Return on Investment

What is the return on investment
of public school funding?

Conversations about return on investment in our public schools look at a broad range of variables both in terms of education outputs such as high school graduation rates and post-secondary participation and completion rates, as well as community-based impacts such as economic indicators, projected tax revenues and projected public costs such as health care, social services and criminal justice.

Twin Cities Compass, a project of the Itasca Project and Wilder Research, tracks topics that impact our quality of life, including civic engagement, early childhood, economy and workforce, education, health, housing, public safety and transportation.

Economic Prosperity

Perhaps the seminal document for understanding the connection between public school investment and economic prosperity is John Fitzpatrick’s June 2003 report, Business Cycles and Long-Term Growth: Lessons from Minnesota, which draws a historical connection between Minnesota’s rapid annual per capita income growth and increased educational attainment, Federal Reserve Bank of Minnesota.

In October of 2005, the Itasca Project released the Mind the Gap report, raising a call to action to reduce disparities to improve regional competitiveness:

“The demographic changes in store for the region demand attention. If ignored, growing race, class, and place disparities will hamper the  region’s future workforce and overall economic health.”
Executive Summary

In collaboration with the Brookings Institution, the Itasca Project has undertaken several follow-up efforts, most recently resulting in the Fall 2008 version of Close the Gap:  A Business Response To our Region’s Growing Disparities (Power Point).

“In spite of our overall economic strength, there are three stark and growing socioeconomic gaps in the Twin Cities – gaps tied to race, class, and place – which threaten to undermine our region’s future. Closing these gaps now is not just the right thing to do, but the smart thing to do.”
— The Itasca Project

As early as 2004, Minnesota State Economist Tom Stinson and Tom Gillaspy, Minnesota State Demographer, began raising concerns about the ramifications of the retiring baby boom generation, growing diversity, and workforce development.

In addition, Growth & Justice has been conducting an ongoing investigation and community conversation on how education investment drives prosperity through their Smart Investments in Minnesota’s Students initiative.

  • Invest for Real Prosperity – Real Prosperity grows from a foundation of public investment in education, health care and smart infrastructure, including roads, transit and development density, Growth & Justice, January 2007.
  • Workforce First – A practical and affordable path toward a strong Minnesota economy and a decent standard of living for all, Growth & Justice, February 2004.

Additional Resources

Minnesota Economic Realities Tied to the Educational Success of African American Males – As we enter into a new era of intensive globalization, shifting markets, job-market and corporate restructuring, it is important that academic achievement gaps are erased and a greater emphasis is placed on education quality and equity; points to the need for laser-focused efforts, Minnesota Minority Education Partnership Policy Brief, November 2010.

Minnesota’s Slip Toward Mediocrity: Less Investment, Less Return – Since 1995, state and local government revenues and expenditures in Minnesota have declined relative to the rest of the nation. This investment lag has been particularly dramatic since 2002, and it corresponds with significant declines in Minnesota’s prosperity, educational achievement and quality of life compared with other states. While Minnesota is not an economic “basket case,” we no longer shine with the luster we once did, Minnesota 2020, June 2008 (Release article).

June 5, 2008 – Tax Protest Puts “Me” Over “We,” The UpTake.

Media coverage of issues related to the Return on Investment in Education and the Economic Prosperity of our state.