(Guest Post by Matthew Ladner)
Recently I made an off-hand comment about Arizona NAEP gains being like the problem with the orbit of Mercury. I decided that it would profit from some further explanation. Newtonian mechanics seemed to have everything figured out, with that nagging problem of the orbit of Mercury doing something it shouldn’t. The “problem” with the orbit of Mercury of course wasn’t really a problem at all. It turned out to be a problem with our incomplete understanding of how the universe works- as illustrated in the above video.
So just how do Arizona NAEP scores resemble the orbit of Mercury? The 2015 NAEP shows that Arizona charter school students scoring in the range of New England states. Arizona charter schools serve a majority minority student population and spend only $8,041 per student- about a thousand less per student than Arizona districts and far less than the average spending in New England states.
Arizona’s AZ Merit exam demonstrated even larger gaps between charter and district scores than the NAEP, providing external validation for the NAEP scores.
Moreover Arizona charters, like districts, have been operating in a very tough environment. Back in my Goldwater Institute days, I would go to the Joint Legislative Budget Committee website as a rich source of for refuting complaints about public school spending. As it happened, the districts were getting more students, and the spending per pupil was climbing. Cry me a river. The Great Recession however clobbered the housing dependent Arizona economy and the same document now shows that the Great Recession shot Arizona school funding in the arm, punched the gunshot wound, and then threw us out through the front windshield.
Look at those guys! Their NAEP scores are going to collapse!
A little before the release of the 2015 NAEP, Mike Petrilli offered a friendly bet of a beer to me and Lisa Graham Keegan that Arizona’s NAEP scores would go down between 2013 and 2015 based on economic difficulties. We both instinctively thought they would go up, and they did. We are thirsty Mike! Taking a longer term view of the entire Great Recession period however proves more revealing.
Arizona scores have improved at six times the national rate on 4th grade math, 7 times the national rate on 8th grade math, five times the rate on 4th grade reading and 2.67 times the rate on 8th grade reading. How did a state that saw a decline in inflation adjusted spending per pupil drop from $9,438 in 2007 to $7,828 in 2014 (see JLBC doc link above) manage to outpace the nation in progress by such a wide margin? District interests here have a non-stop mantra about Arizona’s relevantly low ranking in per pupils funding but, er, why are we outpacing the nation by such a wide margin even as our funding declines?
Whoa- that’s unpossible!
Something is wrong here- but it is not Arizona’s positive score trends. What is wrong is some very common assumptions about K-12. I’ll get to that below.
The reality of Arizona K-12 improvement is of course complicated and defies any single explanation, with big changes going on at the same time. One factor that obviously contributed and that we can quantify charter schools. The next figure shows the NAEP gains by subject/grade for Arizona students for districts and charters (2015 scores minus 2007 scores).
Some may attempt to dismiss the difference between charters and districts as a product of differences in student populations. Only a random assignment study could definitively test this assumption, but a large amount of evidence suggests which way such a (sadly non-existent) study would fall. Arizona charter students rank well when compared to statewide averages when compared to a wide variety of subgroups (general ed, White, Hispanic, etc.) While differences in student populations could explain some of the differences between Arizona charters and Arizona districts, they can’t be put to similar use in explaining why Arizona students outscore similar students in New Hampshire. Arizona law also require random lottery admissions, serve a majority-minority student population and the improvement we see in the district scores does not exactly sit comfortably with a massive brain drain to charters story. If all of Arizona’s brightest students were fleeing to charters, it would put a substantial drag on district scores. Instead we see district scores improving.
Arizona has a higher percentage of students attending charters than any other states, but that still only falls in the teens– 13.9% in 2012-13. Even so these gains are large enough to make a noticeable difference the aggregates:
The differences in the above charts only display direct impact of charter school scores the statewide average. We have substantial reason to believe however that the growth of charter schools has indirectly raised Arizona scores as well through competition. In other words, charter schools almost certainly deserve some of the credit for the blue columns in the above chart rather than merely the difference between the red and the blue.
The reason I was willing to take Mike’s friendly bet on 2015 NAEP scores- I believe that by far the greatest opportunity to improve K-12 lies in making more efficient use of existing resources. In the opening pages of his 2004 book Hard America Soft America: Competition vs. Coddling and the Battle for the Nation’s Future the astute observer Michael Barone noted the following:
Public schools for example may be the most notable example of a predominantly Soft institution-which helps explain why American children are confined mostly to Soft America. But as we will see, our schools have not always been so Soft; they have contained corners of Hardness, and there are signs they are getting Harder now.
“Coddling” is not a term one would use to describe Arizona public education during the 2007-2015 period. Declining spending forced both district and charter leaders to seek efficiency. The state passed a law forbidding schools from making reduction in force decisions exclusively on length of service- this was very wise. Ineffective/expensive workers should be the first to go in a reduction in force- the alternative being to RIF a much larger number of young employees regardless of their effectiveness. Federal stimulus and a temporary sales tax increase delayed the need for these adjustments-but only temporarily. During this period Arizona lawmakers began grading schools A-F, and the combination of (mostly) recession related slow population growth and expanded competition halted what had been a non-stop process of student population growth for districts. Charters continue to gain market share against districts- and now both a more rigorous state test and NAEP show a substantial academic advantage for charter students.
None of this is easy for district leaders. It’s not exactly the cold howling wind of market competition, but it is a much higher level of competition and transparency than that to which the K-12 folks feel accustomed. Their world has become less stable and more competitive-Harder to use Barone’s phrase. To their credit, many district leaders have embraced the challenge.
It’s very difficult. It’s also very good for children. 
Jay P. Greene's Blog 
[…] charters close the racial achievement gap on half the funding of traditional public schools — and charters are legally forbidden from refusing any student for any reason. They have to take […]