EDLD+5342+Week+4+Part+2


 * Week 4, Part 2 **

Number of Students Dist. 1 – 830 Dist. 2 - 32,326

Total Revenue per Pupil Dist. 1 - $10,529 Dist. 2 - $10,316

Total Revenue (2007-2008) Dist. 1 - $8,823,250 Dist. 2 - $329,638,930

Taxable Value per Pupil Dist. 1 - $162,892 Dist. 2 - $567,521

Total Operating Expenditures per Pupil Dist. 1 - $8,611 Dist. 2 - $8,908

Total Instructional Expenditures per Pupil Dist. 1 - $4,619 Dist. 2 - $5,494

Average Teacher Salary Dist. 1 - $39,771 Dist. 2 - $50,307

District 1 is significantly smaller than District 2 (830 students vs. 32,326 students). Although the two have many similarities, District 1 expends 54% of their budget on instructional expenditures (teachers), while District 2 expends 62% on same. District 1 expends 34% of its budget on Plant Services and Other Operating expenditures, while District 2 expends only 28% on same. This is a good example of “economy of scale.” Because District 2 is larger, their Plant and Other Operating expenses require a smaller piece of the revenue pie, therefore leaving more money available to increase the instructional/teacher salary piece of the pie…more funds available to enable District 2 to be able to pay higher salaries than District 1.

From Robert:

Our district is one that does not allow transfers. In some respects this is a double-edged sword. Not only are we constantly running around using resources to determine if “suspect” students don’t actually live in the district, but we are overlooking the merits of the added financial benefits of increased ADA. With that being said, I am COMPLETELY in support of our position as it bests suites our particular situation in the area in which we are located.

Previously I was at another district that benefitted from allowing transfers. The concept was a simple one. It was a rural, somewhat-isolated district with a low teacher/student ratio. Quite simply, any admission of additional students that didn’t 1) cause you to require additional staffing, or 2) didn’t push your class numbers to unreasonable heights, would simply benefit the district through increased ADA. It was a slippery slope, but manageable due to size and location.

Our case study is a more enhanced example of two such districts. District 1 could very easily be the former, small district I mentioned above. When comparing the two, we can actually see that the two are proportionate in regards to both their total revenue per pupil and their operating expenditures. Below is a quick reference table:


 * || **District 1** || **District 2** ||
 * **Total Revenue/Pupil** || $10,529 || $10,316 ||
 * **Operating Expense/Pupil** || $8,611 || $8,908 ||
 * **Average Teacher Salary** || ** $39,771 ** || ** $50,307 ** ||

In terms of revenue, District 1 receives the bulk of their funding from state revenues (61%) whereas District 2 relies largely on local tax revenue (62%). So proportionately, both district funding breakdowns are very similar, with the exception of the differing funding sources each relies on.


 * Analysis **

The major disparity in our comparison falls in the area of teacher salary. This is where the economy of scale rears its head. Analysis indicates that teachers in District 2 make (on average) more than 20% more than comparable teachers in District 1. Additionally, the average level of experience is considerably higher in District 1, which indicates an even larger disparity when salary steps are taken into consideration. Central administration is the most disproportionate example, with District 2 making a 45% higher salary. Our particular district uses close to 85% of funding in salaries. The salary disparity due to economy of scale is very evident in this particular case.

In my opinion the adage “money isn’t everything” holds true here. There are a number of reasons that teachers choose to stay at the lower paying district (locale, school and/or community conditions, cost-of-living, etc.). Whatever the case may be, turnover at each is comparable. Unfortunately still, advantage to the bigger district. If the two were side by side, the larger would be in a much better position to hire (or steal away), and retain the better quality staff.

From Shirley Hitt:

My info matches Rob's info. I'd add with regards to "economy of scale" that the reason District 2 can afford higher salaries is because they can do more with their money in terms of buildings, energy, etc. per student. Look at how much money is available after you consider the per-pupil "infrastructure" costs. The expenses start decreasing per pupil in larger districts, leaving more funds available for salary increases, etc.

Comparing Economy of Scale in Large and Small Districts


 * || **District 1** || **District 2** ||
 * Total Revenue Per Pupil || $10,529 || $10,316 ||
 * Total Operational Expenditures || $8,611 || $8,908 ||
 * Average Teacher Salary || $39,771 || $50,307 ||

District 1 is significantly smaller than District 2 (830 students vs 32,326 students). Although the two have many similiarities, District 1 expends 54% of their budget on instructional expenditures (teachers), while District 2 expends 62% on same. District 1 expends 34% of its budget on Plant Services and Other Operating expenditures, while District 2 expends only 28% on same. This is a good example of “economy of scale.” Because District 2 is larger, their Plant and Other Operating expenses require a smaller piece of the revenue pie, therefore leaving more money available to increase the instructional/teacher salary piece of the pie…more funds available to enable District 2 to be able to pay higher salaries than District 1.