CommonWealth's fall issue has a symposium on the equitable funding of education in Massachusetts. Similar in focus to the Campaign For Fiscal Equity in New York City, this lawsuit is based upon the premise that low performing schools must receive more money before they can improve. This is, in the opinion of many, simply outside the point, which is that there is a middle step which must be taken before funds are given: the establishment of an ever-changing mixture of building capacity, providing systemic transparency and accountability, maintaining political will, and obtaining union support in the right amounts. Until the system has these in place, any infusion of money has the potential of being wasted or used inappropriately.

Symposium: The Hancock Case

The Hancock Case and The Adequacy Doctrine

With the Supreme Judicial Court hearing oral arguments in the potentially landmark Hancock v. Driscoll education equity case Monday, October 4, CommonWealth is pleased to provide this package of analysis and commentary on the case, drawn from the upcoming fall issue. These analyses are written by important figures in the case, and in education reform in Massachusetts.

In a 78-day trial lasting from June 2003 to January of this year, Superior Court Judge Margot Botsford, acting at the behest of the SJC, took testimony from 114 witnesses and examined more than 1,000 exhibits. In April, Judge Botsford issued her report to the SJC, concluding that the plaintiffs - students in 19 low-income urban and rural districts representing, by extension, students in all high-poverty areas - were not being given the education they were entitled to under the Massachusetts Constitution. The judge advised the state's high court to order the state to ascertain the "actual cost" of an adequate education for all and of "provid[ing] meaningful improvement in the capacity" of local school districts to deliver such an education - and then come up with a means of paying the bill. If the SJC follows Judge Botsford's lead, the consequences - for state intervention in local schools and for the state budget - could be enormous.

Now posted online is a set of analyses of Judge Botsford's report and its implications, written by important figures in the case and in education reform in Massachusetts.

Norma Shapiro, president of the Council for Fair School Finance and a supporter of the plaintiffs, explains the background of the current case in the McDuffy decision of 11 years ago and details the evidence that led Judge Botsford to propose her sweeping remedy. "The Commonwealth is still not meeting its constitutional obligation to provide the required education to all students, particularly students at risk for school failure," Shapiro explains.

But chief state economist Robert M. Costrell offers a scathing critique of Botsford's report, arguing that the judge uses faulty reasoning and faulty calculation in reaching her conclusion that high-poverty schools are underfunded - and especially, after a decade of increasing state aid to poor schools, that more money will make a difference in the quality of education. "If we become distracted by another huge monetary fix," Costrell insists, "our energies will be entirely absorbed by questions of how to finance it, how to distribute it, and so on, pushing aside the central issues of accountability, leadership, flexibility, and intervention that are so critical to fulfilling the promise of education reform."

Then Mark Roosevelt, a co-author of the Education Reform Act of 1993 and now managing director of the Massachusetts Business Alliance for Education, weighs in with a moderating view, acknowledging that "more money may well be needed," but so too may be "tough reforms." In Judge Botsford's report, "the emphasis is on funding for services, not on management reforms," Roosevelt laments. "Yet without such tools, additional resources sent directly to local districts might be inefficient or simply wasteful."

Also available online, from the summer issue of CommonWealth, is Ed Moscovitch's analysis of the ruling, which argues that living up to the state's constitutional obligations in education is going to cost money - though not necessarily as much as the Botsford report implies - but it's also going to require a more prescriptive approach to making schools improve. "Properly understood and implemented, Judge Botsford's decision could help us make some long overdue changes in our decade-long education reform effort, changes that could lead to major improvements in the schools."

Click your way through this CommonWealth Symposium on Hancock, and begin your own deliberations.

Robert Keough
Editor

The state still doesn't provide equal education
By Norma Shapiro

June 15, 1993: an important day for education in Massachusetts. On that day, the Supreme Judicial Court issued its decision in McDuffy v. Secretary of Education and defined the Commonwealth's duty to educate all public school students, without regard to their personal wealth or poverty, and without regard to their district's fiscal capacity. The SJC relied, in part, on the words John Adams wrote in the Massachusetts Constitution describing the obligation of the state to "cherish" the public schools to preserve knowledge among the people of all classes-in order to secure democracy and enable economic productivity. The court also held that the Commonwealth was failing in its duty to provide students with the requisite education.

Less well known, however, are the standards the justices adopted from a similar case in another state to be used as the benchmark of a Massachusetts education. The court ruled that public education must equip children with seven capabilities: (1) sufficient oral and written communication skills to enable students to function in a complex and rapidly changing civilization; (2) sufficient knowledge of economic, social, and political systems to enable students to make informed choices; (3) sufficient understanding of governmental processes to enable students to understand the issues that affect their community, state, and nation; (4) sufficient self-knowledge and knowledge of their mental and physical wellness; (5) sufficient grounding in the arts to enable students to appreciate their cultural and historical heritage; (6) sufficient training or preparation for advanced training in either academic or vocational fields to enable students to choose and pursue life work intelligently; and (7) sufficient level of academic or vocational skills to enable public school students to compete favorably with their counterparts in surrounding states, in academics, or in the job market. The court ordered the state to develop the specifics of how to deliver the required education to all students, to find a means to finance that education, and to meet its responsibilities within a reasonable time.

It has been almost 12 years since the McDuffy decision.

By the time the Supreme Judicial Court issues its decision in the latest round of the legal battle on behalf of public school students, Hancock v. Driscoll, it will have been 12 years since the McDuffy decision-enough time for an entire generation of children to pass through our schools-and the state is still far from meeting its constitutional obligation.

FROM MCDUFFY TO HANCOCK

Three days after the McDuffy decision, then-Gov. William Weld signed the Education Reform Act of 1993 with what the Boston Globe described as a "lukewarm pen." The otherwise much-praised legislation contained three important changes in the roller coaster history of state support for education: It established a process for setting standards; it required assessment and evaluation, by multiple means, of how the standards were being met; and it included a new "foundation level" of financial support for schools, based on an estimate of what it should cost to educate the mix of children in each district. In addition, a seven-year program of increased funding was undertaken to pay for these reforms. While each of the three major changes has sparked controversy in its particulars, hardly anyone believes that the public schools are not better off today than they would have been without education reform.

Under the 1993 law, and in response to the court's requirement under McDuffy that it develop a specific educational plan to provide children with an education that equips them with the seven capabilities, the Commonwealth developed curriculum frameworks in English, math, history and social studies, science and engineering, arts, health, and foreign language. The foundation-budget program gave the schools a significant infusion of new resources, much of them going to school districts with the neediest students.

So why, a decade later, was it necessary to file the new lawsuit, Hancock v. Driscoll? The answer is simple: The Commonwealth is still not meeting its constitutional obligation to provide the required education to all students, particularly students at risk for school failure. First, the foundation budget was developed prior to the curriculum frameworks and never reassessed in light of the new state standards established in the Education Reform Act, and it has proven inadequate to the task of paying for the education required under McDuffy. Second, much more needs to be done to improve our schools in order to educate our children to the constitutional standards.

Accordingly, 20 plaintiff children from 19 poor school districts across the Commonwealth returned to court on the grounds that many students across the state, including the plaintiffs, were still not receiving the education necessary to meet the seven McDuffy capabilities and master the curriculum frameworks; the school districts in which the plaintiffs attend school continued to be unable to provide necessary programs and services; strong research-based evidence demonstrated that many educational deficits, especially those of especially challenged students, can be significantly ameliorated, but have not been in the plaintiffs' school districts; and the state has failed to provide appropriate help, evaluation, and support, including necessary funding, to ensure every child a constitutionally adequate public education. The Hancock case was referred by the Supreme Judicial Court to Superior Court Judge Margot Botsford to conduct a trial and make findings of fact and recommendations to the SJC.

On June 12, 2003, the Hancock trial began in Superior Court in Boston. The trial lasted 78 days over a seven-month period and included the testimony of 114 witnesses and more than 1,000 exhibits. On April 26, 2004, Judge Botsford issued a 300-plus-page report of detailed findings of fact and recommendations to the SJC.

