A r c h i v e d  I n f o r m a t i o n

Investing in School Technology: Strategies to Meet the Funding Challenge - November 1997

Chapter 1:

Educational Technology and the Investment Paradigm


In his State of the Union address on January 23, 1996, President Clinton challenged Congress and the American public to commit the resources necessary to ensure all students access to high-quality technology and the information superhighway:
Our ... challenge is to provide Americans with the educational opportunities we'll all need for [the 21st] century. In our schools, every classroom in America must be connected to the information superhighway with computers and good software and well-trained teachers. We are working with the telecommunications industry, educators, and parents to connect ... every classroom and every library in the entire United States by the year 2000. I ask Congress to support this educational technology initiative so that we can make sure this national partnership succeeds.
In accord with the President's challenge, the U.S. Department of Education has produced a national educational technology plan, calling for the placement of high-quality computers, one for every five students, in American schools by the year 2000.1 These computers will be capable of running high-quality educational software and will be connected to the information superhighway.2 Reflecting the seriousness of the commitment to reach that goal, the President’s budget provides $2 billion over five years for the Technology Literacy Challenge Fund to help states implement their educational technology plans.

The goal of providing America's school children with access to high-quality educational technology cannot be realized without the commitment of significant resources. What is more, it cannot be realized efficiently and effectively without a concerted effort on the parts of local and state governments to coordinate their strategies for investing in educational technology.

The purpose of this paper is to provide state and local policy makers, state legislatures, state superintendents and departments of education, local school boards, and school district superintendents, some tools and pointers for thinking about their educational technology plans and for developing comprehensive strategies for funding those plans. In this first chapter, we introduce the issues involved: the promises of educational technology; existing cost estimates for placing educational technology in all the nation's schools; and an overview of the notion underlying our investment paradigm for financing educational technology.

In Chapter 2, we turn to the investment paradigm, laying out for state and district policy makers a systematic method of thinking about the costs of educational technology. The chapter also develops a framework for costing the technology plan.

In Chapter 3, we summarize different funding strategies that states and school districts may want to pursue in order to realize the objectives of their educational technology plans. These strategies include both some funding mechanisms familiar to those in the public sector and some mechanisms that may merit experimentation. Descriptions are provided of several different funding mechanisms that have been tested by states and districts.


In summary, this report's main recommendations are:

The Cost of Educational Technology and the Funding Challenge

Several attempts have been undertaken to estimate the cost of placing a number of different educational technology models in every American school. Some of the most notable of these estimates include:

These numbers are imposing. However, when considered within the context of total current expenditures in elementary and secondary education, they seem more manageable. For example, McKinsey & Company estimates that deployment and operation of its Classroom Model will require 3.9 percent of current elementary and secondary education expenditures, while 1.3 percent of current expenditures are devoted to educational technology at present. In other words, McKinsey's estimates suggest that school districts, on average, need to triple their expenditures in educational technology to put in place the type of educational environment envisioned by the national educational technology plan. Yet tripling current expenditure amounts to devoting less than 4 percent of a district's total budget to education technology.

Costing the Technology Plan and the Investment Paradigm: An Overview

The objective of this report is to provide state and district policy makers with a framework for thinking about the costs of school technology plans and for developing the funding strategies for those plans. The value of this framework to state and district policy makers is premised on two assumptions: (a) school technology plans will most efficiently and effectively be implemented in those places where districts and states work together to develop funding strategies; and (b) most school districts need to revise the way in which they budget for technology expenses.

The funding of school technology plans is best carried out by a coordinated state-district effort for several reasons. First, it is at the state level that economies of scale can best be realized. Second, state governments are well positioned to ensure that the costs of implementing school technology plans are borne, at least in part, by all the beneficiaries of those plans. Third, state governments have an important equity role to play: districts in rural areas and districts with older schools or small tax bases should be supported by states in their efforts to implement school technology plans. By establishing guidelines and goals for what school technology plans should contain, states can help districts realize economies of scale and ensure that the technology plans being implemented across the state are reasonably comparable.

Coordination between states and districts is not sufficient, however, to bring about a funding strategy that works. In addition, school districts must change the way in which they budget for and fund their school technology plans. Educational technology is unlike any other expenditure budgeted by school districts. It is neither a labor expense nor a capital expense nor a recurring material expense, but rather a hybrid. Technology resembles capital expenditures in that it usually requires significant start-up costs followed by maintenance costs, but it generally should not be funded through the same types of mechanisms available to school districts for capital expenditures.7 Neither do expenditures on educational technology closely resemble expenditures on other educational materials, for the start-up costs are greater, and the extent of professional development required to support the program is far greater.

For these reasons, educational technology should be treated separately "in its own line item or budget category" from other items in the school or district budget. By distinguishing technology from other categories of expenditures, the various components that make up a school technology plan will become more distinct. This effect has the advantages of facilitating the projection of future funding needs, and providing information needed for revision of the school technology plan. At the same time, by creating a line item for technology, the district is acknowledging that the maintenance of up-to-date educational technology systems will require ongoing expenditures. Building these capacities into the school's or district's budget process will be crucial to the successful implementation of school technology plans.

1 U.S. Department of Education (1996), Getting America's Students Ready for the 21st Century: Meeting the Technology Literacy Challenge , Washington, DC.

2 The National.Information Infrastructure (NII), or information superhighway, is an extensive, seamless web of computers and communication networks that makes available vast amounts of information contained in databases held by libraries, universities, government agencies, commercial businesses, and many other types of organizations. Eventually, the NII will integrate telephone systems, cable systems, broadcast and radio stations, and satellite systems.

3 U.S. Department of Education (1996) 33.

4 Ibid.

5 Ibid.

6 Rothstein, R.I. and McKnight, L. (1996). Technology and Cost Models of K-12 Schools on the National Information Infrastructure. Massachusetts Institute of Technology, Cambridge.

7 Many districts have used school bond initiatives as vehicles to support the installation of technology into new and rehabilitated schools. However, technology in general should not be subsumed under capital expenditures, for too great a proportion of technology costs recur regularly.

[Title page] Table Of Contents [Chapter 2 (Part 1 of 2)]