Student learning has taken a big hit during the pandemic, especially for kids in low-income communities. While federal officials wager that a huge influx of cash will turn things around, Michigan’s largest school district is doubling down on old spending patterns. Its approach figures to deepen future fiscal challenges more than boost academic achievement.

The Detroit Public Schools Community District brought in more than $16,000 per student in 2019-20. That was before the pandemic and nearly $1.3 billion in extra federal COVID relief came in, ostensibly to safely reopen schools and remedy lost learning.

The district has dedicated a chunk of the temporary cash to hire more teachers and significantly boost their pay. Several weeks ago, district and union officials agreed to a series of automatic salary increases and bonuses. None of the additional pay is offered as incentives to help students learn more.

Unprecedented levels of spending on unproductive pay systems should keep classrooms staffed for the near future. But the strategy is more likely to create future financial stress, when the COVID money starts running out, than to meaningfully improve student achievement.

At face value, the prospect of more school spending appears to be one of the best uses of the new federal money, considering the country’s notoriously mediocre placements in global education rankings. Similarly, one would think an increase in spending should cause Michigan to improve its stagnant record of mediocre performance. At the least, perhaps, it would help districts like Detroit make up lost ground from the pandemic. In reality, things are much more complex; simply having more money does not lead to better education outcomes.

In 2016 the Mackinac Center set out to determine the relationship between school spending and student achievement. The findings may surprise some, but they align with past studies on the topic: In most cases, increased spending has very little to no effect on student achievement as measured by standardized tests. In only one of 28 academic indicators, 7th grade math, was there a statistically significant increase in performance associated with increased school-level spending during the years 2007 to 2013.

This is not to say that spending has no effect on academic achievement. But there are some important reasons why additional spending isn’t having the intended result. Eric Hanushek, a scholar at Stanford University, offers an explanation. His findings point toward the need to shift incentives. Schools often focus a budget increase on things that don’t directly lead to measurable academic improvements, such as hiring more noninstructional staff or giving across-the-board raises to all teachers, regardless of quality.

If spending will not lead Michigan to better education outcomes, what will? To break down this question, it is first important to understand the role of the most important element in the education process, the teacher. Teachers teach and students learn, and whether a teacher does a good job matters a lot to how much students learn.

Since student achievement is tied to teacher effectiveness, it’s important that the system rewards successful teachers. But the current education system does a poor of job of doing this, which should be the issue in the spotlight. Consider the long-time call for smaller class sizes, which pledges that they will give each student more of a teacher’s attention. Yet even then, good teachers are still needed; underprepared teachers will make the average classroom worse, no matter how small.

Teachers have little financial incentive to do a better job, and administrators simply hope they have an intrinsic motivation to improve. Union contracts reward teachers based on the degrees they hold — a problematic indicator of teacher quality — and how long they have been teaching. While teachers often improve during their careers, schools do little to try to improve compensation for quality teachers.

The lack of compensation for better performance remains despite rules from Lansing that administrators give teachers feedback and reward them when they improve. Too often, district officials provide only token financial rewards for teachers who do a good job. And when they rate teacher quality, they often do this via a peer review system, and administrators tend to rate every teacher the same.

The best way forward is to create a better system of incentives for teachers who excel, and a better system to manage them. For example, policy and school leaders should offer experienced teachers more incentives to take on work in poorly performing areas. Finally, it should be noted that schools will fight calls for change. But district administrators have extra cash from recent federal stimulus efforts, albeit less than Detroit’s take, which they could use to pursue performance pay.

It requires more than just extra cash to improve teacher quality, of course. It requires commitment, consistency and innovation from administrators. State policymakers can offer encouragement with their funding decisions. The best education reforms can have noticeable effects on student achievement. Where additional spending generally fails to make a difference, a push toward methods that reward talented teaching could boost productivity and achievement.

Detroit, the state’s largest district, is placing its chips on the status quo. The people of Michigan wait to see which districts, if any, will forge a new path that gives students greater hopes of success.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.