1. A POLITICAL ECONOMY ANALYSIS
OF SCHOOL FUNDING POLICIES
Aitza Marie Haddad Núñez
Seminar in Education Policy
Spring 2015

2. OVERVIEW
 Introduction
 Primary Laws
 NCLB: Accountability & AYP
 Failing AYP: School Improvement &
Corrective Action
 Failing AYP: Restructuring
 DOE & ESEA: State Waivers
 State Flexibility & Waivers
 Flexibility & Waivers Today
 Highly Qualified Teachers
 Teacher Quality State Grants
 Other Grants
 More Grants
 The Four Turnaround Models
 And Other Programs
 The Political Economy of Minorities and Gender
Discrimination in Education
 The Modern Liberal Perspective on Minorities
 The Conservative Perspective on Minorities
 The Modern Liberal Perspective of Gender
 The Radical Perspective of Gender
 Modern Liberal Responses to Gender &
Minorities Discrimination
 Race to the Top &The Texas Example
 Texas Continuing Fight for its Education

4. INTRODUCTION
 Education is primarily a State and local responsibility in the United States
 It is States and communities, as well as public and private organizations of all kinds,
that establish schools and colleges, develop curricula, and determine requirements for
enrollment and graduation
 The Federal contribution to elementary and secondary education is about 10.8%
 Department of Education (DOE) and other Federal agencies, such as the Department
of Health and Human Services' Head Start program and the Department of Agricultur
e’s School Lunch program
 At the elementary and secondary level about 87.7% of the funds come from non-
Federal sources
 Of an estimated $1.15 trillion being spent nationwide on education at all levels for sch
ool year 2011 and 2012, a substantial majority will come from state, local, and
private sources

5.  Department of Education (DOE) was created in 1867
 Primary mission – To promote student achievement and preparation for global competitiveness
by fostering educational excellence and ensuring equal access
 While the DOE programs and responsibilities have grown substantially over the years, the Department
itself has not
 Has the smallest staff of the 15 Cabinet agencies, even though its discretionary budget alone is the third largest
 Elementary and Secondary Education Act of 1965 (ESEA)
 Part of Johnson Administration’s War on Poverty Campaign
 Original goal (which remains today) – improve educational equity for students from lower income
families by providing federal funds to school districts serving poor students
 Major federal law authorizing federal spending on programs to support K-12 schooling
 Largest source of federal spending on k-12 education
 Has been reauthorized 7 times
 Improving America’s Schools Act of 1994 (IASA)
 Put in place key standards and accountability elements for states and local school districts that receive funds under the
law
 Most recently – No Child Left Behind (January 2002) (NCLB)
 Further develop the key standards and accountability elements established by IASA
PRIMARY LAWS

6. NCLB: ACCOUNTABILITY & AYP
 Allows for the distribution of federal funds to states for the improvement of k-12 education
 Authorizes 45 programs, organized into 10 sections, and funded at $25.7 billion FY2014
 Tends to focus on the Title I law’s testing, accountability, and teacher quality requirements:
 Title I is NCLB’s largest program supporting local school districts elementary and secondary education from
birth through the 12th grade
 School districts have some discretion in how they distribute Title I funds among schools within the district
 But the law requires them to prioritize the highest poverty schools
 More than 50, 000 schools (almost half of all public schools) receive Title I funds annually
 Funded $14. 4 billion in FY2014
 Test students in reading and math to ensure that all students are proficient in grade-level by 2014
 Annually grades 3-8 and once in grades 10-12
 Proficiency is determined by the Adequate Yearly Progress (AYP)
 States are responsible for defining grade-level performance and the rate of AYP
 Schools must meet is targets for students for reading and math each year
 And for publicly report tests results
 In the aggregate
 For specific student subgroups – low-income students, students with disabilities, English language learners, and major racial
and ethnic groups

