Bang For The Buck

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Bang For The Buck is a study conducted by Richard Innes and the Bluegrass Institute analyzing the return on investment taxpayers are receiving in terms of funding education through taxes. You can read the entire study here...

"Bang For The Buck" Executive Summary

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Kentucky devotes considerable resources toward measuring the inputs and outputs of its education system. The state’s Department of Education publishes an annual series of reports on the achievement levels of students at every school across the commonwealth on a number of assessments, including the Kentucky Core Content Test (KCCT).

As important inputs, the department’s reports identify the amount of money every school in Kentucky invests in each child to carry out its constitutional obligation to provide educational services for those students within its jurisdiction. Other reports include the percentage of children in the federal free/reduced-lunch program to indicate each school’s level of poverty.

However, despite the immense amount of input and output data available, the state neglects to quantify the relationship between funds invested and student results achieved.

Our report comprises the first formal study (at least the first one publicly available) gauging the “return” that taxpayers — the people who support Kentucky’s public schools — receive on their “investment.” This is the amount of “bang” that Kentucky taxpayers receive for their education “bucks.”

To explain the relationship between spending and results, we offer a statistical approach based on a system created by the Yankee Institute, our sister free-market think tank in Connecticut. The Yankee Institute allowed us to adapt their methodology to one we refer to in this report as a Score-Spending Index (SSI).

We have designed the SSI so that a school receiving average results on the Commonwealth Accountability Testing System (CATS) with an average level of state funding receives a score of “zero.” Schools obtaining less- than-average CATS results with average funding receive a negative SSI, while schools with a superior CATS performance at an average funding level receive a positive SSI. Our SSI percentage-like figure indicates, for example, that a school with an SSI of 50 performs about 50 percent better than the state average on spending its dollars wisely.

We also offer SSI calculations for high schools using the ACT (college-entrance test) scores and find similar results as demonstrated when the CATS scores are used to determine “bang-for-the-education-buck” performance.

By analyzing individual schools instead of school districts, our SSI analysis probes even deeper than the Yankee Institute’s evaluation.

Our SSI calculations yield the following conclusions:

  • Many efficient schools receive low funding yet achieve solid academic results. For example, Carlisle County Elementary School spent only $3,080 per pupil in 2004 — well below the state average — with a poverty rate of nearly 60 percent and produced an above-average CATS score. By contrast, Portland Elementary School in Jefferson County scored well below the CATS average with 54 percent of its children in poverty while spending a whopping $10,340 per pupil.
  • Schools with high test scores do not always achieve them with the highest level of efficiency. The Anchorage Independent Schools produce high CATS scores but do so with the highest per-pupil funding of any elementary schools that score above average on the CATS, 342 have better SSIs than Anchorage Elementary School.
  • Poverty cannot be used as an excuse for poor performance. Among the 50 elementary schools with the highest SSIs, six have free/reduced-lunch rates above the state average. Yet each one of these schools scores above the elementary-school CATS average. At the other end of the spectrum, some of the highest-funded schools in Kentucky at elementary, middle and high-school levels generate some of the worst CATS performances and also yield strongly negative SSIs. Hickman County High School receives a lofty SSI despite having an above-average number of free/reduced-lunch students in attendance. This accomplishment merits attention considering this school’s annual per-pupil funding registers almost $1,500 dollars less than the state high-school average. Policymakers should carefully evaluate the schools that demonstrate the ability to spend tax revenues wisely and adopt a “best practices” approach so more schools can deliver cost-justified results. While we continue to question the use of the CATS as Kentucky’s primary testing system, we believe our use of CATS — and ACT — scores provides a comparative tool that sheds new light on this subject. In the end, we solidly conclude that: Higher levels of education funding alone do not yield higher academic performances in Kentucky’s public schools. Clearly, other important issues are involved — factors that can be better understood as we look at the “bang-for-the-buck” performances of the commonwealth’s schools.

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