• Introduction
• National Findings
• State Findings
• References

The "School District Financial Survey" (Form F-33) is an annual survey of school district financial data that is part of the Common Core of Data (CCD). The F-33 collects data on revenues and expenditures for prekindergarten through grade 12 in public schools in approximately 15,500 local education agencies (LEAs) in the 50 states and the District of Columbia.

This report presents analyses of school district expenditures for the 1997-98 school year. The F-33 data form the core of these analyses, but information is supplemented by data on selected school district demographic and fiscal characteristics from the 1990 School District Data Book, prepared by the U.S. Census Bureau.*

Analyses of school district expenditures are presented for the nation and the states. The national analyses focus on expenditures in school districts in different geographical regions, of different size, with different fiscal capacity to support education (measured by median household income and median housing value), with different proportions of minority enrollment and with different poverty rates. The state analyses focus on interdistrict variation in expenditures per pupil, and the relationship between expenditures per pupil and the school district fiscal and demographic characteristics cited in the national analyses.

The analyses of expenditures presented in this report are based on both actual dollars and cost-adjusted dollars. Cost adjustments are designed to take into account differences in the cost of education across school districts in a state. The cost adjustment used in these analyses is the Geographic Cost of Education Index (GCEI), which uses school districts as the geographic area (Fowler and Monk 2001; Chambers 1998). The GCEI was developed using data from the 1993–94 Schools and Staffing Survey and works with three categories of school inputs: certified school personnel, noncertified school personnel, and nonpersonnel school items. The index reflects how much more or less it costs in different geographic locations to recruit and employ comparable school personnel, as well as the varying cost of nonpersonnel items such as purchased services, supplies and materials, furnishings and equipment, travel, utilities, and facilities.

All analyses presented in this report are for the 1997–98 school year. Although most school finance relationships tend to be relatively stable over time, changes often occur as a result of changes in state funding formulas. The relationships observed for the 1997–98 school year may therefore differ from those observed in earlier or later years.

In the next section, the major findings of the report are presented using cost-adjusted expenditures. Findings based on actual expenditures are included in the body of the report.

The national findings focus on three areas: total expenditures and expenditures in different geographic regions, expenditures in school districts of different size, and the relationship between expenditures and selected school district fiscal and demographic characteristics.

Cost-adjusted school district expenditures for elementary and secondary education totaled $324.7 billion in the 1997–98 school year, or about $7,138 per pupil. The largest share of total school expenditures was for current expenditures—$273.1 billion, or about 84 percent of the total. Capital expenditures of $35.3 billion made up almost 11 percent of the total. The remaining $16.4 billion was used for nonelementary and nonsecondary programs and expenditures by LEAs (NCES 1998).

Cost-adjusted expenditures per pupil for education were highest in the Northeast for seven of the eight expenditure measures. Expenditures for administration were highest in the Midwest. With the exception of expenditures for plant maintenance and operation, which were lowest in the South, expenditures per pupil for all other education functions were consistently lowest in the West.

Cost-adjusted expenditures per pupil for most school functions were generally highest in small school districts and lowest in large districts. Per pupil expenditures were highest in districts with fewer than 1,000 students for all functions except student and instructional staff support. This was the one function for which expenditures per pupil were highest in the largest districts (with 10,000 or more students) and lowest in the smallest districts (with fewer than 1,000 students). The other expenditure measure for which expenditures per pupil were not lowest in the largest districts, administration expenditures per pupil, was lowest in districts with between 5,000 and 9,999 students.

For the nation as a whole, there was a weak relationship between school districts' fiscal capacity (measured by median household income and median value of owner-occupied housing) and cost-adjusted expenditures per pupil. The correlation between median household income and cost-adjusted current expenditures per pupil was +0.03; the correlation between median housing value and current expenditures per pupil was statistically insignificant. Correlations between these two measures of district fiscal capacity and all other measures of cost-adjusted expenditures per pupil were also weak or statistically insignificant.

Minority enrollment in a school district and the district poverty rate also showed weak relationships with cost-adjusted expenditures per pupil. Correlations between these two school district demographic characteristics and all measures of cost-adjusted expenditures per pupil were either weak or statistically insignificant.

The state findings focus on two areas: interdistrict variation in expenditures per pupil, and the relationship between expenditures and selected school district fiscal and demographic characteristics.

States differ substantially in the amount of interdistrict variation in expenditures per pupil. Using the synthesized measure of variation, 12 states had the largest overall variation in cost-adjusted expenditures per pupil. Of these 12 states, 4 (Alaska, Idaho, Montana, and Wyoming) were in the West, 2 (Massachusetts and New Hampshire) were in the Northeast, and 6 (Illinois, Kansas, Missouri, Nebraska, North Dakota, and South Dakota) were in the Midwest. No state in this group was from the South.

Illinois, Montana, and North Dakota were in the quartile of states with the greatest interdistrict variation on all components of expenditures per pupil, while Alaska was in this quartile for six measures of expenditures per pupil.

At the other end of the spectrum were 12 states with the weakest interdistrict variation in cost-adjusted current expenditures per pupil. Of these 12 states, 9 (Alabama, Delaware, Florida, Kentucky, Louisiana, Maryland, North Carolina, South Carolina, and West Virginia) were in the South, 2 (Iowa and Wisconsin) were in the Midwest, and 1 (Nevada) was in the West.

