Divvying up the school dollar. State expenditures for school reform level off

THE significant increase in state spending on education that helped launch the school reform movement of the past five years and increased teachers' salaries from 30 to 40 percent shows signs of leveling off. Reasons range from economic pressures in farm, oil, and rust-belt states to a lack of consensus in state legislatures over just what reform ideas, if any, ought to be financed. Still, state spending on schools has ``passed a threshold'' in the past several years. It has been perceived as such an important long-term economic priority in individual states that experts such as Allen Odden of the University of California, Los Angeles, say it's unlikely that funding will ever return to the ``poor cousin'' status of pre-reform days.

Between 1983 (the year of the Department of Education's seminal reform document, ``A Nation At Risk'') and 1987, state outlays for education rose a whopping 41 percent, according to the National Conference of State Legislatures (NCSL) in Denver. The biggest spenders were Alaska, California, Florida, South Carolina, and Connecticut.

The conference's figures for state appropriations in this fiscal year (FY 1989), however, show few dramatic instances of new education money. Only eight states have double-digit increases - and of those, Maine, Rhode Island, and Vermont are making up for years of little growth; and Florida, Arizona, California, and New York have high new-student growth, making their net increases marginal.

Further, spending on schools in comparison with other state general-fund budget items such as prisons and roads has decreased slightly. The average state education budget increase in FY '89 is 7.4 percent. The general-fund increase is 7 percent. During reform years, education spending exceeded general budget increases by margins of more than 2 percent.

``This year most states are only a notch or two above the cost of living [3.5 to 4 percent],'' says Chris Pipho of the Education Commission of the States in Denver. ``New money for reform is not there.'' Previous big-spending reform states, especially in the South (Arkansas, Tennessee, South Carolina, Georgia), are at near-level funding.

Yet when polled, state legislators say education is the No. 1 issue in their state. When they were asked in a recent NCSL study what the top three issues in state assemblies are, education won hands down. (Twenty-seven states reported ``education,'' 24 said ``elementary and secondary schools.'' The closest other issues were ``taxation'' - 20; budgetary policy'' - 12; prisons - 7; transportation - 6.)

State funding for reform, which Arthur Wise of the RAND Corporation says ``was always icing on the cake,'' has taken a back seat to basic costs such as class size, textbook purchasing, equity compensation, construction, and maintenance.

Major reforms in such states as Iowa (teacher salaries) and Tennessee (career ladder plan) are on temporary hold financially.

But action in school reform is no longer at the state level anyway, says Michael Kirst of Stanford University. Major reforms such as teacher testing and more ``seat time'' in class are already in place in most states. ``Currently, there's no reform idea out there that's going to lead legislators to raise taxes,'' Dr. Kirst adds. ``In '83 we had teacher renewal and core curriculum, but I don't see any state-level reforms now that will capture the political imagination.''

One reason is that reform is now local - and fairly inexpensive. ``School site management'' and ``school restructuring'' - both hot reform ideas - revolve around the monetarily cheap principle of giving teachers and principals more power and autonomy to redesign classrooms, teaching, curriculum, and methods.

On a somewhat darker note, research completed by Debra Inman for Columbia University shows that much earlier state money for reform was so loosely managed and defined that it was often channeled through education networks and ended up paying for central office staff, teacher salaries, new buildings, and other arguably non-reform endeavors.

Between 45 and 50 cents of every state dollar goes for education. During the rise of state school spending in the middle '80s, the share of federal and local outlays declined (federal from 7.1 to 6.2 percent; local, from 45.2 to 43.8 percent). Kirst says the increase was due to a national economic recovery, rising state taxes, and resulting state surpluses.

Now, with economic growth slowing and student enrollment beginning to pick up nationally, states will be less likely to fund reforms, even if they want to. ``A world oil glut hurts American oil, and you aren't going to see any new initiatives in Alaska, Oklahoma, Texas, or Louisiana,'' says Dr. Wise. Ditto for farm states.

Spending on education - state, local, and federal - increased 5.9 percent in '83, jumped 9.4 percent in '85, and rose only 6.3 percent in '87 for a cumulative increase of 34.1 percent (see the chart on Page 19).