Published Online: January 4, 2005
Published in Print: January 6, 2005, as Spending: Interpretation

Spending: Interpretation

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Return to the table, "Resources: Spending."

Spending index: While no consensus exists about how much money is necessary to provide an "adequate" education, it is clear that districts with certain characteristics tend to require more aid. Specifically, districts enrolling more students with special needs require more money. The National Center for Education Statistics estimates that students in poverty, for example, need 1.2 times as much funding as other students do. The Center for Special Education Finance estimates that students with disabilities need 1.9 times as much money.

After adjusting per-student-spending figures for each school district in the United States to reflect regional cost differences and student needs, the Education Week Research Center found that the average per-pupil expenditure in the nation for the 2000-01 school year (the most recent data available at the district level) was $6,503. We use that amount as a benchmark against which to gauge each state's spending.

Our spending index takes into account both the number (or percent) of students in a state enrolled in districts with spending at the national average, and the degree to which spending is below that benchmark in districts where per-pupil expenditures fall below the national average.

Each district in which the per-pupil-spending figure (adjusted for student needs and cost differences) was equal to or exceeded the national average received a score of 1 times the number of students in the district. A district whose adjusted spending per pupil was below the national average received a score equal to its per-pupil spending divided by the national average and then multiplied by the number of pupils in the district.

The spending index is the sum of district scores divided by the total number of students in the state. If all districts spent above the U.S. average, the state attained a perfect index of 100. Example:

Example:

District Enrollment Per-pupil spending
1 400 $8,000
2 450 $7,000
3 500 $6,000
4 300 $5,000
5 350 $4,000
  Total: 2,000  

Districts 1 and 2 are the only ones providing at least an average level of spending on education (i.e., equal to or above $6,503). Scores for those districts are equal to their respective student enrollments.

District Score
1 400
2 450

Then the number of students attending schools in these districts, 850, is divided by 2,000. This indicates that 42.5 percent of students in the state attend schools in districts spending at least the national average. That figure, however, does not account for how close spending is to average in the remaining three districts, a problem that is corrected in the calculations below.

Districts 3 through 5 have spending below the U.S. average, so assigning a score to each district will tell us how "far" it is from average spending across the nation. The score is equal to the district's average spending, divided by the U.S. average, and multiplied by the number of pupils in the district.

District Score
3 461.33 = ($6,000 / $6,503) * 500
4 230.66 = ($5,000 / $6,503) * 300
5 215.29 = ($4,000 / $6,503) * 350
Total: 1,757.28 (for all five districts)
Spending index = 1,757.28 / 2,000
       = 87.86

That value represents an index against which we can compare the relative spending of the 50 states and the District of Columbia. This year, values for the spending index range from 66.6 to 100.

Vol. 24, Issue 17, Page 103

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