State the Issues - October 2006

Estimating the Cost of an Adequate Education in Nevada

By: Augenblick, Palaich and Associates, Inc

In today’s world of No Child Left Behind (NCLB), increased accountability for student, school and district performance, and a steady growth in high-stakes testing, there is ever-increasing pressure on education systems to ensure that all students leave school with the tools and skills they need to succeed in life. Such increased pressure can have a positive influence on performance, but only if policymakers and education leaders also have the capacity to answer what might appear to be a simple question: Do schools and districts have the resources they need to meet performance expectations?

In many states, policymakers have created accountability systems with consequences for schools and districts when expectations are not met. Most often, however, these expectations and consequences are created without understanding what it costs for schools and districts to meet desired outcomes.

This "funding adequacy" report is designed to help address this issue in Nevada and address both what is it costs to meet present-day standards as well as future standards, where 100 percent of students are required to be meeting proficiency by both the federal and state government in 2013-14.

Key Findings

"Starting" cost. Drawn primarily from an analysis using 2003-04 data, 12 Nevada districts need an additional $79.6 million, or $231 per student on average, to bring them up to the successful schools adequacy level. In total, Nevada would need to spend $2,295.5 million annually to meet the 2003-04 successful schools adequacy level, plus an additional $15.3 million in hold-harmless money for the five districts currently spending over adequacy. This figure must also be adjusted for inflation.

A "goal" cost. This cost, drawn primarily from the professional judgment group analysis, represents the full cost of educating students – including the base cost and added weights for CTE (career and technical education) and students with special needs – to reach future performance standards. The end-point would be $3,551.3 million, not allowing for hold-harmless money.

By: Richard P. Phelps, Ph.D.

Proponents of increased spending on public schools often describe funding adequacy studies as objective and scientific. They are neither. Augenblick, Palaich and Associates (APA), the most prolific of several groups conducting this type of study for a fee, released its latest for the Nevada Legislature in August 2006. APA recommends doubling public expenditure on Nevada’s public schools.

APA chiefly employed two estimation methods – the "successful schools" and "professional judgment" approaches. Both are simplistic and produce unreliable results. With the former method, APA relied on a three-year trend in test scores to judge school success and ended up selecting a disproportionate number of magnet schools and schools labeled "in need of improvement" under NCLB criteria. The latter method asked panels of teachers and school administrators how much money they needed in order to be successful in meeting standards. Not surprisingly, they estimated high.

These estimation methods rest on three assumptions: educators bear no conflict of interest when estimating their own resource needs; legislators will (and should) implement the funding recommendations of the panels exactly as the panels prescribe; and a one-to-one correspondence exists between education spending and student achievement.

In cases of extreme deprivation – in some very poor countries, for example – the correlation between spending and achievement can be rather high. Given the current structure of United States school systems, however, researchers have difficulty finding any correlation between spending and achievement. The most optimistic estimates claim a correlation of 0.1, meaning a doubling of education spending could be expected to increase student achievement by just 10 percent.

A vast research literature on effective schools reveals that the key features leading to improved student achievement are related not to money, but to the quality of school management and leadership.