Although free for students, public education can cost cities big. In fact, education topped state and local government spending at $876.5 billion in 2013, according to the finance data from the U.S. Census Bureau. Even so, the quality of education students receive can vary drastically from city to city, but why?
Traditionally, public school budgets have relied on local taxes, disparities in which potentially spur income inequality among students upon reaching adulthood, a Harvard University and National Bureau of Economic Research study concluded. The authors suggest that school-district quality reflects the amount of tax dollars families can pump into their local economies.
Exacerbating the inequality problem is the fact that state and local governments currently operate on tighter budgets, even though real spending per pupil has increased 85 percent over the past 31 years. More recently, however, capital outlays on education have fallen 12.2 percent, from $91.7 billion in 2007 to $80.5 billion in 2013. A decline in elementary and secondary school spending accounted for much of the overall drop, begging an important question: How efficiently are cities spending taxpayer dollars on public school education?
With taxes being top of mind and schools back in session, WalletHub addressed that question by calculating the return on educational investment for 112 of the most populated U.S. cities. To do so, we divided each city’s aggregated standardized test scores in reading and math for grade 8 by its total education spending per capita. We then normalized the data by four key socioeconomic factors. The results, as well as expert commentary and a detailed methodology, can be found below.
Main Findings
|
Adjusted ROI Rank |
City |
Average Standardized Test Scores (Rank) |
Education Expenditures per Capita (Rank) |
Unadjusted ROI Rank |
|---|---|---|---|---|
| 1 | New Orleans, LA | 57.89% (53) | $624 (1) | 1 |
| 1 | Miami, FL | 54.52% (63) | $1,147 (9) | 9 |
| 3 | Birmingham, AL | 72.24% (20) | $1,596 (61) | 61 |
| 4 | Mobile, AL | 78.24% (4) | $1,293 (24) | 24 |
| 5 | Hialeah, FL | 54.00% (65) | $1,197 (12) | 12 |
| 6 | Philadelphia, PA | 59.71% (50) | $1,477 (43) | 43 |
| 7 | Richmond, VA | 62.86% (40) | $1,571 (54) | 54 |
| 8 | Dayton, OH | 57.83% (54) | $1,665 (67) | 67 |
| 9 | Orlando, FL | 53.93% (66) | $1,288 (23) | 23 |
| 10 | Cleveland, OH | 58.90% (51) | $2,009 (94) | 94 |
| 11 | Tucson, AZ | 55.02% (62) | $1,130 (7) | 7 |
| 12 | Toledo, OH | 65.62% (38) | $1,528 (49) | 49 |
| 13 | St. Louis, MO | 34.95% (100) | $1,146 (8) | 8 |
| 14 | Montgomery, AL | 60.73% (45) | $1,226 (17) | 17 |
| 15 | Pittsburgh, PA | 74.22% (17) | $1,572 (57) | 57 |
| 16 | Atlanta, GA | 82.63% (1) | $1,738 (78) | 78 |
| 17 | Cincinnati, OH | 71.95% (21) | $2,068 (99) | 99 |
| 18 | Baton Rouge, LA | 51.46% (72) | $1,433 (40) | 40 |
| 19 | Flint, MI | 26.75% (111) | $1,508 (47) | 47 |
| 20 | Gary, IN | 49.67% (77) | $2,009 (94) | 94 |
| 21 | Fort Wayne, IN | 74.41% (15) | $1,263 (21) | 21 |
| 22 | Austin, TX | 76.43% (7) | $1,217 (14) | 14 |
| 23 | Milwaukee, WI | 60.68% (46) | $1,817 (86) | 86 |
| 24 | Tulsa, OK | 67.50% (33) | $1,370 (31) | 31 |
| 25 | Durham, NC | 70.38% (25) | $1,369 (30) | 30 |
| 26 | Salt Lake City, UT | 76.22% (9) | $1,221 (15) | 15 |
| 27 | Charlotte, NC | 71.40% (22) | $1,221 (15) | 15 |
| 28 | Greensboro, NC | 69.11% (30) | $1,496 (45) | 45 |
| 29 | Lubbock, TX | 70.96% (23) | $1,377 (32) | 32 |
| 30 | Houston, TX | 73.20% (19) | $1,602 (63) | 63 |
| 31 | Akron, OH | 70.03% (26) | $2,009 (94) | 94 |
| 32 | Knoxville, TN | 43.51% (89) | $1,097 (5) | 5 |
| 33 | Dallas, TX | 69.49% (29) | $1,635 (64) | 64 |
| 34 | Raleigh, NC | 74.00% (18) | $1,340 (28) | 28 |
| 35 | Chicago, IL | 80.84% (3) | $1,981 (93) | 93 |
