Education Spending | Analysis

Cato Research: States Under-Report Education Spending

• By Dian Schaffhauser
• 09/03/13

Libertarian think tank the Cato Institute has shone a light on how transparent states are about their spending for education. In a recent report, the non-profit organization's Center for Educational Freedom examined the spending data made available by all 50 state education departments of education through their Web sites. According to the report, few education departments provide financial information that's complete or timely or understandable by the public.

For example, reported "Cracking the Books," per-pupil expenditures for half of all states leave out capital expenditures; as a result the cost is considerably understated from what's actually spent. Alaska doesn't report per-pupil spending at all. "These partial expenditure figures, so-called 'current' or 'operating' expenditures, significantly understate the actual cost of K-12 education," the report's authors stated.

Cato researchers scored each state based on information made available in four categories: per-pupil expenditures, total expenditure data, average salary data, and public accessibility. The scores for the first three categories were divided equally between statewide and district-level financial data. Expenditures included such costs as instruction, administration, transportation, food service, building construction, and debt service. The scoring didn't take into account whether expenditures covered the full cost of employee pensions in state calculations of total expenditures.

New Mexico ranked as the most transparent state with a score of 93, followed by South Dakota with a score of 92.5 and Washington with a score of 85. At the bottom of the rung was Alaska, with the lowest score, 26.75; Hawaii was ranked at No. 49 with a score of 28.25; and Iowa was No. 48 with a score of 35.75.

"When the state education departments provide incomplete or misleading data, they deprive taxpayers of the ability to make informed decisions about public school funding," said the report's authors. "At a time when state and local budgets are severely strained, it is crucial that spending decisions reflect sound and informed judgment."