The school finance consultant used by the Department of Education in 2003 to assist in costing out an adequate education in NJ just completed a similar cost study for Pennsylvania, and the results again call into serious question the cost determinations reached in the NJ study. The Pennsylvania study,  performed by Augenblick, Palaich, and Associates (APA) of Denver, and released by the Pennsylvania State Board of Education on November 14, 2007, concluded that public schools in the Keystone State are under-funded by an estimated $4.6 billion.

The differences in methods and results of the two cost studies are striking. For example, APA used an entirely different, and more rigorous, method to determine education costs in "successful school districts" (SSD) in Pennsylvania than that used by NJDOE in 2003 for New Jersey. ELC estimates that if the Pennsylvania method were applied in New Jersey, the estimated base education cost would have been $11,506 per pupil, not $8,443, the 2005-06 cost estimated by NJDOE.

NJDOE hired APA in 2003 to provide advice on the NJ cost study. When the study was finally released last December, education stakeholders and advocates roundly criticized the methods and results. Even three nationally known school finance experts hired by DOE to review the study found serious flaws. Yet despite all of the concerns, the NJDOE is likely to use these costs as the basis for the soon-to-be-released new school funding formula.

The Pennsylvania APA study raises even more concerns about using the NJDOE costs in any New Jersey funding formula. Given the major differences in the costing-out methods used by APA in Pennsylvania and the NJDOE’s approach in 2003 – and the potentially stark differences in the results – ELC is calling on Senate President Richard Codey and Assembly Speaker Joseph Roberts to ask Augenblick to immediately return to New Jersey and testify to the Legislature about those differences.

The SSD approach to costing-out education was one of two methods used both by NJDOE in New Jersey and one of three methods used by APA in Pennsylvania. This approach identifies school districts already considered to be successful in terms of student achievement and uses the average cost of educating students in those districts. The standard used to define "successful" in Pennsylvania is much higher than the standard NJDOE used in New Jersey. This definition is critical because the average basic expenditure per pupil in the successful school districts is considered the base cost for all districts.

In the NJDOE study, a SSD was defined as one currently meeting the proficiency rates set by the State to meet Adequate Yearly Progress requirements under the Federal No Child Left Behind Law in 2004-05 for language arts and mathematics. A total of 305 New Jersey school districts, about half the state’s districts, met the established criteria and were thus defined as "successful," and were used to calculate a base cost per student.

In the Pennsylvania study, APA set the SSD bar much higher. First they identified districts achieving at levels far above current state performance standards—those districts already meeting Pennsylvania’s reading and math standards for 2012. Second, APA identified districts whose year-to-year growth in State test scores suggests that they will have 100 percent of students scoring proficient or above by 2014 in reading and math. Using these results, APA identified a total of 82 out 501 school districts, or 16 percent, as successful. He then further narrowed that list by conducting an efficiency analysis to eliminate the highest and lowest resourced districts.

When ELC applied the same basic methodology ¹ used by APA to identify SSDs in Pennsylvania to New Jersey, the costs are much different than what NJDOE arrived at in 2003. Using 2005-06 language arts test scores, there are only 48 districts in New Jersey meeting State standards set for 2012 or that have a year-to-year growth rate that, if continued, would have all students scoring proficient or above by 2014. After conducting a similar efficiency analysis, that number is reduced to 43. The resulting average per pupil expenditure among these districts was $11,549 in 2005-06, a number remarkably close to the per pupil expenditure in New Jersey’s successful suburban districts, the cost benchmark used by the NJ Supreme Court in the landmark Abbott v. Burke case.

As Governor Corzine noted in a speech to the League of Municipalities last week, any "constitutionally appropriate" funding formula must begin with a determination of "the adequate level of resources for a child to learn, prepare for college or enter the workforce." The Pennsylvania cost study performed by the State’s own expert again underscores the criticism leveled by NJ education associations, civil rights and other advocates last December -- that the education costs arrived at by NJDOE in 2003 are outdated, based on seriously flawed methods, and are not "adequate" to educate and prepare our children for success in college and the economy. Any formula based on these costs would neither be "constitutionally appropriate" nor educationally sound.

Prepared: November 29, 2007

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