The Public School Crisis: Higher Payrolls Associated with Worse Student Performance

Debates about public school funding sometimes include an underlying assumption that more funding results in better student outcomes. Available data tells a more complex story. Our review of 12,531 school districts across the country shows a negative correlation between overhead and student performance. In other words, districts that spent more on teacher and administrative pay saw their students’ standardized test scores drop.

Using the Open the Books proprietary database of government salaries across America, we calculated how much each U.S. state increased its total public school payrolls from 2019 to 2023. We compared that number to the change in each state’s ranking on the National Assessment of Educational Progress (NAEP), which measures reading and math skills for 4th and 8th graders.

VIEW THE DATA HERE

By plotting the percentage change in payroll, state by state, versus the percentage change in the national rankings of its districts, a surprising picture emerges. Growing payrolls are not closely correlated with improved performance among districts in a given state. In fact, the opposite correlation appears. There is a mild inverse relationship between these two data sets. Higher overhead costs are associated with lower test scores. [1]

In layman’s terms, that means while schools may hope that increasing their payroll will help their students outperform other states, there is little evidence in the data to support that claim. Again, the opposite seems to be true.

Diving Deeper into Payrolls

There were six states that increased their school payrolls by at least 23% from 2019 to 2023. Four of them saw student performance decrease, and one saw no change. Only Utah moved up in the NAEP rankings.

A negative correlation does not prove causation, but it raises another important question: Is the negative correlation more likely the result of increased teacher pay or is higher pay for administrators a factor?

The relationship between teacher pay and student performance has been studied for decades. A 1986 study from the Journal of Education Finance found that while the relationship between increased school spending and student outcomes is “minimal,” some “direct instructional expenditures” like teachers’ salaries do have a positive impact. Researchers at Stanford University and the University of California at Davis estimated in 2000 that increasing teacher pay by 10% reduces high school dropout rates by 3% to 4%.

This research suggests that an increase in administrator pay is a more likely cause of the negative correlation with student achievement.

Administrative bloat in public schools is not new. Benjamin Scafidi, an Economics of Education professor at Kennesaw State University, found that the number of non-teaching staff at U.S. schools increased by 702% from 1950 to 2009, while the number of teachers increased by only 252%. Meanwhile, student scores on the NAEP fell.

Scafidi wrote that this “irresponsible use of taxpayer dollars is indefensible,” and that was before the surge in salaries over the last few years. From 2010 to 2022, the number of administrative staff rose by another 41%, while overall school employment rose by only 10%.

In 2023, 8,884 public school employees across the country earned salaries of at least $200,000, costing $2.08 billion, according to Open the Books’ database. California had 2,758 of the employees, and New York had 1,457. California’s students ranked 43rd on the NAEP; New York’s students ranked 31st.

Skyrocketing expenses for staff benefits, which are not included in Open the Books’ payroll figures, are also redirecting resources away from students, as school districts spend more and more money paying off pension debts. Christian Barnard, assistant director of education reform at the Reason Foundation, previously reported that per-pupil spending in the U.S. increased by almost 21% from 2002 to 2019, but 64% of the increased spending was used to pay benefits for instructional and support staff. Barnard found that if benefit pay had instead only kept pace with inflation, U.S. schools would have saved nearly $70 billion in 2019 — enough to give every teacher in America a $20,913 raise.

The problem has only gotten worse since Barnard published his findings. School districts around the U.S. spent $4.36 billion on pensions in 2019, but that increased to $5.02 billion in 2023, according to our data. That’s still a vast underestimate because 17 states have laws preventing the public from viewing pension payments.

From 2019 to 2023, school districts in Maine increased their payroll spending by 19%. Yet, from 2019 to 2024, no state saw its standardized test scores fall more than Maine. The state’s 4th and 8th graders ranked 22nd in the country in reading and math in 2019, but 38th in 2024.

A glance at the payroll of Portland Public Schools, Maine’s largest school district, shows where some of the money is going. In 2023, the school only paid six-figure salaries to 30 people. In 2024, 137 people made six figures, but only 68 of them were teachers. The others were mostly principals or administrators like the Executive Director of Equity & Belonging and the Director of Social & Emotional Learning (SEL), many of whom got raises of $10,000 or more in a single year.

