Utah’s total spending per student for the year that ended June 2002 increased 8.2% from $5,762 in FY2001 to $6,234 in FY2002. This significant growth occurred despite the fact that this was the first of three fiscal year budgets which was affected by legislative cuts brought about by the current economic downturn. This figure encompasses all district spending including instruction, maintenance and operation, as well as capital outlay and debt service. Typically, most media reports on per student spending do not include capital outlay and debt service costs, but the Taxpayers Association believes that all spending should be considered when reporting education spending.
This 8.2% increase continues the trend of spending per student increasing well in excess of inflation. In the past ten years, Utah’s total per student expenditures have increased at an annualized rate of 5.8%, slightly higher than the national average of 4.5% and much higher than the annualized inflation rate of 3%.
Every year, the Utah Taxpayers Association analyzes expenditures for Utah’s 40 school districts. A complete district-by-district analysis for FY2001-02 is found in the Association’s July 2003 newsletter which can be found on the web at www.utahtaxpayers.org . The Association’s analysis is based on the most current data from the State Office of Education and the State Tax Commission. This year, in addition to all 40 school districts, the Association also analyzed charter school spending.
Instruction Spending Slows
School district expenditures are classified into several categories. The annualized growth in various school spending categories for the five-year period between 1997 and 2002 shows that the fastest growing spending was student services at an average 8.2% per year, followed by media/library spending at 7.5%, transportation 6.7%, and administration 6.4%. Surprisingly, instructional expenditures grew second slowest at 5.1%. Instructional costs are affected by pupil teacher ratios and teacher compensation. The only category which grew slower than instruction was debt service at 4.7%, whose growth has slowed in recent years due in part to low interest rates.
Education is a labor intensive endeavor. In FY2002, 68% of all Utah education expenditures were allocated for employee salaries and benefits. Purchased services accounted for 9% while supplies/materials and property expenditures accounted for 8% and 7% respectively.
Compared to the nation, Utah’s educator compensation was tilted in favor of higher benefits instead of salary, according to U.S. Census Bureau data. Nationally, adding employee benefits to employee salaries resulted in a 26% increase. In Utah, benefits added a 37% increase.
Spending per student varied significantly from district to district. Many of these differences can be attributed to obvious differences between districts including declining or increasing enrollment, urban or rural population, property tax valuation per student, district management, and voter preferences. Some interesting observations include:
Wayne and Granite school districts have no debt service costs, and Uintah’s debt service cost per student is very low.
- Alpine has the highest percentage of personnel as teachers at 68%. The state average is 54%.
- Logan had the highest percent of maintenance and operation expenditures that was allocated for instruction at 78%. The state average is 69%.
District Size and Administrative Costs
The Taxpayers Association reviewed the administrative costs per ADA for Utah’s eighteen school districts that are located in urban and suburban areas and found that the correlation between district enrollment and administrative costs per ADA was minimal. These eighteen districts represent 90% of Utah’s total enrollment. Rural districts were excluded from this analysis since rural districts inevitably have higher administrative costs due to lower population densities and necessarily existent smaller schools.
In this analysis, administrative costs included the following: district level administration, school administration, business administration, information services, and data processing.
A linear regression yields only a very slight decrease in administrative costs per ADA as enrollment increases. Per 1,000 student enrollment increase, administrative costs decline $1.30 per ADA. However, this slight decrease in administrative costs for larger districts is statistically insignificant.
School District Revenue Sources
Statewide, school districts received 58.7% of revenues from state sources, primarily individual income taxes. Four years ago, 61% of school district revenue came from state sources. Nationally, schools receive 50% of their funding from state sources.
Districts received 33% of revenues from local sources, primarily property taxes but also fees and interest on balances. Park City received 83% of its revenues from local sources while Tintic received only 10% from local sources. Nationally, schools receive 43% of funding from local sources.
The remaining 8.3% of revenues comes from the federal government compared to 7.1% for schools nationally. However, Utah receives less than the national average on a per student basis, $475 compared to $606. Since Utah’s total spending per student is less than other states, a lower than average per student federal spending can equate to a higher than average federal share of total state spending.
San Juan depends on the federal government for 31% of its revenues while Park City receives only 3% of its revenues from Washington. Four years ago, 6.9% of Utah’s public education funding came from the federal government.
Traditional Public Schools vs. Charter Schools
- This year, for the first time, the Association’s analysis also included charter schools.
- Any analysis of charter schools and traditional schools must consider the following factors
- Charter schools are still relatively new in Utah.
- Charter school enrollment is 0.13% of total K-12 enrollment.
- Charter schools receive significant federal “start up” funding that is eliminated in within a couple of years of start up.
- Charter schools do not receive public funding for capital costs.
Prior to FY2004, charter school received only a portion of the local school district property tax. Starting in FY2004, charter school funding will be based on a statewide average per student and will be funded entirely from state income tax (no local property tax dollars).
Roughly half of charter school students are enrolled in grades nine through twelve while 30% of traditional school students are enrolled in the same grades. High school students are generally more expensive to educate than K-8 students.
Charter schools spending per student for 2002 was 17% higher than regular public school spending. Pupil-teacher ratios are much lower in charter schools than in traditional public schools (14.86 vs. 20.17) even though the funding mechanisms and formulas are similar for both types of schools.