The trial focused on four of the districts-Brockton, Lowell, Springfield, and Winchendon-because the conditions in those districts were typical of the districts in which the plaintiffs attend school. In addition, evidence was presented comparing these districts with Brookline, Concord, and Wellesley, as in the original McDuffy case. Although the court offered the state the opportunity to offer similar evidence about any district it chose to demonstrate that there were low-spending, high-performing districts, the state declined to do so.

Districts lacked resources to provide adequate education.

During the trial, superintendents, teachers, and specialists from the focus districts described-without contradiction-conditions not unlike those found at the time of the McDuffy case. After considering this evidence, Judge Botsford concluded in her report that these districts continued to be plagued with "overcrowded classes"; "'extraordinary' staff reductions"; "abysmal" libraries; "difficulty filling positions for mathematics, science, special education teachers, bilingual teachers and certified librarians"; "a virulent dropout problem"; and SAT scores that "are flat and frighteningly low, if one considers the importance of college education to future success." In her report, Judge Botsford noted that on every performance measure used by the Department of Education to assess district and school educational quality, the plaintiffs' districts, with few exceptions, "have not improved at all" since 1993.

THE EVIDENCE

How is it possible that after so much money has been poured into schools, they have not generally improved? The evidence presented during the trial answered this question. First, funding has not kept up with the demands of the new curriculum or spiraling costs such as health insurance, nor has it matched the needs of school systems dealing with particularly difficult populations to educate. Judge Botsford was especially impressed that the focus districts were spending between 100 percent and 110 percent of their foundation requirement, while the state average for the 75 highest performing districts was 130 percent of foundation and the wealthier comparison districts were spending an average of 160 percent of their foundation budgets.

Second, abundant evidence showed that the focus districts lacked adequate resources to provide the required education. While the specifics differed from district to district, there was evidence of glaring educational problems, including: (1) class sizes that were too large, especially for districts with large clusters of poverty, English-language learners, and children with special-educational needs; (2) teachers not certified in the field they were teaching; (3) a lack of essential materials, such as manipulatives and graphing calculators in math, and laboratories equipped with microscopes and the other equipment needed to provide a hands-on experience in science; (4) libraries with inadequate technology and out-of-date books not well aligned with the curriculum frameworks-one Winchendon school library still had The Miracle of Asbestos and The Boys' Book of Tools on its shelves; (5) minimal or no alignment of curricula with the frameworks, including minimal or no teaching of health, the arts, and foreign language; (6) textbooks that were either out-of-date or not aligned to the frameworks, and even those were in short supply; and (7) not enough slots for those applying for early childhood education, and an inability to offer full-day kindergarten.

Expert witnesses also testified about the proven effectiveness of programs that were needed in these plaintiff districts, but not available due to a lack of resources. Long-term studies (including some lasting for decades) have proven beyond dispute that high-quality early childhood education taught by certified teachers increases school readiness, lessens the learning gap for children who are poor or bring special challenges to school, and results in far greater success in school and in later life. These quality programs have been shown, over time, to result in returns to society of between $4 and $7 for every dollar spent. Yet the plaintiff districts are unable to provide sufficient early childhood education programs because of a lack of resources. In original research for this case, the disparities in school readiness toward the end of kindergarten were detailed, demonstrating that children in the urban districts -Brockton, Lowell, and Springfield-were far behind the norm for their age and even further behind their peers in more affluent districts.

Similarly, evidence was presented about the benefits of small classes, especially for early grades. As Judge Botsford concluded, the pre-eminent research in this field is the Tennessee STAR study, which established that children who are in classes of fewer than 20 students in their early school years enjoy long-term benefits in school success. Yet, in the plaintiff children's districts this was often not the case.

FIGURE 2: Number of Classes with More Than 20 Students

The court also heard evidence about the "virulent dropout problem." In the urban districts, as many as half of students do not graduate on time. (See Figure 3, on Springfield.) The court noted that the drastic reduction of remediation programs as a result of state budget cuts had exacerbated this already serious problem.

FIGURE 3: On-Time Graduation and Progress, Springfield
Enrollments Class of 2000 Class of 2001 Class of 2002

After considering all the testimony and reviewing all the exhibits, Judge Botsford concluded that "the factual record establishes that the schools attended by plaintiff children are not currently implementing the Massachusetts curriculum frameworks for all students, and are not currently equipping all students with the McDuffy capabilities." Further, the inadequacies of the educational programs in these schools are "many and deep," and "even more profound" for those students at greatest risk of failure, "children with learning disabilities, children with limited English proficiency, racial and ethnic minority children, and those from low-income homes."

Judge Botsford found that the ability to address these issues is limited by both inadequate funds and the Department of Education's inadequate capacity to provide assistance to school districts. The department has shrunk from 1,000 employees in 1980 to less than 400 today, in spite of all the additional responsibilities under the Education Reform Act. This lack of capacity was undisputed at trial and was exemplified by the evidence that, although there are hundreds of low-performing schools across the state, the department has reviewed only a small fraction of them. "In the meantime," Judge Botsford concluded, "the plaintiff children in the failing schools continue to suffer."

THE REMEDY

In her report to the SJC, Judge Botsford concluded that the state was not meeting its constitutional obligations and that the plaintiffs were entitled to further relief. She recommended that the state be directed to perform a study under the supervision of the court to determine what it would cost to provide the appropriate education to all children as described in the curriculum frameworks and to determine the cost of providing adequate resources to the Department of Education to carry out their tasks to improve the districts. She further recommended that the state be given a limited time-perhaps six months-to conduct the study and to implement the changes and funding necessary to accomplish the tasks.

Based on the evidence at trial, Judge Botsford identified certain educational programs that "must be included" in the determination of necessary costs and others that "should be considered." Those that "must be included" are sufficient funding for (historically underfunded) special education, including professional development for all teachers who have responsibility for teaching children with special educational needs; sufficient funding to cover all seven curriculum frameworks, including health, arts, and foreign language; adequate school facilities; and a public pre-school program for 3- and 4-year-olds, taught by certified teachers, free for those unable to pay, and available to all children at risk.

Judge Botsford also identified programs and strategies that "should be considered" in the determination of cost. These included increased teacher salaries, especially in poor districts; increasing the factors in the foundation budget for low-income and limited English proficiency students; adding factors in the foundation budget for technology, teacher coaches, and school leadership training; implementation of class sizes of less than 20 through third grade; provision of adequate libraries; and institution of regular, established (as opposed to episodic) remedial programs for children at risk.

At this time, the Supreme Judicial Court has received Judge Botsford's Report and recommendations, as well as briefs filed by the Commonwealth and the plaintiffs. In addition, the court has received 15 amicus, or friend-of-the-court, briefs representing more 40 organizations, virtually all the urban superintendents, and almost 50 state legislators. Every single one of these amicus briefs supports Judge Botsford's recommendations. After oral arguments, which the court heard in early October, the SJC will deliberate, and is expected to issue its decision by early next year.

It was 1974 when the Council for Fair School Finance was formed to support litigation on behalf of students who are not receiving the education to which they are constitutionally entitled. Now, 30 years later and 12 years after the landmark McDuffy decision, it is apparent there is more work to be done to reform and equalize public education in Massachusetts.

The constitution requires that the state provide public education that prepares students to participate in the civic and economic life of the Commonwealth, and the Council continues to believe that it is in the interest of the Commonwealth to do so. The Hancock case seeks to define the challenges ahead for government and educators. The council looks forward to the SJC's decision in Hancock, and to working with the legislative and executive branches of government to make the promise of education that John Adams enshrined in our state's constitution a reality for all students.

Norma Shapiro, legislative director for ACLU of Massachusetts, is president of the Council for Fair School Finance.

Symposium: The Hancock Case
Wrong answer on school finances
by Robert Costrell

In the first week of October, the Massachusetts Supreme Judicial Court heard arguments in the Hancock school finance case. The arguments addressed the opinion issued last April by Superior Court Judge Margot Botsford that funding is constitutionally inadequate in the districts of those who brought the suit and, by extension, in high-poverty districts across the Commonwealth.