8. FAILING AYP: SCHOOL IMPROVEMENT &
CORRECTIVE ACTION
 School districts must spend up to 20% of their federal NCLB Title I funds on public school choice and
supplemental services for students in schools identified for school improvement
 District schools that fail to make AYP for two consecutive years
 Are identified for "school improvement,” (SI) and must:
 Draft a school improvement plan
 Devote at least 10% of their federal NCLB Title I funds to teacher professional development
 The school district must offer Public School Choice to children – The option to transfer to a higher-performing school in the same district
 District schools that fail to make AYP for a third year:
 Are identified for ”Corrective Action”
 Must institute interventions designed to improve school performance from a list specified in the legislation
 And must provide Supplemental Educational Services to students – The option to receive supplemental educational services
 Tutoring and other outside-of-school services designed to improve academic achievement
 NCLB seeks to empower parents by providing them with information about students, schools, and districts
performance
 NCLB requires that states and local school districts disseminate to parents annual school report cards describing their
student and school performance
 Local district schools must also produce and distribute to parents a report card for each individual school

9. FAILING AYP: RESTRUCTURING
 District schools that fail to make AYP for a fourth year:
 Are identified for restructuring, which requires more significant interventions
 If a district school fails to make AYP for a fifth year:
 It must implement a restructuring plan that includes:
 Reconstituting school staff and/or leadership,
 Changing the school’s governance arrangement,
 Converting the school to a charter, turning it over to a private management company, or some other major
change

10.  Requirements that the DOE waives include:
 States meeting AYP targets whereby students must reach 100 percent student proficiency by 2014 in
reading and math, and mandated interventions,
 Districts must allow students to attend different schools and offer Supplemental Educational
Services Title I schools and school districts failing to meet the AYP targets.
 Allowing states to opt out of mandatory interventions for districts failing to meet requirements to staff
only ‘Highly Qualified Teachers’ in their schools
DOE & ESEA: STATE WAIVERS

11.  In order to receive flexibility through a waiver;
 States needed to demonstrate that they had adopted or would implement a series
of reforms to their academic standards, student assessments, and accountability
systems for schools and educators
 Specifically, the DOE required states to implement:
 College and career ready standards and assessments that measure student achievement and
growth
 A differentiated accountability system that both recognizes high-achieving, high progress
schools (reward schools) and supports chronically low-achieving schools (priority and focus
schools);
 Teacher and principal evaluation and support systems to improve instruction.
STATE FLEXIBILITY & WAIVERS

13. FLEXIBILITY & WAIVERS TODAY
 In September 2011, President Obama and Secretary of Education Arne Duncan announced that the
administration would allow states to request flexibility in meeting some of the requirements under NCLB in the
absence of the law’s reauthorization
 Wisconsin – along with 42 other states, Washington, D.C. , a group of California Districts, Puerto Rico, and the
Bureau of Indian Education – applied for a waiver of these targets and other NCLB requirements for the DOE.
 Since February 2012, 43 states and Washington, D.C. have been granted waivers, most of which were in effect until the
end of the 2013-2014 school year, when states had the opportunity to extend their waivers for another two more years
 Although states have struggled with implementing the policies outlined in the waivers these seem to continue serve as de facto
federal policy until NCLB is reauthorized
 For states without waivers, NCLB remained and remains in full effect
 The Coalition for Community Schools has proposed that State Education Agencies (SEAs) use ESEA Flexibility
Waivers to include the community schools strategy as an intervention model for school improvement
 States such as Connecticut, Massachusetts, and Oklahoma have used community schools both as a school
improvement, as well as a family and community engagement strategy
 Federal funding, across the DOE, Health and Human Services, Housing and Urban Development, DOJ and more,
can be used in implementing a comprehensive community schools strategy (Community Schools Infrastructure,
Engaged Instruction and Expanded Learning Opportunities, Health and Social Services, Early Childhood,
Community Engagement)

