Should we switch to weighted student funding and do it now?

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In next year’s budget, Gov. Jerry Brown proposes to rearrange school funding based on a weighted student formula – a concept that State Board of Education President Michael Kirst fleshed out in a 2008 brief. Beyond a flat grant for all students, districts with large concentrations of English learners and low-income students would get a premium of potentially thousands of dollars more per student. Districts would decide how the money would be used. Under the initial plan, Brown would phase in the new system over five years but would not hold districts financially harmless; doing so would require new money or a  long timeline to implement. As a result,  there would  be district winners and losers. Proponents praise the transparency and equity of the new system. Skeptics have other concerns, as you will read. (See an earlier TOP-Ed post for details on how it would work.)

Four individuals who have given the issue much thought are Merrill Vargo, executive director of Pivot Learning Partners, which is involved in a weighted student formula demonstration project; Eric Hanushek, a senior fellow at the Hoover Institution who has written extensively about school finance; John Affeldt, managing attorney of the nonprofit law firm Public Advocates and a leading voice on education equity; and Gary Ravani, a frequent TOPed contributor who is a retired middle school teacher and vice president of the California Federation of Teachers.

We welcome your comments as well.

Merrill Vargo: Why now is the hour for a weighted student formula

Merrill Vargo

Merrill Vargo

Most advocates of weighted student funding think that the reason to do it is that schools are over-regulated, while skeptics point out that schools already have substantial categorical program flexibility – flexibility that was granted, as it often is, as a sort of consolation prize when budgets were slashed.

This points to the first reason why now is the hour to move to a weighted student approach. Every veteran school administrator knows this drill: When budgets are cut, policymakers discover the value of flexibility and local leaders get to make the tough calls about what programs to eliminate; but when new money flows back in, it comes in the form of new programs. Without moving to a weighted student formula now, economic recovery will inevitably bring new money in the form of new programs, each with its own new regulations. This alone is sufficient reason to argue that now is the hour for a weighted student formula. But there is more.

Even critics of categorical programs rarely point out the economic costs of the way we currently fund our schools. Categorical programs are a recipe for inefficiency: Funding schools the way we do is like paying someone in gift cards rather than dollars. Fifty dollars at Target, $100 at Safeway, $75 at Macy’s…. Somebody might manage to spend money this way without waste, but at best it would be a lot of work. In our current budget crisis, we just can’t afford to make it harder for districts to use money efficiently. And the currently flexibility is only a partial – and temporary – fix. But there’s more yet.

As executive director of Pivot Learning Partners, I’ve had the chance to observe what two districts – LAUSD and Twin Rivers Unified, in north Sacramento – have actually done with the idea of a weighted student formula. Both LAUSD and Twin Rivers have made an important commitment that is implied by the reform put forward by the governor, but not actually included: They have committed to creating a system in which the “weights” dictate not only how much money flows from Sacramento to the school district, but also how much money flows to schools.

Surprisingly to those unfamiliar with education politics, this does not result from the current system of categorical programs; school districts tend to spend dollars intended for poor children on the schools they attend – but they balance this out by spending a disproportionate amount of unrestricted dollars on the schools without poor children. Local politics dictates that everybody gets the same amount, even when some students need more. The commitment by school districts to establish policies and processes to do something else is difficult in any circumstances, but it is far easier when people are arguing only about a principle. Once there is real money on the table, this discussion becomes far harder.

So that’s three reasons why today is the best possible time for a weighted student formula.

Merrill Vargo is both an experienced academic and a practical expert in the field of school reform. Before founding Pivot Learning Partners (then known as the Bay Area School Reform Collaborative, or BASRC) in 1995, Dr. Vargo spent nine years teaching English in a variety of settings, managed her own consulting firm, and served as executive director of the California Institute for School Improvement, a Sacramento-based nonprofit that provides staff development and policy analysis for educators. She also served as Director of Regional Programs and Special Projects for the California Department of Education.

