The cost of education

A simple question

Over the past few weeks, the Metro Ideas Project has sat down with leaders from around Chattanooga to learn about the important issues to this community. Education came up time and again as one of this city’s key policy challenges. Education stands out not only because it affects everyone — we’ve all been through school or have a child in one — but it also touches on other issues like poverty, race and geography.

So we wanted to tackle education by posing a simple question: What is the average expenditure per student at each school in Hamilton County?1 Understanding average per-student expenditure by school can shine light on how resources are allocated among schools that serve different populations. We thought this would be a question with a fairly straightforward answer, but it turns out we were wrong.

Let’s start with the fact that we couldn’t find average spending per-student for each school in the county. Publicly available budget documents, like the Comprehensive Annual Budget Report or the Comprehensive Annual Financial Report, don’t provide that information. Neither does the Citizens’ Guide to Understanding the Budget. In fact, the only number we could find on per-pupil spending was the average for Hamilton County.

Student expenditure: Anyone’s guess

So we started by asking what people in Chattanooga thought the average per-pupil spending in Hamilton County was last school year. Our informal poll showed that people estimated per-pupil spending to be between $100 to $30,000, with an average response of $7,239. Average spending in 2014–15, according to the Tennessee Department of Education, was actually $9,728 per student, significantly higher than the estimated average.

County-level expenditure, however, masks potential spending variations across schools that serve different student populations. If we just consider county-level expenditure from combined federal, state and local revenue, Hamilton County is actually spending higher relative to the state average ($9,374). It’s also spending more relative to other counties in Tennessee where enrollment is over 25,000 students (Knox, Montgomery, Rutherford, Sumner and Williamson). These counties spend between $8,000 to $9,000 per student. The only counties that spend more than Hamilton are Shelby ($11,221) and Davidson ($11,496), which have significantly higher student populations.

Putting Hamilton County in context

If we look at how these Tennessee counties are doing in terms of graduation rates, more money doesn’t seem to translate into more students with high school diplomas. For counties with average expenditure less than $9,000, graduation rates are higher than 90 percent. For Hamilton County, this rate drops to 85 percent — 3 percentage points lower than the state average. Further, rates appear to decline as average spending increases.

Lower graduation rates in Hamilton County also appear to be related to relatively higher rates of economically disadvantaged students2, minority students and students with limited English proficiency. This is all to say that while Hamilton County appears to be spending more per student than other major school districts in Tennessee, students are still not achieving similar rates of success. County-level data prevents us from understanding important school-level variations that might affect how resources are allocated. To understand spending across the county and how this might be linked to achievement, we need to look at the average per-pupil expenditure at each school.

So what?

We think it’s important to understand how resources are allocated on a per-school basis for four reasons: equity, transparency, community engagement and results.


Average per-student spending on a school basis would allow us to understand if resources are being distributed fairly across schools, regardless of students’ economic status, race, learning ability or location. Several studies in recent years have revealed that intradistrict funding, or funding to different schools within a district, is often unequal. In 2005, Marguerite Roza, Larry Miller and Paul Hill found that in four out of five urban school districts studied, the highest-poverty schools had 10 to 15 percent less per-pupil expenditures from non-categorical program funds than the lowest-poverty schools. In a 2008 study of 10 large urban districts, Roza found that teachers in the highest-poverty schools received lower salaries than teachers in the lowest-poverty schools.

The most extensive study on intradistrict spending, completed by the U.S. Department of Education in 2011, looks at state and local funding for salaries on a per-school basis for all districts in the U.S. with a Title I school. The data for this study was based on conditional reporting from districts that received Title I funds from the American Recovery and Reinvestment Act for the 2008-09 school year3. This was an exceptional opportunity for the Education Department to study funding at individual schools and to ensure that federal funds were not making up for an unfair distribution of local and state funds to benefit more affluent schools.

Data was analyzed from over 82,000 schools in 50 states, the District of Columbia and Puerto Rico. The analysis revealed a reality of inequitable spending. On one hand, over 40 percent of Title I schools spent less state and local money on teachers and other personnel than the same district’s average for non-Title I schools, controlling for grade level. On the other hand, more than 50 percent of Title I schools had expenditures above the non–Title I school average. Spending inequality appeared to be the highest at the elementary school level.


Understanding average per-student expenditure by school is critical for reasons of transparency. Without transparency, schools and school districts cannot be held accountable for spending decisions. Better transparency was the key driver behind the Education Department’s 2011 study. Following the release of the study’s results, a department official stated, “Transparency on resource allocation within school districts is critical to ensuring every child has access to the same educational opportunities. This new data highlights that the Title I comparability provision is broken and has failed to provide access to equitable resources, and that it is possible to fix it.” Without honest communication, education stakeholders don’t have the tools to clearly identify waste or needs and push for reform where it’s needed.

Community engagement

Closely tied to transparency is community engagement. Understanding how resources are being allocated and spent at schools can help the public and policymakers advocate for better funding allocations. Parents can hold the district accountable for its funding decisions. Community stakeholders can advocate for more equitable resource allocation. And policymakers can build consensus around tough budget decisions.


Average expenditure at the school level may be one additional variable affecting individual student success. But without this data on hand, it’s impossible to study correlations between spending and metrics like test scores or graduation rates. While our intention is not to undertake an in-depth study of this connection, we do recognize the value of understanding how inputs relate to outputs, or in this case, how expenditure relates to results.

Searching for the answer

Over the next several weeks the Metro Ideas Project will explore the question, “What is the average expenditure per student at each school in Hamilton County?” We’ll be reporting on our attempt to answer this seemingly simple question. We’ll explain the county’s revenue for education, explore teacher performance and compensation, and decode the district’s complex education budget. Our attempt to uncover an answer may in fact reveal more questions in the end, but we hope this will help our community identify areas for greater transparency and engagement.


  1. The Hamilton County Department of Education (HCDE) oversees the 79 schools for Hamilton County, which includes the urban area of Chattanooga. 

  2. “Economically disadvantaged” refers to students who qualify for free or reduced lunch prices. According to HCDE’s Guide to Understanding the Education Budget, a student whose family earns about $44,000 (85 percent above the federal poverty level for a family of four) qualifies for reduced lunch. A student whose family earns $23,000 or less (the federal poverty line for a family of four) qualifies for free lunch. 

  3. Hamilton County was included in this study. We’ll discuss those results in a later part of this project. 

Jacqueline Homann

Policy research director

Jacqueline Homann has worked at a number of international and federal institutions. She is a graduate of the LBJ School of Public Affairs at the University of Texas at Austin and holds an M.A. in policy studies.