Education Spending




Study: Charter Schools More Efficient

JULY 28, 2014

School Choice

It is impossible to do more with less, they say; you cannot expect schools to achieve better results without increasing spending.

Yet an essential new report from the University of Arkansas dispels this myth by measuring the cost effectiveness and return on investment (ROI) of charter schools compared to traditional public schools (TPS). The authors find significant advantages for charters in their study of 28 states.

When it comes to cost effectiveness, or bang-for-your-buck, the authors measure National Assessment of Educational Progress (NAEP) scores per $1,000 of per-pupil revenue.

In this category, charter students achieved an average of 17 more NAEP points in math and 16 more NAEP points in reading than TPS students. In other words, charters were 40% more cost effective—while receiving less funding per student than their traditional counterparts. 

Charters Cost Effective

Consider this most recent study another piece of the ever-mounting evidence that school choice is a win for students, a win for parents, and a win for taxpayers. 

posted by JAMES PAUL | 05:30 PM | Comments

Is There a Pension Crisis?

JULY 18, 2014

Public pensions

PolicyBlog readers will be well-familiar with the fact that Pennsyvlania state funding for public schools is at a record high. 

So why do government union leaders and some politicians still repeat a lie about multiple-billion dollars being cut from public education? Simply put, in some cases they refuse to count state funding to school districts for teachers' pension costs as part of education funding.

As the chart below shows, state aid to public schools for pensions has increased more than $1 billion since 2010-11 (this includes a $225 million transfer from the Tobacco Settlement Fund, not counted in the General Fund total).

State Pension Aid to Districts

Note that this $1 billion increase in state pension aid only covers about half of school employees' pension costs. School districts have had to match this increase with a billion dollar increase in payments from local property taxes.

It makes it easier to say that "there isn't a pension crisis" when you completely ignore a dramatic increase of more than $2 billion in public school pension costs. 

Unfortunately, that pension crisis is only going to get worse. Costs will continue to rise over the next few years. The required increases under Act 120 of 2010 are equal to about $900 per household. The costs increase for school districts for required pension payments would be the equivalent of laying off one out of every three teachers in the state.

The fact is this: We are spending more on public education than ever before (see chart below as a reminder of that), but more and more education dollars are going to pay off pension debt created by past political decisions.

State Education Subsidy 2-Color

posted by NATHAN BENEFIELD | 08:56 AM | Comments

Will Higher Taxes and Funding Save Students?

JULY 16, 2014

Philadelphia is in the midst of a crisis. According to the National Center for Education Statistics, more than 80 percent of 4th and 8th grade students did not reach proficiency in math and reading in 2013.

For years, the School District of Philadelphia has been plagued by poor performance and budget challenges. And to address the most recent challenges, some have suggested higher cigarette taxes and more funding as the solution. But raising cigarette taxes, which would disproportionately affect the poor, is not real reform.

Just as a funding mechanism, increasing cigarette taxes proves to be inadequate, as it encourages smuggling, which would mean a loss of sales for businesses and decline in tax revenue for governments

There's also the issue of fairness. For example, say a family in Philadelphia is already sacrificing to put their son through private school. And because both parents are smokers, they would feel the painful effects of the proposed tax increase. Is it fair that they bear an even bigger tax burden due to years of bad public policy decisions? 

Still, don't Philadelphia schools need more funding? It has to come from somewhere, right?

The School District of Philadelphia already spends about $14,000 per student, which is also around the state’s average for per-pupil spending. At approximately $25 billion, overall spending on Pennsylvania public schools is at an all-time high.

Yet, we haven’t seen the results expected from such an enormous investment. In Pennsylvania, nearly three out of five 8th graders are not proficient in math and reading, and according to a Cato Institute analysis, since 1972, SAT scores have slipped, despite a 120 percent increase (adjusted for inflation) in education spending.

Education is the key to a better future for students. This is why it’s critical to push for meaningful education reforms that put parents and students in charge of education.

In Philadelphia, as students languish in violent and failing schools, their quest for a better life becomes much harder. As each year passes without a quality education, they fall further and further behind their peers.

Instead of unfairly taxing individuals to spend more on education, public officials should strongly consider a proven solution to the state’s education woes: school choice. In the end, Philadelphia's school crisis isn't about money. It's about allowing failed policies to continue—with kids paying the price.

posted by BOB DICK | 01:30 PM | Comments

State Education Spending at Record High

JULY 8, 2014

The recently passed Pennsylvania state budget sets a new record for state funding for public schools. The chart below illustrates this growth over the years.

The total budgeted for the 2014-15 fiscal year—$10.04 billion—is $290 million more than the prior year. Indeed, in represents an increase of nearly $1 billion since 2011-12 (Governor Corbett's first budget).

