, ‘Oh, there’s not a lot of choice going on here. Students aren’t transferring between districts,’” Carlson said. “And that might not be because the students don’t want to. It’s because the districts won’t participate.”

Ladner said the Fordham study’s findings on Ohio would have once applied to Arizona, but today there is “almost universal participation in open-enrollment in Arizona.” He pointed to the Phoenix suburb of Scottsdale as an example.

“Scottsdale Unified has 22,000 students, and 4,000 of them are from out of district,” Ladner said. “That’s pretty unusual to see a fancy, suburban school district taking that percentage of kids from open enrollment.”

He attributes that fact to not only having an open-transfer law in Arizona, but also having a robust charter-school sector that competes with suburban districts for students, and a school-funding system that bases state aid on current-year student counts. Because of the funding system, schools quickly feel the pinch when students transfer out, but also reap the financial benefit when they attract new students.

“When you add open enrollment, plus charter, plus private and home schools, a majority of Phoenix-area kids are not attending their zoned district school,” Ladner said. “And this is what stands out about (Arizona). It’s not spending per pupil. It’s not what we do in testing. What stands out about Arizona is that—it’s the mobility of students.”

In contrast to Arizona, Oklahoma’s traditional public schools are funded based on the highest weighted average daily membership from the prior two years. That system has been criticized because it means schools are given state funding to educate students who no longer attend class in the district, informally referred to as “ghost” students.

But Oklahoma’s funding system may also cause schools to resist transfers.

“I will tell you that superintendents are very cautious on kids that want to transfer in after the October count, because they know they’re not going to get paid on them.” — Former school administrator and state Rep. Dennis Casey

Byron Schlomach, director of the 1889 Institute, notes that under the current system school districts report an average daily membership figure in October, “and that’s the number, and if you end up with fewer students by the end of the year, that’s pure profit to the school district.” Meanwhile, he said schools that gain students after the October date “pay the price” for that student growth.

Former Rep. Dennis Casey, a Morrison Republican who was a school administrator prior to serving in the Legislature, concedes the latter fact leaves some school officials leery of transfers.

“I will tell you that superintendents are very cautious on kids that want to transfer in after the October count, because they know they’re not going to get paid on them,” Casey said.

Ladner said that hesitation has mostly disappeared in Arizona due in part to reforms that based school funding on current-year head counts.

“Scottsdale Unified has 4,000 kids from out of district, and I think the fact that there are 9,000 kids that live in Scottsdale Unified but go somewhere else, that’s why there’s open-enrollment,” Ladner said. “I’m a taxpayer in Scottsdale Unified, and I’d like to think that after decades of running a district as an economic-segregation Taj Mahal, that we suddenly saw an angel on the road to Damascus and had a change of heart and decided we were going to let out-of-district kids come in. I don’t think that’s what happened. I think we got the incentives right.”

While 17 percent of Arizona students now attend public charter schools, he said the number of students who use open enrollment to transfer to other traditional public schools outnumber charter-school students two-to-one in the Phoenix area.

 “If you start a charter school in Phoenix, you better bring your A game, because your home districts want your kids, Scottsdale Unified wants your kids, the other charter schools want your kids, the private schools—everybody wants your kids,” Ladner said.

The competition for students has benefited children’s learning in Arizona, Ladner said. Arizona students’ academic performance, as measured by the National Assessment of Educational Progress (NAEP), has notably improved through the years, including among black, Hispanic and American Indian student subgroups.

Arizona was one of only two states to make statistically significant gains on all six NAEP tests—reading, math, and science in fourth and eighth grade—between 2009 and 2017. Charter schools in Arizona did better on the eighth-grade math test in 2017 than did students in Massachusetts, a typically high-performing state.

“The great irony of all this is that if you actually want to best serve low-income urban kids, yes you want to give them access to charter schools, yes you want to give them access to private schools, but you also want to give them access to suburban district schools,” Ladner said. “That’s when you’ve got the stereo turned to 11.”