One answer, many questions

School-level spending helps us understand if schools are getting their money’s worth in terms of student outcomes and whether schools with different needs are getting adequate resources. In this post, we explore average per-student spending at different schools in Hamilton County.

Average spending across the U.S.

While information on individual school spending is hard to come by, average per-student spending at the national, state and county levels is readily available. Both the U.S. Census Bureau and the National Education Association provide data on average spending for the nation and by state.

For the 2014–15 school year, the national average spending per student was $11,732, according to an NEA report. States that have more revenue can spend more on students. Vermont spends the most ($23,149) followed by New York ($21,366) and New Jersey ($20,925). The lowest spenders include Arizona ($7,461), Utah ($7,711) and Oklahoma ($7,977). Tennessee ranks 38th in the nation ($9,105), according to the NEA. Taking into account these variations, most school districts across the U.S. still spend roughly 80 percent of their operating budgets on salaries and benefits.

When comparing average spending over 10 years, the national average has consistently outpaced average spending for both Tennessee and Hamilton County¹.

How we calculated average per-student expenditure

The Hamilton County Department of Education’s (HCDE) fiscal budget provides a wide perspective on education spending. It accounts for salaries and benefits, textbooks and supplies, school nutrition, transportation and other items. Calculating spending at an individual school is tricky. Most expenditures and funding sources are centrally itemized or reported as aggregate figures. As such, most school spending is actually district spending.

To calculate the average per-student expenditure by school, we examined both budgeted and audited numbers from HCDE on school-level spending; we interviewed local and national experts; and we reviewed similar studies done in other school districts across the country.

Our analysis captures about $300 million, or 75 percent, of HCDE’s budget of approximately $400 million for fiscal year 2015.

For our calculation of average per-student expenditure, we focused on spending that directly benefits students. Some data was already divided on a per-school basis, including salaries and benefits, Title I and internal school funds. When data was not earmarked by school, we allocated spending amounts either based on the number of students at a school as a percentage of district enrollment or the percentage of a special student population.

Our analysis includes six major spending categories:

• School-level salaries and benefits: At over 80 percent of total spending, salaries and benefits for school personnel are the biggest chunk of the general purpose school fund.
• Title I: These federal funds go toward equalizing the playing field for economically disadvantaged students. Title I represents over 50 percent of the federal projects fund. Fifty schools in 2015 received Title I funding.
• Individuals with Disabilities Education Act (IDEA): Federal funds for special education were not identified by school. IDEA grants were allocated based on a school’s percentage of total students with disabilities.
• Title III: These federal funds assist students with limited English proficiency. School-level data was unavailable; these funds were allocated based on a school’s percentage of total limited English speakers.
• Transportation and food service: These items are accounted for centrally but benefit nearly all students in the district. We divided this spending based on a school’s enrollment as a percentage of total district enrollment.
• Internal school funds: These funds are raised at the school level through donations, school fees and other avenues. Some of this funding — for example, charitable spending by foundations, nonprofits or other private donors — is not allocated by HCDE. While school-level data was available, any charitable or fundraising contributions not reported to HCDE are not represented.

Some aggregate or centralized figures were not included. While we strived to reflect as much data as possible in our final calculations, our analysis of the fiscal 2015 budget does not capture about 25 percent, or approximately $100 million, of district spending.

One important, missing school-level category is the cost of operating and maintaining school buildings. Since buildings vary in size and energy-efficiency, we couldn’t simply divide this expense category based on enrollment.

Some schools receive specific grants targeted toward bridging achievement gaps. While those grants are not reflected in our analysis, the recipient schools fall in the higher range of our per-student spending scale².

Another overall challenge is that schools are constantly changing. Student and personnel numbers fluctuate throughout the year. Spending calculations only capture a snapshot of a certain time.

Findings

We added up the spending categories detailed above and divided the total by enrollment to come up with an average per-student spending amount for each school in Hamilton County. A little over 60 percent of county schools spend within 10 percent of the district average of $7,200. Middle schools appear to have the most equal spending amounts with 80 percent of schools spending within 10 percent of the average. We found that around 40 percent of schools spend less than our calculated district average. This was consistent across elementary and middle schools. In contrast, around 25 percent of high schools spend less than the district average. High schools, however, have the highest number of schools that spend above 10 percent of the the district average — 29 percent, compared to 20 percent for elementary and 10 percent for middle schools.

We knew average per-student funding wouldn’t be equal across schools because they receive different amounts based on their number of teachers, their Title I status and other factors. What we didn’t know was how different spending amounts related to different achievement outcomes. This relationship can help inform us about return on investment. Do outputs respond to inputs? It can also tell us about equity. Do lower performing schools need additional resources to help close achievement gaps?

To explore the relationship between average spending and achievement we used 2015 school accountability data from the Tennessee Department of Education, which measures the percentage of students who are advanced, proficient, basic or below basic. We looked at the percentage of students rated as proficient or advanced for elementary (grade 3), middle (grade 7) and high schools (grades 9-12). The chart below shows school-level proficiency relative to the county average for reading and math plotted against average per-student spending.

Based on this scatterplot, we see how spending relates to student outcomes at different schools. Some schools spend relatively higher but still have lower student proficiency. Some schools spend relatively lower but have higher student proficiency. While spending is not the only influence on performance, it may help create conditions where students are able to thrive. In future studies, it would be interesting to look at what low-spend, high-achievement schools are doing to get the most out of their budgets. At the same time, we should also be paying attention to low-spend, low-achievement schools and understand how increased funding might help address achievement gaps.

Recent national research has also indicated that schools with similar demographics can spend similar amounts of funding on the same things and get radically different results, suggesting that there are additional significant non-financial factors impacting student outcomes that must be considered.

The Tennessee accountability system designates Reward Schools based on relatively high levels of achievement³. Reward Schools are the top five percent in the state in terms of student performance and year-over-year progress. While these schools are helping students achieve great outcomes, spending amounts differ. Both Lookout Mountain Elementary and Chattanooga School for the Liberal Arts have high performance but relatively higher average per-student spending. Thrasher Elementary also has high performance but relatively lower average per-student spending. These differences highlight the need to look more closely at how high performing schools are spending their money and how more efficient behavior can be replicated.

What next?

In the upcoming final part of our report, we’ll discuss ideas and examples of how budgeting can better respond to the needs of education’s primary focus: students. Student-based budgeting, which depends on a school-level understanding of the needs and priorities of each student, can enable more informed and equitable resource allocation. And it can help create better learning environments to nurture student success.

Footnotes