Trends in Educational Funding - Does More Money Equal Better Student Achievement?

Whether more money leads to better student achievement is one of the most hotly debated topics in American education. What we do know is that students in high-poverty schools are, according to a Congressional study, "least able to demonstrate the expected levels of academic proficiency."⁹

Schools may have money, but their SAT scores may be lower than those of schools with less money. Schools may have money, but their NAEP¹⁰ scores may show little improvement from one year to the next.

RAND's Top 8 States Ranked for Improvement on NAEP Scores, Their Per-pupil Expenditures and SAT Scores

State	1998-99 expenditure	2001 SAT verbal/math
Maine	7,783	506/500
North Dakota	6,321	592/599
Iowa	7,015	593/603
New Hampshire	7,048	520/516
Montana	6,525	539/539
Wisconsin	8,385	584/596
Minnesota	7,860	580/589
Nebraska	7,423	562/568

The evidence seems to point to this conclusion: Learning is complex. It cannot be linked to a single variable. The chart shows the top 10 states ranked according to per-pupil expenditures in 1998-99. The "rank" figures come from a RAND¹¹ study that ranked 44 states according to improvement on NAEP tests between 1990 and 1996. RAND found that NAEP scores are "higher in states with higher per-pupil expenditures, lower pupil-teacher ratio in lower grades, [and] higher percentages of teachers reporting adequate resources for teaching."

The table shows RAND's top eight states and their per-pupil expenditures in 1998-99. Both the chart and the table show 2001 SAT scores.

Gerald Bracey contends that disparities in SAT scores cannot be used to deny a relationship between money spent on education and higher scores. He says: "the principal source of differences among states is the proportion of seniors taking the SAT. In Utah and Mississippi, only 4% of the seniors take the test and this tiny elite does well [2001 SAT results: 575/570 and 566/561, respectively]. In Connecticut, 82% of the senior class huddles in angst on Saturday mornings to bubble in answer sheets. With 4/5 of its senior class taking the test, Connecticut is digging much deeper into its talent pool and that excavation shows up in lower scores," (509/510, as shown on the chart).

A study of Texas schools found only "weak" increases in student achievement on standardized tests — despite a steady increase in federal, state, and local dollars for education. The researchers stated: "It is difficult to attribute an increase in student learning to any one factor because so many forces influence student learning, including factors outside the school environment."

Standard & Poor's weighs in from a business perspective. Their Performance Cost Indicator (PCI) "quantifies the return on a school district's resources by directly linking district spending with student results, including standardized test scores and nontest data such as graduation and dropout rates… PCIs can be used to identify districts that yield a particularly strong return on resources." At least two states have signed on for the multimillion-dollar S&P program. Early results for one Michigan district: "Relative to other K-12 school districts in Michigan, Bloomfield Hills School District achieves exceptionally above-average student results with spending that is among the highest in the state." Coincidence? — Or is it related to a combination of factors in addition to money?

When Californians passed Proposition 13, all schools received less money. People saved billions on property taxes. School performance declined. Coincidence? — Or as Pacific Research Institute claims, "a failure in the way education services are delivered?"

Critics of the "more money for schools" movement complain that schools mismanage their funds. A USA Today analysis contends that big cities "are increasingly inefficient in providing basic services. It costs New York, Chicago, Los Angeles, Philadelphia, and other big cities twice as much to educate a child."

Whether or not more money brings better results, for now at least, states that do not perform will be penalized by the federal government. President George W. Bush promises: "Taxpayer dollars will only go to states that have standards and expectations for improving schools or teaching a solid academic curriculum."

Sources: Chart: U.S. Bureau of the Census. Annual Survey of Government Finances, Table 11. Online. Available: http://www.census.gov/govs/www/school99.html. May 3, 2002. David W. Grissmer, Ann Flanagan, et al., "Improving Student Achievement: What State NAEP Test Scores Tell Us." RAND. Online. Available: http://www.rand.org/. May 3, 2002. SAT scores, Online. Available: http://www.collegeboard.com. May 8, 2002. Vinovskis, Maris A. "Do Federal Compensatory Education Programs Really Work? A Brief Historical Analysis of Title I and Head Start." American Journal of Education. (May 1999). v107. i3. p.187. Moore, Stephen and Dean Stansel. "Can We Stop the Decline of Our Cities?" USA Today (Magazine) March 1994, p.1. Standard & Poor's. Online. Available: http://www.ses.standardandpoors.com/. May 3, 2002. "California Schools Fail While Spending Increases." Online. Available: http://www.heartland.org/education/apr97/californ.htm. May 3, 2002. Alexander, Ph.D., Celeste D. "Resource Allocation Practices and Student Achievement: An Examination of District Expenditures by Performance Level with Interviews from Twenty-One Districts." Southwest Educational Development Laboratory (SEDL) and Charles A. Dana Center. The University of Texas at Austin. Online. Available: http://www.sedl.org/pubs/policy24/allocation-practices.pdf. May 7, 2002. Gluckman, Amy. "Tests and Money: Where Does U.S. Public Education Stand?" Dollars and Sense (March-April 1998) p.1. Gerald W. Bracey, "Public Education and Its Discontents." Online. Available: http://www.america-tomorrow.com/ati/gb71221.htm. May 8, 2002.