How Schools Allocate and Use Their Resources.
by Picus, Lawrence O.
School finance has traditionally concentrated on the distribution of
resources to school districts, focusing primarily on the equitable distribution
of funds within a state. In recent years, more attention has been paid
to the issue of productivity-how efficiently school districts use the funds
they receive to provide education to students.
To date, research on productivity has not been conclusive (see, for
example, Picus forthcoming). One thing is clear, however-before we can
fully understand how to make schools more productive, we must better understand
how schools use the resources currently available to them.
This Digest summarizes data on expenditures and staffing patterns in
the nation's schools, weighs the impact of financial resources on students'
educational outcomes, and discusses the implications of these allocation
patterns for future policy at both the state and local level.
WHERE DOES THE MONEY GO?
All fifty states collect fiscal information from school districts on
revenues and expenditures and on district employees. The revenue data generally
contain information about the sources and amounts of revenue received by
each school district.
Expenditure data are most frequently collected by object of expenditure,
divided into categories such as professional salaries, classified salaries,
employee benefits, materials and supplies, and capital expenditures. States
now also collect expenditure data by broad program area or function, such
as instruction, administration, transportation, plant operations and maintenance,
and debt service.
Staffing data typically consist of information on the number of licensed
staff members employed by each district and their job title (teacher, administrator,
principal, librarian, counselor, and so forth). Some states maintain databases
with information on instructional aides. In a few states, data on teacher
credentials and/or teaching assignments are also maintained.
The National Center for Education Statistics (NCES) collected data on
expenditures by function at the national level between 1920 and 1980. Over
the sixty years these data were collected, the percentage spent on instruction
declined and the percentage spent on operations, maintenance, and fixed
charges (benefits) increased. In addition, the proportion spent on instruction
remained about 61 percent from about 1950 onward.
During the late 1980s and early 1990s, NCES inaugurated a project to
collect more detailed and consistent expenditure data that would be available
for cross-state comparisons. During this process they made some changes
to the categories of data collected. During the 1990s, these data show
that instructional expenditures continued to compose about 61 percent of
the operating budget, rising slightly from 60.5 percent in 1991 to 61.7
percent in 1995. Data from the 1990s also show what have become typical
school district expenditure patterns: about 10 percent for student and
instructional support, 3 percent for district administration, 6 percent
for site administration, 10 percent for operations and maintenance, and
about 10 percent for transportation, food, and other services.
WHAT DOES THE MONEY BUY?
The single biggest expenditure in school districts is for personnel.
Translating the broad expenditure patterns identified above into staffing
patterns is the first step in analyzing what happens to the education dollar.
In looking at staffing patterns in school districts from fall 1960 to fall
1995, a number of interesting patterns emerge.
Instructional staff dropped from 69.8 percent in 1960 to 67.1 percent
in 1997. But this small decline masked larger changes in the composition
of instructional staff. Teachers constituted 74.1 percent of total staff
in 1950. By 1960 that figure had dropped to 64.8 percent, and by 1995 only
52.0 percent were identified as instructional staff. At the same time,
the percentage of instructional aides rose from almost zero in 1960 to
9.9 percent of staff in 1995.
Central-office administrators composed just 1.7 percent of total staff
in 1995 and school-site administrators just 2.4 percent. Combined, administrators
composed a total of 4.1 percent of all staff, a fairly small percentage
in light of charges that the education system spends too much on administration.
Similarly, the percentage of support staff also rose over this time
period, from 28.2 percent in 1960 to 31.2 percent in 1995. These numbers
show that about one-third of staff in the education system are neither
instructors nor administrators. Rather they are secretaries, custodians,
bus drivers, and other operations and maintenance personnel. When policymakers
and local taxpayers ask why only 60 percent of expenditures are spent on
instruction, a partial answer is that nearly one-third of educational funds
are allocated to building, maintaining, and repairing buildings, and transporting
and feeding students.
The bottom line, however, is that the percentage of teachers dropped
nearly 33 percent in the second half of the twentieth century. Many teachers
have been "replaced" by instructional aides, pupil support staff, and,
as we shall show below, by specialist teachers within schools who do not
teach in regular classrooms. The policy and productivity issue is whether
this use of resources is the most effective.
