‘Dollars to the Classroom’ — less than meets the eye?

The recent Dollars to the Classroom report from the Indiana Office of Management and Budget brings to mind Mark Twain’s oft-quoted line about “lies, damned lies and statistics.” Not that the report is dishonest – but gleaning truth from its hundreds of pages is no easy task.

Key points, according to Indiana OMB director Ryan Kitchell, include that Indiana schools spent only 57.8 percent of their dollars “in the classroom” in 2008-09, and that this figure “continues to trail the U.S. average by 5 percentage points.”

But calculations of how much is spent in the classroom can vary dramatically, depending on how spending is recorded and categorized. And the comparison of Indiana with the national average isn’t quite the apples-to-apples comparison that Kitchell implies.

Indiana’s Dollars to the Classroom reports grew out of a nationwide push a few years ago, led by the CEO of online sales company Overstock.com and endorsed by columnist George Will and other prominent conservatives, to force public schools to spend 65 percent of their budgets on instruction. Several states adopted the requirement. Gov. Mitch Daniels and some Indiana legislators flirted with the idea but settled for a law requiring annual reports to show whether schools were making progress in spending more money in the classroom.

The so-called 65 Percent Solution drew support from the belief that schools waste money on administrative overhead; that if they just managed their money better, we could keep taxes low and still generously fund education.

But Dollars to the Classroom shows that the Indiana’s schools spend only 4.4 percent of their money on central-office administration and just 4.3 percent on school administration – principals, assistant principals, office staff, etc. The big-ticket items for non-classroom spending are construction debt, building maintenance, transportation and food services.

As the report points out, if you look only at operating costs – excluding building costs and capital expenses – Indiana schools spend 72 percent “in the classroom.”

Furthermore, skeptics have cited studies that found no correlation between student performance and the percent of school funding spent in the classroom. Arguably, effective schools require effective leaders, along with reliable systems for getting kids to and from school and keeping them fed.

Even so, when this year’s Dollars to the Classroom came out, I asked OMB staff how they determined that Indiana spends 5 percentage points less in the classroom than the national average, given that Indiana and the U.S. Department of Education use different categories for tracking spending. Amy Angelopoulos, a budget analyst with the State Budget Agency, explained:

You start with school spending data from the National Center on Education Statistics (Table 5, page 13); then you adjust Indiana’s figures to make them comparable. You subtract the costs of adult education, property and other “nonoperational” factors from Indiana’s total spending, because they aren’t included in the federal data. You also deduct school administration costs from Indiana’s “classroom” spending, because the feds don’t consider school administration to be “instruction.”

Using the federal government’s approach produces a different set of percentages than the state formula used in the Dollars to the Classroom report. The result: Indiana spent 66.4 percent on instruction, instruction-related and student support costs ( i.e., “in the classroom”) and the national average was 71.2 percent — a difference of 4.8 percentage points.

Except that the national data in the NCES document are for 2007-08, a year earlier than the Indiana Dollars to the Classroom data. And the same federal figures show that in 2007-08 Indiana spent 69.1 percent on instruction, instruction-related and student support costs. That’s just 2.1 points shy of the national average, not the 5-point spread that the Indiana report claims.

Angelopoulos said it will probably be almost a year before the NCES data for 2008-09 are available. By then, Dollars to the Classroom for 2009-10 will likely be out, and we can compare apples to oranges once again.


1 thought on “‘Dollars to the Classroom’ — less than meets the eye?

  1. Pingback: Education issues looming in Indiana legislative session « School Matters

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