Also in the Northeast, Maryland is making historic investments in education through its 10-year, $30 billion Blueprint for Maryland’s Future plan. However, the plan has put such a strain on city and county finances that local legislator Joseph Stonko recently called it the “Blueprint to Bankrupt Maryland’s Future.” In Maryland, student performance has yet to improve. In fact, since the Blueprint bill was first discussed in 2019, Maryland’s ranking on NAEP exams has dropped eight spots.

In Maryland, the program may not be properly designed to increase reading and math scores. From 2020 to 2024, six counties used $7 million of federal grant funds on the True You Maryland health class program. Teachers were told to help students embrace “fat pride” and “eat without guilt and without rules, without restrictions,” according to records obtained by FOX45. Another teacher training session used a purple cartoon character called The Gender Unicorn to help teachers differentiate between gender identity, gender expression, and sex assigned at birth.

By contrast, Massachusetts schools are demonstrating it’s possible to do more with less. Their students had the best exam scores in the nation in both 2019 and 2024 while payrolls across the state increased just 4% from 2019 to 2023.

Big Cities, Big Salaries

The NAEP maintains a list of 25 “large city” school districts. Those with the best exam scores are not the ones spending the most on payroll.

Miami-Dade County Public Schools in Florida had the second-best exam scores in 2024 while spending just $6,380 on payroll per student – the fifth-lowest among the 25 large cities. Only sixteen employees earned $200,000 or more despite the district serving 335,500 students. Also in Florida, Hillsborough County spent only $5,330 on payroll per student, the second-lowest of the large cities. Its students’ exam scores ranked 5th.

Some districts that tried to raise test scores by increasing payroll have been unsuccessful. In 2019, Baltimore City Public Schools’ test scores ranked 22nd. By 2024, Baltimore had increased its salaries by 43%, spending $12,520 per student on payroll, fourth-most among the large cities. Its students’ exam scores still ranked 22nd.

Not coincidentally, Baltimore’s school district has arguably the most administrative bloat in the U.S. In 2024, there were 13,023 employees earning $949.2 million, but less than half are listed as teachers or principals. There are 285 people with Manager in their job title; 58 Supervisors; 63 Analysts; 80 Coordinators; 67 Directors and Assistant Directors; and 46 Administrators.

The school district’s Senior Executive Director of Equity makes $213,550, but there is also a Director of Equity, a Director of Equity-Centered Principal Development, five Educational Specialists of Equity, and a Staff Associate of Equity. The school district has two Directors of Environmental Health each earning over $160,000, a Senior Project Manager of Environmental Compliance, and a Supervisor of Environmental Compliance.

Similarly, the Los Angeles Unified School District spent $9,054 on payroll per student in 2024, with 29 people earning $200,000 or more. Their students’ NAEP exam scores ranked 17th out of 25.

Conclusion

Eric A. Hanushek of Stanford University’s Hoover Institution explains that while increased spending may help student performance, the benefits are “highly variable” and depend on how the money is spent. Throwing money at a problem does not make the problem go away.

Increased transparency is also one of the most reliable avenues towards reform. A 2019 survey by Education Next found that 72% of Americans supported increasing school salaries, but only 56% supported it once they actually saw the salaries. North Carolina is currently considering House Bill 56, which would require school websites to publish the salaries and job descriptions of their administrators.

---

Methodology notes: The Covid-19 pandemic is often blamed for decreased student performance across the country. To eliminate that factor, we ranked states not based on their numerical exam grades, but based on how their exam scores compare to other states. For example, even though Alabama students’ test scores fell between 2019 and 2024, their ranking increased from 48th in the nation to 43rd.

Open The Books’ database lists employee compensation exactly as it is reported by local districts and may be missing some small schools. We also omitted school districts that provided salary information in 2023 but not 2019 from our state totals.

[1] A scatter plot of the two data sets produces a line of best fit with a -0.32 correlation coefficient. For reference, a 0 means no relationship between the datasets; a 1 means the strongest possible relationship, and a -1 means a perfectly inverse relationship between the datasets.