Education Spending

Not sure where it goes, but here is Califnoria State Senator Senator Tom McClintock’s take on how you could spend the US$10,000.

(And 33/sq ft is expensive, IMHO. You can get 10/sq ft around here for class-A stuff.)

The Governor proposed spending $10,084 per student from all sources. Devoting all of this money to the classroom would require turning tens of thousands of school bureaucrats, consultants, advisors and specialists onto the streets with no means of support or marketable job skills, something that no enlightened social democracy should allow.

So I will begin by excluding from this discussion the entire budget of the State Department of Education, as well as the pension system, debt service, special education, child care, nutrition programs and adult education. I also propose setting aside $3 billion to pay an additional 30,000 school bureaucrats $100,000-per-year (roughly the population of Monterey) with the proviso that they stay away from the classroom and pay their own hotel bills at conferences.

This leaves a mere $6,937 per student, which, for the duration of the funding crisis, I propose devoting to the classroom.

To illustrate how we might scrape by at this subsistence level, let’s use a hypothetical school of 180 students with only $1.2 million to get through the year.

See the original article for more:

Link

What are the overheads for special education? The costs must be high relative to mainstream students. What about nursing staff? Transportation costs? Food for undernourished children? Insurance?

Food for undernourished children?

Sigh.

Nathan – here in Maryland for one. According to the AFT teh average salary for MD is $50,303, which means that about 50% of teachers make more.

Here is the link to state-by-state salary data from the AFT:

http://www.aft.org/presscenter/releases/2005/salary_map.htm

See “It’s Only an Ocean Swell Now” at New Media Journal,
by
Dennis Duggan McMahon
San Francisco
December 8, 2005

Higher education costs would certainly knock that down by quite a bit, but that does not include state and local costs which must be much larger. You might want to compare that to other large organizations such as the military or post office. Spending 90% on logistics is normal.

Right off the bat judges do not often determine how much school systems should spend.

Wrong. A recent AZ ruling states that AZ needs to “adequately fund” English learning in schools (not a school system, but nevertheless a judge interfering in school matters). If the funding is determined not to be “adequate” by the judge, then AZ can be fined up to $2 million a day until it can come up with an “adequate” amount.

As far as your analysis of John Stossel’s report, I haven’t seen it (I only watch ABC for “Lost”), but let me pick your points anyway:

1) Most public school systems don’t even show us how it arrives at the arbitrary number of spending it does on each student, but your allegation of John Stossel’s calculation (if indeed that’s how he did it) is more transparent that what the public school system is.

2)Well, Federal and local responsibilities have been mixed up for quite some time and picture got a little hazier with No Child Left Behind. And I wouldn’t be surprised if all of them are overspending. Several thousands of dollars are spent on each pupil, but as mentioned in 1) there has never been any rational reasoning made as to why it costs so much to teach a child. Where does the extra money go?

As for 3) well, as much sensationalism that has been presented by the left for years, one sensationalist expose (though I fail to see how exposing government’s wasteful abuses of OUR money is sensationalist) by a libertarian should be tolerated.

True and NJ has similar rulings. However most of the time judges are not setting the budgets of school districts. Usually when this happens it is not a typical school district but one that has serious dysfunctions. Certainly you’re not going to argue that the Kansas City district wasn’t exceptionally bad?

In the case of Arizona, it is a state dysfunction (at least, that’s what the judge believes). And I don’t think school districts are going to voluntarily say that they are dysfunctioning and it will take an outrageous act to reveal which ones are underperforming (such as in the case of the Colorado City School District, which had only been discovered because of the Warren Jeffs polygamy scandal).

What are you talking about? You can’t obtain the budget of your local school system? You don’t have elections for your local school board? They don’t have public meetings?

How exactly is his calculation ‘transparent’ when he doesn’t even bother to say where it’s coming from or how he performs it?

The first three questions hardly reveals that the school’s budget are transparent. When I think of transparency, I think of having the information readily available for parents and teachers at each individual school or a budget mailed to each home. Not everyone in the school district is going to attend so there should be other safeguards put in place to ensure that everyone is at least notified of what the school district is up to financially, even if the parents don’t read them. This is required of publicly traded companies and I don’t see why it should be required of government entities.

The second question comes down to a matter of personal preference. Would it have been nice to have John Stossel mention how he came up with the numbers? Maybe, but it doesn’t hurt the story in any way.

