So Much Confusion On School Funding

Tom Roeser pulls out the 65% Instructional spending proposal again in praising Joe Birkett’s idea to adopt a proposal from Arizona that requires 65% of school funding be spent on instruction.

Now the wording is different in the Roeser column.

Under a Gov. Birkett, legislation would be prepared to require every Illinois school district to spend at least 65 percent of expenditures directly on K-12 classroom instruction, a marked increase from the 58.4 percent now expended. Educational reformers have long been critical of the bureaucratic overload that hobbles teaching because of top-heavy administrative staffs. Illinois has 881 school districts, each with a superintendent, assistant superintendent, principal and assistant principal. Some administrators in Illinois are earning as much as $300,000 a year along with lavish pensions. It’s amazing when you consider that almost half of the 881 districts have fewer than 150 students.

I have a slightly different calculation using the 2004 numbers for the state–59.2%, but close enough to know we are using similar numbers.

I made a bad prediction previously, but I think after going through several districts I’m familiar with that no one has thought through the implications of what such a rule would do.

In suburban schools, classroom instruction % would increase and in larger districts in areas with rural areas that transport students the percentage would increase as well.

However, in smaller districts, the ones that haven’t merged, the percentages are already close or above 65% and yet these are the districts facing some of the biggest problems.

In other words, simply forcing 65% of expenditures to be on classroom instruction would do little to nothing to solve the financial problems in those districts. Roeser tries to imply that administrators are making $300,000 in those districts and that is pure bunk. The areas that pay high administrative salaries are suburban districts in relatively wealthy areas.

Furthermore, such a restriction would hit hard on merged school districts. Those are districts that spend significantly more proprotionally on transportation than do suburban districts. By increasing the amount of travel students have to be bused, the districts have to spend more–and that isn’t accounted for in the formula.

If you look at general administrative costs, the highest proportion of costs are in relatively small districts that must have a certain positions filled, but do not have as large of a budget. No district can go without a superintendent obviously. Illinois already caps the percentage of these costs at 5% as well.

Where the higher proportion of funds is spent outside the classroom are in relatively well off districts where one observes higher support service or higher other costs. Those can include all sorts of differences including transportation, libraries, and other non-classroom programs.

The essential problem of such a plan is that it doesn’t address those districts that are most in need of help. It would make well off suburban and larger districts that have a decent tax base reduce extras offered in the districts. In districts that are small and in financial need, no changes will be made continuing to leave them in financial need. In districts that are merged districts where spending is below 65% for classroom instruction, the reason is because of higher than average transportation costs.

The ‘solution’ doesn’t actually address any of underlying problems of the Illinois educational system. The money being moved from other costs to direct classroom costs would stay in the districts that are relatively well off. It isn’t redistributed to financially strapped districts that are generally within or close to the cap.

Making the situation worse is that if those small districts were to merge, their non-classroom based costs will be higher due to transportation giving them an incentive not to merge–one of the worst decisions in many rural areas.

If one wants to solve school finance problems without a tax increase, one has to redistribute from wealthy districts to poor districts. There is simply no other way to do it. Those who attempt to throw a pithy catch phrase at the public are only going to continue the crisis and reinforce the decline of our rural communities and inner ring suburbs.

The larger issue of what is the exact right amount of non-classroom expenditures is hard to answer. For some communities, they need to spend more on transportation. Others wish to spend money on instructional support of have to if they have a high needs population. Other districts simply wish to spend more so their students have the ability to have more experiences.

The question for the state is what minimum level does it guarantee to all students? From there local districts can tax themselves and provide the service level the citizens want. The problem of capping non-classroom expenses is it doesn’t actually address where need is in Illinois.

All that said, it’s an incredibly good issue to run on in terms of how people perceive it so Birkett gets credit for picking a winning issue, even if the idea is flawed.

10 thoughts on “So Much Confusion On School Funding”
  1. Making the situation worse is that if those small districts were to merge, their non-classroom based costs will be higher due to transportation giving them an incentive not to merge–one of the worst decisions in many rural areas.

