Do Our Schools Really Need More Money?

If your wallet starts feeling a lot lighter, you can thank the administrators of Pennsylvania’s public school system. On March 12, over 50 superintendents and board members descended on the state capitol to warn that they will seek increases in local property taxes if legislators do not add $200 million more in state funding this year—on top of Gov. Schweiker’s already budgeted increase of $52.5 million.

Pleading poverty is a perennial tactic of virtually every tax-funded entity, so it is fair to ask: Are Pennsylvania schools really in need of more money?

The facts suggest no. Pennsylvania’s public schools have received steady funding increases of nearly $7 billion from 1989 to 2001, and total expenditures for the Commonwealth’s 501 school districts topped an estimated $16 billion for 2001-02. While this generous amount increases annually—regardless of the system’s performance—school officials insist there’s never enough money and threaten to increase taxes or cut programs.

One reason districts may be having trouble finding enough money for education is that over 30 percent of tax dollars earmarked for public schools never reaches the classroom. This amount is absorbed by administrative and other costs that have little or nothing to do with the actual instruction of students.

Before seeking additional funding, therefore, public officials should take a step back and evaluate the efficiency with which they are spending the money already entrusted to them for the education of children. Families and businesses throughout Pennsylvania are reprioritizing their budgets in these difficult economic times; school districts must follow suit and re-evaluate their priorities using existing funds. In fact, making adjustments in three key areas could free up more than $1 billion to spend on classroom instruction.

So what should officials do? First, school districts must apply more of their budgets to the classroom. Timothy Potts, director of the union-backed Pennsylvania School Reform Network, chastises legislators for “moving money away from education toward other things.” Potts, however, fails to criticize the spending practices of school officials who increasingly divert money from the classroom into non-instructional services.

Over the last decade, instructional costs—that is, dollars spent in the classroom—have plummeted as a percentage of total expenditures in public education. In 1989, 75.8 percent of total expenditures were for actual instructional costs, compared to 69.2 percent in 1999. In other words, if school districts had spent the same percentage oftheir resources on instructional costs in 1999 as they did in 1989, an additional $970 million could have been used in the classroom in 1999. So who’s really moving money away from education toward other things?

Second, Pennsylvania school districts should more fully explore the good business practice of outsourcing—hiring private companies to provide non-instructional services such as transportation, food, and janitorial services. Thousands of districts throughout the country competitively bid out such services and save millions of dollars in the process. For example, Old Bridge Township Public Schools in New Jersey saves almost $1.3 million each year by contracting out custodial and food services. The Piscataway, N.J. school district outsources bus and cafeteria services and to date has saved a combined $2 million. And schools in Pontiac, Mich. save nearly $500,000 a year by using an outside busing company. Contracting out not only saves districts money but also often results in higher quality services as companies perform to a higher level under the threat of replacement.

Third, a bill currently sits before the House Labor Relations Committee to exempt school districts from Pennsylvania’s so-called “prevailing wage” law. This law mandates that contractors on government-funded construction projects be paid at artificially inflated, above-market union wages. The effect is to force schools to waste millions of dollars every year in unnecessary construction costs. Allowing Pennsylvania schools to pay market wages on construction projects would save an estimated $348 million annually.

When discussing funding issues in Pennsylvania, school officials are fond of referencing Article III, Section B of the state constitution, which states that the General Assembly “shall provide for the maintenance and support of a thorough and efficient system of public education….” Although the system is certainly “thorough” in annually pleading for more money, it remains far from “efficient.”

As parents all hope their children will learn to spend money wisely and not live beyond their means, it is past time that school officials and state policymakers demonstrate they’ve learned this lesson well by finding more “efficient” ways to spend the already generous amounts of taxpayer money.

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Ann C. Thomson is a former policy analyst with the Commonwealth Foundation, a non-profit, independent, non-partisan research and educational institute based in Harrisburg, PA.