Eric Hanushek: Liberals and conservatives are equally naïve

Eric Hanushek

Eric Hanushek

Weighted student funding has become a core idea of both liberals and conservatives. Liberals like the idea because, by their vision, it would push funding to schools that served more disadvantaged populations. These schools have traditionally engaged in less actual spending than more advantaged schools because they employ more rookie teachers, who come with lower salaries. Conservatives like the idea because, by their vision, it will push funding to charter schools that traditionally have received less than equal shares of the local funding for schools. Both groups see weighted school funding as providing more funds to the schools that they focus upon, and both see this as leading to improvements in achievement.

Both groups seem naïvely wrong. The liberals ignore the fact that local schools have no control over salaries of teachers or, for the most part, over the choice of teachers. Thus, the added funding does not allow them to make choices that improve the quality of teachers in a world where the quality of teachers is unrelated to the salary of individual teachers. The conservatives, focused on the funding from the state, ignore the fact that local funding would not necessarily flow with the child under a weighted student funding system, so that redirecting the state funding would not achieve the parity that they seek for charter schools.

Both positions also rely upon an untested view of politics that would lead to improved allocation of resources if only the actual flows of dollars were more apparent and more real. We have no reason to believe that their vision will occur.

The overall idea of weighted student funding – that some students require more resources than others because they require extra educational services – makes sense at the district level. But, hoping that this creates the right incentives if it is taken to the individual school seems naïve.

The thing that both liberals and conservatives really desire is improved achievement of all students. Thus, it is much more likely that rewarding success, rather than relying on a naïve model of political reaction, would work.

Here is the simple idea (developed in a book by Alfred Lindseth and me, Schoolhouses, Courthouses, and Statehouses) that changes incentives. Provide funding to districts that adjusts the base amount for each student – disadvantaged students, English language learners, or special education students. But, having provided funding that recognizes different needs to provide additional services, reward districts that promote more achievement of their students. And, don’t reward students who fail to attain higher achievement. In other words, provide incentives for greater achievement and do not reward failure.

Schools will not improve until there are greater incentives for improving student achievement.

Eric Hanushek is the Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University. He has been a leader in the development of economic analysis of educational issues. His most recent book, Schoolhouses, Courthouses, and Statehouses: Solving the Funding-Achievement Puzzle in America’s Public Schools, describes how improved school finance policies can be used to meet our achievement goals.

John Affeldt: Money must follow the student

John Affeldt

John Affeldt

Putting aside the key fact that the governor’s school finance reform plan fails to address the woeful underfunding of California public education, the governor’s plan should be applauded for proposing a more rational and equitable finance system than the one we currently have. The most alarming distributional shortcoming is its failure to make sure districts actually spend the weighted funds on the needy students who generate those dollars for their districts. Under the proposal, low-income students and English learners become a convenient mechanism for a district to receive more money to spend “flexibly” however it wants — including on students who are neither poor nor learning English. That is very troubling. The extra funds generated by these students need primarily to be directed to the schools where these students are.

Absent a requirement that the money follows the student, the proposal risks being worse than what we currently have. There are too many categoricals in California, it is true. But let us not forget that among the key reasons they originally came into being were to correct the fact that the neediest and often least politically powerful students were being overlooked by unfettered district “discretion.” More than one educator has privately conceded to me that absent rules requiring funds be spent in equal or greater measure on poor or EL students, districts will stray, pulled by pressures from adults — be they influential parents, effective local unions, or administrators with a different agenda.

This is doable. As Mike Kirst noted recently on KQED, Florida has implemented such a system. And, too, the concept is not all that different than requirements found with federal Title I, special education, and Economic Impact Aid dollars that they be spent on the needy students who generated them.

Like the proposed weighted funding itself, requiring that the money follow needy students to their schools can be phased in over time. This would allow districts to readjust their too often inequitable distribution of teacher quality dollars where typically the more experienced and expensive teachers teach the higher-performing students. If more expensive veterans do not want to move, at least the schools with concentrations of needy students will be able to purchase the extra staff that will provide for smaller classes and supplemental supports. In Oakland, which has been experimenting with site-based, weighted student funding, such measures have helped attract and retain young teachers where before they quickly moved on to the more affluent schools. Shoring up resource provision, including teacher quality, in low-income schools is the only way we will be able to begin to close the achievement gaps.  Only holding schools accountable on the back end — after the funds have been spent and gaps have not been addressed — will too often prove too little too late.