    Does it necessarily follow that if school districts merge, transportation costs will go up? Seems to me that two or more districts could merge, administratively speaking, while still maintaining their local schools such that students would not have to be transported any further than they are in their smaller districts. It strikes me as ludicrous to have 800+ school districts, even in a state this size, all with separate headquarters, administrative staff, purchasing and maintenance contracts, etc. It would seem to make considerably more sense to consolidate those overhead requirements wherever possible on a regional or county level, and send the big bucks to the actual schools.

  2. Actually there are some safeguards in the program.

    1. Things like athletics and other extra curriculars that keep kids in school and active are considered part of the 65%

    2. There are small and rurall school districts around the country that exceed 70% in the class room. Part of the program involves getting school boards to adopt best practices. I think that is important.

    3. The program calls for schoold districts to move toward .65 cents per dollar by increasing classroom spending by 2 cents per year until the reach. If they can’t meet their goal, they can get a waiver for that year.

    The Illinois Policy Institute is a proponent of this idea and we have called for it publicly on two occassions. Simply getting us up to the national average can put more than $300 million in the classroom.

    The concern I have with AP’s notion that money should be redistributed is that my INITIAL reaction would be that we would undermine local control of schools. Second, recent research from the Manhattan Institute suggests that people will move from district to district to adjust to anything government attempts to do “solve inequities.” Unless you are willing to tell people where and how to live and enforce that, they will confound your best intentions. The answer is to find ways to make this work for you…. Again, this is just an initial opinion…I open to discussion and better analysis than I can provide here. best, Greg

  3. Amy–the problem is that the bill that Birkett seems to be supporting wouldn’t distinguish between categorical aid funds and others–if he did–every district would hit 65%

    Michael–yes, transportation is highest in large rural based districts. Much higher than small single community districts. So take Olympia or other districts that have merged, the transportation goes up because inevitably one high school is closed and all the kids have to be transported. There’s very little savings if you don’t consolidate any schools.

    The incentives for consolidation are administrative costs and building costs which are far greater savings than the extra transportation, but in the way the 65% rule would be hit–construction/capital costs are excluded, but transportation isn’t–meaning joining together is hurt.

  4. I didn’t know about the 5% cap on administrative costs. But, wouldn’t you concede that it is ridiculous to have school districts with less than 150 kids? And shouldn’t progressives get in front of school consolidation and push it harder than we do? I know most legislators seem to agree that we *should* consolidate more, but it seems the state is taking a rather weak position. And aren’t we already spending far too much money on transportation costs? Maybe Roeser isn’t fair to imply that all superintendents make 300 grand, but I wonder what the average salary actually is. 150K? We’ve got a problem. Too many high administrative salaries — and even if you don’t agree that we actually have a problem, we definitely have a perception problem that needs to be solved before we can get a 5% income tax to buy better futures for poor kids. Local control of schools, as Greg advocates, is often a nice way of saying “let them eat cake” — a local tax is reverse Robin Hood, no matter how you slice it, because poor areas suffer under higher rates to generate funds, while wealthy areas enjoy lower rates and more funds.

  5. I live in a primarily rural county. Off the top of my head, there are at least half a dozen school districts completely or predominantly located in this one county (and I’m sure there are more that I don’t remember). The Census Bureau estimated that we had 95,503 people in the county in 2004, the vast majority of whom live in the northern third where those six school districts I can think of are located. But according to the 2000 Census, more than three-quarters of the population is aged 18 or older, and about 6% is under 5 years old, which would give us something on the order of 18,000 school-aged children.

    I still have to agree with Dan. A school district with only a few hundred students is a ridiculous waste of taxpayers’ money. Do we really need ten or a dozen school districts, each with a thousand-odd students, in this county? (And that average is misleading, because there’s one gigantic school system that accounts for probably a good two-fifths or more of the students, leaving that many fewer for the rest to split up.)

    But even rural districts with a thousand or more students could probably survive with their current schools (and transportation costs) if they could merge, administratively speaking, with a nearby district. And I have to think they could manage some significant savings by combining their purchasing operations as well: volume begets price breaks.