Much has changed since the SJC last examined school finance 10 years ago. Massachusetts now ranks fourth nationally in expenditures per pupil. The state has vastly reduced, eliminated, or even reversed spending gaps that previously existed between wealthy and poor districts, including the four plaintiff districts that are the focus of Hancock(Brockton, Lowell, Springfield, and Winchendon). Education Trust, a national organization devoted to narrowing achievement gaps, consistently finds that Massachusetts spends significantly more in poor districts than in wealthy ones, ranking at or near the top of the nation by various such measures.

In her opinion, Judge Botsford acknowledges this progress, but holds that funding is still inadequate. This opinion has been widely publicized, but the basis for it has not. A hard look at the evidence reveals a surprisingly weak case.

Much is at stake for the next round of education reform. Should the Commonwealth, once again, pursue the monetary solution that featured so prominently in the first decade of reform? Or, instead, should we focus on developing the leadership, accountability, flexibility, and intervention capabilities needed to turn around low-performing schools? Just as important is the constitutional issue of whether the legislative and executive branches should decide our future policy direction, as opposed to the courts doing it.

ADEQUACY STUDIES INADEQUATE

In order to demonstrate the inadequacy of funding, the plaintiffs commissioned two studies to estimate what an adequate education would cost in Massachusetts. The court found neither of these studies helpful, and it is important to understand why, for several reasons. First, it explains why the court's opinion rests instead on what were clearly secondary arguments presented by the plaintiffs. It also explains why the court's opinion that spending falls below what is necessary is unaccompanied by any indication of how much spending is necessary, since the court found no reliable basis for determining it. Finally, it is important to understand the shortcomings of these studies, since the nature of the opinion, if adopted by the SJC, may force the state into the very types of flawed studies that Judge Botsford rejected.

The plaintiffs' two studies are representative of those produced by consultants for school finance cases, each of them following one of two frequently used methods: the "professional judgment" model and the"successful schools" model. The professional judgment approach asks educators to build an ideal school budget to meet certain educational objectives. In the plaintiffs' study, those objectives were the seven state curriculum frameworks (English Language Arts; mathematics; science and technology; history and social science; foreign languages; the arts; and health). The panelists build the budget from the bottom up, by answering questions such as: What is the optimal class size? How many teacher aides and computers should there be? They are encouraged to "be creative and innovative," to design new programs or services, and to assume there are no revenue constraints.

Predictably, the plaintiffs' professional judgment study implied that almost every district in the state-even the wealthiest-was underfunded (with the ironic exception of Cambridge, a high-spending but low-performing district). Judge Botsford rejected this study as "a wish list of resources that teachers and administrators would like to have if they were creating an ideal school with no need to think about cost at all."

In contrast, the "successful schools" approach is based on spending and performance data. The plaintiffs' study selected the 75 districts with the highest MCAS scores on math and English Language Arts and went through a series of calculations to estimate what it would cost for other districts to attain the same level of success. For a variety of technical reasons, the calculations led to the nonsensical conclusion that two-thirds of the successful districts were not spending enough to be successful. Consequently, Judge Botsford also rejected this adequacy study.

WEAK FOUNDATION

Despite rejecting both of the plaintiffs' attempts to calculate funding adequacy, Judge Botsford nonetheless concluded that the Commonwealth's "foundation budget"-the state's measure of the minimum cost for an adequate education-is too low to meet constitutional muster. But the basis for Judge Botsford's conclusion is problematic.

Since the court discarded the plaintiffs' direct estimates of the cost of adequacy, the court's opinion relies instead on three strands of indirect evidence. The court relies most heavily on disparities in the ratio of spending to foundation budget between high-scoring and low-scoring districts. Second, the court's opinion cites shortcomings in the foundation budget formula, especially for the cost of special education. Finally, the court sounds a note of alarm that "the funding inadequacies have been exacerbated by profound cuts in public school education funding by the Commonwealth in the last two years."

The foundation budget is central to the funding-adequacy issue. As the state's benchmark for the minimum cost of an adequate education, it is the cornerstone of state education financing. For any school district unable to fund schools at the foundation-budget level from property tax revenue, the state has pledged to make up the difference, and it has made good on that pledge even during the recent recession and fiscal crisis.

High-scoring districts are not all high-spending.

Last year, the foundation budget in wealthy districts was about $6,700 per pupil. For districts in the poorest quartile, it averaged about $8,300, some 25 percent higher. This is because the foundation budget formula assigns a premium of $2,000 to $2,500 for low-income children (depending on grade level), and an additional premium for limited-English-proficiency students.

These premiums have provided a powerful mechanism for closing or reversing the spending gaps between poor and wealthy districts. But the foundation budget is the minimum every district must spend; it's not a limit. Any school district is free to spend as much as localities choose, and many affluent communities fund their schools at levels well above the required minimum. As a result, while K-12 school districts in the poorest quartile spent, on average, more than $8,700 last year, districts with the least poverty spent about $8,500. Poor districts spent a bit more per-pupil than affluent districts, on average, but not by as big a difference as in foundation budget.

Here is what the plaintiffs made of that data. Rather than comparing per-pupil expenditure, they expressed spending as a percentage of foundation budget. By this measure, poor districts spend less than wealthy districts, even though, in real dollars, they spend more: Wealthy districts spend, on average, well above 100 percent of foundation budget, while average spending among poor districts is not much more than 100 percent. The plaintiffs postulate that wealthy districts would not spend more than necessary, so their foundation budget (about $6,700) must be inadequate for them to obtain their high level of performance. Thus, they conclude, the poor districts' foundation budget (about $8,300) must be inadequate as well, even though it is far higher.

The court acknowledges the sketchy nature of this argument, describing the approach as offering a "rough" insight. Nonetheless, this is the main basis of Judge Botsford's recommendation to the SJC regarding the constitutionality of our funding system.

Specifically, her opinion cites two facts as evidence that today's foundation budget levels are inadequate: (1) the state's highest scoring districts spend, on average, about 130 percent of foundation; (2) the state average is about 115 percent. From these facts, the court infers "it is difficult not to conclude that the minimum 'adequate' funding level for every school district in Massachusetts lies above the current foundation budget formula amount."

This inference is not justified. Four flaws in the argument are as follows:

1. Average spending is no indication of necessary spending. The court uses the average ratio of spending to foundation budget to conclude that the "minimum adequate funding" ratio materially exceeds 100 percent for successful districts. However, among high-scoring districts, there is a wide spread of spending levels, including some that are close to the foundation budget minimum. Figure 1 plots MCAS scores (scaled on the state's 100-point "proficiency index") against percentage of foundation-budget spending for two groups of districts. The districts depicted by the green dots, which are in the lowest-poverty quartile, include almost all the highest-scoring districts, and their average spending is 125 percent of foundation. But the average is no indication of necessary spending, since a number of districts that obtain this high performance spend much closer to foundation. District M, for example, is at 104 percent, but its performance level is among the highest. More than one-fifth of the students who earn these high scores are in districts that spend less than 110 percent of foundation.

Similarly, it is wrong to infer anything about minimum necessary spending from the statewide average of 115 percent: So long as districts are free to spend more than the minimum, many of them will do so, and the average will exceed the minimum. To ignore this is to fall prey to the Lake Wobegon fallacy.

2. Association is not causation. On average, high-scoring districts spend more above foundation than low-scoring districts. From this fact, the court infers that higher spending is necessary for higher performance. But this confuses association with causation. After controlling for demographics, the association disappears.

Consider the black dots in Figure 1, representing districts in the highest poverty quartile (there are fewer of them, since they are larger districts). On average, these districts spend closer to foundation than low-poverty districts (106 percent vs. 125 percent). But these districts also score below low-poverty ones with the same or lower spending ratios. For example, each of the low-poverty districts spending 100 to 110 percent of foundation scores higher than all of the high-poverty districts, no matter how high they spend. Clearly, demographics are a powerful influence, so we cannot infer the effect of spending on performance without controlling for that.

To do so, look horizontally among black dots or green dots. There is no association between performance and percentage of foundation-budget spending. For example, among high-poverty districts, the worst performer, district H, spends nearly the highest, 119 percent. One of the best performers, district S, spends 123 percent of foundation, but district R does just as well at 101 percent. Turning to low-poverty districts, district M at 104 percent does about as well as district W at 158 percent. If we were to fit a line through the green dots or through the black dots, it would be virtually flat, signifying no association between performance and spending ratio among demographically similar districts.