John Affeldt is managing attorney at Public Advocates Inc., a nonprofit law firm and advocacy organization that challenges the systemic causes of poverty and racial discrimination by strengthening community voices in public policy. He is a leading voice on educational equity issues and has been recognized by California Lawyer Magazine as a California Attorney of the Year, The Recorder as an Attorney of the Year, and a Leading Plaintiff Lawyer in America by Lawdragon Magazine.

Gary Ravani: Rearranging spreadsheets  on a sinking budget

Gary Ravani

Gary Ravani

The governor’s plan for weighted student funding, sending more education dollars to districts that have more “needy” (based on English learners and low-income populations) students is intriguing. Obviously, students of greater need require more educational supports to have a greater chance of playing on a level academic field.

As noted in a recent TOP-Ed  piece by Kathryn Baron on the Quality Counts report by Ed Week, compared to most states, California already does a pretty good job in this area: “The state’s … average means that poorer districts receive more funding than wealthy ones on a weighted per-pupil basis.” This does not mean that there are not some significant differences in school funding under California’s “revenue limit income” funding program that favor wealthier areas. If one takes into account the per-pupil funding available to “basic aid” districts, the disparities are even greater.

The problem is that California is relatively equitable in how it underfunds the majority of its students. The Quality Counts report places this state at 47th of the 50 states in per-pupil spending, some $3,000 below the national average in “adjusted” dollars. The RAND Corp., as well as others, cite California’s “unadjusted” dollars expenditure per pupil sinking below the national average in the mid-1980s and sinking lower ever since.

However admirable the governor’s weighted funding plan might be (and it is admirable in principle), this does not seem to be the appropriate time to consider it. Being 47th in per-pupil spending may well be the high point for some time. Even if the governor’s proposed tax initiative passes, it is not likely to improve the immediate school funding situation.

The new funding plan proposes to set a base of $6,000 per student with enhancements based on the number of English learners and economically disadvantaged students. This new variable, and possible cut in funding, is to be calculated by districts already being asked to budget for further cuts next year on top of the cuts from the last few years. The weighted plan does allow for implementation over time, but what are the prospects for improved funding “over time”?  Where are there signs, other than the proposed Millionaire’s Tax Initiative that will plug some holes in the eviscerated education budget, that the state is ready to live up to its obligations to its public schools and children?

The equitable and responsible action, before embarking on reorganizing student funding, would be for California to commit itself, publicly and legislatively, to bringing its education spending up to the top tier in the nation, reflecting its international ranking as the ninth largest economy in the world and the nation’s wealthiest state. Only then can all  school districts be “held harmless,” and real improvements to educational programs as well as improved student achievement take place. Without the fundamentals of an adequate educational revenue stream in place, funding “reform” that potentially pits one stressed school district against another stressed school district is all just a matter of rearranging the fiscal spreadsheets on the sinking education budget.

Gary Ravani taught middle school for more than 30 years in Petaluma. He served for 19 years as president of the Petaluma Federation of Teachers, is currently president of the California Federation of Teachers’ Early Childhood/K-12 Council, and is a vice president of the CFT. He chairs the CFT’s Education Issues Committee.

21 Comments

  1. Eric Hanushek writes:
     
    “Schools will not improve until there are greater incentives for improving student achievement.”

    I could tell someone that I’ll set their shoes on fire if they won’t run a 3 minute mile for me… but the reality is that regardless of what incentive (positive or negative) you put in place, merely trying hard isn’t always sufficient.

    I don’t see a general lack of motivation among California educators. I do see them wasting their time on tightly managing copy paper and writing grant applications for a few hundred dollars worth of science supplies via Donors Choose and the like.

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  2. (By the way, TOP-Ed folk: I suggest you view your golden box layout for this entry on Safari. I don’t think it looks the way you intended on that browser.)

