Getting What We Pay for from Our Schools

Many school districts in California could boost student achievement without increasing spending if they used their money more productively. According to a report released in January by Center for American Progress Senior Fellow Ulrich Boser, “Return on Educational Investment: A District-by-District Evaluation of Productivity,” efficiency varies widely between school districts in each state.

Spending on America’s education system has nearly tripled in the last three decades while the performance of our students has largely remained flat, and the report found that inefficient spending on education costs our nation’s school system $175 billion per year, which is equal to about 1 percent of GDP.

Consider the Los Angeles and San Diego City Unified school districts. Both educate over 100,000 students and have a similar percentage of students from low-income families—around 60 percent. But in 2008—the most recent year for which data are available—Los Angeles Unified spent $11,357 per student, about $1,000 more than San Diego.

Despite similar student bodies and financial inputs, Los Angeles’ students score consistently lower than San Diego’s students on state reading and math exams from elementary all the way through high school. In other words, San Diego appears to get a far better return on its investment than does Los Angeles, spending its money more wisely to improve student outcomes.

The report and its accompanying website represent the first-ever attempt to determine the efficiency of nearly every major school district in the country. This productivity data reveals which school districts are getting the most bang for their educational buck.

If we are serious about improving student outcomes then we must maximize the productivity of our schools—or how much they achieve relative to what they spend after adjusting for factors such as students in poverty and cost of living.

But the report’s findings are not only about dollars and cents—there are larger implications for communities of color. Students from minority backgrounds are more likely to be enrolled in highly inefficient districts, and the least-efficient districts nationwide are more likely to have larger percentages of Hispanic students (14 percent versus 7 percent) than the most efficient ones.

These findings present an important avenue for additional research since our data cannot capture everything that goes into creating an efficient school system.

But do the results suggest that we should slash the funding of the nation’s least productive school districts? The answer is unequivocally no.

The least productive districts overwhelmingly educate our nation’s most disadvantaged students. Taking an axe to their budgets would only lead to more disparate outcomes in an already unfair public education system.

An emphasis on productivity is not an endorsement for unfettered market-based reforms. Moreover, our nation’s system of financing schools is deeply unfair. Low-income and minority students are far more likely to attend schools that don’t receive their fair share of federal, state, and local dollars. But while fairness must be central to any conversation about education finance, we cannot refrain from examining efficiency for the sake of equity.

What the report does suggest, however, is that there are meaningful steps we can begin to take with this new data.

First, we have to elevate the national conversation on educational productivity. The data cannot capture everything that goes into creating an efficient school system, and there are confounding variables for which the study was not able to control. Still, this is an important starting point.

Second, we need to study the work being done by districts that produce higher-than-average achievement per dollar spent on education. Their innovations and successes can be a useful guide for districts looking to save costs and increase performance.

Finally, we have to commit to improving the productivity of school districts serving the nation’s most disadvantaged students. It won’t be easy—but is necessary—if America hopes to realize its untapped potential.

James Hairston is a Research Associate at American Progress.

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