Dennis P. Sheehan | Adequate funding doesn’t always equal results

November 27, 2013 

Reading Holli Jo Warner’s column in the CDT on Thursday (“Pennsylvania public education is at a crossroads”) reminded me of “Fortunate Son,” that great song by Credence Clearwater Revival.

The lyrics that sprang to mind:

And when you ask them, “How much should we give?”

Ooh, they only answer More! More! More!

Warner thinks “It’s time to adequately fund public schools.”

But what is “adequate”? Warner offers no answer.

Readers might come away from her column with the impression that Pennsylvania is spending less on schools now than in the past. If we consult the National Center for Education Statistics ( http://nces.ed.gov/ccd/pub_rev_exp.asp), we find that expenditures per pupil in Pennsylvania have risen from $6,372 in 1993 (the first year covered) to $13,096 in 2011 (the most recent year).

That’s a compound annual growth rate of about 4 percent a year.

Current expenditures, according to NCES, “include instruction, instruction-related support services and other elementary/secondary current expenditures, but exclude expenditures on capital outlay, other programs, and interest on long-term debt.”

Obviously, this means total expenditures are even larger.

NCES also reports that, in 2011 inflation-adjusted terms, per-pupil expenditures in Pennsylvania grew from $9,906 in 1996 to $13,096, a growth rate of slightly more than 2 percent a year. Spending in nominal terms has gone up in every one of the past 15 years (through 2011); inflation-adjusted spending rose in 12 of the 15 years.

Does this prove that Pennsylvania spends enough on schools? No, it does not. It merely shows that spending has more than kept pace with inflation.

To answer the question of whether we are spending enough, presumably we ought to ask what is the result of spending more or less.

Like may issues in social science, there is no clear answer.

It is certainly easy to be skeptical about whether more money translates into better schools. Consulting the same NCES website, we can find the eighth-grade National Assessment of Educational Progress math scores in 2011 for all states.

Math scores are a reasonably objective measure of students’ outcomes. If we relate per-pupil expenditures by state to the eighth-grade math scores, we have the above scatter plot.

There is essentially no relation between these two variables.

Does this prove money has no effect on student achievement? No, it does not. But it is surely consistent with skepticism about the effect of more money.

Warner might object that her concern is not with student achievement but with the flourishing of our democracy, which she thinks is fundamentally dependent on public education.

I share her appreciation for the virtues of public education. If, however, we cannot figure out whether spending more will produce higher math scores, I doubt we will ever come to agreement about whether spending more will make our democracy more robust.

If Warner wants to make the argument that we need to adequately fund schools, she ought to first define “adequate” and second show us how this level of spending likely would result in better outcomes for our students.

Until she does that, all I can hear is Credence Clearwater Revival singing, “more, more, more.”

Dennis P. Sheehan is a professor of finance in Penn State’s Smeal College of Business. Readers may write to him at dps6@smeal.psu.edu.

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