Cost of Adequacy in Education
Frequently Asked Questions Regarding the Study
Full name: Determining the Cost of an Adequate Education in Minnesota: Implications for the Minnesota Education Finance System
Summary: The purpose of this study is to discover what influence certain factors have on school spending in order to determine what it costs to provide an "adequate" public education in Minnesota. "Adequacy" is defined as the achievement of certain state test score standards. The study examines how the cost to achieve these standards varies among school districts and what the implications of this variation are for Minnesota's education finance system
Study Reveals Cost of Providing an Adequate Education in Minnesota
The Minnesota Center for Public Finance Research, the research and education arm of the Minnesota Taxpayers Association, today released a study examining what it costs to provide a basic education in Minnesota and what the implications are for the state's education finance system.
The report entitled "Determining the Cost of an Adequate Education in Minnesota" generates district-specific cost estimates of providing an "adequate education" as defined by the achievement of state standardized test scores and high school graduation rates. "Basic skills" level of achievement from both the Minnesota Comprehensive Assessment Tests and the Minnesota Basic Skills Tests, and a district high school graduation rate 80% made up the eight standards defining an "adequate education."
Using 2002 district expenditure, profile, and test score data, "cost of adequacy" estimates were created for 316 of Minnesota's 343 school districts by using an advanced mathematical technique that compares each district to best performing groups of districts in the state – districts achieving the same or better educational outcomes at lower levels of spending. District poverty rates, numbers of special needs students, district size, and several other environmental factors were incorporated into the analysis so that this comparison-based approach did not unfairly penalize districts for having higher cost characteristics.
The report also examines the sufficiency of state education aid in providing districts the necessary funds to achieve these adequacy standards and how fairly state aids are distributed. The study further identifies causes and characteristics of district inefficiency – conditions within a district's control that cause them to spend more money than needed to achieve their levels of educational performance.
Key Findings Regarding Cost of Adequacy and State Funding
- The cost of an adequate education in Minnesota as defined by achieving the eight education standards varies significantly across Minnesota school districts. The state average cost of adequate education was $6,236 per pupil. The cost was well over twice the state average for the district facing the harshest educational environment ($14,446) and approximately $700 less per pupil in districts with the most advantageous environment ($5,524).
- Most Minnesota school districts were currently spending sufficient amounts to achieve an "adequate education" as defined by the eight standards. Only 8 districts had per pupil spending totals less than the district per pupil cost of adequacy.
- On average statewide, districts spent 20% more per pupil than the cost per pupil of - more - achieving an adequate education as defined by the eight standards. However, there is significant disparity among districts regarding district spending and the cost of adequacy. Spending ranged from nearly 80% more per pupil above and beyond the cost of adequacy to 25% per pupil less than needed to achieve adequacy.
- Minnesota provided sufficient resources to Minnesota school districts to support a basic education for most state students. Including the 2002 district general education levy in state aid totals (which approximates the current education finance system since the state takeover), general education aids alone totaled nearly 80% of the state's total cost of adequacy for all districts. On a district basis, nearly 90% of the estimated cost of an adequate education was provided through general education aids alone in 2002. This support does not include voter approved referendum aid from the state or program aids such as special education. On a district basis, 14 of the 317 districts included in this study would have received more per pupil general education aids than necessary to achieve state adequacy standards with the state takeover.
- The state compensates for the "correct" district characteristics that create a more costly educational environment, but the size and distribution of individual aid programs need adjustment. 142 districts (45%) were overcompensated for their environmental costs; 134 districts (42%) were undercompensated; and 40 districts (13%) were correctly compensated.
Key Findings Regarding District Efficiency
- Most Minnesota school districts operate at efficiency levels near the most efficient districts in the state. Still, approximately $234 million more than necessary was spent to achieve 2002 levels of educational performance.
- The optimal ratio of pupils to all teachers (classroom, special program, and early childhood) in a district in terms of getting the greatest educational return for the amount of money spent was 18 to 1. District efficiency was found to decline at higher or lower ratios, all else being equal. (The state average is 15 to 1.)
