Now Is a Great Time to Consider the Per Unit Cost of Everything in Education

January 2010

There’s nothing quite like a serious fiscal crisis to inspire a sober assessment of an organization’s finances. So it is with the current recession and our nation’s schools. Whether policymakers are staring at the exponents on projected budget gaps, or scrutinizing budgets to find what to cut, or even sizing up the stimulus package, they are dealing with dollar signs like never before. Yet, in the frenzy of renewed interest in finances, many education officials miss the one step that can often provide the best insight into the implications of all those dollar signs. That step: convert the money into per unit terms.

In education, putting money in “per unit” terms often means “per student,” particularly when examining those funds used more directly to serve students. For instance, many already know that the country spends an average of around $10,000 per pupil per year on K-12 education. But for many education leaders, that’s where much of the per pupil analysis ends. Rather, education finance documents summarize finances across categories, reporting instead the millions spent on teacher salaries, benefits, or debt service, or on broad categories like “instruction” and “instructional support.” And then there are the reams of accounting and compliance data reported to states and federal agencies to ensure funds aren’t misused in some way. What isn’t clear from all this fiscal documentation, however, are the per unit costs of what it is that schools or districts deliver. For instance, what does the district spend per pupil for math, science, or physical education? What’s the price tag on different sports offerings, or on counseling, or drama productions? And, how does spending on a range of efforts intended to improve teaching compare on a per teacher basis?

Read more of Dr. Roza's paper: "Now is a Great Time to Consider the Per Unit Cost of Everything in Education."

This paper was prepared for the American Enterprise Institute and Thomas B. Fordham Institute conference, “A Penny Saved: How Schools and Districts Can Tighten Their Belts While Serving Students Better,” January 11, 2010. The final version was published in "Stretching the School Dollar: How Schools and Districts Can Save Money While Serving Students Best," edited by F. Hess and E. Osberg (Harvard Education Press, 2010).

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