Dozens of more formal analyses prepared for the court also show no such association. These analyses apply standard statistical methods to district and individual student data, using such demographic controls as district income and parental education, individual LEP, SPED and free-and-reduced-lunch status. The court chose to disregard all such statistical analyses. In Judge Botsford's opinion, the "real world" is better represented by simple averages, without attempting to control for demographics.

3. Comparing spending ratios of wealthy and poor districts uses a variable yardstick. Figure 2 depicts the same data as Figure 1 in terms of spending per pupil, instead of percentage of foundation. The minimum spending per pupil is higher in the high-poverty districts, because the foundation budget is much higher. After concluding, on a highly tenuous basis, that minimum spending is substantially too low in the wealthy districts, the court takes a further leap, concluding that minimum spending must be too low in the poor districts as well. As the diagram indicates, this rests on the assumed difference between minimum spending in poor and wealthy districts. In other words, the percent-of-foundation argument is that the base level of foundation (for students who are the least challenging to educate) is wrong but that the low-income premium is right.

The truth is, neither the base level nor the appropriate premium for low-income students can be known with certainty; at best, one can only determine a reasonable range, based on available evidence. That means policy-makers should have some latitude in designing a foundation formula. A progressive formula consists of a base level toward the low end of the range (since most wealthy districts will spend more anyway) and a low-income premium that is on the high side (since high-poverty districts are less likely to be able to exceed foundation spending levels). Massachusetts has a relatively high low-income premium, resulting in one of the nation's most progressive funding systems. Reasonable proposals have been advanced to increase the low-income premium even more, most notably in Gov. Romney's fiscal 2004 budget.

The irony is that raising the low-income premium (a measure recommended for consideration by the court) would not remedy the constitutional violation, under the court's percentage-of-foundation logic. Raising foundation in poor districts from, say, $8,300 to $9,300 would increase spending by up to $1,000. But, as a percent of foundation, spending would be unchanged, still close to 100 percent. (The black dots in Figure 2 would move right, while those in Figure 1 would stay put.) For wealthy districts, with no change in either spending or foundation budget, the spending ratio would remain unchanged. Thus the disparity between average spending in relation to foundation budget in rich and poor districts would be undiminished. By the criterion used to justify the finding of inadequacy, it would be as if no solution had been adopted at all. Under the court's criterion, no increase in the low-income premium, no matter how large, could eliminate the finding of inadequacy for low-income districts. This deterrent to a more progressive formula, no doubt unintended, vividly illustrates the perils of judicial intervention in policy-making.

4. There is no association between spending ratios and improvement over time. High test scores often reflect favorable demographics; whether scores are improving is often better evidence of what the school is actually doing. By focusing solely on a snapshot of test results, the court ignored evidence that a number of districts spending near foundation have shown strong improvement over time, while many districts spending well above foundation show little improvement. On average, high poverty districts have improved faster than low-poverty districts, despite lower spending ratios.

These four flaws show there are important differences in performance and rates of improvement among demographically similar districts that are unrelated to spending. There are even greater differences among schools within these poor districts. There are high-poverty schools whose scores on the proficiency index rival those of low-poverty schools and districts. How do we bring the lowest-performing districts (e.g. district H) up at least to the level achieved by the similarly poor district R, and to the higher levels yet achieved by some schools within these districts? That is the challenge in the next round of education reform, and it involves such elements as leadership, accountability, flexibility, and intervention, not funding levels.

COMPONENTS OF FOUNDATION

The second strand of the court's argument is that certain components of the foundation budget formula underestimate true costs, most notably of special education. To evaluate this argument, one must consider changes in special-education funding made by the Legislature and the executive branch in recent years. The special-education component of foundation budget itself has been increased, and "circuit-breaker" legislation has been enacted to help pay for the extraordinary costs of severely disabled children. The circuit-breaker was implemented last year for the first time, providing an increase in funding over the program it replaced by 72 percent. As the court points out, this was still well below "full funding" of the new program, since claims jumped faster than expected. This year's appropriation (enacted after the court's report was issued) raises circuit-breaker funding by another 66 percent, to $201 million. State funding for special education cannot be evaluated on foundation formula alone without the circuit-breaker. And it would be premature to declare that circuit-breaker funding is inadequate, as its implementation is rapidly ratcheting up and the new program is still being evaluated.

The court also believes that the component of foundation budget for teacher salaries is inadequate. The basis for this conclusion is that the ratio of actual expenditures on salaries to that component of the foundation budget averages well over 100 percent and is particularly high in certain high-spending districts. But since teacher salaries are the largest component of the foundation budget, this simply reproduces the spending-to-foundation-ratio argument, with all its shortcomings. Moreover, it is misleading to decompose spending ratios and focus only on those components where spending exceeds foundation level, while ignoring those where districts often spend less than the foundation formula allots, such as support staff and central office.

LESSONS FROM THE DOWNTURN

The final strand of the court's opinion involves spending cuts during the recent economic downturn, the result of what the judge called "profound cuts" in state aid. This strand is subordinate to the other two, since the court's assertion here is that the cuts "exacerbated" funding inadequacies. But the data underlying this assertion are flawed. Specifically, the court reported in April that spending was expected to drop in each of the four plaintiff districts last year, most notably by over $10 million in Brockton. Instead, Brockton's spending rose by about $2.6 million. The report also contains erroneous figures for fiscal year 2004 spending in the other plaintiff districts.

No dramatic decline in spending took place last year in any of the four plaintiff districts. Spending fell by about 1 percent in two of the districts, and rose by about 2 percent in the other two. Nor did spending drop as a percent of foundation, in three of the four districts. Finally, since enrollment dropped in each of these districts, spending per pupil fell only slightly in one district and rose by 2 or 3 percent in the others, in this last, hardest year of the fiscal crisis for public education.

More generally, the record of education spending during the three-year economic downturn is rather different from the impression conveyed by the court, as well as by press accounts and ads aired by the Massachusetts Teachers Association. From fiscal year 2001 to 2004, Massachusetts school spending grew by 12.7 percent (15 percent, if we include construction, transportation, grants, and federal funds). For the state as a whole, spending never fell in any year of the recession. On a per-pupil basis it grew 10.9 percent over this three-year period.

Spending growth certainly slowed during this period, but schools were generally able to avoid sharp revenue cuts due to the mix of local and state funding sources. For most districts, local tax revenues are the major source of school funds. Statewide, property taxes grow steadily at about 5 to 6 percent per year. That is because new development of residential and commercial property roughly doubles the base allowable tax growth of 2.5 percent under Proposition 2H. In general, local contributions to the schools closely track this steady growth in property taxes, in compliance with state law.

In contrast, state tax revenues are highly volatile. In fiscal 2002, state tax revenues fell by a devastating 14.6 percent. Education aid, however, based on a previously enacted budget, continued to rise at a healthy pace (including 15 percent hikes that year for three of the four Hancock districts). Over the next two years, as the fiscal crisis continued, state aid declined modestly. In all, by fiscal 2004 education aid remained 4 percent above fiscal 2001, despite a 4.5 percent drop in state revenues. The cuts in aid, though painful, were far more muted than in the last recession, when school aid fell 23 percent over three years, despite a much smaller drop in tax revenues.

For those districts with few local resources, the state was able to minimize cuts in aid. For the four Hancock districts, which rely on the state for 80 percent of their school funding, state aid rose 9.7 percent over this three-year period, about two-and-a-half times the state average. (The modest recovery in aid for fiscal 2005 also favors the Hancock districts. Their aid will grow 2.7 percent, or 4.2 percent per student, vs. 2.8 percent per student statewide.) This allowed their spending to grow 9.1 percent from 2001 to 2004. It would have grown 10.4 percent if the local contribution of these four districts had all kept pace with their tax levies, as it did in other low-income districts and in the rest of the state.

