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“Most states are acting like the problem of declining public support for education is going to go away, but it’s not,” said Paul Hill, director of the Center on Reinventing Public Education, as he kicked off the opening session of summit. The discussion focused on the summit’s theme of how to advance education reform in a time of fiscal austerity.

Most state legislatures are unwilling to tackle their funding problems now and lack vision, according to Hill. He said states need to ask tough questions like, “What if public education is the last sector to rebound?”

Education funding gap is not a short-term problem

“We’re in the middle of the funding cliff—you ain’t seen nothing yet,” said Marguerite Roza of the University of Washington. She said the economic forecast from the Congressional Budget Office indicates there will be a continual gap between education spending and revenues over the next ten years, with the gap reaching 9.1% by 2017. That would mean states would have to cut their budgets by an average $1,300 per student.

“If you think we just have to solve the problem this year and next year, we’re in for the long haul,” she said. “What we’ve been doing is not an option.”

Roza said there are three possible paths for dealing with the funding gap:

1. Slow budget cuts that work to erode public education such as shortening the school year.
2. Tinkering around the edges in an attempt to “be clever to protect students and learning” with changes such as cutting out the masters degree pay bump and shrinking class size.
3. Far-reaching, more ambitious steps to redesign schooling to improve processes and outcomes, and sustainability.

Roza said she’s optimistic states will pursue the third scenario, but “it doesn’t happen by itself. It requires looking multiple years down the road and not as a yearly strategy.”

Rethinking state education finance

The current way of allocating education resources doesn’t align with priorities, according to Roza; in fact, spending results in “outcomes that are the opposite of what we want.” For instance, within districts, teachers are paid more to teach wealthier students because senior teachers get to work where they want, and teachers are paid more to teach electives rather than core courses. She said the system is “ripe for change.” For example, she cited a survey of teachers asking if they would prefer a $5,000 bonus or teaching two fewer students—84% chose the bonus.

“Education processes are changing due to mass customization, technical efficiencies, and information systems,” she said. “For example, math work can now be graded automatically.” But she said many schools and teachers don’t realize what’s available. “State finance formulas can be levers for change,” she said.

Restructuring is essential to deal with funding gaps

The basic structure of schooling has remained the same, while the number of teachers has increased, according to Karen Hawley Miles of Education Resources Strategies, which consults urban school districts to help them analyze resource use and organize talent, time, technology and money to create great schools at scale.

“We’ve bought more staff instead of investing in knowledge, skills, and support,” said Miles, noting that typical class sizes are much lower than the contractual maximum.

“Budget gaps are systematic due to a fundamental cost structure that continues to rise regardless of revenue,” she said. “No matter what a school does they’ll have to cut spending the next year unless revenues rise.”

Her top priorities for restructuring are:

1. Restructure one-size fits all compensation and job structure to attract needed expertise, promote teamwork and link to greater results and contribution.
2. Rethink standardized class size model to target individual attention by strategically raising class sizes and rethinking one-size-fits-all class size models for providing individual attention
3. Shift special education spending toward early intervention and targeted individual attention in general education settings where possible
4. Optimize existing time to meet student and teacher needs and extend where needed

Miles said research shows most districts devote less than 2% of all teacher compensation spending to reward increased contribution or performance. “We need to rethink the compensation structure and in the short term, stop automatic increases that don’t link to improved instruction.”

Miles said many districts should consider lengthening their school day, and add time to the required teacher work-day so that teachers can collaborate together. This change is typically one of the first things charters do. She cited research showing teachers at small, high-performing high schools spend four times as much time in collaborative mode as the typical teacher.

Advocating for tough choices

“Advocacy can make a difference by making these numbers clearer,” said Miles. She said extending the school day can be a huge cost if districts ask teachers to add on 60 minutes to the same job. Instead, Miles suggests creating a new vision. “It’s like trying to solve traffic problems by widening the road a little, instead of investing in high speed rail,” she said. “We need to reinvent the paradigm so new visions become feasible with the dollars districts have to spend.”

For example, she said most districts still schedule five to seven periods in middle and high school rather than varying time by grade and subject, which is what happens in a good elementary school. “By taking on tough choices, schools can move toward transformed practice,” she said. “We need to talk about big tradeoffs instead of incremental changes.”

Miles said budget pressure can help create a different kind of conversation. “We need to create a vision that’s brighter, one that moves toward something that’s worth fighting for.”

“We need to invest in new models and don’t assume systems will drift there on their own,” said Roza. She said while more money is needed, tradeoffs still need to be made.

Miles agreed, saying, “You should get more money because you commit to high standards, teacher effectiveness, and turning around low-performing schools.

Additional information with research citations is in the attached PDF. You can also contact Marguerite Roza for more information on her presentation.