Kansas Study Finds Huge Infusion of Cash Didn’t Help Schools

Posted on December 10, 2008



Today, the self-proclaimed non-partisan news outlet KansasLiberty.com reported that a scholar at the University of Kansas Business School has come to the brilliant conclusion that the massive infusion of funding that went into Kansas public schools from 1997 to 2006 has led to no substantive improvements in student outcomes. The author of this report presents a handful of graphs and a few crude regression models of the relationship between spending change and outcome change between 2004 and 2006 for test scores and 1997 to 2005 for “persistence” measures.

http://www.business.ku.edu/_FileLibrary/PageFile/1041/TR08-1205–EducationSpending_Neymotin.pdf

Setting aside academic nitpicking over the absurdly crude statistical analysis provided by the author, lets take a look at the basic question of whether there even was a massive infusion of funding to Kansas schools from 1997 to 2005.

Data on unified K-12 school districts from the Fiscal Survey of Local Governments – Public Elementary and Secondary Education Finances suggest otherwise – In fact, Kansas fell further and further behind national averages during that very period. And, any court ordered funding that went into the system, did so after the period investigated.

year Nation Kansas Gap
1990 $ 4,422 $ 4,105 $ 316
1991 $ 4,683 $ 4,252 $ 431
1992 $ 4,779 $ 4,536 $ 243
1993 $ 5,072 $ 4,944 $ 128
1994 $ 5,242 $ 5,157 $ 84
1995 $ 5,415 $ 5,261 $ 154
1996 $ 5,568 $ 5,436 $ 132
1997 $ 5,751 $ 5,550 $ 201
1998 $ 6,020 $ 5,786 $ 234
1999 $ 6,336 $ 5,946 $ 390
2000 $ 6,722 $ 6,243 $ 479
2001 $ 7,191 $ 6,547 $ 644
2002 $ 7,525 $ 7,048 $ 477
2003 $ 7,854 $ 7,291 $ 563
2004 $ 8,123 $ 7,519 $ 604
2005 $ 8,530 $ 7,706 $ 825

Okay… so let’s take a second look. Here’s Kansas versus the nation after adjusting simultaneously for regional differences in labor costs and for inflation in labor costs, using the National Center for Education Statistics, Comparable Wage Index. Now… Kansas is higher than the national average, because Kansas is a very low cost state.  But, notice that Kansas current spending has been pretty much flat over the period after controlling for changes in competitive wages.

year National Kansas
1998 $ 6,558 $ 7,251
1999 $ 6,579 $ 7,102
2000 $ 6,609 $ 7,041
2001 $ 6,801 $ 7,078
2002 $ 6,748 $ 7,238
2003 $ 6,858 $ 7,277
2004 $ 6,851 $ 7,290
2005 $ 6,987 $ 7,328

So why does this matter? Let me connect the dots here. If there was no massive infusion of cash into Kansas schools, one could not possibly measure an effect of such an infusion on educational outcomes. There must be a shock to the system to measure the effects of that shock on the system. Pretty simple. Further, even if funding had crept incrementally upward across all districts while outcomes simultaneously crept incrementally upward, one could not distill statistically a relationship between the two – Certainly not over a period from 2004 to 2006, only a few years later. Interestingly in this case what we have are outcomes drifting upward with resources staying constant (with respect to competitive wage growth) or negative with respect to education spending growth nationally.

One earlier, more rigorous, peer reviewed study in the Economics of Education Review, addressing the infusion of funding to Kansas schools during the 1992 reforms, found via fixed effects (change over time) regression:

“Using panel models that, if biased, are likely biased downward, I have a conservative estimate of the impact of a 20% increase in spending on the probability of going on to postsecondary education. The regression results show that such a spending increase raises that probability by approximately 5%.”
Deke, J. (2003). A Study of the impact of public school spending on postsecondary educational attainment using statewide school district financing in Kansas. Economics of Education Review, Volume 22, Number 3, June 2003 , pp. 275-284(10).

Other studies on Massachusetts, Kentucky and Vermont have produced similar findings following major structural changes to aid formulas. I’ll gladly share the citations for those interested.

Cheers!