The lessons to be drawn from the downturn are not those drawn by the court, which seem to be that any cyclical slowdown of state education aid growth is a potential constitutional violation. Rather, one lesson is that because state revenues are far more volatile than local revenues, it would not be prudent for the Commonwealth to continually increase the share of education spending borne by the state. Aid should be carefully distributed to those communities whose local resources are most scarce, so that when the next downturn occurs, they can again be spared sharp cuts. Increasing the share of funds provided by the state could well make education spending more vulnerable to economic cycles.

Growth certainly slowed, but spending never fell.

An additional lesson from the downturn concerns collective bargaining. Figure 3 depicts the growth in education wages and employment in the four Hancock districts. (The picture, and the story it tells, is similar for the state as a whole.) Total education wages grew steadily throughout this period, from calendar year 2000 (the last year before the downturn) through 2003, for a rise of 14.8 percent in the four Hancock districts. (During the same period, total private sector wages in Massachusetts fell.) In the four Hancock districts, the average wage in education grew 13.4 percent during this period, exceeding inflation and several times higher than private sector average wage growth (3.3 percent). Education employment continued to grow in these districts through 2002, but layoffs occurred in 2003 as revenues became tighter while wages continued to rise unabated.

Several factors affect the growth of average wages, but the main factor is collective bargaining. In some districts, raises were rigidly locked in prior to the downturn. Brockton, however, negotiated its teacher contract in January of 2003, well after the state's revenues went into free fall. This was the month Gov. Romney came into office and determined that the state faced a $600 million deficit. He was authorized by the Legislature to implement immediate mid-year budget cuts, including local aid. And yet, Brockton negotiated a three-year contract raising school payroll costs by 11 to 12 percent. Under this contract, any individual with fewer than nine years of service could expect to receive raises of 25 to 37 percent over three years.

In response to testimony that districts such as Brockton made painful program cuts, the defense pointed out that those cuts wouldn't have been necessary if they had negotiated less generous contracts. Judge Botsford dismissed this statement, and rejected the suggestion (that had not been made) that Brockton and Lowell teachers were "overpaid." The court did not find that teachers in these districts were underpaid either. As the court reported, Brockton's average teacher salary of $57,398 in 2001 exceeded that of Wellesley and Concord, two of the plaintiffs' preferred "comparison districts." The most recent data show that the average salary among the four Hancock districts exceeds the state average, which is seventh highest in the nation, according to the American Federation of Teachers. Nor did the court find persuasive evidence that salary levels kept plaintiff districts from attracting and retaining qualified teachers. In short, there was no evidence of any educational downside had the teachers' unions showed modest restraint to avoid the painful program cuts cited by the court.

REPAIRING THE FOUNDATION

The court's opinion that funding is constitutionally inadequate is based on a weak case: None of the three strands of evidence stands up to scrutiny. Consequently, the court's recommended remedy also rests on weak ground. That remedy would have the state revise its foundation budget within six months under court guidelines, and remain under judicial review, presumably until it meets the court's criteria for adequacy.

The time is certainly ripe for the state to take a fresh look at the foundation budget, and it has already begun doing so. Unlike a decade ago, we now have considerable information on educational outputs to help move away from a strictly input-based approach. As a national leader in standards-based reform, Massachusetts is positioned to develop new methods to estimate the cost necessary to achieve continuing educational progress, as we consider raising the standard on math and English Language Arts and phasing in accountability for other subjects at a judicious rate. We can experiment with a foundation budget formula that guides districts toward the kind of reforms that are most promising. We need also to carefully consider if and how the foundation budget can be constructed to put educational needs over the sometimes-dysfunctional dynamics of collective bargaining.

None of this will happen if the state is handcuffed by a rigid and unrealistic court decree. Judge Botsford's recommended court order would require the state to determine the cost of educating students to state standards in all seven curriculum frameworks. Our state standards still have a large aspirational component. Since only two of the frameworks (math and English Language Arts) are currently tested for graduation, there are no reliable data from which to estimate what it will take to generate acceptable student outcomes on the other subjects. Consequently, such an order would result in a highly speculative exercise, suffering from the same problem as all professional judgment studies: There is no attempt to tie observed spending levels to actual student outcomes.

After rejecting just such an estimate, produced for the plaintiffs, as a "wish list," Judge Botsford would have the SJC order the state to produce another "wish list." (Predictably, the Massachusetts Teachers Association has already filed a brief providing a host of such studies for emulation.) Should the SJC force the state into such inflated cost estimates, as a result of the state setting ambitious performance goals, there may well be a chilling effect on the standards movement, both here and elsewhere.

When considering evidence on individual elementary schools in Springfield, Judge Botsford found some high-poverty schools, spending less than their peers, that perform quite well-schools that outshine a number of the low-poverty districts depicted in Figure 1. The judge candidly notes "as a matter of puzzlement and concern...such great disparities in performance and quality. This variation within the same district, shown not to be particularly related to funding, indicates unaddressed problems of management and leadership."

At this stage of education reform, funding is neither the problem nor the solution. After committing billions of additional dollars to schools over the last decade, and leading the nation in establishing high standards and assessments, we have made great progress. State policy always envisioned that the next phase would focus on accountability and intervention to address the problems of management and leadership cited by the court. This will require resources to ramp up state efforts in educational auditing and intervention in low-performing schools and districts.

But it will also require a host of non-monetary measures, some as yet unknown, and some laid out in various reports, including that of the Governor's Task Force on State Intervention in Under-Performing Districts, which is favorably cited by the court. Unfortunately, the teachers' unions continue to block many of these measures. The thrust of the Hancock suit-funded almost entirely by the unions-is to redirect state policy away from key concerns flagged by school reformers, and back to another round of school funding hikes. If we become distracted by another huge monetary fix, our energies will be entirely absorbed by questions of how to finance it, how to distribute it, and so on, pushing aside the central issues of accountability, leadership, flexibility, and intervention that are so critical to fulfilling the promise of education reform.

Robert Costrell is chief economist for the Commonwealth, in the Executive Office for Administration and Finance, and professor of economics (on leave) at the University of Massachusetts in Amherst.

Symposium: The Hancock Case
Remedy lies in new goals, new strategies
By Mark Roosevelt

We are really just beginning to understand that schools are indeed our most important social institutions. And only recently have we faced up to the reality that, rather than being the great equalizers that mythmakers proclaim, schools have been reflective of the enormous inequalities in American life. The good news is that for the past two decades or so we have been working very hard-state by state-to extend educational opportunity to children who have heretofore been left out.

In Massachusetts, we are attempting to accomplish this through a far more equitable distribution of state education dollars, as well as through newly established guidelines for what all children need to know at every grade level and as high school graduates. "Standards-based education reform" is an unfortunately bland, bureaucratic description for what is in truth the great progressive undertaking of our time.

Partly because we do not use grand rhetoric to describe this work, we tremendously underestimate the magnitude of the task before us. We have yet to fully comprehend the extraordinary changes in state budgets, school management, and educational practice that will be required. Indeed, if our goal is to educate all students to a reasonable standard, to literally "leave no child behind," then we are just at the beginning of what will be a long, arduous, intellectually challenging, and, yes, expensive struggle.

Judge Margot Botsford's lengthy and well-considered report to the Supreme Judicial Court in the Hancock case confirms how large and complex an undertaking we are really pursuing and how much work is still to be done. She fully acknowledges the enormous financial commitments made in the 1993 Education Reform Act and the considerable achievement represented by an over 96 percent pass rate on the MCAS graduation exam. Yet she still finds that the Commonwealth has failed to meet the constitutional standard laid out in the 1993 McDuffy decision-to adequately "educate all its children."

And how could she have decided otherwise? After even a cursory analysis of student achievement in many of our urban centers, would anyone in good faith seriously argue that children in all the state's districts and schools are now receiving an "adequate" education, much less a fair opportunity to learn to the rather high if vague standard of the "seven capabilities" laid out in McDuffy? Certainly, no one should.

As we-and the state's highest court-consider what needs to be done, we should keep in mind that the great achievement of these past 10 years has been that we have finally stopped the process of systematically writing off a great many of our children-poor kids, urban kids, rural kids, kids of color, English language learners, and kids with disabilities. Prior to 1993 and the imposition of state graduation standards, many, if not most, of these kids did not take algebra in high school, to take just one example; at the end of 12th grade they were awarded diplomas more for attendance than for any ascertainable accumulation of knowledge. Now every Massachusetts school must educate all their students to be able to pass the 10th-grade MCAS, and as we have seen in the 2004 results they are doing that in higher numbers than anyone predicted just a few years ago.

