Analysis: How Much States Spend on Their Kids Really Does Matter

The initial difference between state education rankings and the average per-pupil spending is clear and rather obvious: States that spend more on their students tend to rank higher, and states that spend less rank lower. But if the answer were that simple, education reform would be a breeze.

So like every complex story, outliers and exceptions to the rule exist.

Take Colorado, for instance. The Centennial State ranks ninth nationally in quality of education but spent an average of $9,155 per student in 2009, putting it among the 10 states spending the least per pupil.

In comparison, Wyoming — ranked 29th in quality — spent the most of any state, averaging $18,068 per student. Alaska, ranked 41st for its education quality, spent an average of $16,174 per student. Overall, the U.S. spent an average of $11,665 per student.

But it's hard to ignore patterns that emerge. Success or so-called education-quality measurements generally are based on a formula of graduation rates, test results, and pre-K enrollment, among other factors. Of the top 10 states ranked highest for their education systems using 2009 data, four were among the nation's highest per-pupil spenders.

On the other end of the spectrum, states that spent the least per student in 2009 were ranked fairly low on education. Nevada, ranked lowest at 50, spent just an average of $8,363 on each student and is second-to-last in spending. Utah, ranked 27th, claims the lowest spending at an average of $7,217 per student.

The data comes from the 2012 Kids Count Data Book, a report released annually by the Annie E. Casey Foundation, which evaluates nationwide trends in child well-being by education, economics, health, and community factors.

The education rankings are calculated from several outcome-based indicators, including pre-K enrollment rates, reading and math proficiency scores from fourth grade and eighth grade, as well as high school graduation rates.

Ranked No. 1 in quality is Massachusetts, which spent an average of $13,361 per pupil. The Bay State was barely edged from the top 10 most expensive states by its neighbor, New Hampshire, which spent an average of $13,519 and ranks No. 4 nationally.

Northwestern states arguably spent the most per student, while states in the South spent less. The national education rankings also notably appear to inversely mirror the map of spending. Some of the lowest-ranked states flank the southern U.S. border, while the highest-ranked states are concentrated in the Northwest.

The per-pupil spending, also sourced from the Casey Foundation, was derived from the National Center for Education Statistics based on the fiscal year 2009. The averages have been adjusted for regional cost differences, including teacher salaries in urban areas versus more remote regions.

Education funding is driven largely by state and local sources, supplemented by federal funding. The funding also excludes any spending for pre-kindergarten programs. The Casey Foundation uses pre-K enrollment as an indicator in its calculations for the state rankings.

A correlation analysis sent to National Journal by the Casey Foundation found a moderately positive correlation between per-pupil spending and educational ranking. This means, statistically, that as states spend more, their education ranking tends to increase.

Formulas for school funding vary by each state, so it's difficult to prescribe any one reason for the correlation, if any, between per-pupil spending and educational attainment.

Even states that may have scored higher overall for education still have pockets of funding inequities caused by inconsistent spending on a district level. A recent Center for American Progress report found that six states in particular — Illinois, Missouri, New York, North Carolina, Pennsylvania, and Texas — have children in higher-poverty school districts receiving far less access to state and local funding than children in lower-poverty districts.

What is clear, however, is the correlation between lower educational attainment and pockets of lower-income students of color. Many of the states that ranked lower and spent less on its children, such as California and Texas, also have higher poverty rates, as well as higher rates of minority children. In fact, according to a recent National Journal analysis, many states with higher concentrations of poverty are in the South.

California and Texas are both majority-minority states with a population that is more than 50 percent people of color.

California, which is ranked 43rd in the nation, spent an average of $8,667 per student. Nearly 17 percent of its residents are below the poverty line and 58.8 percent are people of color. Texas, ranked 32nd, has a 17.4 percent poverty rate and spends about $8,654 on each student. About 54 percent of its population are people of color. Both states are in the top 10 lowest-spending states across the nation.

Nationwide, based on demands for improvement, school officials are engaging in education reform, exploring creative solutions leading to improved scores, graduation rates, and college admissions. The majority of states are now exempt from core No Child Left Behind requirements, and many participate in the Obama administration's incentive-based initiative Race to the Top program.