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  3. Governor Brown is on the right track.  SIATech provides a dropout recovery high school program.  All of our students are low or very low income.  As former dropouts, there is no doubt about our students being “at risk”.  Yet as a charter school, we are receiving significantly less funding than traditional high schools whether they serve at risk students or high performing students.  We are a direct funded charter school which means every dollar goes to serve low income students.  We have no other students.   So there is none of the diversion of funds that many critics of weighted funding and categorical block grants fear. 
    We’ll volunteer to drink the Kool-aid.  Provide weighted student funding levels to direct funded dropout recovery schools and watch us increase student performance and graduation rates.  From Henry Levin to the Alliance for Excellent Education and the National Governor’s Association, all agree that funding dropout recovery provides a real return on the State’s investment.  Let’s stop fiddling and start investing in dropout recovery.

    SIATech is a dropout recovery high school in operation at each of the seven Federal Job Corps Centers in California.  SIATech has full WASC accrediation and offers a BTSA Induction program.  Over 7,000 former droputs have earned California standards aligned high school diplomas from SIATech in the past 12 years.

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  4. You say Weighted, I say Categorical. And no one asks for standards. No not those Standards that mandate Common Core or textbook content standards. Standards that tell us what a school looks like: that offer a broad range of subjects; that make for a civilized human being; that look out for a developing person by providing physical education, art, music and counseling. Nurses on hand to look after students’ physical well being.
    And every school has a credentialed school librarian, guiding developing minds through the maze of information, technology, and literary joy that only a high quality library can provide:
    http://www.cde.ca.gov/ci/cr/lb/schlibrarystds.asp
    Or we can continue to settle for the state with the lowest level of school and public library service in the nation — and the obvious consequences.
     

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  5. Summary and extension:
    Implementing a weighted student formula for state education funding would create new rules for how state education money is allocated to school districts, and would remove some of the rules associated with how districts use funds. In his set-up, John Fensterwald points out that this zero-sum redistribution would produce “winners and losers,” which calls the whole plan into question from a perspective of political viability.
     
    All of the forum contributors seem basically to agree that a state-level funding system that begins with weighted-student funding would better than the system we have – or at least not worse. Merrill Vargo argues that, at minimum, this approach would reduce the complexity of restricted-purpose categorical funds, which she likens to funding districts with gift cards. Gary Ravanni seems to agree with the principle of funding districts on a weighted student basis, though he questions the timing and importance of this change.
     
    Both Vargo and John Affeldt point out that distributing funds to districts is not the same as distributing money to schools, or to students. Both express concerns that without strings attached, money will not spontaneously redistribute itself – at least not durably. Affeldt argues that such a system could actually be worse, if implemented without attention to how money is used in practice.
     
    Similarly, Erik Hanushek argues that “the overall idea… makes sense at the district level” but he argues that on its own weighted funding would not change outcomes because it would not change the incentives in the system. In order to create a system that provides both weighted distribution of resources and also helpful incentives, he argues that the system should go beyond simple weights, directing a portion of state resources toward districts that accelerate student learning.  (A version of this approach was recommended by the Education Excellence Committee.)  http://everychildprepared.org/finance.php
     
    Gary Ravanni argues this debate is a distraction.  To tinker with California’s system for distributing education resources is to miss the point.  This state is badly out of line with other states’ investment in children, and changing the way the resources are allocated might be good policy, but it won’t make them sufficient.  (http://ed100.org/californiaskimps )
     
    Extending the argument: What about Local Funds?
    The debate about Weighted Student Formula tends to omit discussion of local funding, partly because including it makes a complex topic even more so. This topic belongs on the radar. California funding for education has dropped relative to state personal income ever since school funding ceased to be a local matter.  Taxpayers don’t trust Sacramento!  Voters are more inclined to support their own schools than they are to send money to Sacramento, and gradually local communities with the wherewithal to do it are learning to take the job into their own hands by passing parcel taxes.  Weighted Student Funding does not make this patchwork approach better. A more complete plan for remaking California education finance would return a portion of the responsibility for funding schools to local communities, and allocate state funds to match local investment on a variable basis according to each community’s relative ability to raise local funds.  This solution would be much more powerful in the long run.  http://fulllcirclefund.org/EACH
     