In 1993, we set some goals. First, that all school districts should be spending at their "foundation budget" level by 2000, and they are. Second, that all students should be required to pass the math and English portions of the MCAS exam, and over 96 percent of our kids have done so. What are our goals today? And what are we willing to do to reach them?

Although it represents significant progress, having all students pass the 10th-grade MCAS is only the first step toward educational fairness. As Achieve Inc. detailed in its report Do Graduation Tests Measure Up?, the passing score of 220 on the MCAS only means that a student has absorbed eighth-grade material.

Nonetheless, there may well be a problem reaching consensus that it is time to make major new commitments to K-12 education. As Commissioner David Driscoll often notes, there is no sense of urgency on this issue right now.

Today, there is no great public outcry, as schools do not appear to be in crisis. Educators may feel hamstrung by recent cuts, but no community has anything like the 73 kids in a classroom the town of Wales had back in 1992. And legislators and the public are aware, as Judge Botsford noted, that despite recent cuts, we are still spending more than twice as much today on K-12 education as we did in 1993. And depending on which numbers you prefer, the spending gap between rich and poor communities has either been greatly reduced or eliminated entirely.

No, 2004 is not 1993. It is doubtful there's the energy in the public sector to go through the kind of tumultuous political battle necessary to produce another major reform bill. So, we who are committed to this enterprise of educational equity should be grateful for the SJC's ongoing involvement. The Hancock case represents a great opportunity for an honest assessment of the first decade of reform, a look at what worked, what didn't, what we can do better in the years ahead-a chance to make adjustments, improvements, and additions that will quicken the pace of reform.

In that process, Judge Botsford's report to the SJC represents an important contribution. In a trial that lasted more than seven months and included 114 witnesses and more than 1,000 exhibits, Judge Botsford got a good taste for the intricacies of education politics. She heard a great deal from those who want large sums of additional money to be sent to local districts to spend as they will, as well as from folks who argue that such expenditures are unlikely to make a bit of difference in the educational achievement of students. In her report, she sorts it all out in a fairly reasonable manner, concluding that some critical new expenditures need to be made, as well as some critical management changes.

In her recommendations to the SJC, Judge Botsford touches on a long list of what "should" or "must" be done. There is a great deal in the judge's list that can-and should-be debated, in terms of deciding what is worth investing in to improve student outcomes in districts where achievement is lagging, and in the emphasis between additional funds and management reforms. She concludes that "capacity problems are a cause of the inadequate educations being provided to the plaintiffs," but that "inadequate financial resources are a very important and independent cause." The order she recommends to the SJC addresses both resources and capacity, calling on the state to determine the "actual cost" of providing an adequate education and of "provid[ing] meaningful improvement in the capacity of these local districts" to provide it.

But in her detailed listing of "musts" and "shoulds," the emphasis is on funding for services, not on management reforms. The judge does not require a plan to improve the management and leadership skills of school and district administrators, nor does she direct attention to what it will take to expand state capacity to get failing schools to change. Finally, she does not direct the state toward an investigation into whether administrators currently have the power and flexibility to evaluate, train, and remove professional staff so as to make effective use of available resources. Yet without such tools, additional resources sent directly to local districts might be inefficient or simply wasteful.

For either the SJC or our elected officials to decide what new expenditures or reforms are most urgent, they need much more research into the years since the 1993 Act was passed. Where has the money gone? What has been effective? What has not? And what are the most important missing pieces?

The Massachusetts Business Alliance for Education (MBAE) and the Rennie Center for Education Research and Policy at MassINC are currently engaged in a research project in this area, but even while the research is going on there are some things that are already abundantly clear.

We need to rally around the goal of proficiency.

First, we need to rally educators, parents, and the community as a whole around a new goal. That goal should be proficiency-technically, a score of 240 on the MCAS. Proficiency represents a reasonable standard for high school students, an achievement level more likely to equate with McDuffy's seven capabilities. We should consider whether and how to ramp up the passing score to that level, and we should charge the Department of Education and all of our school districts with developing realistic plans for getting our students to proficiency over the next 10 years. (This is already required by the federal No Child Left Behind legislation.)

Second, we need to understand that the responsibility for effective schooling and attainment of proficiency by all of our students will continue to shift from local governments to the state. As McDuffy established and Judge Botsford reiterated, "This duty lies squarely on the executive (magistrates) and legislative branches of the Commonwealth. That local control and fiscal support has been placed in greater or lesser measure through our history on local governments does not dilute the validity of this conclusion. While it is clearly within the power of the Commonwealth to delegate some of the implementation of the duty to local governments, such power does not include a right to abdicate the obligation imposed on magistrates and Legislatures placed on them by the Constitution."

Schooling will continue to shift to the state.

To a considerable degree, the idea behind the 1993 Act was that if the state sends out significantly more money to school districts on an equalizing basis and establishes curriculum frameworks and a testing system to measure results, then the local districts will figure out what needs to be done to raise student achievement. Judge Botsford's examination of the four focus districts and the district audits performed by the Office of Educational Quality and Accountability show that this is often not the case. Many districts have not implemented even the most basic elements of standards-based reform, including aligning their curriculum to state standards and using student achievement data to inform personnel reviews and professional development plans.

The current lack of state capacity to assist districts with essential reform and to intervene with districts that cannot make progress towards raising student achievement appears to be a clear abdication of the Commonwealth's constitutional duty, and a critical flaw in the implementation of education reform. Figuring out how best to build that capacity is a critical next step if we are continue to make progress towards our goal. And finally the changes that we make in state law and funding, whether expanding early childhood education, extending time on learning through a longer school day, or establishing a more rigorous value-added system of adult accountability, must be made after consideration of how they will contribute to the attainment of our goal. More money may well be needed. Tough reforms in the way we operate our schools may be needed as well.

Former state representative Mark Roosevelt, co-author of the Education Reform Act of 1993, is managing director of the Massachusetts Business Alliance for Education.

Summer 2004 PERSPECTIVE

Passing judgment: What it will take to make schools constitutionally adequate
By Edward Moscovitch

The coverage in the press gave a misleading picture of the school finance decision handed down by Judge Margot Botsford in April. The judge did not say that the state needed to throw out its current system of funding schools nor did she say that we needed to divert millions of dollars from wealthy districts to poor districts in order to remedy inequalities in school spending. Instead, she said exactly what she should have said-the education in the plaintiff districts (and, by extension, other districts across the state) is not good enough, and does not measure up to the constitutional standard (originally written by John Adams) that Massachusetts must "cherish" the education of its students.

Under the Massachusetts Constitution, it is ultimately the state's responsibility to ensure that schools are providing a good education to their students. Toward that end, Botsford laid out, in her recommendation to the full Supreme Judicial Court, two requirements:

• that the state determine how much schools would have to spend to meet the educational needs of all their students-particularly those at risk-and then provide the necessary funds; and

• since money alone won't solve the problem, that the state address the leadership and other non-monetary issues that stand in the way of quality education.

Properly understood and implemented, Judge Botsford's decision could help us make some long overdue changes in our decade-long education reform effort, changes that could lead to major improvements in the schools.

POOR GRADES

The judge's findings on school quality come as no surprise to those who follow the MCAS results. Ten years after the 1993 reform law, with the state fully meeting its foundation budget obligations and now spending some $2 billion a year more on schools than prior to the reform, only 14 percent of Hispanic and black students in poverty meet the goal of proficiency in math and only 28 percent in English (Figure 1). Proficiency rates for non-poor minorities and for poor white or Asian students-virtually identical at 26 percent in math and 46 percent in English -are also very low. These scores are up somewhat from where we started, particularly in English, and particularly for 10th-graders. We're looking here at the percent of students who are proficient-that is, those who can function well in the modern world. This is the standard required under the federal No Child Left Behind law, and it is somewhat higher than the "needs improvement" standard required of 10th-graders for high school graduation.