Well what is rather intersting is that aside from Catholic Schools most private schools cost well over several thousand a year to teach a student full time. The Catholic schools, being a non-profit charity, can subsidize tuition with support in both money and volunteer labor from the Church. They can also keep costs down by filtering out the most difficult to teach kids and also self-select the student body (parents are probably more dedicated than average). Are you telling me that no one can ask what the Catholic school system is doing that the public school system can’t? Or is the best answer “don’t build zoos”?

The difference here is “public” vs. “private”. I can care less about a private school and how it decides to run its business. The Catholic School’s concern should only be to its congregations and the parents who pay to send their kids to school there. However, I am involuntarily involved in the public system and since it is financed with taxpayer dollars, I want to see those dollars efficiently used. If the money is being wasted on frivolous things, then the public deserves to know about it.

Ahhh yes, the right wing’s intellectual bankruptcy continues to deepen. You’re argument here can basically be summed up as “Liberals didn’t think critically for a good 20-30 years so I’m getting my turn now to be dumb!”

I don’t know about “intellectual bankruptcy”, seeing as how it is YOU who is defending monolithic entities that have not shown vast improvements in educational attainment, but that’s okay. I’ll just keep civil and leave it at that.

I think what we have here is something along the lines of an urban myth. Not quite the same, though. Call it a collective delusion perhaps. It’s either a lie or half-truth that is accepted by everyone because many people have a stake in it. I believe Arnold has written before about something similar, ‘conventional wisdom’ that is wrong.

The delusion here is that the education system is falling apart. Both the left and the right find that in their interest. The left because it justifies spending increases and other activity to ‘fix our schools’. In a bit nicer light it also justifies focusing attention on failing urban systems under the umbrella of ‘fixing all our schools’. The truth is more like “80% of our schools are fine but a chunck of the ones that are not are sitting in urban areas that shall we say have dramatically different demographics than the rest of the state”. This has a very real danger of having many voters shrug and say ‘the hell with them’. Of course the right finds it to their advantage to let this line continue because it supports a host of issues they want such as vouchers, skepticism of gov’t, and of course the spector of those ‘urban areas’ spreading their ‘errors’ to the rest of us.

This would explain how so much shoddy reporting takes place with hardly anyone calling attention to it. For example, a while ago Slate.com looked at a story that got lots of attention. The US was falling behind other countries in some international test given to High School students. In an unusual move Slate looked a bit more carefully. This test had no high stakes associated with it. Students taking it in America would not be held back or see their education careers altered in any way for getting a bad grade on it. No school would receive more or less funding based on the results. In other countries the test is given with a competitive zeal. Prep rallies are held and it is sold as a badge of ‘national honor’ to score well on the test. The Dept. of Education tried to do some promotion but its efforts were very small.

So what the test was really showing was intelligence on the part of students. They put no effort into a test that would benefit them in no way at all. In fact, I don’t even think students would get their individual results so its not like the test even could be used as a self-diagnostic for the student. So kids did the right thing and put their energy into studying for tests that really matter like the SAT or tests required to get the diploma. In the meantime, though, the predictable headline was “US falls behind Obscure Third World Country Tuskrelwrjlstain in International Testing: Conservatives call for Vouchers Liberals for more funding”

So to conclude my rant on this topic let me post more observations/questions:

1. If Arnold’s thesis is correct and public schools are dramatically overspending then why is college so costly? College in the US is paid for either with:
A: Private dollars
B: Loans that the student/parent have to pay back
C: Financial Aid that, like vouchers, can be used at just about any school.

Shouldn’t we see dramatic savings as one leaves the ‘monopolized’ public high school and entered the ‘market centered’ college system?

2. If public schools are ‘failing’ then how do you account for the fact that most public schools are locally controlled? Wouldn’t local control mean it would be easier for taxpayers to mount campaigns against lavish waste and abuse happening in their own small communities?

3. In keeping with #2, why do most people and most communities agree that ‘public schools are in trouble’ but are generally happy with their local school?

4. Considering that most people went to public school do you feel that most people consider themselves poorly educated? Is this because they are too stupid (relative to you) to realize they were shortchanged by their school?

5. If public schools are failing us then how come more and more people are going to college and graduating than before?

6. If your answer to #5 is that colleges are going down hill then shouldn’t the income differential between a HS grad and a College grad be shrinking rather than expanding?

