Below is an analysis of per pupil expenditure for 2007 for the 50 states and how it interacts with other important education indicators such as funding, demographics, and achievement.

Interstate inequities in annual per-pupil expenditure are dramatic, particularly when aggregated. 1

The top five spending states in the country—New Jersey, New York, Connecticut, Vermont, and Rhode Island—spend, on average, more than twice as much per-pupil as the bottom five spending states—Utah, Idaho, Tennesse, Arizona, and Oklahoma.

New Jersey, with the highest per-pupil expenditure, spends almost $10,500 more each year on an individual student than Utah, with the lowest per-pupil expenditure. For a single classroom with an average size of 25 pupils, this translates into an annual spending disparity of more than $261,000. For an entire elementary school with an average size of 473 students 2, the annual spending disparity reaches almost $4.9 million. School finance inequity is starkest at the high school level: an average high school in New Jersey of around 811 students 3 spends $8.5 million more each year than an average high school in Utah.

Interstate inequities in per-pupil expenditure are regional in nature.

The Northeast spends significantly more on each student than the rest of the country—on average, around $3,600 more per-pupil than the Midwest, and around $4,560 more per-pupil than the South and the West. Eight of the top 10 spending states are located in the Northeast. Southern states spend, on average, the least on public education, although many of the Western states are also near the bottom. Of the bottom 10 spending states, six are located in the South and four are located in the West. 4

In the South, both Tennessee and Oklahoma spend less than $7,500 per-pupil. Compare this to students in New York State and New Jersey, who spend $15,000 or more—at least double—per student each year. While a small portion of this disparity may be attributed to the cost of services, it is unlikely that Oklahoma schools can provide an education comparable to schools in New York State with $8,116 less in funding for each student.

Per-pupil expenditure is roughly correlated with student achievement.

In general, states with high per-pupil expenditure outperform states with low per-pupil expenditure on national achievement tests. While the correlation is not perfect, a positive correlation between per-pupil expenditure and student achievement exists. However, there are a few states that spend relatively high amounts per-pupil but score poorly on achievement tests. For example, Rhode Island ranks fifth in spending, but 35th in both 8th grade reading and math proficiency, proving that student outcomes are also dependent on how money is spent.

In the top five spending states, 35.4% of 8th grade students are proficient in reading on average and 34.8% are proficient in math. In the bottom five spending states, an average of only 27.6% of 8th grade students are proficient in reading and 27.2% are proficient in math.

Per-pupil expenditure is also roughly correlated with student poverty.

In general, the larger the percentage of poor students in a state, the less the state spends on education. While per-pupil expenditure is also related to fiscal effort, the amount of taxable wealth in a state (i.e. fiscal capacity) plays a substantial role in per pupil spending. More students in poverty indicates less aggregate family income available for tax contributions, which usually translates into a lower statewide per-pupil expenditure level. In the top five spending states, 12.6% of the student population is living in poverty, in comparison to 16.4% of the student population in the bottom five spending states.

1. 1. Statewide per-pupil expenditure includes the total current expenditures for public elementary and secondary education divided by the fall membership as reported in the state finance file. The expenditures for equipment, non-public education, school construction, debt financing, and community services are excluded. These data are from the Common Core of Data (CCD) National Public Education Financial Survey for school year 2006-07.
2. 2. National Center for Education Statistics estimate 2008
3. 3. National Center for Education Statistics estimate 2008
4. 4. Regions. Northeast: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Pennsylvania, Rhode Island, Vermont. Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin. South: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia. West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington, Wyoming.