In the United States, public school spending per pupil doubled in constant dollars from 1960 to 1980. Moreover, average class size shrank and the number of teachers with master's degrees rose from 25 to 50%.  In stark contrast, the performance of public schools, as measured by SAT scores, fell approximately 9% over the same period. 
In Detroit, education expenditures rose from $2,766 to $3,998 per pupil from the 1983-84 academic year to 1988-1989, a 44.5% increase.  During the same period, the consumer price index for the Detroit-Ann Arbor area rose by less than 17%. 
Moreover, Detroit's per-pupil expenditures exceed the state-wide average. In 1988-89, state-wide expenditures per pupil were $3,836 while Detroit spent $3,998 or approximately four percent (4°10) more than the state-wide average. Furthermore, out of 524 state school districts Detroit ranks 98th in expenditures or in the top 20% of the school districts. 
Notwithstanding these expenditures, Detroit ranks consistently in the bottom 3% of state school districts in terms of educational performance.
This lack of correlation between expenditures and educational achievement is well documented and not limited to the city of Detroit. For instance, the Oak Park Public School district ranks 10th in annual per-pupil expenditures of $6,198, or in the top 3% of state school districts. Yet, Oak Park ranks consistently in the bottom 3% of Michigan school districts in terms of educational achievement.  On the other hand, the Berkley school district ranks 139th in per-pupil annual expenditures. Berkley spends $3,737 per-student, 66% less than Oak Park; yet Berkley students consistently out-perform Oak Park pupils.
At the national level, Professor Eric Hanushek of the University of Rochester confirms that little positive correlation exists between educational expenditures and performance. Indeed, at least some studies suggest the possibility of a negative correlation. 
Notwithstanding the existence of incontrovertible data, some professional bureaucrats and their supporters persist in pursuing the money illusion. A November 25, 1990 Detroit Free Press editorial stated that "the basic injustice of Michigan's system of public school finance has been obvious for years."  The editorial continues by supporting educational expenditure equalization, claiming that "toleration of huge disparities in per-pupil spending from district to district violates Michigan's constitution."  While this claim rests on a debatable legal foundation, its central assumption cannot withstand examination in logic or economics. As the data from Oak Park unequivocally illustrates, increased funding may simply translate into poor educational achievement. Indeed, if operating expenditures per pupil were equalized at current state-wide average levels, the Detroit Public Schools would lose funds!
In sum, neither expenditure increases nor levels seem to have much impact on educational performance. Moreover,
Instructional expenditures per pupil in the United States exceed the level of other industrial nations. In 1985, U.S. expenditures per pupil were 47 percent greater than West Germany, 66 percent greater than France and Australia, 74 percent greater than the United Kingdom and 83 percent greater than Japan. 
In contrast, the basic math and science skills of high school students in each of these countries exceed the level of U.S. high schoolers.  Additionally, when comparing a group of 10 states possessing the largest increase in real expenditures for the period 1970 to 1988 against 10 states with the smallest increase in real expenditures, those states with a smaller increase did better in terms of graduation rate improvement and SAT and ACT scores.  Given the current structure of our educational system, there is no reason to believe that higher levels of educational spending will improve public school student performance.
On the other hand, Detroit's private school spending per pupil is dramatically and significantly lower while educational achievement is relatively high. In general, per-pupil annual expenditures are less than $2,000 per child in our sample. Moreover, statistical reports of standardized tests demonstrate a qualitative advantage for private, primarily religious schools.
Valerie E. Lee and Carolee Stewart, after comparing Catholic and public schools, concluded that "the advantages of Catholic high schools documented elsewhere are generalizable to elementary and middle school levels."  Moreover, they concluded that while earlier national assessment results focused on the writing and reading advantages, the benefits of Catholic schools are also evident in mathematics and science. Importantly, proficiency differences between minority and white students are smaller in Catholic schools than in public ones. Accordingly, Catholic schools demonstrate a thrust towards social equity unlike most schools in America.  This narrowing in achievement gaps between whites and minority students is not limited to Catholic schools. It occurs at all private schools.  In our survey, schools like Bethany Lutheran and Evergreen Lutheran mirror the national results. For instance, at Evergreen Lutheran, the majority of 8th grade students read at the 12th grade level, yet annual cost per pupil was less than $1,300 during 1989-90.
Meanwhile, average Detroit Public School achievement was considerably lower yet per pupil expenditures were 200% higher.