It is even higher than years when state tax dollars were supplemented with temporary federal stimulus funds—$400 million more than the combined total in 2010-11 (and $1.5 billion more when just looking at state tax dollars).

State Education Subsidy

posted by NATHAN BENEFIELD | 02:46 PM | Comments

A Fair Funding Formula: School Choice

JUNE 12, 2014

Case for School Choice

Although it doesn’t fit the popular narrative of cash-starved school districts, spending on education is at an all-time high.

The Pennsylvania Department of Education budget reached $11.2 billion in FY 2013-14, more than one-third of the total $28.4 billion in General Fund appropriations. Basic education funding alone increased by $90 million, bringing that line item to nearly $5.5 billion.

While school district spending exceeds $14,000 per student, ranking 10th in the nation, performance has not improved with spending increases. The National Assessment of Educational Progress shows nearly three in five Pennsylvania’s 8th grade students aren’t making proficiency in reading and math. Meanwhile, Pennsylvania public schools reported 14,572 violent incidents in the 2012-2013 school year.

In contrast, schools of choice have become increasingly popular as they spend less per student and provide better and safer schools for families. School choice saves Pennsylvania taxpayers millions of dollars each year. Public charter schools and cyber charter schools educate children for a fraction of the $14,027 per pupil spent in public district schools. The average EITC scholarship, which allows a child to leave a district school for a school of his or her choice, was $1,100 in 2011-12, while non-public schools receive about $1,250 per pupil in taxpayer support. If each of the 391,657 students utilizing school choice returned to public district schools, schools would require an additional $3.8 billion in revenue to handle the enrollment.

Total Taxpayer Savings from Students Attending Schools of Choice

 2011-12 School Year

 

Savings Per Student*

Number of Students**

Total Savings

Private and Nonpublic

$12,777

265,724

$3,395,155,548

EITC Scholarship Students

$11,677

45,200

$527,800,400

Home School

$14,027

20,897

$293,122,219

Public Charter (Total)

$1,429

105,036

$150,096,444

Cyber Charter

$2,516

32,322

$81,322,152

Total

 

391,657

$3,838,374,211

* Includes All state funding for nonpublic schools plus tax credits for EITC scholarships as a cost.

** Homeschooling enrollment estimate based on 2007-08 PDE data.

Sources: PA Department of Education, Summaries of Annual Financial Report Data; Public School Enrollment Reports, http://www.portal.state.pa.us/portal/server.pt/community/data_and_statistics/7202

A report by the Friedman Foundation for Education Choice found that school choice “improves academic outcomes for participants and public schools, saves taxpayer money, [and] moves students into more integrated classrooms.” The report includes numerous empirical studies. It finds 11 out of 12 gold standard studies found school choice improved academic outcomes for participants, and all six empirical studies of school choice’s fiscal impact found that school choice saves taxpayer money. Not only is school choice a sound investment for the state, it places power back into the hands of parents.

Is it possible to better educate students at a lower cost to taxpayers? Absolutely, and school choice programs prove it.

posted by JESSICA BARNETT | 09:00 AM | Comments

Ignoring Pension Costs Won't Work

MAY 13, 2014

Public pensions

We've mentioned before the big lie of "$1 billion cut from education." 

Part of the reason that lie continues is that union executives ignore a big chunk of education spending. For instance, the PSEA doesn't count payments toward teacher pensions as "education spending" when making their allegations. 

While it is absurd to suggest payments for teachers' pensions "doesn't go to the classroom," excluding employee benefits from instructional spending means less than half of the $26 billion public schools spend "goes to the classroom." Employee benefits consume 19 percent of public school spending, with construction and debt costs another 13 percent and support services (less employee benefits) 21 percent. 

What is more, those categories are among the fastest-growing among school spending.

Here is a shocking statistic: Since 2002-03, school district spending on employees' salaries grew 22 percent, but spending on benefits grew a whopping 108 percent, largely because of pension payments.

PA School Spending Growth by Category

It is pretty obvious that employee benefits are consuming more and more of school spending — whether union executives want to count this as "classroom spending" or something else.

So what does the PSEA want to do to fix this runaway growth? Nothing.

posted by NATHAN BENEFIELD | 09:00 AM | Comments

School Spending is the Issue

MAY 9, 2014

My letter to the editor in yesterday's York Daily Record addresses some inaccuracies about education spending in Pennsylvania.

Your editorial on education funding (“Funding formula a good place to start,” May 2) unfortunately gets some facts wrong. For starters, it repeats the myth that the state government provided 50 percent of school districts’ revenue in the 1970s. The truth is, local tax dollars have always exceeded state dollars, with the state share peaking at 45 percent in 1975, according to data from the Pa. Department of Education.

It also notes that the percentage of funding from the state ranks low compared to other states. However, the funding per student mirrors the national average. The reason the state funding percentage is lower is because Pennsylvania’s school districts collect far more in local taxes than other states—$3,000 per student more than the national average.