7. In the mid 80’s the famous “Nation at Risk” report came out and said that our public schools horribly failed to educate the children for a new technological age. How do you explain the fact that the graduates of that system went on to create the Internet revolution & produced record economic growth? How do you explain the fact that they outperformed the supposedly superior educated labor forces of Japan and Germany? If you cannot does this give you reason to be careful of “the schools are falling” type of reports? Especially when they are supported with ancedotes and ‘factoids’ devoid of relevant context?

8. Most argue that the public schools were good years ago. Why does no one objectively state what made them good and simply advocate adopting those policies rather than supporting a radical scrapping of the entire system?

9. How do you explain that vouchers only seem to get voter support in communities with exceptionally bad schools or for ‘other people’s schools’? Why do conservative communities known for heavy Republican voting patterns seem to lack the will to vote vouchers into their own system?

10. If we accept the Stossel/Kling thesis that public schools are horribly overpriced then how do you account for their remarkable consistency? Is there no local gov’t that is in a financial pinch and needs to find ways to economize? Is the teacher’s union universally powerful that it wins always and everywhere?

11. If teachers unions are so powerful then how come the portion of education spending going to teacher’s salaries seems so small? Believe it or not but $35,000 is not a huge starting salary for a college graduate and $50K after 10 years of working is not unusual either. What is odd is $50K and more for unskilled labor like collecting tickets on a train but you see transit workers often have powerful unions. Powerful unions demand powerful pay…not the other way around.

When I was working as an engineer (in the steel industry and later in IT) a good rule of thumb was that the full cost of employing someone was about three times their salary. On that basis, five times salary for a teacher including the cost of the classroom and other school facilities sounds like a fair ball-park figure.

Thanks Jim, I’m still filtering thru the usenet chatter of your link but I just have a few more thoughts to this:

1. If the $10K figure is accurate then how much should it be ideally? Considering that my questions indicate a strong case that we have a good system already how much is that worth?

2. Comparisons with the private sector do not indicate that the figure of $10K is out of line. People of means are often happy to spend that much on exclusive schools & in the days before free public education I’m not sure that $10K per year (adjusted for inflation) was that out of line for what private schools charged in the past.

3. As another comparison how much does it typically cost to send your kid off to a summer day camp for a few weeks? Now take that cost and adjust it by a full school year (adjusting the other way, if necessary, for the fact that schools do not provide for night time room and board). I wouldn’t be surprised if the figure you get is close to $10K. This is despite the fact that camps are
a. Not mandatory
b. Not paid for by the taxpayer
c. Not, to my knowledge, an industry with much unionization

4. What exactly does the metric ‘spent in the classroom’ mean? Stossel cited among his examples of wasted money ‘intense foreign language instruction’ and a robotics lab. Wouldn’t that count as ‘spent in the classroom’? How about the capital costs of the classroom itself? What about the janitor who cleans the classroom or the bus driver that brings kids there? Is this really a sensible metric? Would you evaluate, say, Wendys vs McDonalds by comparing the percentages of their spend that goes into purchasing food? If you did would it be upsetting to learn that less than 30% of their spend was on raw food?

5. While we are on the subject what metrics are really proper to measure the value of education? Test scores are easy to obtain but that doesn’t make them accurate. Take a peek at colleges, how do they (they are more of a free market than primary education) promote their effectiveness? The most common metric I hear them use is how their alumni have fared. People think an Ivory League school is great because its alumni make a lot of money and go onto important positions in society. I’ve never heard anyone say Munsi College is better than Princeton because the GMAT scores of their graduates are a bit higher! If this is the case then shouldn’t the ultimate metric used to measure out education system be the income our workers make? Of course this is hard to use because you have to wait 10-20 years before you can even begin to see the results but if Stossel and ourselves want to measure the system as a whole shouldn’t that be the starting point?

6. Also, comparing price is not the same as comparing cost. Catholic schools may charge a lot less than public or other private schools but that tells us nothing about the true cost. For one thing, the Catholic Church has a huge amount of prime real estate that it owns and uses for its schools. If they ever decided to get out of the school business they could sell that prime real estate to developers for hundreds of millions…maybe billions. As an economics blog shouldn’t this opportunity cost be considered (as it should for public school buildings)?

This is not to say there isn’t a lot of areas that can be dramatically improved but Stossel has a good reputation as a reporter who challenges conventional wisdom by trying to see what the reality was really. I feel disappointed that seems to have degernerated into simply being one who challenges liberal conventional wisdom.

Yet what is ‘dollars to the classroom’? It sounds like a perfect mantra for the teachers union to increase teacher pay! You’d think the union would really love that idea, fewer Principals and more pay for teachers.

