Last modified: Thursday, February 15, 2007
Simplifying the "Complexity Index"
Indiana school funding formula's "Complexity Index" could be made less complex, more equitable, and more effective
FOR IMMEDIATE RELEASE
Feb. 15, 2007
EDITORS: Several mp3 audio soundbites are available for download on the IU School of Education Web site at: https://education.indiana.edu/audio.html. See the end of this release for more information.
BLOOMINGTON, Ind. -- Indiana's school funding formula is keeping money away from the highest-need school corporations, say researchers at Indiana University.
A new study finds the "Complexity Index," or CI, isn't doing what lawmakers envisioned, partly because index factors are not considered properly and other state provisions designed to prevent dramatic changes in individual school budgets are hindering the effort. The CI is the portion of Indiana's school funding formula that weights per-pupil funding based on five socioeconomic categories within school corporations. It is supposed to send more money to schools with traditionally disadvantaged student populations.
"State policy makers have been concerned that they haven't seen a whole lot of gains in student performance," said Robert Toutkoushian, co-author of "What is the Complexity Index?," the latest Education Policy Brief from the Center for Evaluation and Education Policy (CEEP). "That's especially true for at-risk students, despite having this formula that gives more money to school districts that have more at-risk students."
The new policy brief recommends simplifing the Complexity Index to just one factor -- percentage of students receiving free-lunch -- because that factor has such a substantial impact on the pass rate for ISTEP Plus, the state's standardized evaluation test. However, Toutkoushian, an associate professor in the IU School of Education's Department of Educational Leadership and Policy Studies, also says legislators could consider expanding the CI. The study found a total of seven factors that have a significant association with the ISTEP pass rates in school corporations.
In the brief, Toutkoushian and Robert Michael, a CEEP policy analyst, examine the origins of the CI addition to the school funding formula and consider whether the state's formula is working to fulfill school funding objectives.
The categories the CI considers are the percentage of families with children under 18 and living below poverty income, the percentage of population over 25 without a high school diploma, the percentage of single-parent families, the percentage of students receiving free lunch, and the percentage of students with limited English proficiency. The CI started as the "At-Risk Index" in 1993 as a way to provide more funding to school corporations with more students who were thought to be at greater risk for academic failure.
The study finds the index may not have resolved problems of low-achieving students in some corporations partly because some of the factors don't correspond directly with learning outcomes.
"Based on our analysis, we found that two of the five do not have an independent relationship or an association with a school corporation's ISTEP pass rate after you take the others into account," Toutkoushian said. "So we would say at a minimum, you could drop two of the measures from the index. And we found evidence that another variable could be replaced by a similar and yet better measure that is more strongly associated with the ISTEP pass rate."
Toutkoushian said their research found that students who qualify for free lunch are far more likely to struggle on ISTEP. That might indicate the state should re-weight the factors that comprise the CI. "So if one factor, 'free lunch,' has twice as high of an association with performance as let's say coming from a single-parent family, then the weight for free lunch should be twice as high as the weight for single-parent family," Toutkoushian said.
The researchers also found that the various "overlay" provisions in the school funding formula are also keeping proper amounts of money from getting to the students who need it. Overlay provisions are legislative actions that limit the year-to-year variations in school funding. Toutkoushian and Michael found those provisions have significant impacts on the additional dollars given to school corporations for at-risk factors.
The report makes three main recommendations:
- Adjust the school funding formula so that the Complexity Index is a categorical funding item and would thus be independent of the overlay provisions.
- Update the set of factors used in the Complexity Index. Toutkoushian says that the Complexity Index could be simplified to just one factor—free-lunch students. The study also found a total of seven factors that have a significant association with the ISTEP pass rates in school corporations. It may be more appealing politically to expand the CI to seven factors than to reduce the CI to only one factor, Toutkoushian says.
- The weights for the CI factors should be adjusted so that they are proportional to the associations of each factor with the ISTEP pass rate. In this way, more funding will be allocated for factors that have larger associations with performance.
The full report may be viewed at https://ceep.indiana.edu/projects/PDF/PB_V5N2_Winter_2007_EPB.pdf
CEEP promotes and supports rigorous program evaluation and policy research primarily, but not exclusively, for education, human services and non-profit organizations. Its research uses both quantitative and qualitative methodologies. To learn more about CEEP, go to https://ceep.indiana.edu.
Robert Toutkoushian can be reached at 812-856-8395 or rtoutkou@indiana.edu.
The following mp3 audio soundbites are available for download on the School of Education Web site at https://education.indiana.edu/audio.html. Toutkoushian's is pronounced toot-koo`-shee-an.
Toutkoushian on the current Complexity Index factors: "Currently, there are five factors in the index. And based on our analysis, we found that two of the five do not have an independent relationship or an association with school corporation performance after you take the others into account. So, we would say at a minimum, you could drop two of the measures from the index. And we found evidence that another one could be replaced by a similar variable."
Toutkoushian on the one factor that outweighs all other factors: "In the end we found seven factors that had significant association with performance. However, out of those seven, one had the largest impact by far, and that's the number of students who are receiving free lunch."
Toutkoushian on the study's recommendation that index factors be re-weighed: "The second one would be that the weights for those factors should be set in relation to the strength of the association of those factors to performance. So, if one factor, 'free lunch,' has twice as high of an association with performance as let's say coming from a single-parent family, then the weight for free lunch should be twice as high as the weight for single-parent family."