- Teacher experience and percent of district teachers with masters degrees were highly correlated with district inefficiency. Higher spending for teachers with many years of experience and advanced degrees is often not justified by commensurate improvement in educational outcomes and test scores.
"The state has done a very good job of supporting an adequate education for most Minnesota students as defined by these education standards." said Mark Haveman, Director of Operations of the MCPFR and chief author of the report. "However, it is clear opportunities do exist to improve Minnesota's education aid system in a way that encourages efficiency, compensates districts for having a higher educational cost environment, and is linked to the achievement of state adequacy standards."
Dr. John Ruggiero, professor of economics at the University of Dayton in Ohio, was the technical consultant to the Center in the development of this report. Dr. Ruggiero is a leading national researcher on quantitative methods of measuring school district efficiency and educational costs.
The full report is available on the Minnesota Center for Public Finance Research website, www.mntax.org/cpfr.
Frequently Asked Questions Regarding "Determining the Cost of an Adequate Education"
Q: Only eight standards were used to determine an "adequate education" -- most of which were based in reading and math. Is this really a good measure of an adequate public education?
A: Probably, because academic studies have demonstrated very high correlations between measured performance on the "basics" -- math, reading and writing -- and "unmeasured" topics like science and social studies. However, our report does conclude that no education finance reform based on our approach should be pursued until stakeholders agree on a complete set of performance standards and a means to measure them. In our study we used all the statewide quantitative measures of academic performance that were available in 2002. If measurable performance standards had existed for science, social studies, and other subjects, we would, of course, have put them in.
Q: But by including other topics and standards wouldn't the cost estimate of an "adequate education" be much greater? In other words, aren't you actually calculating only the spending needed to get minimally acceptable scores in math and reading?
A: No, because our estimates reflect what it costs districts to achieve district math, reading, and writing standards while also achieving some unmeasured levels of performance in all the other subject areas. Because there are no measurable standards in these other topics and areas, we don't know and can't evaluate what level of performance is being achieved. However, as noted in the previous answer, it is quite likely that the amount of money spent by districts to achieve basic skills levels of performance in math and reading would also yield basic skills level of performance in science, social studies, and other topics.
In other words, even if other topics and standards had been included, the cost estimates are unlikely to change much.
Q: So why did you use only "basic skill" levels of performance to define an adequate education. Shouldn't we expect a lot more from our education system?
The cost of the minimally acceptable level of educational performance must be determined to evaluate the sufficiency and fairness of existing state education aid. Only after the cost of the minimally acceptable level of educational achievement is identified can we then meaningfully debate about how much more we expect from our education system and how much more we are willing to pay for it. We do provide cost estimates of an "adequate education" using the "proficiency" levels on the math and reading tests required by No Child Left Behind.
Q: When you say that some districts spend more per pupil than other districts to achieve their test scores, are you saying this extra spending is waste?
No. What we are saying is only that some districts spend more to achieve their test scores than other districts even after accounting for cost factors like poverty, numbers of special education students, district size, and district cost of living. It is true that some of this extra spending may be going for the delivery of unmeasured subject areas such as music, art, and sports or advanced academic programs. But remember, the analysis is based on benchmarking school districts against each other. Presumably, the most efficient districts are also providing most if not all of the same opportunities defining a complete, well rounded education but are still able to deliver these programs at lower per pupil cost.
Q: But if districts are in fact putting this "excess spending" to very good use, either by offering a broader range of school subjects, or exceptionally high quality extracurricular programs, or academic excellence programs like advanced placement, then why should we even care about these spending differences?
We should only care if the money for these programs comes from state government because then there is a potentially large fairness and equity problem in state aid distribution. In an education finance system linked to academic performance, the state's first responsibility is to ensure all students in the state have equal access to an "adequate education" defined by whatever group of standards and levels of achievement citizens and policymakers deem appropriate. We have a problem in our education finance system if some districts receive significantly more aid than necessary to provide an adequate education while other districts receive barely enough or not enough aid to achieve these basic standards. Such is the case in Minnesota today.