The cost of testing: States spending $1.7 billion a year. Georgia on low end of spending scale.

A new report today on test spending by the Brown Center on Education Policy at Brookings concludes that states would be wiser to consider joining forces in test creation, which is now costing  $1.7 billion per year or one-quarter of one percent of annual K-12 education spending. (The money breaks down to $27 per pupil in grades 3-9.)

The author of the “Strength in Numbers: State Spending on K-12 Assessment Systems” is Matthew M. Chingos, co-author of  “Crossing the Finish Line: Completing College at America’s Public Universities.” (See my 2009 interview with him.)

Georgia, by the way, spends far less than many other states, according to the study. Georgia spends $14 per pupil on tests, compared to Massachusetts, which spends $64, or Hawaii, which spends $105.

While the costs of tests amount to less than one percent of per-pupil spending , the authors say, “Spending in U.S. public schools totaled $658 billion in 2008-09 (the most recent year for which data are available), so even one-half of one percent would add up to more than $3 billion each year. And states can make changes to their assessment budgets with relative ease compared to some larger categories of expenditures, such as employee salaries, which are often constrained by collective bargaining agreements. For example, Georgia cancelled the upcoming spring 2013 administration of its state test to first- and second-grade students due to budget constraints.”

Here is an excerpt, but take a look at the full report if you can. You will have to download it:

We find that the 45 states from which we obtained data spend a combined $669 million per year on their primary assessment contracts, or $27 per pupil in grades 3-9, with six testing vendors accounting for 89 percent of this total. Per-pupil spending varies significantly across states, with Oregon ($13 per student), Georgia ($14), and California ($16) among the lowest-spending states, and Massachusetts ($64), Delaware ($73), and Hawaii ($105) among the highest spending. We find that larger states tend to spend substantially less, per student, than smaller states, which is not surprising given that larger states save on fixed costs like test development by spreading them over more students and may have more bargaining power.

We estimate that states nationwide spend upwards of roughly $1.7 billion on assessments each year, after adjusting the $669 million figure to (1) account for the fact that six percent of students are located in states for which we were unable to obtain data, (2) reflect spending on assessments not included in states’ primary assessment contracts, and (3) include state-level spending on assessment-related activities that are not contracted out. This seemingly large number amounts to only one-quarter of one percent of annual K-12 education spending. Were all statewide assessment activities to cease and the funding used to hire new teachers, the pupil-teacher ratio would only fall by 0.1 students. If instead the costs were devoted to an across-the-board pay increase for teachers, the average teacher would see her salary increase by one percent, or about $550.

This relatively low level of spending on assessment, combined with concerns that the quality of tests in many states is not high enough to use them for high-stakes purposes such as teacher evaluation, strongly suggests that states should seek efficiencies in order to absorb budgets cuts without compromising test quality or to free up resources that could be reinvested in upgrades to assessment systems. A clear strategy for cost savings suggested by our data is for states to collaborate on assessments so as to share the fixed costs of test and item development over larger numbers of students. Our cost model predicts substantial savings from collaborating on assessments. For example, a state with 100,000 students that joins a consortium of states containing one million students saves an estimated 37 percent, or $1.4 million per year; a state of 500,000 students saves 25 percent, or $3.9 million, by joining the same consortium.

Collaborating to form assessment consortia is not a new idea, and is in fact the strategy being pursued by nearly all of the states that have adopted the Common Core standards. Our model cannot be used to estimate the cost of the tests being developed by the Common Core consortia because they include innovative features not part of most existing systems and because they are substantially larger (in terms of students covered) than any existing state assessment system. But our model does suggest that these consortia will create opportunities to realize significant cost savings, all else equal, compared to the current model of most states going it alone.

–From Maureen Downey, for the AJC Get Schooled blog