Monday, the Census Bureau released a report on the finances of public elementary and secondary schools in 2007. Such reports lead to a number of common questions: Why is public schooling so expensive? Why is there such a weak relationship between spending and student achievement? If high-spending states and school districts don’t outperform lower-spending states and school districts, are we getting our money’s worth? These questions are especially pressing in a state such as New York, which, as Yoav Gonen pointed out in yesterday’s New York Post, has the highest average per-pupil expenditures among the 50 states and the District of Columbia, but ranks 15th and 23rd among the states on the NAEP fourth-grade and eighth-grade reading tests, respectively.
Three quick points about state-level expenditures. First, expenditures are higher in states with a higher cost of living. The chart below shows that the correlation between state per-pupil expenditures in 2007 and the 2009 cost-of-living index calculated by the Council for Community and Economic Research is .63, a strong association. If we remove Hawaii, which has an unusually high cost of living, the correlation rises to .70.
Second, wealthy states are higher-spending states. The next chart shows that the correlation between a state’s median family income and its average per-pupil expenditure is .61. And, since in most states, expenditures are at least partly driven by local property tax revenues, this pattern is mirrored within most states, with higher-spending districts within a state having more wealth than the lower-spending districts within that state. Often this means that the wealthy suburbs ringing central cities have much higher spending levels than those cities.
Third, average expenditures at the state level often mask considerable variation among the districts within a state. The chart below shows the distribution of per-pupil expenditures among districts within New York State. Even though the average per-pupil spending in New York state is the highest in the country, some New York districts spend quite a bit more than that average, and others much less. This variation can be reproduced within a school district, as a number of researchers have found that some schools in New York City spend more than other schools—even if they are serving similar kinds of students.
Which brings me to my final point. It is difficult to interpret whether the level of spending in a state, district or school is appropriate without knowing more about (a) the characteristics of the students enrolled, and their academic needs, and (b) what the money is being spent on. It costs more to educate children and youth who have learning disabilities, are English language learners, and who are growing up in poverty than it does to educate children whose families and communities provide rich supports for schooling; and children with special needs may struggle academically even if more is spent on them. But money can be spent wisely or foolishly, and we still lack consensus on what counts as “good” spending, and what is wasteful. The general rule of thumb is that spending more on classroom instruction is better than spending less, but this is still uncomfortably vague.
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