Determining the Cost of an Adequate Education

The Pennsylvania General Assembly recently commissioned a $650,000 study to determine what it “costs” to educate a child. The firm winning the commission reported that the state should increase spending by more than 27% to an average of $12,058 per-child (with an estimate for each school district). In his budget address, Governor Rendell proposed phasing in a $4 billion increase in education spending over six years to meet this higher level of spending.

Yet spending billions of dollars more does not assure an adequate education. Several districts spend well over their recommended cost, but have woeful academic performance. Nor does not spending that amount of money guarantee poor performance. Many schools do very well while spending much less. Further, the research literature is dubious at best to suggest that more money is the key to academic improvement.

Over the past twenty years, Pennsylvania taxpayers increased spending on public schools by $14 billion, or 72% after adjusting for inflation. This dramatic increase in spending has not improved academic performance. Likewise, spending differences between districts do not explain academic achievement differences, and spending across districts correlates very weakly—when it even correlates—with measures of academic performance.

The costing-out study also does not consider how education could, or should, be delivered. All methods of “costing-out” are based solely on what the state currently spends—including all the waste, bloat, and mandates of a government-run system. To be precise, it is based on current spending by school districts. The study ignores charter schools (which receive only three-fourths of what school districts do) and private schools, which often spend half as much per-pupil as district schools, regardless of their performance. This is a major flaw. No study based solely on a taxpayer-funded monopoly can measure what it should cost to educate a child.

Not surprisingly, all of the spending recommendations of the study are those endorsed by the school employee labor unions and employees of the government school system itself (who sat on the “professional judgment” panel for the study). These recommendations include smaller classes; government-run preschool; full day kindergarten; more teachers; more counselors, support staff, and school nurses (i.e. dues-paying members)—though the evidence that these initiatives improve performance is mixed at best. Other reforms—merit pay for teachers, smaller schools, and school choice—which are linked to academic improvement were ignored.

The results of the costing-out study could have been predicted before the study was ever conducted. The firm hired to do the study has produced “costing-out” or “adequacy” studies for other states. These studies offer a wide range of recommendations for the same function. For example, the firm recommended 63 instructional personnel per 1,000 pupils in Indiana, but nearly double that amount of 116 per thousand in Maryland.

The estimated “cost” to educate a child also varies dramatically by state. This variance was not based on a cost of living index, but on what states were currently spending. Despite the wide range in final per-pupil recommendations, one conclusion was consistent across the firm’s studies—each state needs to spend more than they currently do, typically 20 to 40% more!

“Costing-out” studies acknowledge that more spending alone won’t result in greater performance, contending that it depends on how the money is spent. That is to say, funding must be spent “wisely.” Unfortunately, Pennsylvania school districts have a very poor record of spending money in such a manner.

A Commonwealth Foundation report, Edifice Complex: Where has all the Money Gone, demonstrated that higher spending districts spent a greater proportion of their funding on construction and debt. This relationship grows stronger when controlling for enrollment growth and district size. In other words, when given additional resources, many local school boards seem inclined to spend on football fields and Taj Mahal buildings rather than student instruction.

What Pennsylvania school children need is not more funding for schools currently failing to provide an adequate education, but a transformation of the system. Taxpayer funding for public education should follow the student, allowing families to take the funds to whatever school best serves their needs. Choice and competition in education will result in better quality, greater efficiency, and truly determine the “adequate” cost.

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Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (, an independent, nonprofit public policy research and educational institute based in Harrisburg.