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Exploring District-Level Expenditure-to-Performance Ratios

by Heather Lavigne, Sarah Ryan, Jacqueline Zweig and Pamela Buffington

State education budgets have shrunk since the economic recession of 2007-09. During the 2012-13 school year 35 states provided less funding for education than they had five years earlier (Leachman, Albares, Masterson, & Wallace, 2016; Levin et al., 2012; Oliff, Mai, & Leachman, 2012). As a result, districts across the country are seeking ways to increase their efficiency by using fewer resources while maintaining or even improving education outcomes. This study examines the expenditure-to-performance ratio, a measure that can be used along with other information to examine districts' use of resources as a proxy measure of efficiency. District expenditure-to-performance ratios offer a simple descriptive method of simultaneously assessing spending and student outcomes using publicly available data. However, expenditure-to-performance ratios can use different measures of expenditure and performance, and research has not always explicitly considered how variability in the choice of measures and of district characteristics (such as locale, student enrollment size, and student poverty status) can affect outcomes. Conducted by Regional Educational Laboratory (REL) Northeast & Islands in partnership with the REL Northeast & Islands Northeast Rural Districts Research Alliance, this study used state department of education of data to create six expenditure-to-performance ratios, each calculated by dividing one of three district-level measures of per pupil expenditures by one of two district-level measures of performance. The six ratios were then used to rank the 98 sample districts in the example REL Northeast & Islands Region state. Key findings included: (1) The rank of each district varied according to which of the six expenditure-to-performance ratios was being considered; (2) Districts' ranks may show more movement when comparing ratios calculated using different measures of performance than when comparing ratios using different measures of expenditures; and (3) Nearly half (43) of the 98 districts ranked among the top 25 districts on at least one ratio, but only 8 districts ranked among the top 25 on all six ratios. This study demonstrates how, at least within one state, conclusions about district efficiency may vary depending on which measures of expenditure and performance are considered. Two appendices are included: (1) Data and Methodology; and (2) Supplemental Statistical Tables and Figures.

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