Are Kentucky’s education administration costs out of line?
The quick answer is that the state does appear to spend an unusually high amount on general education administration. In fact, if the state could just reduce those general administration costs to match the overall US average, annual savings on the order of $20 million seem possible. That would be about enough to give every teacher a $500 raise.
Want to see the details?
Click the “Read more” link.
Interest in the administration costs associated with Kentucky’s public education system increased recently, so I decided to see if data would allow a comparison of those costs across the states.
It turns out that, along with a lot of other information, the US Census Bureau’s annually issued Public Education Finances series does have information about the cost for general administration of education in each state. The latest document in the series is Public Education Finances: 2015 and I found the data used in this blog in Table 11.Table 11 from the Census publication shows and ranks each state’s per pupil expenditures on general administration and also shows and ranks each state’s current spending per pupil on education. Current spending omits capital construction spending and many consider it an important and stable indicator of annual direct spending for education. Construction spending, by comparison, can experience wide variations from year to year and doesn’t very directly relate to what happens in the classroom.
This table shows 2015 data for all the states along with the rankings.
KY Education Admin Costs Compared to Other States
The first section on the left covers the per pupil spending for general administration in each state. For example, the top-listed state, Mississippi (MS), spent $275 per pupil on general administration. That ranked Mississippi in 22nd place among the states for general administration spending. In this area, note that Kentucky also ranked above the median state for administration spending, paying $249 per pupil for such expenses. Kentucky’s general administration spending was also higher than the national average figure of just $218 per pupil.
The middle section of the table shows the total current spending per pupil in each state and where each state ranked for total current spending. Mississippi spent $8,456 in 2015, which ranked in 47th place. Kentucky’s total current spending on education in 2015 was $9,630, ranking in 37th place (no, not at the bottom – not even in the bottom 10).The last column shows the difference between each state’s rank for total current spending and its rank for general administration costs. For example, Kentucky’s total current spending ranking of 37 minus its general administration cost ranking of 23 equals 14.The table order is listed according to the numbers in the far-right column and is organized so that states spending relatively high amounts on general administration versus their overall education spending will appear at the top. As you can see, Kentucky is listed very high in the table, which indicates its general education administration costs are indeed above national norms.
Are there savings to be had for Kentucky?
Compare Kentucky’s general administration costs for education ($249 per pupil) to the national average for general administration ($218). The difference is $31 per pupil.
Next, consider the state’s current K to 12 enrollment is about 650,000.If Kentucky could reduce its general administration costs to match the national average, we would save $31 for each of those 650,000 students. That is a cool savings of about $20.2 million a year. Since the state has around 40,000 teachers, we could give each one a $500 increase in salary if we saved that from our general administration expenses.
The table shows some other interesting things.
Take a look at some of the states near the bottom of the table. These maintain the most cost control over their general administration bills. At the same time, all are funding total current education spending at well above national average rates. What do these states know about keeping administration costs low? It is particularly noteworthy that three very small states, Rhode Island, Delaware and Hawaii are listed near the bottom of the list. How do they manage to control general administration costs so well when they don’t have many students to divide those costs among? Finding such states at the efficient end of the table is a real surprise. It also tells me Kentucky can learn something from them about how to keep its general costs for education administration in better check.