Last week, the U.S. Census Bureau released 2017 data on state public school spending that shows West Virginia spends less per student than the national average and less than most of our neighboring states. If you subtract out federal revenue, WV collects less education revenue per student than 31 states (including DC) and nearly $2,000 less than the national average. Instead of a race to the bottom on public school investment, research shows West Virginia needs to invest more in our students, teachers, and other school personnel.
There are several ways to look at how much states invest in elementary and secondary public education. Most commonly, researchers look at per pupil “current spending” to make interstate comparisons. Current spending includes federal, state and local spending on instruction and support services, which includes salaries and wages, employee benefits, and support services (administration, operation/maintenance, transportation, and other support services). Current spending does not include capital expenditures (construction, equipment, or land), interest on debt, or payments to other governments.
Using the “current expenses” method, West Virginia ranked 26th highest with per pupil public education spending of $11,554 in 2017. The national average was $12,201, a difference of $647 per student. If West Virginia spent another $647 per student to match the national average, it would need another $177 million. The only border state that spent less per pupil in 2017 was Kentucky ($10,121).
Between 2001 and 2017, per pupil public education spending in West Virginia was typically more than the national average in inflation adjusted dollars (2018 dollars). However, during the last two years per pupil spending in West Virginia has dropped below the national average. In 2011, West Virginia’s per pupil spending was 12.2% above the national average – ranking the state 15th highest in the nation. In 2017, however, West Virginia dropped to 26th highest with real per pupil spending 5.3% below the national average. These changes reflect how West Virginia was hit later than other states by the Great Recession and how changes in energy markets impacted the state, along with significant tax cuts that were phased in between 2007 and 2015.
The graph below breaks out per pupil spending by specific categories for West Virginia and the national average. In 2017, West Virginia spent less per pupil in most categories except for transportation, operations and maintenance, and instruction benefits. West Virginia’s above average transportation costs are most likely because West Virginia is rural state with no large cities.
The central reason West Virginia spends more on instruction benefits compared to salaries and wages is the state’s large unfunded teacher’s pension liability. In fiscal year 2017, West Virginia appropriated $321 million toward this unfunded liability. In total, West Virginia spent $887 million on employee benefits in 2017 according to the Census Bureau.
Another way to look at our state’s effort in investing in public schools is to just look at state and local spending on public education since West Virginia has little say in how much federal money gets spent in the state on education. While the Census Bureau does not break out federal expenditures from the “current spending” category, they do show how much federal, state, and local revenue is used in state public education spending. Looking at just state and local revenues per pupil in 2017, West Virginia ranks 32st at $11,248 while the national average was $13,136, a difference of $1,888. The central reason for this large gap is West Virginia receives more federal public education funds than most state’s because it’s a low-income state. In fact, West Virginia receives the 7th highest amount of federal public education per pupil in the nation (including DC). In 2017, West Virginia received $348 more per pupil than the national average, $1,478 compared to the national average of $1,137.
While compared to most states, West Virginia’s fiscal effort in funding education – based on the state’s income and gross domestic product – is above average it needs to target more funding to school districts (counties) that have higher poverty rates if wants to achieve better results. As Sean O’Leary highlighted last week, widespread poverty in West Virginia is one of the driving factors behind our state’s low test scores.
A recent peer reviewed study from the Quarterly Journal of Economics found that a 10 percent increase in per pupil (for all 12 school-age years) spending is associated with a 17 percent increase in family income in adulthood. In a recent analysis and review on whether money matters for education, professor Bruce Baker of Rutgers University concluded:
While there may in fact be better and more efficient ways to leverage the education dollar toward improved student outcomes, we do know the following:
Many of the ways in which schools currently spend money do improve student outcomes.
When schools have more money, they have greater opportunity to spend productively. When they don’t, they can’t.
Arguments that across-the-board budget cuts will not hurt outcomes are completely unfounded.
As West Virginia legislators reconvene soon to take up education reform, they should focus on ways to invest more in our schools and target more funding to schools in higher poverty districts instead of devising ways to redistribute public school money to private corporations.
