The Faulty Premise of the Budget Impasse

Governor Rendell wants the taxpayers to spend more on public schools.  So do Republicans in the General Assembly—nearly 12 percent more.  Yet education funding remains a major obstacle in the budget impasse.
The governor decries his opponents’ proposed level of spending as a “cut” because—though actually an increase—it’s below the level identified as “adequate” in a so-called costing-out study commissioned by the General Assembly in 2007.
Unfortunately, most of the players in the debate have accepted as gospel the argument that we under-spend in our public schools—even though our per-student spending is among the highest in the nation.  Few have questioned the findings of the costing-out study despite its faulty assumptions and flawed methodology.                              

First is the assumption that more dollars will produce more scholars.  Even the costing-out study indicated that while several districts already spend well over the “adequate” level, their academic performance is consistently inadequate.  Additionally, many districts are doing well despite spending much less than the study recommends.

This should come as no surprise because volumes of research have failed to demonstrate a direct relationship between spending more money and improving academic achievement.   Case in point, Pennsylvania:  public school spending increased from $2,842 in 1981 to $13,183 in 2008 (nearly triple the rate of inflation), while academic performance by any measure remained stagnant at best.

The flawed methodology of the costing out study, however, is what makes the current budget debate over public school funding most troubling.

The costing-out study’s methods were based solely on what the state spent in traditional public school districts without first discounting wasteful, inefficient spending.  More importantly, the study completely ignored charter schools (which receive only three-fourths of what school districts do) and private schools, which often spend half as much per-pupil as public schools.

This flaw alone should cause policymakers to question the study’s findings and recommendations.  Indeed, no study based solely on a taxpayer-funded monopoly can truly measure what it should cost to educate a child.  Yet, this parochial study is driving the education funding debate today in Pennsylvania.

Another reason to question the costing-out study is that, not surprisingly, all of the spending recommendations are those lobbied for by the teachers’ unions and employees of the government school system (who sat on the study’s “professional judgment” panel). These recommendations include smaller classes, government-run preschool, full-day kindergarten, and more teachers, counselors, support staff and school nurses (i.e., dues-paying members)—though the evidence that these initiatives improve performance is mixed at best.  Ignored were reforms linked to academic improvement—merit pay for teachers, smaller schools, and school choice.

At a cost to taxpayers of $650,000, the costing-out study’s results could have been predicted. The firm hired to do the study has produced “costing-out” or “adequacy” studies for other states. These studies offer a wide range of recommendations for the same function.  For example, the firm recommended 63 instructional personnel per 1,000 pupils in Indiana, but nearly double that amount of 116 per thousand in Maryland.

The estimated “cost” to educate a child also varies dramatically by state.  This variance was not based on a cost of living index, but on what states were spending.  Despite the wide range in final per-pupil recommendations, one conclusion was consistent across the firm’s studies—each state needs to spend more, typically 20-40 percent more!

Costing-out studies acknowledge that more spending alone won’t result in greater performance, contending that success depends on how money is spent.  Unfortunately, Pennsylvania school districts have a very poor record of spending money wisely.

A Commonwealth Foundation report, Edifice Complex: Where has all the Money Gone, revealed that higher-spending districts spend a greater proportion of their funding on construction and debt.  In other words, when given additional resources, many local school boards seem inclined to spend on football fields and Taj Mahal buildings rather than student instruction.

Unfortunately, neither side in the budget impasse is questioning the premise of the debate or how schools spend the $28 billion they already receive.  But what is worse is that whether the public schools get Governor Rendell’s increase or that of the General Assembly’s Republicans, it will not likely improve the academic achievement the taxpayers and our children have been promised.


Nathan A. Benefield is Director of Policy Research and Matthew J. Brouillette is president and CEO of the Commonwealth Foundation (, a public policy education and research institute located in Harrisburg.