Rutgers University

The Real Shame of the Nation: The Causes and Consequences of Interstate Inequity in Public School Investments

Posted on April 2, 2018

This report presents a first attempt at better understanding interstate variation in the costs associated with achieving common outcome goals across all settings and children. We take advantage of two recently released national data panels, applying methods used previously for inter‐district, within state analyses of the costs of meeting common standards.

Executive Summary

For decades, school finance researchers have explored the impact of funding inequities across local public school districts within states on children’s opportunities to meet state student achievement accountability standards. Due, however, to the variation of both state achievement tests and economic conditions within and between states, there has never been a national study comparing states’ abilities to achieve a common student achievement outcome and assessing the cost associated for each state to do so. In addition, there has never been a study applying a uniform model for determining the fiscal impact of poverty on reaching a particular student achievement outcome across states.

This paper presents, for the first time, a new National Education Cost Model (NECM) to better understand the relative adequacy of state investments in public schooling toward achieving common outcome goals. The NECM builds upon two recently released national data panels, applying methods used previously for inter-district, within-state analyses of the costs of meeting common standards. The goal is to estimate and better understand between-state variations in the costs associated with achieving average student outcome goals across districts serving children of different poverty levels. Among the NECM’s most notable findings:

 Most states fall below the funding levels necessary for their highest poverty children to achieve national average outcomes;
 High-poverty school districts in several states fall thousands to tens of thousands of dollars short, per pupil, of funding required to reach the relatively modest goal of current national average student performance outcomes on standardized assessments. In some states — notably Arizona, Mississippi, Alabama and California — the highest poverty school districts fall as much as $14,000 to $16,000 per pupil below necessary spending levels;
 In numerous states — including California, Arizona, New Mexico, Mississippi, Alabama, Georgia, and Tennessee — only the lowest-poverty districts have sufficient funding to achieve national average outcomes (but many low-poverty districts still do not have sufficient funding);
 Only a handful of states — including New Jersey and Massachusetts — are doing substantially better than others in terms of the average level of funding provided across districts in each poverty quintile and, consequently, the student achievement outcomes that flow from these more sufficient funding levels.

This paper reveals not only the significant variation in student achievement outcomes across U.S. states, but also the wide range of state and local investment in improving those outcomes. Put simply: there are striking differences in the investment in public schooling across states and a commensurate variance in the ability of states to achieve even modest student outcome levels. This paper further shows that states make vastly different levels of effort (i.e., spending relative to fiscal capacity) toward addressing their own fiscal and student outcome-related shortcomings. In addition, we show that some states lack the economic capacity to raise outcomes even to modest levels, even with relatively high effort.

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