Serious debates about the future of K-12 education in the United States must reckon with two realities.
First, government funding for public education has never been higher, crossing the $1 trillion mark for the first time just a few years ago. Second, student academic performance is abysmal by historical standards. Test scores plunged in the aftermath of the pandemic to some of the lowest levels ever recorded, accelerating a decline that began more than a decade ago.
The timing is thus ideal for Oliver Lee Bateman’s new essay to take on sacred shibboleths in this policy area. Bateman’s argument has several interconnected parts, only some of which I can address in this piece. Although I quibble with some of the details, I share Bateman’s conclusion about the underwhelming aggregate impact of state court intervention in school funding decisions. We most disagree about the lessons and policy implications one should draw from this history.
My own assessment is that many of the failures in K-12 education are hardwired into our governance system. I have far less confidence than Bateman about what “democracy” without court guardrails would produce—especially for America’s most disadvantaged students, for whom the quality of public education is most consequential. I’m also skeptical about the impact we should expect from a modest, universal voucher system, which would only exacerbate some of the system’s current failures and remaining inequities.
The bottom line is that Bateman offers the right diagnosis for what ails public education—problems court-imposed financial reform leaves untouched—but his recommended policy prescriptions fall well short of what America’s students desperately need and deserve.
A Fairer Assessment of School Finance Reforms
As Bateman ably demonstrates, we have seen two periods of aggressive state court intervention in K-12 funding decisions. After the federal Supreme Court decided to stay out of this area in San Antonio Independent School District v. Rodriguez (1973)—a 5-4 ruling—litigation shifted to the states, under different legal theories rooted in state law. In the initial round of victories, state courts struck down state school funding formulas on equity grounds. Starting in the late 1980s, a different legal theory, rooted in arcane state constitutional language about “adequacy,” came to the fore, producing another round of reforms.
Where Bateman’s account goes wrong is in evaluating the consequences of these legal interventions. He focuses on older, outdated research findings that relied primarily on correlational research methods—including James Coleman’s now-60-year-old report. Yet research methods have moved on since then, and more modern studies that pay careful attention to causal identification reach a very different conclusion. They find that financial reform growing out of both equity and adequacy litigation produced meaningful changes in how states allocated their funding and resulted in significant gains in both academic achievement and attainment for the most disadvantaged students and school districts. Indeed, these studies contribute to a recent meta-analysis of causal research that, in my view, establishes that Coleman was wrong. (Even long-time defenders of the more-money-doesn’t-work position have reversed course and conceded they were wrong.)
The same research, however, also shows that the actual effects of marginal increases in school spending are far smaller than many advocates once hoped and believed. The same meta-analytic estimates suggest that $1,000 in sustained additional spending per year over four years improves test scores in math and reading by about 0.03 standard deviations—which is edu-speak for very, very small effects.
State court intervention largely failed to move the needle on aggregate educational outcomes because lack of funding—although a real issue in disadvantaged communities with low property tax bases—was never the root cause of America’s education woes.
How Democratic Control Misfires
So, if the problem is not lack of resources, what is it? I’ve argued in a recent book that the core problem is the democratic governance of public education, which fails to align the interests of students with the re-election incentives of government officials charged with governing our schools.
This thesis, although controversial in many quarters, is hardly groundbreaking. For example, economists have long known that politicians, left to their own devices, face overwhelming incentives to run the economy too hot, resulting in excessive inflation. The consensus about the importance of independent central banks grew out of the realization that voter accountability through elections failed to incentivize public officials to pursue policies that served the long-term interests of their constituents.
Public education faces the same misalignment problem. This arises from a number of features of the local democratic processes through which we fill school boards—including the fact that most voters don’t have school-aged children (and so don’t fully internalize the costs of poor educational quality); that property values reflect only a subset of dimensions of public school performance (often the wrong ones); and that many voters prioritize symbolic culture-war issues and adult employment concerns over student educational interests when casting their ballots in local elections.
The result can hardly be described as the “considered output of a functioning democratic process” Bateman seems to assume. Letting the “preferences Americans actually hold” drive policy works no better in the K-12 education policy context than it worked in the monetary policy context before independent central banks.