The other real problem is performance metrics, which healthcare has as well. How do you tell if a doctor is good? By how many of his patients die? The doctor working with terminal cancer patients will look like a loser while the cosmetic surgeon who gets most of his business just giving botox injections will look like the next Salk. How do we know that NYC’s demographics were not falling apart with a huge increase in dysfunctional families and ‘white flight’ making its remaining student population more difficult to teach? Perhaps the increased funding kept the boat from sinking even faster?

I do propose we look at alumni rather than test scores and other simplistic measures. How did a NYC High School graduate from the class of the 1980’s and 1990’s fare in the first ten years out of school compared to similar classes in the past?

Another thing that I think is becomming obvious is that we are asking a lot more of our schools than simple instruction. Arnold is correct that we can probably just get tutors/teachers to teach kids at home or online for a fraction of the cost. But in most communities schools have been doing much more. They are part mass-daycare for working parents. Part recreation hosting sports teams and such. Part community center serving as meeting places. And finally part ‘preventative detention’ keeping the crime rate down by keeping kids off the streets & occupied during the day.

This may seem objectionable but we should note that this appears to be a consensus if not concsious choice by most communities accross the US without regard to their normal political ideologies. In other words a Red State HS looks quite a bit like a Blue State HS. Can we explain this by ascribing mythological powers to the teachers’ union?

No it doesn’t but let’s imagine the following situation. You are managing a cities education system and the entire city takes a big demographic dive. Middle class people begin leaving the cities in droves taking their kids with them. Crime & gangs become very popular among those that remain. Suddenly the system is facing massive problems that only existed before as rare occurances; parentless families, teenagers who have children and need childcare to attend classes!

In response you are given lots of money. You build great programs. The people who graduate at the top of the class are learning in state of the art labs, participating in assorted academic extra programs and so on. Yet the fact remains that the cities overall demographic decline drags your graduation rate down. So those who graduate do great but many don’t graduate because, quite bluntly, they are suffering from dysfunctional lives.

Have you screwed up? Or think of a hospital in a city that is suddenly hit with a massive bio-terror attack. Thousands will show up at the hospital to die while just last year the hospital had very few deaths among its patients. Bad Hospital?

I don’t doubt for a second that the NYC ed. depart ment has massive waste in it. But to what degree can the quality of its schools be accurately measured? I’m not really sure.

I do know that it is pretty fundamental to economics that something which is valuable is expected to have a high price. That doesn’t mean everything with a high price is valuable! It does tell us to be very skeptical of people who claim education can be ‘fixed’ and dramatically improved for little or no money.

George,

According to http://www.christianpost.com/article/education/730/section/demand.for.catholic.education.persists.despite.declining.enrollment/1.htm

The average cost of tuition for ninth grade at Catholic schools was $5,870 in 2003-04 — a 37 percent increase from five years earlier according to NCEA figures. In 2003, 27 percent of Catholic high school students got financial aid — up from 22 percent in 1998.

So right there you have about $6K for Catholic education versus $10K per the figure from Stossel. But we already know that among private schools Catholic schools are the most likely to be heavily subsidized so the schools are unlikely to be self-sufficient even assuming everyone who attends just pays $6K and there’s no financial aid or scholarships for poorer students.

As far as the world of private schools goes Catholic schools are almost certainly the least expensive for several reasons:

1. The Catholic Church has captured economies of scale by building a very large system mirroring in many ways the public system.

2. The Catholic philsophy is one of evangelicism, especially thru the long tradition of education. It’s quite sensible that they would make education a ‘loss leader’ in the quest to win converts and solidify the faithful.

3. Most Catholic schools have a Catholic community to fall back on for support. They are not stand alone entities seeking to support themselves only thru endowments or donations.

So yea I suppose it’s quite possible to get a Catholic education for less than $6K per year even though that’s the stated menu price but the question is what does it really cost to provide that Catholic education? We aren’t really concerned with what the parent typically pays.

Arnold’s question remains even for Catholic/private schools. There would seem to be a huge amount of money not going to ‘the blackboard’. Catholic teachers are typically paid less than public school teachers. Even assuming the parent pays only half of the stated price ($3k instead of $6K), a class of 30 students is generating $90K in revenue with only $40K going to the teacher.

the problem is the question. asking ‘what goes to the classroom’ is like asking how much of the price you pay for Starbucks coffee is going to espresso beans and milk.

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