With regards to the new NAEP scores out this week, I see a lot of commentators saying things like, “NAEP scores went down even as school spending went up.” As I wrote back in June, it is true that education spending is up nationally over the last decade in real, per pupil terms. Based on the most recent data, national education spending rose by 5.4 percent over this time period. (The spending data is a bit behind the NAEP data, so the most recent “decade” in either data set don’t match up perfectly.)
But wait. While overall education spending is up, spending on instructional costs like salaries and wages for teachers went down by 0.3 percent. Again, these are in real, inflation adjusted dollars spent per pupil.
What’s the main reason for the discrepancy? Benefit costs. Over the same time period, benefit costs for things like employee pension and health care benefits rose by 23.5 percent, in real terms. As I wrote in June, “Most of these cost increases are due to paying down pension debts or changes in accounting rules on retiree health benefits.”
In other words, not all school spending is equal, and spending on under-funded employee benefit plans may not translate into the same student achievement gains as spending in other areas.
–Guest post by Chad Aldeman