What Does “Fully Funded” Mean?

Maryland is on the verge of enacting a trailblazing expansion of educational freedom.

The Maryland Education Tax Credit would grant tax credits worth 60 percent of donations to nonprofit scholarship organizations that help low-income families cover certain educational expenses. Were it to become law, Maryland would become the second state, following New Hampshire, to allow families to use tax-credit scholarship funds on a wide variety of educational expenses beyond tuition, such as tutoring, books, education-related technology, transportation, and special-needs services. The legislation has some flaws–for example, eligible schools cannot charge tuition higher than the statewide average per pupil expenditure at district schools–but it still represents a significant step in the right direction.

Unfortunately, the proposal might not get an up-or-down vote in the legislature. Today, the Baltimore Sun reports that Maryland Speaker of the House Michael E. Busch opposes the school choice proposal because Maryland’s assigned schools are not “fully funded”:

“It’s hard for the legislature to fund private religious schools when Governor Hogan fails to fully fund the public education system,” said Busch, an Anne Arundel County Democrat.

There are numerous mistaken assumptions in that statement–tax credits are not government appropriations;  parents can use the scholarships at religious or secular schools; scholarship tax credits generally produce fiscal savings by reducing expenditures more than tax revenue,  etc.–but the claim that Maryland’s district schools are not fully funded raises the question: what does “fully funded” mean?

Sadly, it appears that the reporter did not ask Mr. Busch what he meant by that, but the answer generally seems to be “more than we are spending right now.” That, in turn, raises the question: how much is Maryland spending on public education right now?

According to the latest figures from the National Center for Education Statistics, Maryland spends more than $15,500 per pupil, about 30 percent more than the national average of $12,048 that year, which puts it in the top ten nationwide for per-pupil spending.

But, of course, the focus on how much the government is spending on district schools carries the implicit assumption that more funding equals better results. However, the evidence for that assumption is scant. As I noted in a recent post for the Friedman Foundation:

Schools obviously require resources to operate, but there’s no strong correlation between resources and results. If resources were what drove performance, then at about $30,000 per pupil, Washington, D.C.’s district schools would be among the best in the nation instead of the worst (though they have made significant gains since the advent of school choice laws in the city).

In 2012, education policy experts Eric Hanushek of Stanford University, Paul Peterson of Harvard University, and Ludger Woessmann of the University of Munich released a report on international and state trends in student achievement. They found that “Just about as many high-spending states showed relatively small gains as showed large ones…. And many states defied the theory [that spending drives performance] by showing gains even when they did not commit much in the way of additional resources.” They concluded: “It is true that on average, an additional $1,000 in per-pupil spending is associated with an annual gain in achievement of one-tenth of 1 percent of a standard deviation. But that trivial amount is of no statistical or substantive significance.”

Like the claim that we can’t expect school performance to improve until we end poverty (good luck), the claim that we can’t expand school choice until we “fully fund” district schools is not an argument so much as an excuse.