Better ways to spend a billion dollars

In 2021, Ohio lawmakers enacted a new school funding formula called the Cupp-Patterson plan. The model, named after its legislative sponsors, promised a fairer method of funding education and with an initial price tag of $2 billion in additional state funding, it promised lots more money to schools.

In the first four years of implementation, Cupp-Patterson certainly delivered more state aid to public schools. But in the most recent budget cycle, state lawmakers—facing a tighter budget and looking to cut taxes—applied the brakes. Specifically, they turned down advocates’ push to update the “inputs” of the formula, which would have added another roughly $1 billion per year in state funding, and instead provided a modest bump through formula supplements.[1]

In a recent paper printed in Hannah News, school funding expert Howard Fleeter decried “the failure by the legislature to update the base cost input data.” Others have also bemoaned that decision. Calls to “update the inputs” are bound to resurface, and perhaps grow louder, in the next budget cycle. But one question—not usually asked in funding debates—is whether pouring more money into the formula is the optimal approach. Are there other ways of spending state education funds that would generate a stronger return-on-investment?

The role of the funding formula

Before looking at alternatives, let us briefly review the function of the formula, which is indeed the backbone of Ohio’s equitable school funding system. In a hybrid state-local funding system such as the Buckeye State’s, a progressive funding formula ensures that poorer districts—those with smaller tax bases—receive more state dollars. Public schools currently receive just over $10 billion via formula out of roughly $12.5 billion in overall state funding for education.[2] On top of this, districts receive another $13 billion in local tax revenues, a sizeable portion of which is generated through a state-required 2 percent property tax. When combined with direct state formula aid, this minimum local tax serves as the foundation for education funding.

All told, Ohio public schools (district and charter) received approximately $25 billion in state and local taxpayer funding to educate 1.6 million students last year. That amounts to $15,000 per student,[3] which tracks national averages and represents a hefty $200,000 investment over the entire K–12 education of a typical Ohio student. The amount spent on education today is also significantly higher—even accounting for inflation—than what Ohio spent decades ago when the funding system was challenged in the courts via DeRolph.

Examining spending alternatives

By any reasonable standard, the amount Ohio spends today on education is “adequate.” To be sure, Ohio should provide increases in formula aid to cover inflation, which is running at relatively tame 2.4 percent. Yet whether Ohio should send a $1 billion per year to schools through the formula is another matter, especially as student achievement has remained stubbornly flat even as Ohio has significantly ramped up education spending.

What are alternatives to formula spending? Using finance guru Marguerite Roza’s “would you rather” framing to underscore tradeoffs, the following offers some ideas about how Ohio could use a billion dollars for education more effectively, split into five initiatives. This assumes that lawmakers would be a bit more willing to open their wallets next cycle, but the ideas here are meant to encourage more thinking about how Ohio could use dollars to improve education in a budget-constrained world.

• Supporting effective academic interventions. Last year, 21 and 29 percent of Ohio students scored “limited” (the lowest level) on state reading and math tests. Such students need effective interventions to help them catch up. High-quality interventions are costly, however. Bona fide high-dosage tutoring, where a trained tutor works one-on-one or in small groups at least three times a week, can cost around $1,500 to $3,000 per pupil. Meanwhile, the Rand Corporation estimated that intensive summer school costs about the same (in 2011 dollars). Would you rather create a $200 million grant program to support 50,000 struggling students at $4,000 per pupil—one that includes stringent quality requirements and evidence of improved outcomes—or put that money into the formula?
   
• Expanding high-quality career-technical education. Effective career-technical education can put students on pathways to good-paying jobs. While the state has invested heavily in career-tech, it can still do more. The Innovative Workforce Incentive Program (IWIP) encourages students to earn in-demand industry credentials, but it has been consistently underfunded (reimbursements have been prorated) diminishing its role as an incentive. Some career-tech centers have waitlists, and high-quality programs are all too rare in Ohio’s urban communities. Meanwhile, only a small fraction of Ohio students participate in apprenticeships and internships. Would you rather invest $200 million to provide high-quality career-technical education and work-based learning to another 40,000 middle and high school students, or put that money into the formula?
   
• Rewarding Ohio’s most effective educators. My Fordham colleague Jessica Poiner (and others) have touted Texas’s successful teacher incentive-pay program, which rewards and helps retain high-performing teachers. Ohio should consider a merit-pay program, as—done well—they have proven to significantly boost student achievement. This cannot be done on the cheap, however. Texas, for instance, provides bonuses of up to $32,000 for its most effective teachers and spends almost $300 million overall on its merit-pay program. Would you rather set aside $200 million for a program that rewards 10,000 Ohio’s best educators with an average bonus of $20,000, or put that money into the formula?
   
• Sharpening core math and reading instruction. Thanks to the leadership of Governor DeWine and a supportive General Assembly, Ohio’s science of reading initiative is off to a strong start, while serious efforts to improve math instruction are afoot, as well. Efforts to improve core reading and math instruction promise higher student achievement, but also require resources to implement. While Ohio has already put more than $180 million toward the science of reading, the state should continue to nurture the initiative, whether through reading coaches and state-support teams, curriculum-specific professional development, or subsidies to help schools upgrade materials (including middle and high school, which haven’t yet been covered). A parallel math initiative could likewise support schools in that content area. Would you rather spend $200 million to improve core math and reading instruction, or put that money into the formula?
   
• Investing in quality school choice. Research demonstrates that Ohio’s charter and private schools provide low-income students quality alternatives. Despite their benefits to families and students, Ohio continues to underfund choice programs. The average charter school operates on less per-pupil funding than their district counterparts, while private-school scholarship amounts fall even below the charter school mark (and much lower than district funding). Would you rather spend $200 million to support quality choice options that provides an extra $2,000 per pupil to benefit 100,000 low-income students—including enhanced support for charters and a weighted private-school scholarship—or put that money into the formula?

Putting a cool $1 billion into the formula has its political appeal, as it ensures bigger sums for everyone without an expectation of higher achievement in return. Some surely would rather go that direction with state education funding. But will pouring that much money into the formula drive higher achievement? Narrow achievement gaps? Increase students’ post-secondary readiness? Anything’s possible, but I would rather put my bets elsewhere.