I tend to think that many state court interventions have made these political problems even worse. States are on the hook to provide a “thorough and efficient” education—an ill-defined standard with a constantly moving target. As state funding increases, districts enter into more generous wage agreements, which translate into higher cost and necessitate further state funding hikes to ensure adequacy. And local school district officials can always blame “state underfunding” and use state officials as a scapegoat to pass the buck for their own imprudent decisions.
But we should not foreclose the possibility that courts can play a constructive role in addressing the misalignment of incentives created through local democratic processes. The unsuccessful Vergara litigation in California, which attacked teacher tenure and seniority rights on the grounds that they resulted in the state’s poor and minority students being assigned disproportionate numbers of “ineffective” teachers, provides one example of a promising legal intervention.
While I share Bateman’s ultimate skepticism about using the courts to improve public education, this remains an open empirical question that cannot be adjudicated based on theory or clever argument alone. We should remain open to the possibility that education policy made through the courts can improve the education policy made through a flawed and dysfunctional electoral process.
Vouchers Put Lipstick on a Systemic Pig
In place of court interventions, Bateman’s preferred solution is a “universal voucher of roughly $5,000 to $7,000 covers grades K through 6, indexed to inflation and nothing else, redeemable at any school, public, private, parochial, or home cooperative, that gives an annual reading and math test and publishes the scores.”
There is much to like about this proposal. For example, in endorsing annual testing, Bateman seems to break ranks with school choice true believers who argue that test scores miss important dimensions of school performance valued by parents and create bureaucratic barriers that keep private providers out of accepting vouchers.
And although the record of vouchers helping students who use them is mixed, at best, the evidence on the competitive effects benefiting students who remain in traditional public schools is compelling (and much larger than the marginal returns to spending increases).
But a universal voucher approach would fail for several reasons.
One is the fundamental informational problem confronting parents. While annual test scores provide a useful metric of student achievement at a point in time, they cannot separate preexisting differences (including demographics) between students, nor can they provide much information about the school’s own contribution to its scores. Put another way, terrible private schools that enroll overwhelmingly wealthy students will likely still have good annual test scores, while schools truly moving the needle for disadvantaged students might still look bad (depending on how much ground they have to make up). Test scores don’t allow parents to separate good schools from bad schools that just happen to attract good students.
The second problem is one of basic economics. The costs of educating students vary dramatically, based on their educational needs. A flat, universal voucher would thus encourage private providers to cream-skim the most “profitable” students—certainly advantaged, high-performing students without special needs. High-cost students, for whom the voucher will fall short of the true cost of providing a quality education, will find few providers to take them.
This is not a purely theoretical concern. Indeed, the Medicare Advantage program—a version of a universal voucher that encourages private providers to compete with traditional Medicare—uses a complicated “risk-adjustment” payment model to try to induce providers to take on unhealthy subscribers with high healthcare needs. Even this sophisticated approach falls short, and has been gamed to the tune of billions of dollars.
The final issue is that the quality of education reflects, at least in part, peer effects. Private schools competing to attract families thus have a strong incentive to pick and choose which students they admit, not only because of the cost-benefit calculations I just described but to ensure a desirable peer mix. Unlike school quality, peer effects are zero-sum. Students most likely to be poorly served in a universal voucher model are the same students currently failed by traditional public schools.
Real Lessons from International Comparison
In laying the groundwork for his indictment of the current education system, Bateman points to a number of assessments that suggest America’s students perform woefully by international standards. My reading of the same data is different.
As other commentators have noted, the average American student doesn’t look so bad on the same international tests. And America’s highest socioeconomic (and thus highest achieving) students look even better.
Where the United States stands out is at the bottom. “That is, the largest shortfalls in performance among U.S. students are concentrated among those with relatively low [SES],” Duke economist Helen Ladd pointed out in 2012. “These shortfalls suggest there is room for the United States to do better by its disadvantaged students.”
They are the students that court-driven finance reforms were intended to help (and did help, to some extent). They are the students most hurt when adult interests dominate the local democratic process and hijack educational policies. And they are the students who are likely to fare worst in a universal voucher system.
These are the students we must keep at the front of our minds as we debate different education governance proposals—and the ones who have the most at stake in the decisions we make.
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