WHAT IMPACT DO RESOURCES HAVE ON STUDENT ACHIEVEMENT?
There is considerable disagreement over the impact of additional resources
on educational outcomes of students. The complexity of the educational
system, combined with the wide range of outcomes we have established for
schools and the multitude of alternative approaches we use to fund schools,
make it difficult to come to any firm conclusions about whether or not
We do not know what the impact on student performance would be if schools
or school districts were to dramatically change the way they spend their
resources. In 1992, Odden and Picus noted that the research summarized
above suggests that "if additional education revenues are spent in the
same way as current education revenues, student performance increases are
unlikely to emerge." Knowing whether high-performing schools use resources
differently than other schools would help to clarify the issue of whether
More recently, Odden (1997) found that the schooling designs developed
as part of the New American Schools project have generally led to increased
student performance. In each of the seven models studied, schools are required
to divert resources away aides and teachers with special assignments and
focus on increasing the number of regular classroom teachers, thereby lowering
average class size. In addition, each of the designs requires substantial
investments, in both time and money, for professional development.
Odden suggests that these investments can often be funded through elimination
of a position through attrition. He asserts that for relatively little
additional money, schools can fund existing programs and organizational
structures that will enhance student learning.
WHAT DO THESE PATTERNS MEAN FOR FUTURE POLICY DECISIONS ON SCHOOL
FINANCE AT THE STATE AND LOCAL LEVELS?
Regardless of what impact additional funds might have, it is important
that existing resources be used as efficiently as possible. In her study
of the Boston school district, Miles (1995) found that if all individuals
classified as teachers were to teach classes of equal size, the average
class in the district could have been reduced from 22 to 13 students. Although
this reallocation would have placed all children with disabilities in regular
programs, Miles also projected what the average class size would be if
some of the most severely disabled children continued to receive services
under current programs. Dramatic class size reductions were still possible.
Miles's work highlights the fact that in many districts it may be possible
to further reduce class size through changing teacher assignments throughout
the district. To the extent that smaller class size improves student performance,
these changes could potentially improve student performance at little or
Odden and Busch (1998) argue that schools can find the additional funds
(which range from $82,000 to $349,000 per school per year) to finance the
various New American Schools designs creative use of categorical funds,
elimination of classroom aides, and reallocation of resources, such as
the elimination of one or two teaching positions. While some of these options
may result in larger classes or fewer teachers, the more intensive use
of staff and greater professional development activities available seem
to result in improved student performance in many of the schools that have
adopted these designs.
Before seeking additional funds, there may be ways to restructure what
is done with existing funds. Levin's Accelerated Schools, the New American
Schools program designs, and hard analyses of current staffing patterns
may all yield improved student performance.
Miles, Karen H. "Freeing Resources for Improving Schools: A Case Study
of Teacher Allocation in Boston Public Schools." Educational Evaluation
and Policy Analysis, 17, 4 (Winter 1995): 476-93. EJ 520 985.
National Center for Education Statistics. Digest of Educational Statistics,
1989. Washington, D.C.: Author, 1989. 542 pages. ED 312 792.
_____. Digest of Education Statistics, 1997. Washington, DC: Author,
1998. 70 pages. ED 417 230.
Odden, Allan. "The Finance Side of Implementing New American Schools."
Paper prepared for the New American Schools, Alexandria, Virginia, 1997.
Odden, Allan, and Carolyn Busch. Financing Schools for High Performance:
Strategies for Improving the Use of Educational Resources. San Francisco:
Jossey-Bass, 1998. 276 pages.
Odden, Allan R., and Lawrence O. Picus. School Finance: A Policy Perspective.
New York: McGraw Hill, 1992. 363 pages.
Picus, Lawrence O. In Search of More Productive Schools: A Guide to
Resource Allocation in Education. Eugene, Oregon: ERIC Clearinghouse on
Educational Management, University of Oregon, forthcoming. 113 pages.