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Bluegrass Institute analysis of K-12 spending: Less bang for billions of KY taxpayers’ bucks

FRANKFORT – This June marks the 35th anniversary of the Kentucky Supreme Court’s famous Rose V. Council for Better Education, which determined that the commonwealth failed to abide by Section 183 of the state’s constitution requiring the legislature to “provide for an efficient system of common schools throughout the State. “Trends in ‘Bang for the Buck’ in Kentucky’s K-12: The Productivity of Funding in Developing Basic Skills and Its Change Over Time,” a new policy point released today by the Bluegrass Institute for Public Policy Solutions, a free-market think tank, indicates a decline in the efficiency of the state’s education system since the Kentucky Education Reform Act (KERA) was enacted by the legislature in 1990 as a response to the Rose decision.


The study, which calculates fourth- and eighth-grade reading and math test scores per $1,000 of per pupil funds – adjusted for inflation to offer an accurate portrayal of K-12 spending over decades – finds a nearly-continuous decline in the taxpayers’ bang for the billions of bucks in funding for public education since KERA was adopted as Kentucky’s education policy.

“These declines are due almost entirely to the large funding increases that have occurred relative to the small changes in test scores,” writes author John Garen, Ph.D., in the report’s summary. “This suggests a large deterioration in the effectiveness of K-12 funding.”

Garen is BB&T Professor Emeritus of Economics at the University of Kentucky and a member of the Bluegrass Institute Board of Scholars.

Among the report’s findings:

--Productivity in 2022 ranged from 47% to 64% of the 1990s level, depending on the National Assessment of Educational Progress (NAEP) test used.

--The decline in productivity has been almost continuously downward from the 1990s to 2022. The exception is the period just after the Great Recession (2009-2013). Some increases in productivity occurred then, but were driven primarily by the temporary drop in funding. 

--Overall, the decline in productivity suggests a marked deterioration of the effectiveness of funding in translating into basic skills test performance. 

“This data-driven analysis adds to the growing mountain of evidence that while Kentucky is spending more than ever of its budget pie on public education, it’s drifting farther than ever from its constitutional mandate of providing an efficiently effective system that serves students and taxpayers well,” said Bluegrass President Jim Waters. “It also confirms what reformers have said for decades: more money does not automatically result in a better education system.”


“More alternatives, greater accountability and expanding education freedom are needed in order for Kentucky to meet its constitutional duty to its students and taxpayers,” Waters added. 


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