Matthew Joseph is a Senior Policy Advisor at ExcelinEd.
Every year state policymakers across the country are besieged with requests for additional school funding. They are asked to increase teacher salaries, lower class size and fund a multitude of important projects and programs. As with most things in life, there is never enough money to go around.
So, how can a state policymaker decide what to fund and, equally as important, make sure the money is well spent?
One of the most strategic ways to answer those questions is an unwavering focus on outcomes. Rather than fund inputs, state policymakers can fund for outcomes that are aligned with student success. This concept goes by many names, including outcomes-based, results-based and performance funding.
Performance funding incentivizes schools to improve. It has already been proven successful in both early childhood and higher education. Based on this research, ExcelinEd developed a modeling tool in collaboration with Dr. Larry Miller, the nation’s foremost expert on performance funding in K-12 education.
The modeling tool illustrates how an investment of $13 million dollars in a large state such as Florida can increase the percentage of students passing Algebra I, from 61 percent to 77 percent, with disadvantaged students making the largest gains.
It is hard to think of any other way a state could direct $13 million in spending with anything close to these impressive results. That’s because performance funding channels the entire energy of schools into focusing on outcomes, with the flexibility to decide how best to improve them.
While performance funding is common in higher education, several states are also utilizing it for virtual charter schools. As with most policy implementation, the key to its success lies in the design. ExcelinEd compiled lessons learned to identify how performance funding can have impact and be equitable and affordable.
There are many different types of outcomes states can use, including completing courses or course assignments, getting a high mark on an Advanced Placement exam or achieve proficiency on a state assessments.
Texas a leader in performance funding and recently passed bold school funding reform legislation. In this case, the state is providing schools extra funding for each student who achieves college, career or military readiness. Schools will receive extra funding based on a variety of measures. For college readiness, students must hit a specific mark on the ACT or SAT and enroll in the college. For career readiness, the student must earn an industry-accepted certificate. For military readiness, they need to enlist. Additionally, for success with disadvantaged students, schools will receive significantly more funding.
Further, technical colleges in Texas receive 100 percent of their funding based on the earnings of their students within five years of graduation. Even 10 or 15 percent can produce a major incentive.
It is natural for policymakers to worry that any funding will be misspent. Funding for outcomes does not prevent the need for basic guardrails and guidelines. However, funding only for specific inputs can lock in antiquated and ineffective instructional models. Ultimately policymakers care the most about whether funding has an impact, and the best way to produce better outcomes is to invest in them directly.