Four states (Delaware, Florida, Nevada, and North Carolina) were in the quartile of states with the weakest overall variation on all measures of expenditures per pupil, and two other states (Alabama and West Virginia) were in this quartile for six components of expenditures per pupil.

Median household income. Among the 40 states with adequate data for analysis, 5 states (Illinois, Louisiana, New York, Pennsylvania, and Virginia) showed a moderate positive correlation between median household income and cost-adjusted current expenditures per pupil; no state had a strong positive correlation between income and current expenditures. On the other hand, median household income was negatively related to cost-adjusted current expenditures per pupil in 24 states, with 5 states (Alaska, Arizona, Iowa, Utah, and Washington) having a strong negative correlation between these variables.

In cost-adjusted dollars, 11 states showed a positive relationship between median household income and at least one measure of expenditure. Household income was related to all eight expenditure measures in one state (New York) and to seven of the eight expenditure measures in four other states (Illinois, Louisiana, Pennsylvania, and Virginia). In contrast, there was a negative relationship between median household income and at least one expenditure measure in 27 states. Five states (Arizona, Indiana, Missouri, Montana, and Nebraska) showed a negative relationship between household income and all eight measures of expenditure. Another 13 states (Alaska, California, Florida, Iowa, Kansas, Maine, Minnesota, North Dakota, Oregon, Texas, Utah, Washington, and West Virginia) showed a negative relationship between household income and at least six expenditure measures.

Median housing value. District property values, as measured by median housing value, were positively related to cost-adjusted current expenditures per pupil in more states than median household income. For the 40 states with adequate data, 5 states (Illinois, Massachusetts, Ohio, Pennsylvania, and Vermont) had a moderate positive correlation between median housing value and current expenditures per pupil, and 1 state (Virginia) had a strong positive correlation. On the other hand, median housing value was negatively related to current expenditures per pupil in 17 states, with 5 states (Alaska, Iowa, Montana, Nebraska, and West Virginia) having a strong negative correlation between these variables.

Twenty-three states showed a positive relationship between median housing value and at least one measure of expenditure. Median housing value was positively related to all eight expenditure measures in one state (Virginia) and to at least six of the eight expenditure measures in four other states (Illinois, Maryland, Ohio, and Pennsylvania). In contrast, there was a negative relationship between median household income and at least one expenditure measure in 25 states. One state (Arizona) had a negative relationship between median housing value and all eight measures of expenditure. Another 13 states (Alaska, California, Indiana, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Texas, Utah, and Washington) showed a negative relationship between household income and at least six expenditure measures.

Minority enrollment. For the 40 states with adequate data, 19 states had a positive correlation between minority enrollment and cost-adjusted current expenditures per pupil. Five states (Kansas, Nebraska, New Hampshire, New York, and Pennsylvania) had a moderate negative correlation between minority enrollment and cost-adjusted current expenditures.

In cost-adjusted dollars, 35 states showed a positive relationship between minority enrollment and at least one measure of expenditure. Minority enrollment was positively related to all eight measures of expenditure in seven states (Arizona, Indiana, Massachusetts, Minnesota, Missouri, Montana, and Ohio) and to at least six of the eight expenditure measures in another six states (Alaska, Michigan, North Dakota, Oregon, South Carolina, and Wisconsin).

District poverty rate. For the 40 states with adequate data, 27 states had a positive correlation between the district poverty rate and cost-adjusted current expenditures per pupil. Three states had a negative correlation between the district poverty rate and cost-adjusted current expenditures per pupil.

Thirty-three states showed a positive relationship between the district poverty rate and at least one cost-adjusted measure of expenditure per pupil. The district poverty rate was positively related to all 8 expenditure measures in 10 states (Arizona, Indiana, Kansas, Massachusetts, Minnesota, Missouri, Montana, North Dakota, Utah, and Washington) and to at least 6 of the 8 expenditure measures in another 11 states (Alaska, California, Florida, Michigan, Nebraska, Oregon, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming). Eight states (Illinois, Louisiana, Maryland, Michigan, New York, Pennsylvania, Rhode Island, and West Virginia) had a negative relationship between the district poverty rate and at least one measure of expenditure.

Chambers, J.G. (1998). Geographic Variations in Public School Costs (NCES 98–04). U.S. Department of Education. Washington, DC: National Center for Education Statistics Working Paper.

Fowler, W.J., and Monk, D.H. (2001). A Primer for Making Cost Adjustments in Education (NCES 2001–323). U.S. Department of Education. Washington, DC: National Center for Education Statistics.

National Center for Education Statistics (1998). School District Financial Survey (Form F-33): School Year 1997–98. U.S. Department of Education, National Center for Education Statistics. Washington, DC. U.S. Government Printing Office.

*While more current census data on district characteristics are now available, the 1990 census data were used in these analyses because they were the most current data available at the time the report was planned and written. The national analyses include districts in all states, even when the percentage of districts with demographic and fiscal data was less than 50 percent of the total districts in the state. The state analyses, however, only included the 40 states in which at least 50 percent of the districts had demographic and fiscal data.