Study: Massachusetts Could Cut $1 Billion Without Harming Education

Published June 20, 2011

The Commonwealth of Massachusetts could cut more than a billion dollars from its annual education spending without measurably affecting the performance of public schools, according to a study by the Beacon Hill Institute.

This finding in “Why Massachusetts Should Spend Less on Education” is the result of an econometric analysis BHI performed on a database that combines school level data from the Massachusetts Department of Education for the Comprehensive Assessment System (MCAS) tests from 1999 to 2008 and financial and demographic data from the National Center for Education Statistics. Researchers used the Composite Performance Index (CPI), which allowed them to apply a new methodology to their panel of data on exam results for several hundred schools for nine years.

The purpose of the analysis was to determine how a small increase or decrease in state education spending would affect school performance, as measured by scores on the standardized MCAS test. The state provides data on school performance in mathematics and English for 4th and 10th graders and in English for 8th graders.

Negligible Impacts
For traditional public schools, the Institute found a 10 percent cut in school spending would:

•    Worsen 4th grade performance in mathematics by 0.43 percent and have no effect on 4th grade performance in English.
•    Worsen 8th grade performance in mathematics by 0.72 percent.
•    Improve 10th grade performance in English by 0.91 percent and improve 10th grade performance in mathematics by 0.61 percent.

In Fiscal Year (FY) 2010, Massachusetts state and local governments spent $10.4 billion on public school education, or $11,068 per student. To ensure equity, the state mandates a “foundation budget” that sets minimum levels of per pupil spending. School spending exceeds this foundation budget by about $1.326 billion.

Deficit Reduction
The Institute recommends paring back state aid to education by enough to bring actual spending into line with the foundation budget. The state could use the funds to reduce its structural deficit. A cut of this magnitude in education spending would have no measurable effect on school performance, the study noted.

David G. Tuerck, executive director of BHI and one of the authors of the study, said “previous BHI studies have led to similar results. What makes this study stand out from the rest is the fact that we were able to use a much improved measure of education performance and a much broader database.”

Reform Progress
Tuerck also said there is nothing in the results that denies the progress the state has made in improving school performance under education reform.

“It is possible to acknowledge that progress, while still recognizing that by spending so lavishly on education, the state is worsening its current fiscal crisis without realizing commensurate gain in school performance,” he said.

Frank Conte ([email protected]) is director of communications and information systems at the Beacon Hill Institute at Suffolk University.

Internet Info

“Why Massachusetts Should Spend Less on Education,” The Beacon Hill Institute at Suffolk University: