Today, Scioto Analysis released a new study measuring the economic impact of changes in K-12 school spending. We found that if Ohio increased its school spending from its current 2023 spending to more closely model Pennsylvania’s level of spending, (about a $2,800 increase per student), the state could see net economic benefits ranging between $23 and $90 billion. A reduction in spending that models the K-12 spending of Indiana (about a $3,500 decrease per student) would create economic losses between $30 and $120 billion.
The most significant impact of changes in school spending would be its impact on college matriculation. Increasing school spending contributed to an increased number of high school graduates pursuing higher education. From an increase in spending, we project that there would be an estimated additional $18 billion in benefits, and a loss of $23 billion with a decrease in spending.
If a change in K-12 spending in Ohio was designated in a way that prioritized funding low income schools, the estimated overall benefits from an increase in spending would be $46 billion as opposed to around $40 billion, and the losses from a decrease in spending would be around $46 billion as opposed to $50 billion.
In addition to college matriculation, other factors that are influenced by changes in K-12 spending are test scores, high school graduation, and social savings from reductions in crime and welfare reliance.
This year, Ohio is currently ranked 19th in the nation for its per-pupil K-12 spending. However, a new federal budget approved in July for 2024 and 2025 designated a total of $12.97 billion for K-12 spending, an 11.4% increase.
This study is part of a series of cost-benefit analyses conducted by Scioto Analysis. Previous cost-benefit analyses were conducted on recreational marijuana, daylight saving time, child tax credit, harmful algal blooms, and urban canopy programs. All previous cost-benefit analyses can be found on the Scioto Analysis website.