Where Does the Education Money Go?

Article Published in The School Reform News

In the wake of defeats for statewide voucher initiatives in California and Michigan, the president of the nation’s largest teachers union was quick to draw the lesson that Americans want even more money pumped into the existing structure of public education.

“The public has no enthusiasm for new voucher ‘experiments,'” declared Bob Chase, president of the 2.5-million-member National Education Association. “Americans are unified in their support for investments in improving public schools where 90 percent of America’s children attend.”

Governor Gray Davis of California also interpreted the defeat of the Draper proposal to award $4,000 vouchers to all K-12 children as a sign of support for his version of state-directed school reform. (Proposition 38 divided the pro-school-choice community, with some preferring vouchers tightly targeted to at-risk children, as opposed to universal vouchers.)

However, a recent study (unrelated to the voucher campaign) by two long-time education activists — Dr. Alan Bonsteel of San Francisco and accountant Carl Brodt of Berkeley – casts doubt on the efficiency of the current California system in delivering educational services to the state’s families. The authors intended their analysis to be non-partisan: Dr. Bonsteel is a Democrat, and Brodt is a Republican.

These were some of the key findings of the study, entitled “Where Is All the Money Going? Bureaucrats and Overhead in California’s Public Schools”(Part I):

Approximately 40 percent of California’s K-12 tax dollars are spent on bureaucracy and overhead, rather than classroom instruction. That figure comes not just from the Bonsteel/Brodt analysis but from previous studies by the RAND Corporation and the Little Hoover Commission.

Even though (contrary to popular perception) inflation-adjusted dollars for California public education increased by 39 percent between 1978 and 1999, textbooks are frequently unavailable, school libraries have been shut down, and art and music programs terminated. “This is,” concluded the authors, “primarily because of the explosion in spending on administration and overhead.”

Four levels of administration run K-12 schools and act as though they were separate fiefdoms. Frequently they quarrel and often those disagreements end in lawsuits among the bureaucratic fiefdoms, with taxpayers paying for lawyers for both sides. The California Department of Education and the State Board of Education maintain legal counsel to sue each other. The study contains a sample State Board of Education agenda listing 30 lawsuits confronting the State Board, seven of which pitted one layer of the education bureaucracy against another layer.

In one set of lawsuits, the San Francisco Unified School District and the State Department of Education have squared off over bilingual education. The STAR testing statute mandates that children who have been in the USA at least a year be tested in English (the presumption being that they should have learned English by then) but the San Francisco district contends it must test immigrant students in their non-English native language. It’s the only district making that claim, but taxpayers must pick up the tab for the legal spat.

Special education programs for children with mental and physical handicaps are plagued by bureaucratic gridlock at the federal, state, county, and local level, as well as by unfounded mandates from the federal and state levels and the lack of a voice for the parents of special-ed children.

Interest groups, like the NEA, exert ever more powerful influence over the education establishment. The California Teachers Association, an NEA affiliate, this year made $961,606 in political contributions to Governor Davis and $402,163 to State Superintendent of Public Instruction Delaine Eastin. As one result of union influence, California teachers have one of the sweetest tenure deals in the country: After two years of teaching, they receive tenure and effectively have a job for life. To become state licensed, they have to pass a test that is at no more than 10th-grade difficulty.

Local citizens have diminishing power to influence local school policy. Almost two-thirds of education tax dollars now are funneled through the state. The federal government furnishes just 6 percent of funding but its requirements account for close to half of education paperwork.(Arizona schools’ chief Lisa Graham Keegan has said that it takes 165 members of her staff, or 45 percent of the total, to manage federal programs.)

The best hope for decreasing bureaucracy and enhancing accountability, the authors conclude, is school choice of various kinds. California’s public charter schools have easily outperformed traditional public schools while operating on about 60 percent of the per-student funding of the conventional public schools. They have accomplished this by cutting the bureaucratic overhead.

Similarly, the successful school-choice experiment targeted to needy children in Cleveland receives only about one-third the per-student funding of the Cleveland public schools, yet has produced significant gains in student achievement.

The study notes that bureaucracies at all levels “invariably understate true per-student spending.” At the national level, the figures released by the National Center for Education Statistics are usually the “current expenditures” number, which does not account for the cost of school buildings or interest payments on school bonds.

In California, the spending statistics are “even more deceptive,” the study’s authors charge. The figure the state bureaucracy most often releases, and the news media usually go with, is the “Proposition 98” number (named for a 1989 voter initiative requiring that 40 percent of the state’s budget go to education). That figure, which does not include the cost of school buildings, interest costs on school bonds, federal aid to K-12 education, and lottery proceeds, is currently $6,701. However, the all-inclusive, accurate figure for per-pupil spending in California is approximately $8,500 per student.

Using the low figure, the California NEA affiliate has advocated hefty spending increases for the express purpose of raising the state’s per-pupil spending above the national average.

Dr. Bonsteel is president and Brodt is treasurer of California Parents for Educational Choice. They plan to do a Part II of this study in early 2001 after obtaining more detailed program budgets – through the Freedom of Information Act, if necessary.

Robert Holland is a senior fellow at the Lexington Institute, a public-policy think tank in Arlington, Va.