Straw into Gold, Revenues into Results:

Spinning Out the Implications of the Improved School Finance
W. Norton Grubb
University of California, Berkeley
Luis A. Huerta
Teachers College–Columbia University
Laura Goe
University of California, Berkeley


Surely revenues are central to the quality of schooling—nearly everybody thinks so. Generations of reformers have come along, each needing more money. Advo­cates for equity have rediscovered inequalities in spending nearly every decade, from Ellwood Cubberly's complaints about reliance on local revenues a century ago; to Jonathan's Kozol's attack on "savage inequalities;" to the latest lawsuits such as Williams v. California, with its extensive documentation of disgusting bathrooms, crumbling buildings, dated textbooks, and inadequate teachers. Most school leaders and district administrators plead for more money, especially in urban areas, where the needs often seem limitless, and some of the most strenu­ous battles in statehouses are now over school funding, particularly in an era of stagnant budgets. As political systems become dominated by special interest groups, debates over the allocation of revenues often overshadow those about teaching and learning.

But the centrality of revenues and expenditures is not necessarily warranted. Real expenditures per pupil (inflation adjusted) have risen constantly throughout the past century, doubling since the late 1960s and increasing by 10% in the late 1990s; yet these increases have not reduced the need for reforms, elim­inated the inadequacies in resources, or enhanced the equity of outcomes. Evidently, just increasing spending has not—and by extension will not—resolve the problems in our schools, perhaps because the problems themselves are moving targets. It has been difficult to show that increased spending makes any consistent difference in outcomes, at least as indicated by test scores; Hanushek's review found only 13 of 65 studies with significant positive effects. School finance lawsuits have proliferated since the 1970s, but even in states where revenues have become more equal, redis­tribution has not led to less variation in outcomes. And school finance researchers have expressed their own misgivings about the analysis of funding only and noted how difficult it is to link funding with resources and outcomes.

It is crucial to move beyond the analysis of money itself and instead examine the relationships among funding, resources, and educational results—an approach for improving school finance analysis. Whereas school finance has emphasized the level and distribution of revenues and expenditures, even when trying to link funding to outcomes, an improved school finance approach focuses on resources in schools and classrooms that improve valued outcomes: a focus on teachers with particular competencies rather than teacher salaries, or on school climate rather than computer spending. The emphasis should be on effective or active resources, in the language of Cohen et al., where the analysis of resources must necessarily engage all the difficult issues when certain resources and practices affect outcomes and when they do not—the purview of substantial literatures on school effective­ness and educational production functions linking outcomes to inputs. This entails elaborating conceptions of resources, clarifying why fund­ing is often wasted, and therefore why the translation of funding into effective resources is not straightforward, then developing new models of the connec­tions between revenues, resources, and the results of schooling.

This article was originally published in the Journal of Education Finance by the University of Illinois Press and Journal Storage (JSTOR).

Suggested citationGrubb, W. N., Huerta, L. A., & Goe, L. (2006, April). Straw into gold, revenues into results: Spinning out the implications of the improved school finance [Article]. Policy Analysis for California Education.