14. HIGHLY QUALIFIED TEACHERS
 NCLB requires all teachers be highly qualified.
 All teachers must be fully certified by the state or have passed the state teacher licensure exam and have a
license to teach in the state
 In addition, highly qualified teachers must demonstrate their knowledge of the subject they teach through
certain credentials or test scores
 NCLB also requires states to take steps to ensure that low-income and minority students are taught by
teachers who are not highly qualified at higher rates than those who are non-minority and don’t teach
low-income students
 NCLB gives parents the right to know about the qualifications of their child’s teacher;
 Whether or not their child’s teacher meets state licensure and other qualifications, if the teacher is under an emergency
license or other waiver, the teacher’s undergraduate major, and any graduate degrees he or she holds
 Parents also have the right to know if their child is receiving educational services from paraprofessionals (i.
e. teacher aides) and what qualifications those paraprofessionals have
 School districts are obligated to inform parents in writing if a teacher who is not highly qualified teaches their
child for more than four weeks

15. Teacher Quality State Grants
 Improving Teacher Quality State Grants
 Was created by combining several smaller class size reduction and teacher
professional development programs that existed prior to NCLB to improve
teacher and principal quality by increasing the number of highly qualified teachers
and principals in schools
 The DOE distributes funds to states, and to school districts within states, on a formula
basis
 In 2014, the program received $2. 3 billion
 NCLB also authorizes several smaller programs to improve teacher quality;
 The Teacher Incentive Fund – supports the development and implementation of performance-
based teacher and principal compensation systems in high-need schools
 In 2012, the Teacher Incentive Fund received $289 million
 The Transition to Teaching Program – Funds alternative teacher preparation programs
 In 2012, the Transition to Teaching Program received $14 million

16. OTHER GRANTS
 Education Technology State Grants
 Provided funds to states and school districts via formula to support technology in elementary ad
secondary schools
 States distributed 47.5% percent of funding they receive to school districts through a formula,
and distributed 47.5% to school districts and other local groups through a competitive grant process
 States could use up to 5% of the funding they received for state technology activities
 The program was funded at $100 million in 2010
 Congress did not appropriate funds for 2011 and beyond
 English Language Acquisition Grants
 Provides funds to states and schools districts via formula to improve education and English language
of children who do not speak English
 Was created as part of the NCLB to replace several bilingual education demonstration and professional
development programs that existed prior to the law
 It replaced the competitive
grant programs with a formula grant program that recognizes the growing number of English language
learner students and their dispersion across a large number of school districts throughout US
 It was funded at $723 million in 2014

17. MORE GRANTS
 Obama’s administration American Recovery and Reinvestment Act (ARRA) of 2009
 Significantly and temporarily expanded the federal role in education
 Race to the Top Fund (R2T)
 $4.35 billion in competitive grants to states, with turnaround being a key focus
 Guidelines for the turnaround section specify that LEAs must implement at least one of the four turnaround models
 LEAs with nine or more turnaround schools must use multiple models
 School Improvement Grants (SIG)
 $3.55 billion allocated to states according to a Title I formula, with the funds to be granted out competitively to districts
 Guidelines align with R2T, including the need to use the four turnaround models
 SIG funds may be awarded to all Title I schools, as well as schools that are eligible for but do not receive Title I, Part A funds, if those
schools have not made AYP for at least two years or are in the state’s lowest-performance quintile.
 States decide the amount of SIG funding an individual school receives, based on district applications, and funding can
range from $50,000 to $2 million
 Investing in Innovation Fund (i3)
 $650 million in competitive grants awarded to nonprofit-LEA partnerships to expand innovative and evidence-based
approaches that improve student achievement, close achievement gaps, and improve teacher and principal
effectiveness — all areas related to turnaround

18. THE FOUR TURNAROUND MODELS
 Turnarounds
 Replace the principal and rehire no more than 50% of
the school’s staff
 Adopt a new governance structure
 Provide job-embedded professional development
 Offer staff financial and career-advancement incentives
 Implement a research-based, aligned instructional
program
 Extend learning and teacher planning time
 Create a community-orientation;
 Provide operating flexibility
 Restarts
 Transfer control of, or close and reopen, a school under
a school operator that has been selected through a
rigorous review process.
 A restart model must enroll, within the grades it serves,
any former student who wishes to attend
 Transformations
 Replace the principal (no requirement for staff
replacement)
 Provide job-embedded professional development
 Implement a rigorous teacher-evaluation and reward
system
 Offer financial and career advancement incentives
 Implement comprehensive instructional reform
 Extend learning- and teacher-planning time
 Create a community-orientation
 Provide operating flexibility and sustained support
 School Closures
 Close the school and enroll students in other, higher-
achieving schools

