Policy Analysis No. 662

They Spend WHAT? The Real Cost of Public Schools

Although public schools are usually the biggest item in state and local budgets, spending figures provided by public school officials and reported in the media often leave out major costs of education and thus understate what is actually spent.

To document the phenomenon, this paper reviews district budgets and state records for the nation’s five largest metro areas and the District of Columbia. It reveals that, on average, per-pupil spending in these areas is 44 percent higher than officially reported.

Real spending per pupil ranges from a low of nearly $12,000 in the Phoenix area schools to a high of nearly $27,000 in the New York metro area. The gap between real and reported per-pupil spending ranges from a low of 23 percent in the Chicago area to a high of 90 percent in the Los Angeles metro region.

To put public school spending in perspective, we compare it to estimated total expenditures in local private schools. We find that, in the areas studied, public schools are spending 93 percent more than the estimated median private school.

Citizens drastically underestimate current per-student spending and are misled by official figures. Taxpayers cannot make informed decisions about public school funding unless they know how much districts currently spend. And with state budgets stretched thin, it is more crucial than ever to carefully allocate every tax dollar.

This paper therefore presents model legislation that would bring transparency to school district budgets and enable citizens and legislators to hold the K–12 public education system accountable.

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Adam B. Schaeffer is a policy analyst with Cato’s Center for Educational Freedom and author of “The Poverty of Preschool Promises: Saving Children and Money with the Early Education Tax Credit,” Cato Institute Policy Analysis no. 641, August 3, 2009.