Spending Index and Equity Indicators

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 need 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 Editorial Projects in Education Research Center found that the average per-pupil expenditure in the nation for the 2002-03 school year (the most recent data available at the district level) was $6,786. We use that amount as a benchmark against which to gauge each state’s spending.

Our spending index takes into account both the proportion of students 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...