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  6. I find it curious that no one has mentioned the extraordinary similarity between this proposal and the charter school funding model adopted in 1978. Both proposals provide schools with per-pupil unrestricted (“base”) funding, with the amount based on grade level. Both provide additional funding for disadvantaged students (i.e., limited English, family poverty). Both make no changes in the allocation of federal funds (e.g., the distribution of special education funding is unchanged). And both (in theory, at least) condition flexibility on performance.
    In fact, it would appear that, with relatively minor changes, the two funding systems could be merged into one.

    Mr. Camp, I agree 100% with your comment about local funding. Unfortunately, Proposition 13 prohibits any discretionary increase in ad valorem (based on property value) property taxes. Moreover, assessed values only increase because of change in ownership or major changes to property which affect its value, and by an annual increase of the lesser of actual inflation or 2 percent.  It’s the “third rail” of California politics, and it’s unlikely that Prop 13 will ever be changed. Even if it were, the state Supreme Courts decision in Serrano v. Priest complicates local districts’ ability to increase property taxes. A system known as “district power equalizing” could comply with Serrano while still allowing some local discretion in setting the property tax rate but, at this point, this system is no more than a historical curiousity.

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  7. I don’t understand why everyone seems to think this proposal was intended to make things better. It seems to me it’s goal is to instead merely do away with categorical programs while still being able to justify having the money around to plug other holes. As virtually everyone points out, without a mechanism to dictate how funds are distributed at the school level, the result could be catostrophic for some a schools/kids. Some are already arguing that regardless of whether we are currently providing sufficient resources, low performance is proof that money is being wasted. Decision makers who believe that will move to reverse the current trend of providing additional funds to schools with highest need.
    I can’t remember having ever agreed with anything hanushek has said, but there is a first time for everything. His points about naïveté seem right on. However, I will disagree with his claim that conservatives want to improve achievement for everyone. I also don’t believe rewarding only success makes any sense in an environment where opportunity is (admittedly) not commensurate with need. If it were, I could maybe buy that argument. But as long as its not, that makes no sense, IMHO.

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  8. @Jeff, can you clarify your parcel tax comments? Are you suggesting the state provides incentives for passage of parcel taxes through matching funds? Or are you saying that the state should step in to aid those communities unwilling or unable to pass a parcel tax? How does the 2/3 vs 51% threshold play into this?
     
    You are somewhat on the right track to understanding that weighted student funding is going to drive wealthier districts to compensate through local sources of funding and we will still be in the land of flaunting Serrano v. Priest, but it’s unclear how your idea rectifies anything.

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  9. In reply to @bea and @edfundwonk: Yes, to re-introduce a local role in school funding would require policy changes, including modifying the rules created by Prop 13. I make no claim that this would be easy. But the status quo approach of funding schools almost entirely from Sacramento has been a slow-motion failure. It is time to talk openly about solutions that get at the root of the problem rather than just twiddle with re-slicing a shrinking pie.
     
    Centralizing to a state system has gradually eroded education funding in California, eviscerated local engagement in support for schools, and eliminated a major imperative for district and union leadership to work through their differences in order to build community support. The political will to support schools is strong and reliable at the local level, but our funding system today blocks that political will from translating to school funding — except in parcel tax districts, which tend to be either wealthy, liberal, or both. And no one I know would argue that parcel taxes are a great solution for providing reliable and equitable funding.
     
    There are many possible solutions to re-introduce a meaningful local community role in funding for schools. Let’s be clear about the equity issue, however: re-introducing a local role in school funding cannot mean simply returning to the days when a community’s school board had the power to set tax rates. We know that this recipe baked inequitably funded schools in the ’70s. An equitable policy would empower each community to fund its schools and would variably match local funding with state dollars in proportion to the community’s tax base per student. Wealthy communities would get permission to fund their schools. Low-wealth communities would get this permission AND state matching funds that would make their funding power equitable.
     
