New Index Provides Efficiency and Effectiveness Ratings for Minnesota Schools

Published May 1, 2005

A new study by former Minnesota Education Commissioner Cheri Pierson Yecke examines the state’s school districts to identify how effective and efficient they are at directing money toward educational improvement.

The study, released February 11, 2005 by the Center of the American Experiment, pioneers a new ratio analysis technique to compute an Efficiency and Effectiveness Index (EEI) for the state’s public school districts. After controlling for levels of student poverty, the EEI ranks districts in terms of per-pupil spending and high school graduation rates. The purpose of the index is to start a “statewide dialogue” using an objective measure, highlight effective districts, and encourage them to share successful strategies.

“Before now, we had no way of objectively identifying the relative effectiveness of Minnesota school districts,” said Annette Meeks, president of the Center of the American Experiment. “Dr. Yecke’s analysis solves this issue, and provides local policymakers with a tool that will help them identify districts that have policies and practices which should be replicated.”

Spending, Achievement Disconnected

The study notes Minnesota has a commitment to funding high-poverty schools, citing research by the Education Trust that ranks the state highly in terms of funding for high-poverty and high-minority school districts. In The Funding Gap 2004, the Education Trust ranks Minnesota fifth in the nation at allocating more funds to high-poverty school districts, and sixth at granting more funds to districts with high populations of minority students.

Despite the commitment to higher funding, however, the study points out Minneapolis has the second-highest gap in graduation rates between white and black males, according to research by the Schott Foundation for Public Education.

“As a state, we provide generous funding advantages to districts with high numbers of disadvantaged children, but it appears that this funding is not resulting in meaningful increases of disadvantaged students, especially males, graduating from high school,” Yecke wrote.

After dividing each district into quartiles based on a proxy for student poverty levels, Yecke found the top 10 districts in each quartile had higher-than-average graduation rates and lower-than-average expenditures. Even school districts in the fourth quartile, which had the highest poverty level, spent less than the state average and graduated more students than the state average.

The “analysis shows, once again, that neither demographics nor expenditures are destiny when it comes to school performance,” Thomas B. Fordham Foundation President Chester E. Finn wrote in a recent edition of The Education Gadfly.

For each quartile, the study also compared two similar districts. For example, Yecke compared Minneapolis–a district with a very low index rating–with St. Paul, which is similar in size and student demographics. Despite facing similar challenges, St. Paul graduates 72 percent of its students, while Minneapolis graduates just 53 percent. Minneapolis spends approximately $1,000 more on each student than does St. Paul.

Effective Practices Identified

Yecke does not speculate about the reasons for differences among peer districts, but her report recommends that “districts with low EEI ratings … begin to examine their practices and policies by communicating with members of their peer group that have higher EEI ratings.” The study provides information on three practices that have been helpful to some districts:

  • Rural Service Cooperatives enable rural districts to make joint-purchasing arrangements for administration, technology, grant writing, record keeping, and other services;
  • district-provided outsourcing enables districts to provide services to other districts and schools; and
  • consolidating services helps districts save money.

Poverty Levels Accounted For

To make a fair comparison, Yecke took student poverty levels into account by organizing districts into four groups according to federal free- and reduced-lunch program participation. Quartile One contained school districts with the lowest percentage of students participating in the program; Quartile Four had the highest.

The index calculates the percentage of graduates and the per-pupil costs in each district, as well as in the district’s “peer group.” An EEI rating of 100 is average. Those scoring above 100 operate with greater effectiveness and efficiency, and those scoring below 100 perform less effectively and efficiently.

To determine each district’s graduation rate, Yecke used a method recommended by the U.S. Department of Education National Center for Education Statistics (NCES), called an “emulated rate.” The emulated rate accounts for all students who drop out at any time during the four years of high school. The average per-pupil funding includes federal, state, and local spending levels.

The index was produced by dividing each district’s graduation rates and per-pupil funding amounts by its peer-group averages; the two ratios were then divided and multiplied by 100.

Krista Kafer ([email protected]) is an independent education writer.

For more information …

For more information, see “Efficiency and Effectiveness in Minnesota School Districts: How Do Districts Compare?” by Cheri Pierson Yecke, Ph.D., Center of the American Experiment, February 11, 2005, available online at