| 36 | Jackson, MS | 42.21% (91) | $1,684 (73) | 73 |
| 37 | El Paso, TX | 74.87% (13) | $1,770 (81) | 81 |
| 38 | Mesa, AZ | 62.14% (42) | $1,114 (6) | 6 |
| 39 | Indianapolis, IN | 68.07% (31) | $1,667 (68) | 68 |
| 40 | Garland, TX | 76.27% (8) | $1,551 (53) | 53 |
| 41 | Corpus Christi, TX | 66.19% (36) | $1,524 (48) | 48 |
| 42 | Columbus, GA | 75.36% (11) | $1,968 (91) | 91 |
| 43 | San Antonio, TX | 70.52% (24) | $1,672 (69) | 69 |
| 44 | Phoenix, AZ | 57.73% (55) | $1,356 (29) | 29 |
| 45 | Columbus, OH | 67.46% (34) | $1,697 (74) | 74 |
| 46 | Arlington, TX | 74.38% (16) | $1,545 (52) | 52 |
| 47 | Oklahoma City, OK | 67.34% (35) | $1,378 (33) | 33 |
| 48 | Detroit, MI | 28.76% (110) | $1,683 (72) | 72 |
| 49 | Madison, WI | 77.45% (5) | $1,576 (59) | 59 |
| 50 | Portland, OR | 65.94% (37) | $1,235 (18) | 18 |
| 51 | Grand Rapids, MI | 40.02% (93) | $1,239 (19) | 19 |
| 52 | Fort Lauderdale, FL | 38.80% (94) | $986 (3) | 3 |
| 53 | Fort Worth, TX | 67.81% (32) | $1,505 (46) | 46 |
| 54 | Little Rock, AR | 60.65% (48) | $1,736 (77) | 77 |
| 55 | Reno, NV | 54.10% (64) | $1,337 (27) | 27 |
| 56 | Albuquerque, NM | 50.44% (74) | $1,305 (25) | 25 |
| 57 | Tampa, FL | 47.55% (83) | $1,459 (42) | 42 |
| 58 | Chattanooga, TN | 32.63% (103) | $1,153 (10) | 10 |
| 59 | Sacramento, CA | 55.20% (60) | $1,491 (44) | 44 |
| 60 | Baltimore, MD | 52.36% (69) | $2,150 (102) | 102 |
| 61 | Boston, MA | 52.30% (70) | $1,750 (79) | 79 |
| 62 | Wichita, KS | 69.61% (28) | $1,724 (76) | 76 |
| 63 | Providence, RI | 49.00% (79) | $2,146 (101) | 101 |
| 64 | Omaha, NE | 62.82% (41) | $1,662 (65) | 65 |
| 65 | Huntington Beach, CA | 75.86% (10) | $1,203 (13) | 13 |
| 66 | Seattle, WA | 60.67% (47) | $1,006 (4) | 4 |
| 67 | Lincoln, NE | 69.92% (27) | $1,571 (54) | 54 |
| 68 | Long Beach, CA | 57.04% (56) | $1,718 (75) | 75 |
| 69 | Norfolk, VA | 52.25% (71) | $1,677 (70) | 70 |
| 70 | Jacksonville, FL | 45.36% (87) | $1,279 (22) | 22 |
| 71 | Riverside, CA | 62.09% (44) | $1,573 (58) | 58 |
| 72 | Worcester, MA | 51.38% (73) | $1,813 (85) | 85 |
| 73 | Colorado Springs, CO | 62.13% (43) | $1,400 (37) | 37 |
| 74 | Spokane, WA | 58.71% (52) | $1,587 (60) | 60 |
| 75 | San Francisco, CA | 55.71% (58) | $975 (2) | 2 |
| 76 | Modesto, CA | 55.06% (61) | $1,662 (65) | 65 |
| 77 | Kansas City, MO | 40.54% (92) | $1,391 (35) | 35 |
| 78 | San Diego, CA | 60.41% (49) | $1,458 (41) | 41 |
| 79 | Las Vegas, NV | 47.54% (84) | $1,403 (38) | 38 |
| 80 | Virginia Beach, VA | 76.86% (6) | $1,864 (87) | 87 |
| 81 | Stockton, CA | 49.50% (78) | $1,774 (82) | 82 |
| 82 | Des Moines, IA | 56.60% (57) | $1,918 (89) | 89 |
| 83 | Shreveport, LA | 46.53% (85) | $2,141 (100) | 100 |
| 84 | Fremont, CA | 75.35% (12) | $1,250 (20) | 20 |
| 85 | Chesapeake, VA | 82.10% (2) | $2,036 (97) | 97 |
| 86 | Anaheim, CA | 55.21% (59) | $1,597 (62) | 62 |
| 87 | Fresno, CA | 47.83% (82) | $1,975 (92) | 92 |
| 88 | San Jose, CA | 63.16% (39) | $1,404 (39) | 39 |
| 89 | Lexington-Fayette, KY | 46.39% (86) | $1,383 (34) | 34 |
| 90 | Aurora, CO | 50.32% (75) | $1,678 (71) | 71 |
| 91 | Oakland, CA | 37.13% (95) | $1,396 (36) | 36 |
| 92 | Nashville, TN | 34.35% (101) | $1,331 (26) | 26 |
| 93 | Denver, CO | 44.72% (88) | $1,540 (51) | 51 |
| 94 | St. Petersburg, FL | 29.25% (109) | $1,192 (11) | 11 |
| 95 | Bakersfield, CA | 53.93% (67) | $1,958 (90) | 90 |
| 96 | Anchorage, AK | 74.78% (14) | $2,248 (104) | 104 |
| 97 | Tacoma, WA | 48.00% (81) | $1,753 (80) | 80 |
| 98 | Los Angeles, CA | 42.73% (90) | $1,801 (84) | 84 |
| 99 | Kansas City, KS | 35.18% (99) | $1,876 (88) | 88 |
| 100 | Minneapolis, MN | 32.32% (104) | $1,571 (54) | 54 |
| 101 | Santa Ana, CA | 48.77% (80) | $2,233 (103) | 103 |
