Education: 12: Vermont’s Comparative Cost of Education Update

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Each year, The Informed Vermonter provides an update with respect to Vermont’s comparative cost of K-12 education based on information collected by the US Census Bureau in it’s Annual Survey of School System Finance.  This Survey allows a direct comparison of Vermont’s education expenditures to all  other states and the country as a whole based on data provided directly by the various state education departments.

Outcomes vs. Costs

The central issue in any debate regarding the proper level of education spending is the effect a change in spending has on education outcomes.  Therefore, before addressing comparative costs, a look at comparative outcomes will help readers make more sense of the information.

Throughout this article, Vermont will be compared to the five other New England States. All six New England states have costs materially higher than the national average and all six have K-12 education outcomes rated at the high end of the range. However, even within this small group of states, the cost to achieve strong outcomes differs widely.

There are a variety of surveys that rank K-12 education outcomes on a state-by-state basis and each use different criteria.  To keep things simple, this article relied on three such surveys:  US News and World Report, WalletHub and Education Weekly.  The results are fairly consistent across these three surveys, as outlined below.

                      K-12 Education Outcomes of New England States

State US News (National Rank) WalletHub (National Rank) Education Weekly: K-12 Achievement Score
Massachusetts 1 1 88.0
New Hampshire 2 4 77.2
Connecticut 5 2 74.6
Vermont 4 5 73.0
Maine 6 16 71.2
Rhode Island 9 19 70.5

 

Vermont’s public education system has a very good reputation.  Vermont ranks within the top five-ten states in the country, which everyone in the state should be proud of. However, Vermont is in a good neighborhood when it comes to education.  Indeed, Massachusetts, New Hampshire and Connecticut rank ahead of Vermont in all or most of surveys outlined above.

Comparative Costs

Basically, the K-12 education outcomes in all the New England states range from good to very good.  In this section, the costs incurred to achieve these outcomes are reviewed.  As it turns out, the correlation between costs incurred and results achieved is not particularly strong.

      K-12 Per Pupil Education Expenditures, Fiscal Year Ended Jun 2016 ($)

State Total Cost/Pupil Total Instructional Cost/Pupil Total Support Cost/Pupil
USA 11,762 7,160 4,107
Connecticut 18,958 11,656 6,621
Maine 13,278 7,587 5,216
Massachusetts 15,593 9,713 5,396
New Hampshire 15,340 9,610 5,341
Rhode Island 15,532 9,035 6,065
New England Average (excluding Vermont) 15,740 9,520 5,728
Vermont 17,873 10,720 6,629

Source: US Census Bureau, 2016 Annual Survey of School System Finance

Massachusetts and New Hampshire, which have the highest rated education outcomes in New England (and the country), have similar spending profiles. In both states, the Total Cost/Pupil is a bit below the New England average, the Instructional Cost/Pupil is a bit above and the Support Cost/Pupil is below the New England average.  These states seem to be controlling their overall costs and running a tight ship with respect to support/administrative costs, which allows them to invest more in teachers.  This looks like a successful formula.

Vermont’s education costs are simply high across the board.  Only Connecticut has higher Total Costs and Instructional Costs. With respect to Support Costs, Vermont is the highest.

Vermont’s high cost structure appears not to be the result of higher than average salaries and benefits.  According to the National Education Association, the average teacher salary in Vermont was $57,349 in 2017.  This compares to $57,522 and $78,100 in New Hampshire and Massachusetts, respectively. The Bureau of Labor statistics tracks K-12 Education Administrator salaries. In 2017, the average administrator salary in Vermont was $88,840 vs. $85,600 in New Hampshire and $107,670 in Massachusetts.

With Vermont’s salary and wage levels at or below other New England states, the only thing that can account for the high level of Vermont expenditures has to be a high number of teachers, teacher assistants and school administrators per pupil.

Concluding Remarks

Vermont recognizes that it has a cost issue and has enacted Act 46 to try and address the situation.  First and foremost, Act 46 seeks to reduce the number of school administrative entities by consolidating school districts.  Secondly, Act 46 also seeks to reduce the number of schools. Presumably, this consolidation process will ultimately result in a reduction in the number of school administrators and teachers, thereby reducing costs.

The stakes in all this are quite high. Vermont now has one of the most expensive pubic school systems in the country and, as a result, some of the highest property tax rates as well.

If Vermont could reduce it cost/pupil to the level of Massachusetts or New Hampshire, two states with superior K-12 outcomes, the savings would be in excess of $200 million per year. If these savings were then applied to property taxes, rates could be reduced by 20%.

$200 million of savings is purely hypothetical and probably a bit aggressive in the real world.  However, the data presented above suggests that there may be scope for meaningful savings in Vermont without any impairment to education outcomes.

The next article will provide a brief update on the Act 46 process.

Related Articles and Additional Reading

  1. Education: How Does Vermont’s Cost of Education Compare to Other States?: https://theinformedvermonter.com/education-vermonts-cost-education-compare-states/
  2. Education: Update on Vermont’s Comparative Cost of Education: https://theinformedvermonter.com/501-2-comparative-edu-costs/
  3. US Census Bureau, 2016 Public Elementary-Secondary Education Finance Data: https://www.census.gov/data/tables/2016/econ/school-finances/secondary-education-finance.html

 

 

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