The virtually unanimous assumption a decade ago was that a tripling of state education aid and the adoption of high-quality assessments would produce a sea change in educational achievement-certainly something more impressive than having only one minority student in six proficient in math and only one in three proficient in reading. It hasn't happened.

Since the disappointing results have come primarily in educating students from minority or low-income families, it is commonly assumed that it is our big-city schools that are failing. In fact, judging by math proficiency rates (see Figure 2), suburban school districts-those with very few low-income students-don't do much better at teaching minority or impoverished youngsters than do inner-city schools. Conversely, inner-city schools don't do much worse than the suburbs in educating middle- and upper-class white or Asian students. (The results in English language arts tell the same story, though the rates are higher.) The difference in overall performance between suburbs and cities is not so much quality of teaching, but the fact that the suburban schools have relatively few minority students and inner-city schools have relatively few well-off students.

One of the major virtues of the No Child Left Behind federal education law is that it requires that we look at data separately for minority and low-income students. When we do so, it becomes clear that virtually all schools have failed to educate properly the students who are most at risk.

RAISING THE FOUNDATION

Contrary to the headlines, Judge Botsford does not call for dismantling the state's funding system. What she does say is that one of the key elements in that system-the foundation budget-is set too low. The foundation budget is the amount (higher per pupil in high-poverty districts) that the state requires each district to spend. Botsford would require the state to determine how much money is needed to provide an adequate education, and then to appropriate it. The question is, how much too low is the foundation budget? And how much will it cost to raise it to a level sufficient to provide an adequate education to all students?

Botsford observes that districts performing at high levels spend, on average, 130 percent of their foundation budget amounts. One possible statistical inference, then, is that we'd have to raise the foundation budget by 30 percent. Still looking at the problem statistically, I'd suggest that a 10 percent increase is just as plausible. It's true that the average spending of high-performing districts is 30 percent above the foundation. But it's also true that the likelihood of success is no greater at 130 percent of foundation than at 110 percent.

Figure 3 compares student performance (vertical axis) with per-pupil spending (horizontal axis) for all high-poverty elementary schools in Massachusetts. Comparable value is the difference between what each student actually scored and the average score for that subject and grade of all students in the state with the same gender, poverty status, and ethnicity. Schools with positive comparable values are those where students outperform their demographic peers. Among high-poverty schools, there is a wide range of performance at every spending level. The higher performing of these schools are not necessarily the highest spending; once spending reaches about $7,000 per pupil, higher expenditure amounts do not increase the likelihood of success. The foundation budget for an elementary school with 20 percent poverty is about $7,200 per student today; it was about $6,400 in the year for which the chart is constructed, so that this $7,000 threshold is roughly 10 percent above the foundation budget.

FIGURE 3: VALUE-ADDED VS. PER-PUPIL SPENDING, ELEMENTARY
High-Poverty Elementary Schools, 2001-02

Per-Pupil Spending (Instructional and Non-instructional)

These numbers give us a very rough idea of how much the judge's decision could cost. The foundation budget is supported in part by the state and in part by local tax effort. Although the details of the state's aid formula are complex, the basic idea is straightforward-for each district, the state makes up the difference between what it is required to spend (the foundation budget) and what it is expected to raise itself. This portion of state aid-the money needed to get all districts up to foundation-level spending-amounts to all but $240 million of the aid scheduled to go to school districts for the 2004­05 school year (fiscal year 2005). The remainder, which goes mainly to wealthier towns, is "extra" aid left over from when there was additional money distributed to all districts even when it was not needed to get them to foundation-budget level.

Raising the foundation budget by 10 percent would require an increase of $530 million in aid; a 30 percent increase would cost almost $2 billion more. If carried out in the 2004­05 school year, this higher adjustment would mean total state school aid of $5.04 billion, instead of the $3.18 billion currently scheduled, an overall increase of 58 percent. As the foundation budget is raised, the state's obligation to school districts also rises, increasing required state aid. For most towns, required local support of schools is set in relation to prior year effort, new property added to the tax rolls, and overall tax wealth, and is not affected by the increase in the foundation budget. Most of the increased foundation budget, then, is the financial responsibility of the state.

At the same time, as the foundation budget increases, some of the aid that was previously "extra" becomes necessary to help even wealthier towns get to foundation. Thus, with a 10 percent increase in the foundation budget, the amount of "extra" aid statewide declines to $100 million; with foundation increased by 30 percent, only $30 million of extra aid remains. In other words, at a higher level of foundation budget, more districts with relatively high property wealth would need state aid to reach the spending requirement-which means that there is little room to finance increased aid to poorer districts by cutting aid to wealthier districts. This is illustrated in Figure 4, where the darker portion of each bar shows pure foundation aid and the lighter portion the amount of "extra" aid.

MONEY IS NOT ENOUGH

The aid projections above are back-of-the-envelope estimates based on statistical observations. We can't, in fact, know in advance how much Judge Botsford's decision might cost to implement because her ruling placed the emphasis on improving education, not on increasing appropriations per se. Instead of a formulaic approach, she recommended to the Supreme Judicial Court requiring the state to consider carefully what communities would need to spend to meet the constitutional standard of educational excellence, and then to incorporate these findings into the foundation budget. The elements to be costed out include, in Botsford's view, adequate funding of special education; adequate teaching of all seven state-approved curriculum frameworks to every student; adequate school facilities; and a public preschool program for 3- and 4-year-old children.

This is an imposing, and potentially costly, list of items to be recalculated or incorporated for the first time into school funding. But the judge's insistence that the state must budget for the kind of education state law (and court rulings) require should also be viewed in light of her other key finding-that money alone won't solve the problem. After ruling that the foundation budget is inadequate, Botsford continued: "This is not to say, however, that increases in the foundation budget alone will produce an adequate educational program in these districts. There is also a need to enhance the managerial, administrative, and leadership capacities of the districts." This finding is consistent with the data in Figure 3 above: Once spending reaches a certain level, further increases do not increase the likelihood of success. Beyond that point, what matters is the ability to spend that money in ways that improve education.

Judge Botsford's finding that underperforming school districts lack not just money but also the capacity to use it effectively is a very important development in the ongoing debate about educational improvement in Massachusetts. To date, the state has set higher standards, spent more money, and introduced school choice and charter schools. The comfortable assumption that these steps alone would bring dramatic improvement has not been realized; the judge's findings underscore this. In response, however, the debate has consisted of various parties suggesting that we need more of the same-more money, or more charter schools. Paradoxically, what the debate has lacked so far is a discussion of how schools improve. The most constructive response to Botsford's decision would be first to understand how schools improve, and only then to put together a funding and school improvement plan.

HOW SCHOOLS IMPROVE

A good place to start the discussion of school improvement is to understand why more money doesn't necessarily mean better education. A medical metaphor may help: Until recently, the standard treatment for severely clogged arteries was bypass surgery, which is invasive, painful, expensive, and risky. In the last few years, medical researchers have discovered that stents-particularly medicated stents-are more cost-effective ways to keep arteries open. They produce similar or better results, involve less risk to the patient, allow a speedier recovery-and cost less.

As in medicine, the key to effective school change is to use rigorous
assessment to determine the problem and research-based interventions to
address it. Because of my work evaluating the Alabama Reading
Initiative-perhaps the largest school improvement effort in the country,
with more than 425 participating schools and thousands of teachers trained-I
am most familiar with literacy instruction, but the virtuous circle of
data-driven instruction really applies across all of education:

1. Frequent assessments are made of individual student progress and of the particular deficiencies that are holding each student back.
2. Teachers learn classroom-management skills that enable them to work with a small group of students while other students are constructively engaged in independent or small-group activities.

3. Teachers use research-based interventions to address the deficiencies they identified in step 1, and are able to do so in the small group settings they learned to manage in step 2.

4. Progress of struggling students is monitored frequently-weekly, for those farthest behind-and this monitoring is used to determine whether the interventions in step 3 are working. If not, the teacher needs to try something else and-with help from coaches knowledgeable in the subject-look for new strategies.

There are four other elements that contribute to the success of this kind of program: support and inspiration from the principal; leadership roles for teachers in monitoring student progress, devising new curricula, and helping each other implement change; consistently high expectations from the faculty and principal as to what their students can accomplish; and support from outside coaches who lay out a vision of change and insist that the school stick with it.