19. AND OTHER PROGRAMS
 The 21st Century Community Learning Centers program
 Provides funding to states via formula to support afterschool and extended learning time programs that provide academic
enrichment activities for children
 States award competitive grants to local providers—including school districts, community based, and faith-based groups—to
administer afterschool and extended learning time programs
 It was funded at $1. 1 billion in 2014
 The Safe and Drug-Free Schools Program
 Provides financial assistance to states and districts to support programs that create safer schools, prevent violence and drug
abuse, and ensure the health and wellbeing of students by promoting the development of good character and citizenship
 In 2011, Congress moved the program to the Office of Safe and Healthy Students and eliminated grants to states and districts
 The program now only funds national initiatives and received $90 million in 2014, a nearly $30 million increase from 2013
 The Impact Aid Program
 Provides funds directly to local school districts, based on the number of “federally connected”
 Children whose parents are in the military, whose parents work on federal property, or who live on Indian lands, federal
property, or federally subsidized low rent housing
 Only the DOE allows funds to be spent directly on school construction
 This funding helps to offset school districts’ loss of revenue because they don’t collect property tax on federal land
 Covers some of the cost of educating federally connected children
 Impact Aid was funded at $1. 3 billion in 2014

21.  Does economy change the law, or is the law that changes the economy?
 Political economists disagree on the definition of discrimination (p.203)
 Even the most narrow conception requires a method of measuring individual productivity
 Many things influence productivity – Initiative, Motivation, Schooling, Etc…
 Political and economic theory have also generally ignored the division of humans into two
sexes
 Women and men are so equal in status and role that need no distinction, or women are so insignificant
that need no mention
 Gender poses additional issues
 Anatomical differences
 Different behaviors, which suggests different interests and values
 In-Market Discrimination – unequal treatment of equally productive persons
 Pre-Market – Arises from social institutions, such as school and family
THE POLITICAL ECONOMY OF MINORITIES AND GENDER
DISCRIMINATION IN EDUCATION

22.  Most federal laws on education come from the idea that some types of social prejudices and discriminations need
some type of governmental intervention to be alleviated
 Modern liberals believe that racial and ethnic conflict in industrial society are a product of the inequitable access
conditions of most minority groups – A deprived background restricts opportunity for acquiring skills
 Minorities’ decisions about education and employment are conditioned by a social system of structured subordination
 The market will not end discrimination because is an arena in which powerful groups seek to control competition to advance their
own interests
 The market is not the only institution shaping society – Economic activity is shaped and shared through cultural practices and power
relations
 Discrimination may persist because of the traditional values shaping human behavior – Fear, ignorance, and the
need to maintain social harmony within a community
 This reality serves as a tool for assessments of economic realities of a racist society
 “Statistical Discrimination for Profit Maximization” – The costs of obtaining information about a person’s qualification leads to
reliance on race and ethnicity as criteria for screening candidates and predict productivity
 Segregation and discrimination = Low self-esteem of minorities
 One’s social environment shapes one’s self-image
 Lack of minorities in prominent positions = lack of role models for raising aspirations
 Feedback effect – less invested time and money in acquiring skills
 Because competition is too imperfect to override deeply entrenched cultural biases and unequal power, policies
on education should recognize and approach diversity on inclusive and empowering terms, rather than on
competitive and subordinating ones
THE MODERN LIBERAL PERSPECTIVE ON MINORITIES

