Howard Stephenson: Why Utah’s rank on per student spending is just one data point – not a vice

When State School Superintendent Brad Smith spoke at the recent Utah Taxes Now Conference on May 28, he struck a nerve with protectors of the education status quo when he said that a high ranking on per student spending is not a virtue and Utah’s ranking at 50th place is not a vice.  “It is simply a measure of input variables and it is one input variable, and that’s all,” he said. Smith had been similarly criticized when he decried those complaining about the Legislature’s 9.4% education funding increase in the most recent session of the Utah Legislature.

Why Utah’s rank on per student spending is just one data point – not a vice
By Howard Stephenson

“The critical shift we must see in education is an emphasis on output variables.” He suggested Utah’s ranking as 50th in funding is of secondary importance.  “It’s being 27th in the nation in student performance that concerns me, because we can be so much better. . . So the single data point I want to leave with you today is this: . . . Only 1 in 4 of Utah’s graduating seniors are fully prepared to succeed in college,” Supt. Smith said.

Why Brad Smith is Right

I feel compelled to give the hard facts as to why Superintendent Smith is exactly right about Utah’s consistently low ranking in per student spending being just one data point.

The most recent National Center for Education Statistics report shows that Utah has moved ahead of Idaho, from 51st in per student spending during the school year ending June 30, 2012 to 50th place. Utah spent $7,818 per student while Idaho spent $7,142.

If our goal had been to bring Utah spending per student to the 2012 national average of $12,069, it would have taken $2.35 billion in new revenues. This could have been accomplished by more than doubling Utah’s individual income tax or nearly doubling Utah’s total take in Utah property taxes imposed by all schools, counties, cities & towns and special taxing districts. Does anyone really believe that if Utah were to increase taxes by that amount, we would still have the best economic outlook of the 50 states? That we would continue to be named the Best State for Business & Careers? That we would continue to have the highest job growth rate and one of the lowest unemployment rates in the nation?

The Rest of the Story

One would expect a strong correlation between per student spending and student performance, but the data do not support that assumption.  Some states with high per student spending score better on the National Assessment of Educational Progress (NAEP) and other high-spending states show low student performance on the NAEP.  Similar lack of correlation exists for low spending states; some score better and some score worse. In fact, the amount spent per student bears little relationship to the quality of education in a state. For example, Washington, D.C. spends just under $26,661 per student (3.4 times Utah) and New York spends $21,401 per student (2.7 times Utah), but few Utahns would opt to send their children to public schools like those in D.C. and New York.

The High Cost of Small School Districts

Other demographic and geographic factors revealed in national studies illustrate why higher spending per student correlates more directly to high administrative costs than improved student instruction.

Screen Shot 2015-06-03 at 6.25.24 AMUtah school districts number only 41, with an average of 13,509 students per district compared to more than 1,000 districts in Texas with an average of only 4,707 students per district and nearly 1,000 districts in California with 6,177 students per district. There are significant administrative costs associated with small administrative units in public education; costs that do nothing to enhance the quality of education those students receive.

The other four of the five lowest states in spending per student have significant overhead in administration due to the markedly lower numbers of students per district. For example, while Utah has an average of 13,509 students per district, Idaho has an average of only 2,327, Oklahoma has 1,272, Arizona has 4,135 and Mississippi 3,228. The additional administrative overhead in these and most other states suggests that Utah is getting more bang for its buck in education spending. If non-instructional overhead costs were deducted from per student spending, Utah’s ranking would be higher.

Other cost factors associated with small school districts involve limited ability to achieve uniform class sizes. Whenever small student populations exist, there are additional costs caused by sporadic class sizes.  For high schools with only a few hundred students it is very costly to provide a full complement of course offerings to prepare graduates for college.  The fact that Utah is the seventh most urban state in the nation – with 91% of its people living in urban areas – provides uniformity of class sizes, thereby lowering costs and improving efficiency.

Vermont, which has an average of 381 students per district – the second smallest in the nation – ranks seventh highest in spending per student at $17,263. Is this money well spent? Montana with the smallest average district size at 344 spends $11,447 per student and North Dakota with 548 students per district spends $13,473 per student. New Hampshire has an average district size of 1,180 students and spends $15,530 per student.  Can anyone argue that students in these states receive a better education or that taxpayers get greater educational value than Utah does at $7,818 per student?

Would the education lobby feel better if Utah students were distributed evenly across the state and educated in small, high-overhead schools? Unfortunately, high cost doesn’t necessarily mean high quality when it comes to public education.

Declining Enrollments Have Generated Higher Per Student Spending

   The industrial Eastern and Mid-Western states have experienced declining economies. Out-migration in the rust belt is taking its toll on school efficiency. Unlike Utah and other growing western states, northeastern and mid-western states have experienced declining public school enrollment in past decades. The most difficult challenge of any school board is closing schools which citizens view as their community centers. Utah has witnessed only a hint of this in the unique portion of the state with declining enrollment – Granite School District’s east bench. Citizens showed up at public hearings with figurative hanging ropes and torches ready to take matters into their own hands. In the end, only token closures were made because it’s politically excruciating for elected school boards to close schools.

Rust-belt states whose districts face declining enrollments see the percentage of the budget dedicated to instructional spending decline as tax dollars are inefficiently used to cover facility operation and maintenance costs in half-empty schools with all the overhead of a school with a full student body. The cost of heating, lighting, cleaning, maintenance, and administration of buildings with half as many students as they are designed to house is a very expensive proposition.  When a state in the rust belt spends more per student than Utah, it does not mean those students are getting a better education.

But Doesn’t More Money Produce Better Education?

   Despite the evidence cited above regarding mis-spent educational resources, some suggest that more money is necessary to produce better education outcomes. However, multiple studies over the years have failed to establish a strong correlation between spending and results. In fact, over the past few decades as education funding per student has increased much faster than inflation, student outcomes have been flat. What is clear to researchers from both sides of the argument is that any effect of per-student spending on student outcomes depends on how the money is spent, not on how much is spent.

This does not suggest that Utah should spend less on education. In fact, with a large percentage of teachers expected to retire in the next few years and an influx of new students entering the system, there is a crying need to ensure that teacher compensation is such that we can attract qualified teachers to our system, especially in the subject areas with the greatest shortages. To accomplish this, the legislature has pushed signing bonuses and differential pay for math, science, and special education teachers, which are in short supply. The legislature also instituted a pilot program for pay for performance for teachers whose students showed the most progress.  The State School Board is currently evaluating a pilot for a modified school calendar which would pay teachers 50% more by providing an option to teach a third semester, without any additional cost to taxpayers. The innovations mentioned here have generally been opposed by the same critics of the Superintendent’s recent comments.

One thing Superintendent Smith asked for which was missed by the media, is his expectation that the public hold him and the elected State School Board accountable for their pledge to significantly improve Utah’s measures of educational output, regardless of our rankings in per pupil spending.

Let’s stop harping at a leader who has the courage to speak frankly, and give him a chance to make the difference he’s promised.

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