President's Message Can Only Mean The Cost of Education is Going Up

Attention Missouri residents. You are about to be hit with new and sizable education funding requests. According to the President’s SOTUA last night, the federal government will now turn its sights on education which, coming from Washington, can only mean one thing - additional funding. Conditions within the state; high unemployment, falling home prices and decreased corporate tax revenues, have resulted in some of the largest budget shortfalls on record, a national average gap of 28% in the general fund budgets for 2010¹. Federal stimulus funds helped us get through the shortfall last year, but those funds are going away and there are plenty of arguments to be made for the state not accepting them in the future should they be offered. For K-12 education, the federal government provides, on average, just 9% of the funding compared to 44% from local sources and 47% from states. When you look at what the state does with the money it collects, $.27 of every dollar goes to funding K-12 education. Put another way, that's 35% of the general fund going to educate our children. Doesn't sound like we have been shortchanging our children in terms of education funding.

Because the state, in order to balance the budget, has to reduce distributions to individual school districts, your district will likely be calling for additional funding in the near future, if they're not already doing so. But before we open our wallets again perhaps we should get someone to fully explain where all this money is going to. The per-pupil funding level may not include everything they're actually spending per pupil within the district. A recent Cato Institute study, “They Spend WHAT? The Real Cost of Public Schools” found that district stated per pupil costs are often not accurate. What some districts failed to account for in their per pupil costs were things like capital costs, debt service and employee benefits. These can increase the actual per pupil cost by 40% or more. The Cato study found that in the five large metropolitan districts it examined the actual cost per student was sometimes double that reported by the district.

The national average for annual spending is $9,800 per student, with some areas on the coasts spending as much as $19,000 per student. Private schools spend between 20-45% less to educate their students yet achieve the same, if not better, results. With all this spending, however, we still see headline after headline telling us our students are underperforming compared to their peers in other countries. Michelle Malkin wrote on Townhall Conservative

"Overall inflation-adjusted K-12 spending has tripled over the past 40 years. Yet American test scores and graduation rates are stagnant. ... And students' performance in one of the most prestigious global math competitions has been so abysmal that the U.S. simply withdrew altogether." Cash for Education Clunkers

The other way to balance a budget is, of course, to cut spending. School districts are currently looking for areas to cut costs in their budgets. While looking at ways to save money, districts cannot dismiss the fact that upwards of 80% of their budget is allocated to staffing and employee benefits. Staffing, while a necessarily large portion of the budget, is also one of the most troubling line items to deal with because:

1) Teacher contracts are usually signed for multiple years locking school districts into a certain pay rate, regardless of what happens in the community or the economy. Teachers in at least one district have received a 3% pay increase last year and will receive the same increase again for the next two years because of their contract, at a time when other businesses are experiencing either pay freezes or salary reductions.

2) Staffing cuts often cannot be made in ways that make the most sense for the district, again due to contractual obligations and tenure (e.g. New, energetic and creative teachers would be the first let go while older and perhaps more burned out teachers are retained due to tenure.)

3) Fewer staff can mean larger classrooms. Everyone, parents and teachers alike, has been preconditioned to believe that lower student:teacher ratios are the ideal. In fact, there have been several studies that have shown that it is not the number of students per teacher that determines the quality of education, but rather the quality of teacher that determines the quality of education. Despite this, the desire for smaller classrooms is often used as leverage when fighting either against staff reductions or for tax increases.

Representatives from local teachers unions are already meeting with teachers and warning them that these future budget shortfalls will mean "Draconian layoffs." These layoffs will then be coupled with dramatic increases in class size, perhaps by a factor of 2 to 3. There is no doubt that there is padding in staffing. The degree may depend on what school district one lives in (see January 21 Shattering Education Policy Myths on education jobs as a means to control urban violence.) But a certain amount of staff shaving can be done without affecting education and this would happen before we started letting go significant numbers of teachers.

While it is possible that such Draconian layoffs may ultimately be necessary, warning teachers about them now may speak more to the local union’s agenda rather than serve as a disaster preparedness plan. Given the state of the economy, successful passage of new local taxes is highly questionable in the foreseeable future. What better way to rally the teachers to actively advocate for future tax increases, or to maybe even staff phone banks to call district families to urge them to vote yes, than to threaten the teachers with massive layoffs if such taxes are not passed.

While nobody likes to be in eternal negotiations, future teacher salary contracts should allow for some flexibility (like tying pay increases to some other economic indicator). And teachers need to realize that if they allow their union representatives to negotiate deals like they currently have, the end result will be exactly as the local union has predicted - future large scale staffing cuts.

It's time that we get very clear information from our school districts as to what we really are being asked to fund with additional taxes, levies and bond proposals. We must begin to understand everything that goes into running a public education system and, either accept those costs as the true cost of the running the system or, identify them as waste and make plans to eliminate them.

The Center For Education Freedom Report proposes A Financial Transparency And Education Act that would require school districts to more accurately account for per-pupil spending and make such information readily available to the public. This would serve the purpose of both identifying waste and potential fraud within an educational system, and also informing the public of the true cost of education.

¹ They Spend WHAT? The Real Cost of Public Schools, by Adam Schaeffer, Cato’s Center for Educational Freedom (2009)