Traditional Resource Reallocation and Use

Uses of the Educational Dollar: Expenditure Patterns

Whatever the amount and however distributed, districts and schools must use education dollars to produce student achievement. Research shows that most districts follow relatively standard practices in using education resources, producing a system characterized by good values but unimpressive results, at least in terms of student achievement. Table 1 identifies how the education dollar is spent by function. The table draws from several CPRE studies of resource allocation and use within districts and schools. The data show that districts spend about 60 percent of the education dollar on instructional services, which includes regular instruction in the classroom for the academic subjects of mathematics, language arts, writing, science, history, social science and other content areas, as well as instruction for special needs students such as the physically and mentally disabled, English language learners, and low achieving students.

Table 1. Current Allocation of Expenditures by Function, Nationally and in Selected States (Percent).

Expenditure Function	Nation	California	Florida	New York
Instruction	61.2%	60.8%	58.4%	61.8%
Instructional support and student services	8.7	7.9	9.9	8.6
Total administration	8.4	11.4	8.1	10.2
District administration	2.6	3.2	1.2	5.7
School administration	5.8	8.2	6.9	4.5
Operations and maintenance	10.3	13.4	10.7	9.3
Transportation	4.2	1.5	4.2	6.3
Short-term capital	-	0.4	0.3	1.1
Food services	4.2	4.6	5.2	2.7

a. Large unified districts.

Sources: Monk, Roellke, and Brent, 1996; Nakib, 1995; Picus, Tetreault, and Murphy, 1996; National Center for Education Statistics, 1996a, tab. 160.

The proportion of 60 percent for instruction is surprisingly consistent across districts and states. Researchers have analyzed these numbers across states and districts in rural and urban areas, with high and low percentages of minority students, small and large in size, and with high and low concentrations of poverty. The results, somewhat surprisingly, show that districts tend to spend their resources in about the same proportions. The results show that the coefficient of variation for instruction was about 10 percent, suggesting that two-thirds of all districts spent between 54 and 66 percent of their budget on instructional services, which supports the results in Table 1 . The 60 percent spent on instruction was also found in other studies.

Table 2. Share of Budget Spent on Administration in Big City Districts (Percent).

District	Central Office	Site	Total
Dade County (Miami)	3.0%	6.3%	9.3%
Los Angeles	4.5	5.3	9.8
New York	2.7	3.6	6.3
San Francisco	4.5	5.4	9.9

Sources: Monk, Roellke, and Brent, 1996; Nakib, 1995; Picus, Tetreault, and Murphy, 1996.

Average administrative expenditures in education generally do not comprise a large portion of expenditures. Indeed, Tables 1 and 2 show that administrative expenditures are less than ten percent of the budget. In most districts, moreover, the larger portion of administrative expenditures occurs at the school level, i.e., the place where educational services actually are delivered. The relatively modest expenditures on administration have been confirmed by other research as well.

It should be noted that although administrative expenditures per se, especially in the central office, are not large in terms of percent of the budget, several functional activities such as transportation, operation and maintenance, and most professional and curriculum development are conducted largely from the central office. This means that central office activities are much larger than indicated by the expenditure category of central office administration. Moreover, several central office administration functions need to be performed such as fiscal and accounting services, personnel administration, and some amount of district management. It could be argued, though, that many of these functions could be more productively conducted on site, at the school level.

Interestingly, higher spending districts tend, on average, to spend their resources in the same proportion as the average district, as well as lower spending districts. Although there is some variation both within and across states, higher spending districts also tend to spend approximately 60 percent of their budget for instruction. Of course, similar percentages of budgets produce much different dollar amounts spent on direct instructional services between high and low expenditure districts. Sixty percent of a $7,500 per pupil budget provides $4,500 per pupil for instruction, compared to $3000 for the average district spending $5,000 and only $2,100 per pupil for the district spending at the $3,500 level.

Table 3. Instructional Staff per Thousand Pupils By Subject Area in New York Secondary Schools (Grades 7-12), 1991-92.

Subject	Quintile 1	Quintile 2	Quintile 3	Quintile 4	Quintile 5
English	5.20	5.25	5.43	5.31	6.10
Mathematics	4.46	4.51	4.67	4.54	5.00
Science	3.86	3.98	4.01	4.18	4.95
Social studies	4.04	4.05	4.06	4.09	4.65
Foreign language	2.18	2.36	2.35	2.46	3.23

Note: Quintiles refer to spending levels, with quintile 1 the lowest and quintile 5 the highest.

Source: Monk, Roellke, and Brent, 1996, tab. 7a.

Higher spending districts tend to spend the bulk of their extra funds on more staff, and only a small amount on higher salaries. But the schools tend not to use the additional staff for the regular instructional program. In an analysis of teacher resources by core subject areas in New York secondary schools (English, mathematics, science, social studies and foreign language), Monk, Roellke and Brent (1996) showed that staffing in core subjects changed very little across district spending levels. Table 3 shows the remarkable stability of the number of teachers per 1,000 students by the five subject areas. Yes, teacher resources spiked a bit in the highest spending quintiles, but only modestly. The average spending between the highest and lowest deciles differed by almost 100 percent, but teacher resources differed by only 20 percent. Teacher resources varied by negligible amounts across the four lowest spending quintile, though spending varied by thousands of dollars.

Indeed, recent studies have shown that the vast bulk of new dollars provided to schools over the past thirty years was not spent on staff for the core instructional program, but on specialist teachers and other resources to provide services to special needs students, usually outside of the regular classroom. Unfortunately, studies have shown that these programs and services have produced modest, if any, long lasting impacts on student achievement. These dollars represent laudable values -- low income, disabled, and English language learning students need extra services. The values that provide the extra dollars for these extra services should be retained, but the productivity of the expenditure of these dollars needs to rise.

As a result of the increase of specialist staff and programs, regular classroom teachers -- the primary service providers -- comprise a declining portion of professional staff in schools. The National Commission on Teaching and America's Future (1996) found that regular classroom teachers as a proportion of all professional staff fell from 70 percent in 1950 to 52 percent in 1995, with 10 percent of the latter not engaged in classroom teaching. The fiscal implication is that a declining portion of the education dollar is being spent on the core activity of schools -- teaching the regular instructional program.

Related research on the local use of new money from school finance reforms has found similar patterns of resource use. Poor districts get more money and use it for clear needs (facilities, social services, compensatory education) but little of the new money makes it into the regular education program. The end result is a system in which money rises, services expand outside the regular classroom, but results in terms of student achievement stay flat or improve by only small amounts.