| 102 | Louisville, KY | 31.17% (107) | $1,531 (50) | 50 |
| 103 | New York, NY | 49.97% (76) | $2,549 (107) | 107 |
| 104 | Springfield, MA | 36.78% (96) | $2,958 (108) | 108 |
| 105 | Rochester, NY | 36.08% (97) | $3,195 (110) | 110 |
| 106 | Washington, DC | 53.76% (68) | $3,552 (112) | 112 |
| 107 | St. Paul, MN | 32.25% (105) | $2,062 (98) | 98 |
| 108 | Warren, MI | 29.39% (108) | $1,798 (83) | 83 |
| 109 | Yonkers, NY | 36.00% (98) | $2,539 (106) | 106 |
| 110 | Memphis, TN | 22.78% (112) | $2,285 (105) | 105 |
| 111 | Syracuse, NY | 32.13% (106) | $3,192 (109) | 109 |
| 112 | Buffalo, NY | 33.91% (102) | $3,417 (111) | 111 |
Note: In the ranking table above, please note that “Adjusted ROI Rank” reflects the results of our analysis after controlling for the four socioeconomic factors, whereas “Unadjusted ROI Rank” reflects the results before normalizing the data.
Ask the Experts
State and local financing is crucial to the well-being of public schools. But even more critical is how cities spend those funds, especially where budgets are more constrained. To expand the discussion, we asked a panel of experts to provide insight on issues related to school financing and effectiveness. Click on the experts’ profiles to read their bios and responses to the following key questions:
- What makes some city school systems more effective than others?
- What factors influence a city’s ROI on education spending?
- How can residents know whether their tax dollars are being used wisely by local authorities on K-12 education?
- How have city education budgets fared in the recession and economic recovery?
Ask the Experts
- Celeste K. Carruthers
Assistant Professor of Economics, University of Tennessee, Knoxville
Read More
- Eric A. Houck
Associate Professor of Educational Leadership and Policy, University of North Carolina-Chapel Hill, School of Education
Read More
- Ben DeGrow
Senior Education Policy Analyst, The Independence Institute
Read More
- David Charles Nice
Professor of Political Science, Washington State University
Read More
- Liv Finne
Director for Education, Washington Policy Center
Read More
- Lewis M. Andrews
Senior Policy Analyst, Yankee Institute for Public Policy
Read More
Methodology
In order to gauge the return on educational investment for 112 of the most populated U.S. cities, WalletHub divided each city’s aggregated standardized test scores in reading and math for grade 8 by its total amount of education spending per capita. Please note that standardized test score data includes only the percentage of students who completed the tests and scored at or above the passing levels imposed by their respective states.
To control for major cross-city differences in economic status among cities, we adjusted education spending levels by two key economic factors: poverty rate and median household income. Moreover, given that education spending is further affected by the percentage of children in single-parent families and the percentage of households that do not speak English as their first language, we adjusted expenditures on these two measures as well.
The adjusted “education spending per capita” measure employed in this study assumes all cities have an average poverty rate, rate of single-parent families, rate of households who speak a language other than English at home and median household income. This allowed us to compare ROI on education spending net of cross-city differences within these indicators.
For our sample, we chose each city according to the size of its population. “City,” in this case, refers to city proper and excludes surrounding metro areas.
Sources: Data used to create these rankings were obtained from the U.S. Census Bureau, the Lincoln Institute of Land Policy and the GreatSchools.org.