23.  However, the promotion of a competency-based education system, which promotes and perpetuates a
hierarchical community, makes for de jure modern liberal policies on education to work as de facto
conservative ones for minorities
 Conservatives reject the idea of a “Brotherhood of Mankind” and favor the idea of a hierarchical
community, without any logically or imply particular attitude toward minority groups
 Edmund Burke – Praised the role of “prejudices” in instinctively stablish loyalties and values
 Segregation is necessary for identity formation – Protects minority cultures in a pluralistic society, as well as the
dominant culture
 Racism implies that race should be a relevant factor in determining a person’s political, economic, or social
status
 IQ Tests – Because of their diminished capacities, minorities should be denied equal rights, which is not
immoral nor unjust
 Dismissed by Modern Liberals and Radicals as “culturally biased”
 No single test can objectively measure intelligence across cultures – Aptitudes associated with intelligence in one culture may
be insignificant for another
 AYP analogous to IQ Tests – Efficiency is measured arbitrarily deeming some schools, and therefore its
students, as having diminished capacities, which allows for the “moral and just” denial of equal rights
THE CONSERVATIVE PERSPECTIVE ON MINORITIES

24.  The Third Phase of Modern Liberal Perspective about Gender came in the 1970s because of the idea that equal
rights and treatment was imposing unforeseen burdens on women
 Differences between gender roles are likely to be reproduced
 Institutional changes are necessary to accommodate the different needs and interests on women in the workplace
 Effective modern liberal policies on gender are grounded on the believe that gender discrimination is resistant to
the market forces because of the following factors:
1. Social conditioning to preferences
 Education tracking and perception of occupations as men work
 Demonstration effects – Absence of role models
 Feedback effects – Women rationally choose to bypass education
2. Imperfect competition
 Establishment of various barriers to entry into certain occupations
 Self-interested behaviors leads men to construct formal and informal barriers to female competition
3. Domestic responsibilities – Division of labor affects women's occupational choices
4. Sexist attitudes – Psychological impact of societal norms in restraining economizing behavior and concern about male
workers’ morale
5. Statistical discrimination – The lack of information about a woman’s productivity leads to reliance on preconceived
notions about women as a group
THE MODERN LIBERAL PERSPECTIVE OF GENDER

25.  The promotion of a competency-based education system, which promotes and perpetuates capitalism, and thus, patriarchy,
makes for these de jure modern liberal policies on education to work as de facto radical ones for women
 Capitalism increases demand for cheap labor and assures a steady supply of cheap labor by the promotion and perpetuation of
a hierarchical community and gender roles through competence
 Women will remain oppressed until the institutions of marriage, family and religion fundamentally change through
education
 Mary Wollstonecraft – women are socialized to be servants of men
 Mere legal reform would not be sufficient to reach equal power and financial independence
 Oppression of women can be solved:
 Marxists – Only by ending capitalism and making the transition into a socialist society
 Socialization of the household
 Similar economic roles will end male domination
 Radicals – Only by developing separate “women-centered” institutions and communities that exclude patriarchal culture and
male domination
 Socialist – Only by the abolition of both capitalism and patriarchy through a broad-based socialist movement
 Capitalism is already contributing to its own demise
 Effective federal funding policies on education must be drafted and applied with an awareness of the market forces shaping
and sharing gender roles and thus discrimination
 Equity v. Equality
THE RADICAL PERSPECTIVE ON GENDER

26.  Viable solutions must involve legal and structural changes as well as in individual’s values:
 Equal schooling and equal opportunity cannot fully compensate for deprived family environments
 Redistribution of income and wealth – politically infeasible and damaging to incentives
 Less ambitious financial assistance and government intervention
 Full employment could be a method to increase minority opportunities
 Affirmative action counterbalances the injustices of the past, and assures greater opportunities for access to good jobs
 Market protects property rights – Government should protect human rights
 Multiculturalism – Restores pride by illuminating contributions and achievements, which eliminates fear and ignorance
 Affirmative action – Require employers and educators to make efforts to locate qualified female and minority applicants
 “Comparable worth” – Market-determined wages can be unfair due to discrimination and gender stereotyping
 The suitably shared of the financial burden of childrearing by both men and women must override market-determined wages
 Can increase efficiency by contributing to women’s financial independence and by enhancing their self-esteem
 Women’s childrearing activities create positive externalities
 Government should compensate women’s home efforts by setting their wages above the level determined by supply and demand
 Marital property reform – secure married persons a legal right to 50/50
 Social security and employment compensation for home labor
 Improvement of the social structure of health care, social services, day care and facilities for youth and elderly
 Flexible work schedules, paid leaves of absence for parenting, fringe benefits for part-time work, and the option of job
sharing
MODERN LIBERAL RESPONSES TO GENDER &
MINORITIES DISCRIMINATION

