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With Cash to Spend, States Throw Down Big Bucks for K-12 Finance Studies

There's wide agreement in states that the way they collect and distribute K-12 funds is outdated and ineffective. But what system, exactly, should they replace their existing funding formulas with—and what does it cost to find out?

In order to overhaul education funding systems, legislatures, advocates and district administrators need an agreed-upon definition of what a K-12 education system should cost. But cost assessment itself can sometimes cause sticker shock. This legislative session, Arkansas, Nevada and New Hampshire have approved comprehensive studies of their K-12 systems, each costing more than $500,000 each. 

Cost studies involve researchers interviewing dozens of educators, reviewing districts' budget books, and attempting to calculate how much it would cost to get several different types of students to reach states' standards. In many instances, researchers come back to the state with a set of recommendations on how much the state should spend on its schools and how it should distribute that money to school districts.

The process can be messy, complicated, and hyper-political with researchers sometimes bought in to be grilled by legislators. 

In Arkansas, legislators debated for months before deciding in December to set aside $659,580 to pay Augenblick, Palaich and Associates, a school finance firm out of Denver, to conduct a comprehensive study of public school funding in the state.  It will be the first time the state has looked at its funding model since 2003.

In Nevada, the state's department of education recommended in November that the legislature pay Applied Analysis, a fiscal and data research firm based in Las Vegas, and WestEd, a consulting firm based in San Francisco, a combined amount of $600,000 to figure out a way to implement the state's new funding formula.

And in New Hampshire, a legislative committee is negotiating with the University of New Hampshire's Carsey School of Public Policy and the National Conference of State Legislatures over a $500,000 contract to design a new funding formula for the state. The contract requires the school to interview educators about their experiences, establish the cost of an adequate education, and provide the state technical support in implementing a new funding formula. 

Mike Griffith, an independent consultant who has conducted these sorts of studies for states, said there's now "pent up demand" from legislatures to better understand what's wrong with their funding formula and how to fix it.

"The world's changing," Griffith said. "These funding formulas were designed 25 years ago and didn't take into account things like school choice and virtual classes." 

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