The Texas School Finance Project Findings

[Updates below.]

Speaking of Texas educational financing...the reports are out. The following links lead to PDF files:

• Key findings
  
• Adjusting for Geographic Variations in Teacher Compensation: Updating the CEI, Executive Summary
  
• Adjusting for Geographic Variations in Teacher Compensation: Updating the Texas Cost-of-Education Index
  
• Measuring Educational Adequacy in Public Schools, Executive Summary
  
• Measuring Educational Adequacy in Public Schools
  
• School Outcomes and School Costs: The Cost Function Approach

From the Key Findings report:

1. There appears to be a fundamental economic relationship among input prices, educational outcomes, and cost in Texas public schools. Other things being equal, the analyses suggest that it costs more to produce higher levels of educational outcomes. Nevertheless, the average minimum funding level per pupil of meeting state performance standards is estimated to be between $6,172 and $6,271 (in 2004 dollars), which is slightly lower than the current average budgeted expenditure level of $6,503. Depending on assumptions concerning natural improvements as students and teachers adjust to new tests, changes in required passing scores on state tests, expectations with regard to the efficiency of school district operations, and inflation, however, the analyses suggest that some Texas school districts will require additional annual funding of between $226M and $408M (in 2004 dollars). These estimates are based on analyses that consider all federal, state, and local dollars for district operations-excepting revenue for debt service, transportation, and food-and are based on the best available data regarding requirements for compliance with No Child Left Behind and the state accountability system. They also assume that school districts receiving additional funding would operate with at least average levels of efficiency.
   
2. As in other studies of the effects of scale on educational costs, the analyses indicate that the cost of educational services in Texas is strongly influenced by school district size and geographic isolation. In particular, costs increase substantially for districts serving less than 500 students. The relative effects of scale on district costs is illustrated in Figure 1.

   

   
   As Figure 1 illustrates, on a per student basis the estimated cost of operating a district with 75 students is nearly twice the cost of operating a district with 7,500 students. Most economies of scale are realized at approximately 25,000 students. The analyses did not find evidence of diseconomies of scale for large urban districts, however.
   
3. Just as other industries experience variations in the costs of hiring comparable employees in different labor markets across Texas, there are substantial regional variations in the costs of public education, particularly with regard to the costs of hiring "highly qualified" teachers. According to the most conservative estimate, a Texas school district in the highest-cost urban area would be expected to have to pay approximately 29 percent more than school districts in the lowest cost rural area to hire a classroom teacher with comparable qualifications. This estimate is derived from analyses of a three-year average of data on school districts, communities, and teachers, including data on teacher salary and benefits, certification status, and time spent teaching in-field.
   
4. There are significant cost differentials associated with student need. Relatively high concentrations of students who are economically disadvantaged, have limited proficiency in English, are in special education programs, or are enrolled in high school can substantially increase school district costs. For example, a district that educates more students who are eligible for free lunch than the state average of 39.5 percent would be projected to need to spend more to achieve comparable outcomes, other things being equal. Conversely, a district that educates fewer students eligible for free lunch than the average would be projected to require less funding.
   
5. On average, unexplained variations in school district expenditures due to the production of unmeasured outcomes or inefficiency are moderate. The average level of inefficiency in school districts is estimated to be 7 percent. There is a substantial range among estimates of district inefficiency, however, from less than 2 percent in some districts to as much as 28 percent. This finding suggests that some Texas school districts are remarkably efficient in transforming resources into measured educational outcomes that reflect the core educational goals of the state; other districts appear to be substantially less efficient. It is important to note, however, that this type of analysis cannot distinguish between school districts that appear inefficient simply because of poor management and districts that appear relatively inefficient because they are focused on producing different kinds of outcomes. For example, the analysis cannot distinguish between excessive spending on administration and relatively high spending on music, athletics, or mathematics programs. This issue suggests that Texas policymakers should take up the question of how much local school districts should be allowed to choose the outcomes they aspire to produce, along with issues concerning state sanctions or incentives to promote cost-effective operation.

The other reports are considerably longer. Might make good weekend reading! :)

In any case, my core principles wouldn't be swayed if the report said we could spend $5,000 less or $5,000 more per student. I want the education systems in this state and in this country privatized and removed from the state's power.

UPDATE(4/9/2004 12:48pm)
Oppose all state income tax plans!

UPDATE(5/4/2004 9:09am)
I did some quick 'n dirty educational cost calculations of my own.

Posted by Drizzten at March 04, 2004 05:56 PM