The other day I received a letter from the intermediate school (Grades 4­6) in Coosada, Ala. In response to the in-depth training they received this fall, teachers held a series of discussions on what was working in their school and what was not. They've totally revamped their reading program, adopted a new school schedule for next fall, and doubled the time available for interventions with struggling readers. They've also begun a shared teaching program-two teachers from different grades and/or subjects teaching a class together-breaking down the isolation in which most teachers work. This is the kind of dramatic change we need to see here in Massachusetts.

In rural Pine Apple, I walked through the local school (all black, all poor) with the principal. As we entered each classroom, I asked him to point out the struggling readers-and he knew exactly who they were. He meets with his teachers twice a month to discuss the strategies they're using with each one, and he couldn't wait to share with me the progress-monitoring results that showed the gains they're making.

Teachers are buying into data-driven instruction.

We don't need to go to Alabama to see how this can work. As part of the federally funded Reading First program, Massachusetts requires participating schools to administer a reading assessment to all students at least three times a year. At an inner-city school south of Boston, the Reading First coach used these test results to show teachers that 75 percent of their students couldn't decode -that is, they couldn't automatically and fluently translate symbols on the page not just into sounds but also into words, sentences, and paragraphs.

I'm sure those teachers already knew that most of their students were struggling. But they hadn't previously known that decoding was the specific problem. If you don't know the problem, you can't fix it. Particularly in literacy, there's extensive research on the kinds of interventions to use for most of the difficulties teachers encounter. The coach helped the school pick out and purchase intervention materials specifically designed for decoding prob-lems and helped the teachers learn to use them. As they begin to see their progress-monitoring results improve, teachers are buying into the whole notion of data-driven, research-based instruction.

Chicopee schools are moving aggressively to improve reading instruction. Outside coaches are showing teachers where their students' specific needs are. They are purchasing specific intervention materials tailored to the kinds of deficiencies they're finding. Many of these are 30-minute, highly structured lessons prepared by leading researchers in the field and designed to work on a specific skill. Title I teachers, special education teachers, and paraprofessionals are trained to give these lessons to the students who need them. For example, a key remedy for fluency difficulties is to have a passage read aloud by a fluent reader, then to have the student re-read the passage-perhaps several times. This can be done by paraprofessionals or adult volunteers who get a little training. As teachers see their students progress, they get interested and want to learn more.

The principal at Chicopee's Bow School has put together a kind of primer, documenting some of the most frequent reading deficiencies, as identified by the reading assessment, along with a set of suggestions for how to address them. One of the key features here is that results of these assessments are instantly available to teachers, so they can immediately see progress and begin to use assessments to measure whether their interventions are working. This empowers teachers and gives them a tool they've never had before.

It's impossible to overstate how far behind children from non-literate homes are when they come to school. By one account, the typical kindergartener from suburbia knows four times as many words as her inner-city counterpart. So minority and low-income students will need extra time to work on vocabulary, language structure, and grammar if they are to have any hope of reading with comprehension-or of mastering science, math, or history. But the Chicopee principal has the right idea-assess progress, identify student deficiencies, and offer appropriate interventions.

It's commonplace in some circles to argue that unions present a critical obstacle to success. That is not my experience, at least with the kind of program I've suggested here. To be sure, teachers expect to be paid for the extra time they put in, but this is not unreasonable. As long as their extra effort is recognized, they are generally happy to participate and not to watch the clock. In schools I've visited in Alabama and in Pennsylvania, I've found local union leaders who have been the strongest proponents of this kind of change.

PRESCRIPTION FOR IMPROVEMENT

If the SJC accepts Judge Botsford's recommendations, the high court will order the state to calculate the cost of providing an adequate education, and also to propose "measuresŠthat will provide meaningful improvement in the capacity of these local districts" to provide that education. I suggest that we put aside for a few months discussion of how much more we need to spend or how to restructure the Department of Education. Instead, let's start by developing a shared vision of what it takes to turn around schools in large numbers. Once we do this, the funding and the structure will follow logically.

Everyone knows that you can turn around almost any school by hiring an outstanding principal. But, except in Lake Wobegon, you can't insist that all principals be above average! Any plan for improving the educational outcomes of large numbers of poor children has to be able to work in any school, by engaging the interest and enhancing the skills of typical principals and teachers.

The power of the assessment/small group/intervention model-as our Department of Education is beginning to apply in Reading First and as my clients in Alabama are using-is that it has already turned around dozens of schools. To accomplish turnaround on a wide scale, we need to practice prescriptive intervention-that is, the department has to have a well-conceived model of school change, and has to insist that participating schools follow that model.

This is not how we've typically done business in education. Until now, we've believed in local autonomy, with individual schools and school districts free to conduct their programs with as little guidance as possible from the state's Department of Education. But teachers and principals don't know what they don't know. If they didn't know their students couldn't decode, and didn't know the research on decoding interventions, and didn't know about assessments and small-group instruction, they couldn't improve reading results-even with more money.

The great majority of teachers and principals went into education because they want to help kids. They may grumble at first about having to follow a prescription they didn't write, but when they see it work they'll become strong supporters. That's what happened in Alabama. The ARI just received $40 million in state money for next year, up from only $12 million-this in a state that's practically broke. It wouldn't have happened without overwhelming support from teachers, who are thrilled with the improvement they're seeing.

BACK TO MONEY

Once we get behind this kind of prescriptive model, the implications for funding will be readily apparent. The Department of Education will need additional funds for outside coaches, development of instructional materials, and teacher training academies. Schools will need money for assessments, teacher training, common planning time, structured intervention materials and instructional programs, and school-based coaches.

How much will it cost? A detailed answer should follow, not precede, adoption of a change model. But a very crude calculation shows that the model I've suggested here would cost something like $200,000 for a school of 400 students-or roughly $500 million statewide. To work properly, this kind of program requires reasonably small classes, particularly in the primary grades in high-poverty schools, and to that end we'd have to restore perhaps $50 million to $100 million of cuts made in recent years. In total, this is roughly equal to a 10 percent increase in the foundation budget. In addition to this boost in operating budgets, it's clear from Judge Botsford's ruling that the state will need to address overcrowding and lack of adequate facilities in some schools across the state. Both the governor and the legislative leadership have made proposals to accelerate school building construction; as this is written, these proposals are being debated in the Legislature.

It's not clear whether $600 million or $700 million spent on structured intervention and reducing class sizes in high-poverty schools, as I've laid out here, would satisfy Judge Botsford's requirement that schools work toward excellence in all of the subject areas encompassed by the state's curriculum frameworks. But anyone who knows schools understands that there's only so much you can change at any given time. A program of comprehensive school change, based on the virtuous circle of assessment, small-group instruction, research-based interventions, and feedback from assessment to instruction, will fully absorb the energies of faculty and principal alike and, even in the most capable of schools, will take three or four years to accomplish.

Since reading is central to all other learning, such an effort should initially be focused on reading. (One of the most interesting of my findings from the Alabama Reading Initiative is that by fifth grade, ARI schools outperform nonparticipating schools not only in reading but also in math.) When schools are successful at teaching all students to read, fewer students are referred to special education and many difficult behaviors disappear (older students who can't read often act out to hide the fact that they can't follow the lesson).

In light of all this, it would make sense for the state to make an interim response to the Botsford order-a response that says we'll spend three or four years focusing on data-driven instruction, primarily in literacy. At the end of that time, teachers will be ready to move on to other areas, and we can determine whether schools are then able to meet constitutional standards across the board or whether additional resources and training are needed. Paradoxically, we'll make more progress in the long run with an incremental approach paced to the realities of today's students and to the difficulties of the task we're undertaking.

There is no doubt in my mind that prescriptive intervention programs can work. It takes longer than we'd like, because kids from disadvantaged homes start so far behind. Along the way, we'll uncover new problems and have to figure out how to address them. But we'll also generate a wave of enthusiasm and energy from teachers who will be thrilled to see their kids moving forward.

Edward Moscovitch is principal of Cape Ann Economics.