Arnold Kling  

Your Public Education at Work

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From an extremely interesting report by Adam Schaeffer:


the Los Angeles metro area comes in third place for average real spending in our study.23 The average real per-pupil spending figure of $19,000 is a stunning 90 percent higher than the $10,000 the districts claim to spend.

Remember that if there are 20 students in a classroom and spending is $15,000 per student, then school revenues are $300,000 per year. A teacher gets paid, say, $75,000 a year, including benefits. That still leaves $225,000 in profit, which gets divided into capital expenses and overhead. Mostly overhead. You will find that if the teacher to pupil ratio is 1 to 20 in the classroom, overall the adult to pupil ratio will be more like 1 to 6. See Efficiency, Entrepreneurship, and Education, which I wrote ten years ago. See also my letter to the editor about the Montgomery County School budget.

But read Schaeffer's whole piece first.

Next, we have Mark Schneider:


Setting a national goal of having all students proficient by 2014 while letting states create their own tests and set their own cut scores has produced a mess.

You put these two stories together, and the result is that school districts are not transparent about what they are spending or about the results.

I have to say that I was never a fan of national testing standards. I wrote in 2003 that for those of us who want to empower parents the national standards look like part of the problem, not part of the solution. I still feel that way.

By the way, in David Brooks' tribute to Barack Obama as a courageous education reformer standing up to teachers' unions, Brooks does not mention that on Obama's watch the DC school voucher program has been essentially killed.

UPDATE: On David Brooks' column, no comment I can make could possibly top the last line of Jonah Goldberg's take.


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COMMENTS (8 to date)
Les writes:

Arnold wrote: "Remember that if there are 20 students in a classroom and spending is $15,000 per student, then school revenues are $300,000 per year. A teacher gets paid, say, $75,000 a year, including benefits. That still leaves $225,000 in profit, which gets divided into capital expenses and overhead. Mostly overhead."

This is jumbled. Here is what I think you mean:

"Remember that if there are 20 students in a classroom and spending is $15,000 per student, then classroom revenues are $300,000 per year. On the classroom expense side, a teacher gets paid, say, $75,000 a year, including benefits. That leaves $225,000 to cover classroom custodial and administrative compensation, classroom occupancy expenses, classroom repairs and maintenance, classroom supplies, other classroom expenses, and classroom profit, if any."

John Thacker writes:

Les:

Almost all of what you listed is either capital expenses or overhead.

Some teachers like to claim that there's too much administrative spending on schools. I think that the data supports that, considering that charter and private schools spend less on administration.

That also suggests that a system with competition would spend less on administration. Yet most teachers don't actually have the courage of their convictions, as they oppose competition.

mattmc writes:

The data I have suggests $75k is a significant underestimate of wages+benefits, particularly guaranteed benefit pension.

The private school I send my kids to is about $23k with a 8:1 teacher:student ratio. I don't think they are too profitable.

Being a public school graduate myself, I found that standards were useful in at least once case. If I was able to pass a pretest, I was able to move up to the next topic in math without having to sit through it. If students were not able to pass the tests after studying the topic for a couple of weeks (at 90% accuracy), they could not move on to the next topic. Students could continue to be socially promoted, but they were always working on things at their own pace and level. A good set of standards like this requires a different sort of classroom design, but it is possible to do in public schools and nullifies the social promotion issues. There is no reason there can't be a four grade level range of students working in a single classroom.

Les writes:

John Thacker writes:

"Les:

Almost all of what you listed is either capital expenses or overhead."

John: For your information, "capital expenses" is an oxymoron. "Capital" means future economic benefits - for example, classroom buildings that can continue to serve students. In contrast, "expenses" are expired resources, such as last year's salaries or last year's repair and maintenance expense.

Further, "overhead" is simply one category of expense. It means indirect expense - as opposed to directly traceable expense.

So thanks for your "corrections," using the term rather loosely.

Tom West writes:

I suspect that overhead is pretty high, but more importantly, there are quite a number of cases where there's huge amount of spending for disabled students. Exceptional care is expensive.

It's like medical care. You can look at a bunch of people in the doctor's office and ask how on earth do we spend so much on medical care?

Also, a lot of private schools charge ~$20K (and the students buy the textbooks, not the school) and don't seem to obviously be spending vastly more in the classroom (still 1 teacher and 20 students).

Lastly, a lot of businesses that are theoretically not amazingly capital intensive charge 3 or 4 times the rate of the base labor cost and still manage to lose money.

The more I think about it, the more I realize overhead *everywhere* is *expensive*.

tsquare21 writes:

Your kidding %20,000 per student and were discusing what is ment by capital expense. This is what is wrong with public education, wherein the details become more important then the problem.

why is it that the private (mostly religeous schools) can produce a higher education rate and a quarter of the cost. Catholic schools are still under $5000 in my area, while public education is 12 to 17 thousands. Cyber schools can deliver a student for around 7,000

As you state with 20+ students per class, teachers salaries are not the overwhelming expenses.

Need a tax break make a law that rvery one gets a reduction of $5,000 on your property taxes if you enroll your kids in a private school All school private or Christian are eligable for tax break

the school district can live off of the millions they charge those that have no school age kids

Telnar writes:

I took a look at the study, and noticed that the methodology for calculating private school costs used median tuition. Putting aside the merits of mean vs median here, I think that some discussion about the relationship between tuition and expenses would have been useful, since it's not at all clear to me how large a role endowments, subsidies from affiliated institutions, and profits play in the relationship between tuition and expenses.

Peter L writes:

Great read…..the information is poignant and dead on for today’s society



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