  6. Greg, excellent points and I tend to think the idea isn’t the bad in the sense of destroying the education system–only that there are some real perverse incentives in the system.

    The question I have is that if extracurriculars are included–doesn’t that mean the current average goes up? Perhaps I’m missing something in the education stats–and I mean that seriously, but I think most are pretty close or over 65% then.

    And yes, best practices are critical–in fact, one reason the regional boards that are pretty mediocre could be useful is in a support situation like that–or perhaps a better mechanism.

    And we have the same concern over redistribution strictly. So let me clarify—I think given certain stipulations, I’m fine with the basic idea. That said, it still wouldn’t fix a lot of the small rural districts and inner ring suburban problems.

    Then again, I guess there isn’t anything wrong with the standard give the adjustments Greg talks about.

  7. —I didn’t know about the 5% cap on administrative costs. But

    I don’t want to oversell it, but it does exist and it keeps the useless numbers capped a bit.

    ==But, wouldn’t you concede that it is ridiculous to have school districts with less than 150 kids? And shouldn’t progressives get in front of school consolidation and push it harder than we do? I know most legislators seem to agree that we *should* consolidate more, but it seems the state is taking a rather weak position

    Preaching to the choir man. I absolutely agree and think consolidation is needed. I would argue consolidating elementary and high school districts would be appropriate too, but I’m not planning on that getting any traction.

    The issue above is that the way I see the numbers the cap generically could result in incentives not to consolidate–much like Blagojevich’s move to not fund consolidation cash has done. I’m sure Greg or other proponents are willing to look at ways to avoid this, but generically I think it’s a problem.

    But consolidation in general is a good thing–that said there are some districts in rural areas that are simply too far away from other populations to consolidate, but that’s a specific, not a general condition.

    Michael–sounds like we are from a similar area. Growing up in Normal, there was a natural consolidation with Bloomington schools, but it hasn’t happened, and it doesn’t look good–Normal voters will never approve it. And in the outlying areas, Unit 5 (Normal) should swallow up some smaller districts, but Normal and those districts aren’t interested. It would be a good thing to consolidate though and it’s absolutely essential in the long run.

    When it comes to local control–my view is that we should have a minimum that all districts can provide that prepare students for quality lives–then local control takes over and decides whether the community can afford the extras.

  8. Larry, you actually get into an area where Van Winkle and I disagree over the number of school districts. Lot’s of school districts does give parents more choices and I consider a certain number of school districts to be a net positive for parents because they can shop around — which they all ready do. Michael says to consolidate them to save money.

    William Eggers of the Manhattan Institute has interesting suggestion that may hold some promise. Consolidate the back office programs such as transportation, supplies, food services etc. By doing so he argues you take advantage of the economies of scale while keeping the benefits of local control and x number of school districts that enhances choice. I don’t know if there is any data to back up his idea, however.

    I do think many extra curriculars would bump up the school districts, but outside of expensive football programs I don’t know by how much.

    A couple of other points. First, Roeser is against this solution. Second, local control of schools is important to me because the highest correlate we can find to student achievement is parental involvement in a child’s education.

    If I’m mistaken in the noting that parental involvement is a very important correlate to achievement, please let me know. I would think that would do far more for your arguments than bringing up Marie Antoinette and challenging the motivations of a perfect stranger.

    I would also note that even if you provide a minimum amount of aid, such as what EFAB calls for you are always going to inequities. Van Winkle has written a pretty good backgrounder on the subject. What happens is that people will self select by moving into communities, voting for higher property taxes, and passing zoning laws to keep away people who are deemed fiscally undesirable. In other words, as long as we have freedom of association we will have inequitities. Michael believes we need to find ways to work around these choices and make it work for poorer communities. Alas, Income taxes and redistribution of wealth has had a poor track record on this front.

    You can read his paper here: http://www.illinoispolicyinstitute.org/education/archives/2005/07/the_roots_of_in.php

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