1. Adequacy and Equity in Nevada School Funding: A School-Level, Cost Function Analysis
Wen Wang, Ph.D.,
Indiana University-Purdue University Indianapolis
Anna Lukemeyer, J.D., Ph.D.,
University of Nevada Las Vegas

2. Special Acknowledgements
Carrie Sampson, Ph.D. Candidate, University of Nevada Las Vegas
Jaewon Lim, Ph.D., University of Nevada Las Vegas
Robin Mendoza, MPA Student, University of Nevada Las Vegas
The Lincy Institute, Las Vegas, Nevada (for funding and support)

3. Introduction
Nevada ranks among the lowest states in the nation in terms of both student achievement and school funding
39th (2013 NAEP 4th grade reading)
37th (2013 NAEP 4th grade mathematics)
43rd (2012 spending per pupil)

4. Introduction
A number of school funding reform bills are currently under consideration in the Nevada legislature.
This study uses cost function methodology to analyze the adequacy and the equity of the Nevada school finance system
Presentation today: preliminary findings

5. Current Nevada School Finance System

6. Current Nevada School Finance System

7. Current Nevada School Finance System
No state funding for capital outlay (i.e., buildings, etc.)
Only 17 school districts (coterminous with counties)
Per pupil funding (state and local) determined largely at the state level. There is little leeway for additional local discretionary spending.

8. Current Nevada School Finance System

9. Current Nevada School Finance System
Based on enrollment with adjustments made for district economic and geographic characteristics and ability to raise revenue.
Does not structurally account for the relatively large number of ELL or low-income students.
Only allocation for at-risk students is for special education.
Categorical state funding exists for specific purposes such as class-size reduction and early childhood programs.

10. Current Nevada School Finance System

11. Current Nevada School Finance System

12. Current Nevada School Finance System

13. Research Objectives
Using education cost function methodology and school level data:
Estimate the amount of funding needed to provide students in a hypothetical “average” school a reasonable opportunity to achieve specified performance outcomes
Estimate adjustments to this level of funding based on resource costs and student characteristics

14. Data and Methods Primary challenges;
No integrated dataset with the variables needed for a cost function study of Nevada
N=17 school districts

15. Data and Methods Current dataset;
School level performance, demographic, and spending data for almost all public schools for school years and (approximately 635 of the 700 public schools for each year)
District-level data for property tax base, community income and demographics, etc.
Clark county = about 375 schools (81, 84, 258)
Washoe county = about 95

16. Data and Methods Data underlying findings presented today
Omits combined schools (K-12, K-8, 6-12), state sponsored charter schools, and special purpose schools.
Cost function study also omits outliers and schools in very sparsely populated counties (Esmeralda and Eureka).
N= about 535 schools per year for descriptives; 480 schools per year for cost function.

17. Data and Methods Cost function model and variables
E=f(P, R, St, Ef) where:
E = Per pupil operating expenditures
P = Student performance (% attaining proficiency in math and reading, treated as endogenous)
R = Resource costs (Comparable Wage Index)
St = Student and family characteristics (enrollment, enrollment squared, FRL, ELL, IEP)
N= about 535 schools per year for descriptives; 480 schools per year for cost function due to omitting outliers and missing values.

18. Data and Methods Cost function model and variables (cont’d)
E=f(P, R, St, Ef) where:
Ef = Efficiency
Income, property value, aid/income ratio, education (proportion of bachelors or higher), district type – large urban, small centralized, rural, small enrollment
Efficiency index (DEA)
N= about 535 schools per year for descriptives; 480 schools per year for cost function.
Aid ratio = state and federal aid/income

22. Conclusions and Next Steps
Current Nevada school finance system does not formally account for student characteristics and in fact directs money away from school districts with the highest needs (Clark and Washoe).
Suggests that at-risk students require additional funding to achieve

23. Conclusions and Next Steps
Refine model.
Estimate model using spatial econometric techniques
Calculate Cost Indices and make recommendations
Add to dataset