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Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

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Nội dung chi tiết: Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-AnalysistsExecutive Summary...............................................................2Introduction.......................................................

.............7Section One: Education Spending and State OperatingFunds....................9Section Two: Education Price Changes and Other Government F Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

unctions............12Section Three: Regional Price Indexes..........................................14Section Four: Statewide Education Spending Adju

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

stedfor Prices.................21Section Five: School District Revenue Adjusted for Prices......................23Conclusions.........................

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis.......................................................29Appendix B.....................................................................34Appendix c..

...................................................................36iExecutive SummarySummary FindingsSpending on education ill Minnesota for childre Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

n in early grades through high school is one of the central constitutional tasks undertaken by the legislature every two years. This spending is one o

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

f the largest budget items, affects every geographic corner of the state and crosses political boundaries. Tn an environment of limited revenue it com

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysiss such as chartered schools to purchase the services and goods required to educate the children of the state. There is no lack of debate about the app

ropriate levels and distribution of resources reflecting conflicting views of adequacy and equity among elected officials.There are seven central find Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

ings of this report:1.Spending for education is a significant share of the state's general fund. From 1985 through 2000 it was about 33% to 35% of tot

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

al spending. This grew to roughly 43% in 2007. but this shift reflected properly tax relief passed in the 2001 session more than new resources for edu

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysise general fund - the share of spending is much lower. During the early 1980’s it was lower than 20% and barely reached 30% by 2007.2.Education spendin

g adjusted for consumer price inflation and pupil change has grown from 1983 to 2007. However, using two alternative measures of price changes more di Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

rectly related to education than the CPI. there is a strong indication that education spending has been declining or is flat. In one measure there was

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

a decline between 2002 and 2004 with a slight increase through 2007. The second measure indicates a higher rate of inflation and even lower real spen

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysisicates that average annual inflation for this 47 year period was 4.9 % compared to the average for all services at 4.7 %. While this difference seems

minor, when compounded over the period, it leads to significant differences for K-12 spending. Inflation was higher in K-12 education than in other im Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

portant areas such as public safety- and income security-.4.This report applies a new price index developed by the U.S. Department of Education to spe

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

cific school districts in the slate. 11 is dear from this data that real price differences between districts exist and that they- affect the real leve

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysisthese differences have not been rigorously identified and measured. These costs reflect differences in size, location and student populations. Only th

rough this analysis can the state assure the delivery of a consistent level of services to students.6.Once cost differences have been properly identif Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

ied and measured, it is necessary to align the funding formulas with the costs. This alignment may- be accomplished either with a reallocation or with

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

new resources. This is a policy decision by the legislature.7.Detailed cost differences are an important part of this report. An appendix contains me

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysistial but important demonstration of how cost differences might be evaluated.Report SummaryMinnesota is a geographically large state with a dispersed p

opulation. A well-known economic fact is that the cost of purchasing the same amount and quality of goods and sen ices can vary across geographic dist Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

ances. This report provides an analysis of prices and education spending in Minnesota through five separate sections presenting different perspectives

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

on resources, relative prices and spending. This is a broad approach but it is important to provide a general context for the price analysis.The firs

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysisucation among the many demands for government goods and sendees. The typical approach is to focus solely on the general fund, but this approach provid

es only a partial view. The general fund is only one. albeit the largest, of state operating funds.•Education as a share of general fund spending has Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

changed substantially between 1977 and planning estimates for 2013. From a 40 percent level in 1977, the share dropped in the late 1970’s and early 19

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

80’s to roughly 30%, was relatively flat from 1986 to 1999 at about 33%. trended up to 44 % by 2007 and is expected to drop through the planning perio

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysispending of all operating funds is substantially lower than the general fund share. Over the same period it ranges from a low of 18 percent in 1984 to

roughly 30 percent in 2007. When all operating funds are taken into account education spending appears to be lower priority of the state.•The spending Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

share increase from 37% to about 44% starting in 2001 reflects property tax policy changes, not education policy changes. The dramatic restructuring

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

of the property tax system in the 2001 session shifted a substantial portion of K-12 funding from local property taxes to state revenue resources. Thi

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysisthe last 20 years. A question raised is how this increase impacts the data: that is. whether the share of funding is higher solely due to increased sp

ecial education funding and not overall funding. In 1996 special education was about five percent of total district revenue, a figure that has grown t Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

o over 11 percent by 2009. While removing this amount from the total would reduce the K-12 share of the general fund, it would not alter the pattern i

Regional-Cost-of-Living-Differences-and-Education-Spending-and-Exploratory-Analysis

n a material way since the spending pattern is dominated by funding for basic education.3

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

Regional Cost of Living Differences and Education Spending An Exploratory AnalysisHamline University School of Business April 30, 2009Table of Content

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