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With the recent news that Chicago Public Schools is planning a property tax increase to fund operations in the current school year, Chicago’s perpetual debate over school funding has kicked into high gear.

On one side of the debate are advocates who believe that more school funding will create additional programs, more opportunity for students and better academic outcomes.  Across the divide stand those who claim that the district must become more efficient and produce better student outcomes before being rewarded with additional revenue.  Both sides seek to address persistent low performance at CPS, but each misses the central question:  Is the $5.9 billion budget sufficient to educate the district’s 402,681 students?  Stated differently, can we expect a world-class education when we spend an amount equal to $14,652 per year, per student? 

The short answer is yes – but not within the current structure, which is hopelessly outdated and unable to adapt to current educational realities. The solution is to move toward a student-based funding model in which need drives funding allocations. Such weighted student funding models have been enacted elsewhere and ensure that funding arrives at the school as real dollars—not as teaching positions, ratios, or staffing norms—that can be spent flexibly.  In this model, accountability is focused more on results and less on inputs, programs or activities. 

Student need should drive decisions 

Much of the current CPS budget is devoted to categorical programs that provide school leaders with no meaningful autonomy and the district with no real flexibility.  Almost a billion dollars is dedicated to capital outlay and debt service on existing facilities obligations.  And federal funds that flow into the system have substantial programmatic restrictions that cannot be altered.  But even on the programmatic side, unnecessary inefficiencies abound.  Why should central office decide, for instance, whether a school on the West Side of Chicago should allocate its academic funding for a program for English-language learners or institute double periods of mathematics?  That choice should be left to the decision-makers closest to the students – principals, in consultation with teachers.   

To be fair to CPS, the proposed FY12 budget is an overall reduction from last year, representing a departure in practice from the previous 10 years during which expenditures steadily increased (though the operating budget has increased from last year).  In 2005, the district’s operating budget (excluding facilities) was $4.2 billion. By 2011, in an era of minimal inflation, the operating budget was $5.6 billion, an increase of 25%.  During that same period, enrollment fell by more than 18,000 students.  Put simply, the district has done less with more. The budget takes a few tentative steps to correct this, but a problem created over many years cannot be solved in one. 

Smarter spending, not just more 

Those who claim that more funding without reform will somehow magically improve academic outcomes are missing lessons from dozens of districts.  The poster child is Newark, New Jersey, which last year spent $24,123 per student, excluding facilities and capital funding.  Newark’s current graduation rate is 38%.  For an average 3rd-grade class of 26 students, this means that the system spends $627,198 every year on one class to produce abysmal results.  These data didn’t stop Facebook founder Mark Zuckerberg from pumping $100 million into the system, an infusion unlikely to have lasting impact without substantial changes in the way funding is allocated.     

The key is money well spent on rational incentives and programs tied to student outcomes.  Consider the current CPS salary schedule, which compensates teachers based on seniority and degrees.  Under this system, the assumption is that more experience and higher-level degrees create better teachers.  While experience improves teacher performance in some cases, this is not true across-the-board.  And research has unequivocally shown that additional degrees do not equate to better performance.  Such a system also creates counterproductive incentives, with diploma mills churning out low-quality masters’ degrees and individual teacher incentives entirely back-loaded, creating barriers to retaining terrific, early-career teachers.  

There was a time when using proxies for teacher quality was more rational – when our data systems could not capture the impact teachers have on student learning gains.  In the past decade, however, abundant research has documented the effect of high-quality teaching on student learning gains.  Rick Hanushek, an economist at Stanford University, found that the effects of a high-quality teacher on student learning gains are significant.  In a 2010 study, he found that teachers in the bottom-quality decile produced one-third the student learning gains as teachers in the top decile, whose students advanced the equivalent of 1.5 academic years per year.  Over several years, a series of great or ineffective teachers can lead to unbridgeable gaps in student learning. 

All of this raises the obvious question: When we have actual evidence of learning gains and the differential impact of individual teachers, why do we still use crude proxies like years taught and degrees earned to drive compensation and job security? 

The short answers are tradition, state and local policies, and constituencies that fiercely oppose any differentiation among teachers.  Thankfully, these foundations are crumbling.  When polled, overwhelming majorities of Americans agree that teachers should be treated as professionals. The good news is that our leaders are now challenging the status quo and revealing a simple truth: Professional standards for teachers are fundamentally incompatible with lock-step, uniform, quality-blind treatment. 

Time for a reality check 

Large school districts are notorious for creating add-on programs to address a particular challenge while avoiding the larger, structural challenges that caused the problem in the first place.  This is why merit pay systems for teachers and principals have had mixed results in Texas, Denver, Nashville and Atlanta. They are implemented as supplements to an outdated salary schedule, rather than as a compensation and retention system that measures what matters (mainly student outcomes) and then aggressively differentiates among teachers. 

This is the core challenge with Mayor Rahm Emanuel’s recently announced merit pay program for principals.  The unit of focus is right: Great principals, when empowered to make decisions, are the most powerful lever we have to create great schools.  However, while the merit pay program represents a step in the right direction, it will not do enough to reform a system that is founded on the wrong principles.  

In the final analysis, the answer to the original question is conditional. A $5.9 billion CPS budget may be sufficient to educate the district’s 402,681 students, but only if the money is spent wisely and not allocated on inputs like inflexible central office supports or quality-blind salary raises for all teachers.  

But that isn’t the debate we are having.  Instead, we are having the usual more money vs. more efficiency argument.  Until we address the core issues of resource allocation and use student outcomes as a significant factor in making personnel decisions, we will suffer with a school system with far too few truly transformational schools.  Incremental “fixes” will sadly result in more of the same. 

Andrew Broy is the president of the non-profit Illinois Network of Charter Schools.