Overall, Pennsylvania school districts receive more than $15,000 in total revenue per student, ranking 10th in the nation, according to the National Center for Education Statistics.

Voters and lawmakers are calling for property tax relief not because state taxes are too low, but because school spending—contrary to many reports—is exceptionally high. And growing pension costs are pushing education costs even higher. Reigning in such out-of-control state spending is a critical step to addressing the property tax issue.

I addressed these facts about Pennsylvania's state spending on education in a longer post here.

posted by NATHAN BENEFIELD | 10:07 AM | Comments

Fewer Districts Seek Big Property Tax Hikes

MAY 8, 2014

Government union leaders like to claim mythical state education funding cuts caused widespread school property tax increases. But new data shows fewer school districts are actually receiving exceptions to raise taxes without voter approval.

In 2011, the General Assembly passed Act 1 reducing the number of exceptions to the school tax referendum requirement. In other words, they made it harder for districts to avoid placing a property tax increase on the ballot, thereby giving local residents a bigger voice in any large tax increase.

For four years straight the number of requested exceptions has declined—even as the "index" has remained around 2 percent, thanks to low inflation. This trend indicates that the law is working, and that districts aren’t raising taxes as much as they had been.

Even the overall rate of school property tax growth is declining. In 2011-12, the rate of growth was 2.9 percent and in 2012-13 property taxes grew by 1.9 percent. Those are record lows minus the year of "relief" from gambling proceeds.

Act 1 Referendum Exemptions Granted by Pa. Dept. of Education
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Base Index 3.40% 4.40% 4.10% 2.90% 1.40% 1.70% 1.70% 2.10%
Exemptions Granted: 210 102 61 133 228 197 171 164
Exemptions Used 66 18 84 135 105 93
Exemption Amount Approved (millions) $143.2 $84.9 $192.4 $265.8 $159.9 $121.7 $121.1
Exemption Amount Used (millions) $41.1 $13.1 $67.6 $95.5 $48.2 $30.5
Source: PA Department of Education

posted by ELIZABETH STELLE | 10:27 AM | Comments

SAT Scores Slip While Spending Soars

APRIL 16, 2014

Pennsylvania education spending is at at all-time high and ranks near the top in dollars spent per student among the states. But all of that extra spending isn't helping kids succeed.

In fact, SAT scores have declined while spending has soared. According to a new Cato Institute analysis, Pennsylvania students perform worse, on average, on the SATs now compared to 1972, despite an almost 120 percent increase—adjusted for inflation—in spending per student. See the chart below.

SAT scor vs Spending

How are we spending so much more without improving education outcomes? The answer is simple: There is no correlation between spending and achievement. How the money is spent is more important than how much money there is to spend. The Cato analysis finds the correlation between state spending and academic achievement is not significant:

Correlations are measured on a scale from 0 to 1, where 0 represents absolutely no correlation
between two data series and 1 represents a perfect correlation. Anything below 0.3 or 0.4 is
considered a weak correlation. The 0.075 figure reported here suggests that there is essentially no link between state education spending (which has exploded) and the performance of students at the end of high school (which has generally stagnated or declined).

The answer to our education woes is not more spending, but smarter spending. Education reform should also mean protecting high performing teachers, embracing different education models (themed public charter schools or public cyber charter schools) to serve different learning styles, and reforming the archaic student funding formula.  

School choice and competition is the key to saving students, not never-ending spending increases. 

posted by ELIZABETH STELLE | 02:29 PM | Comments

The $1 Billion Lie Exposed

MARCH 4, 2014

The American Federation of Teachers (AFT) took out full-page, color ads in several major state newspapers last week proclaiming Gov. Corbett "closed neighborhood schools" and laid off teachers in Philadelphia through massive education funding cuts. In the western part of the state the ad warns, "Don’t let Allegheny County be the next Philadelphia."

These ads were grossly misleading. State funding for public schools is at an all-time high. The $1 billion in "cuts" was the expiration of temporary federal stimulus money. 

So we ran our own ad today correcting the record.

AFT claims Gov. Corbett and state lawmakers "cut $1 billion" in education spending in the state budget. But the real facts about education spending are something else entirely.

The 2013-14 budget spends nearly $10 billion and the proposed 2014-15 budget calls for $10.1 billion for PreK-12 schools—an all-time high, even exceeding when the state budget included federal stimulus funds. As you can see in the chart below, the AFT's claims are simply untrue.

$1 billion cut ed graph

But the worst part of the AFT's misleading campaign is how it was funded—by teachers' dues collected using taxpayer resources. It’s time unions are held accountable for dishonest political ads they run at the expense of educators and taxpayers across the state.

We should stop this practice which gives government unions an unfair political privilege to engage in politics.

posted by ELIZABETH STELLE | 09:00 AM | Comments

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