    There are many versions of this general proposal that can address the equity imperative in different ways. I’m not saying that it will be easy or without challenges. But my core point is this: political will and trust in public schools is fundamentally local. A sustainable solution to the big problem of funding for California public schools must include a strong local role.

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  10. Hi Jeff. Thats an interesting idea. Where would the money come from for the matching? Presumably, if wealthier districts were allowed to fund their own schools, that would come with a requisite reduction in their revenue that flows to the state. Without that, I dont see an easy place to get revenue sufficient to provide a match for less-wealthy communities. (I’ve always thought it somewhat thought-provoking (um, worrying) to compare the amount of revenue (in all forms) generated by the more affluent contingent of society with their usage of public schools). One could argue that the source could be something less education specific, such as a sales or income tax, but Im not sure what one calls it would change the desire to offset it by what the community uses locally.

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  11. Jeff, I’m not convinced that the move to centralized funding from Sacramento is causal in eroding education funding in general. I see this as more cyclical. Indeed, from my perspective, even today, there is more political and financial support for funding schools than there was in the 1970′s, when most voters didn’t even consider education to be a top issue in politics and the idea of 45 kids per class was hunky-dory with most of them.
     
    The reality is that local communities can and do still support their schools, not just through parcel taxes (which are problematic in many ways) but through community fundraising and the like.
     
    One issue I see for schools is that the people who run them tend to believe in meritocracies, and tend to believe that if they’re doing a good job, that people will know and they’ll be rewarded. Often schools aren’t great at communicating with the community and providing opportunities to show themselves off or to talk with community members. When staff gets busier and more pressed for time, this is often the first activity to go, and yet the lack of that communication can have dire consequences.

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  12. Imagine the matching in terms of an order-of-payments model. First claim goes to bonds (after all, the piper must be paid) then, high in the stack, matching-payment obligations. Then distribute general revenues on a weighted basis, perhaps with a performance adjustment as Rick advocates.
     
    The most powerful way to implement this would be to gradually and predictably shift power from central funding to local funding.
     
    There are ALWAYS details to consider, of course. What are the limits on the state’s obligation to match? What would be the limits on local districts’ permission to propose taxes to voters? Would the budget for matching be based on prior year actuals? What counts toward Prop 98? Exactly how are variable matching levels computed? Are charter school enrollments counted?

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  13. edfundwonk,
    Take a look at the recent LAO report on charter school funding. While the charter school funding model should in theory provide roughly the same level of funding as the non-charter schools receive, it doesn’t. In fact it provides hundreds of dollars less. And, since the goal of the charter school funding model is to provide roughly the same resources that non-charter schools receive, even if the formulas were working the way they were intended, they would still not provide the level of resources schools and districts need to serve disadvantaged students.

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  14. There was an announcement yesterday that the base funding amount would be $4920. I believe the original post on this topic suggested that amount would be $6,000. How does this change things?
     
    Also: Can anyone address whether weighted student funding applies only to revenue limit districts? Or does it mean an entirely new funding structure doing away with Basic Aid vs Revenue Limit? Or would Basic Aid districts have an opportunity to calculate the weighted formula, converting back to revenue limit if their particular demographics make it a better financial decision?

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  15. The new base looks suspicously like the elementary statewide average after the deficit factor is applied.  We ran the numbers for a unified district with 65% poverty rate and all EL included in the Free and Reduced count and it meant we lost all of the $4 million in categorical funding we currently receive along with our current reveue limit deficit and and an additional $800K in base funding.  We are already planning about $2 million in cuts to make it through next year without a new funding formula.  I was afraid that the new “flexibility” would mean replacing the deficit factor with categorical funding and now am thinking I was right to be afraid.  No word about the $4920 being deficited, but if it is then these numbers get even worse.
    Anyone else thinking the same thing?
     

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  16. How would I go about citing this forum. I’m composing a dissertation for my literature class and I quoted a great deal of information from this site (the topic was centered on the efficiency of programs that fund schools and whether or not there exist proficient alternatives). If someone could write down the citation I would be able to utilize for my reference page, that would be much appreciated.
    Thank you for your time.

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