27. RACE TO THE TOP &THE TEXAS EXAMPLE
 R2T is a $4.35 billion DOE three round contest created to spur innovation and reforms in state and local district
K-12 education
 It is funded by the DOE Recovery Act, which is part of the American Recovery and Reinvestment Act of 2009 and was
announced by President Barack Obama and Secretary of Education Arne Duncan on July 24, 2009
 States were awarded points for, for a total of 500, for satisfying certain educational policies, such as performance-based
standards (often referred to as an Annual Professional Performance Review (APPR)) for teachers and principals,
complying with:
 Great Teachers and Leaders (138 total points)
 State Success Factors (125 total points)
 Standards and Assessments (70 total points)
 General Selection Criteria (55 total points)
 Turning Around the Lowest-Achieving Schools (50 total points)
 Data Systems to Support Instruction (47 total points)
 Prioritization of STEM (Science, Technology, Engineering, and Math) education (15 points)
 Race to the Top prompted 48 states to adopt common standards for K-12, however, Alaska, North Dakota,
Texas, and Vermont did not submit Race to the Top applications for either round
 Texas Governor, Rick Perry, stated, "we would be foolish and irresponsible to place our children’s future in the
hands of unelected bureaucrats and special interest groups thousands of miles away in Washington”

29.  On December 10, 2014, Texas lost out on up to $120 million (30$ per year) in federal funding for pre-
kindergarten classes
 The DOE announced that it was awarding pre-K grants to 18 of the 35 states that applied but Texas was not
on the list
 Federal reviewers docked the state’s application for not proposing enough new slots and for not detailing a strong
strategy to support children from birth through elementary school
 Texas currently funds half-day pre-K classes for youngsters who meet certain criteria, including those
learning English and those from low-income or military families
 The state spent $768.6 million on pre-K last year, with more than 226,600 children enrolled.
 In its grant application, the state proposed offering 17,900 new pre-K slots and improving 39,600
 Reactions…
 “Texas Legislature, rather than the federal government, will have to take the lead on ensuring that [Texas]
state's 4-year-olds are prepared to succeed when they start elementary school”
 Eileen Garcia, who leads the Austin nonprofit Texans Care for Children
 The winning states “are demonstrating a strong commitment to building and enhancing early learning
systems, closing equity gaps and expanding opportunity so that more children in America can fulfill their
greatest potential”
 U.S. Education Secretary Arne Duncan
TEXAS CONTINUING FIGHT FOR ITS
EDUCATION

30. Questions

31. References
 Clark, B. S. (1998). Chapter 11: Minorities and Discrimination. Political economy: A comparative approach. pp.203-218. ABC-
CLIO.
 Clark, B. S. (1998). Chapter 12: The Political Economy of Gender. Political economy: A comparative approach. pp.210-240. ABC-
CLIO.
 Coalition for Community Schools (2015). Federal Funding. Coalition for Community Schools. Available at
http://www.communityschools.org/policy_advocacy/federal_funding.aspx
 Federal Education Budget Project (2014). No Child Left Behind – Overview. Federal Education Budget Project. Available at
http://febp.newamerica.net/background-analysis/no-child-left-behind-overview
 Mellon, E. & McGaughy, L. (2014). Texas loses bid for up to $120 million in federal pre-K funds. Houston Chronicle Education.
Available at http://www.houstonchronicle.com/news/education/article/Texas-loses-bid-for-up-to-120-million-in-federal-
5948618.php#/0
 The Wallace Foundation. (2015). Federal Funding and the Four Turnarounds Models – The School Turnaround Field Guide. The
Wallace Foundation. Available at http://www.wallacefoundation.org/Pages/federal-funding-school-turnaround-field-guide.aspx
 U.S. Department of Education (2012). The Federal Role in Education. U.S. Department of Education. Available at
http://www2.ed.gov/about/overview/fed/role.html