Some Fiscal Issues and School Choice - Ben Scafidi

SOME FISCAL ISSUES AND SCHOOL CHOICE BEN SCAFIDI KENNESAW STATE UNIVERSITY SENIOR FELLOW, FRIEDMAN FOUNDATION FOR EDUCATIONAL CHOICE

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ROADMAP • STAFFING IN PUBLIC SCHOOLS • • • •

U.S. OKLAHOMA OPPORTUNITY COSTS TEACHER “SHORTAGE”

• DOES SCHOOL CHOICE HARM STATE BUDGETS? • DOES SCHOOL CHOICE HARM BUDGETS OF LOCAL SCHOOL DISTRICTS? 2

Growth in Students and Public School Personnel United States, FY 1950 to FY 2009 800% 702% 700%

600%

500% 386%

400%

300%

252%

200%

100%

96%

0% Students

Total School Personnel

Teachers

Administrators and Other Staff

Source: U.S. Department of Education, National Center for Education Statistics 1991 Digest of Education Statistics Tables 39 and 84; 2008 Digest of Education Statistics Table 87 3 :

Growth in Students and Public School Personnel United States, FY 1992 to FY 2009

46%

50%

39%

45% 40% 35%

32%

30% 25% 20%

17%

15% 10% 5% 0%

Students

Total School Personnel

Teachers

Source: U.S. Department of Education, National Center for Education Statistics 1994 Digest of Education Statistics Tables 40 and 85; 2010 Digest of Education Statistics Tables 36 and 87

Administrators and Other Staff 4

• NO EVIDENCE THE “KIDS ARE WORSE”.

• NO CHILD LEFT BEHIND DID NOT MAKE US DO IT. • AMERICAN PUBLIC SCHOOLS ARE MORE TOP-HEAVY THAN OTHER WEALTHY NATIONS. 5

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During the 1992 - 2009 Staffing Surge National Reading Scores Declined Slightly

46%

50% 45% 40%

288

350

39%

300

32%

35%

284

250

30%

200

25% 20%

17%

150

15%

100

10% 50

5% 0%

0

Students

Total Staff

Teachers

Other Staff

Sources: Digest of Education Statistics and http://nces.ed.gov/nationsreportcard/subject/publications/main2012/pdf/2013456.pdf 7

During the 1992 - 2009 Staffing Surge National Math Scores Were Unchanged 50%

45%

46%

305

305

350

300

40%

39%

35%

250

32%

30%

200

25%

20%

150

17%

15%

100

10%

50 5%

0

0%

Students

Total Staff

Teachers

Other Staff

8 Sources: Digest of Education Statistics and http://nces.ed.gov/nationsreportcard/subject/publications/main2012/pdf/2013456.pdf

During the 1992 - 2009 Staffing Surge United States HS Graduation Rates Increased Slightly 50%

46%

100.0%

45% 40% 35%

39%

73.7%

32%

74.7%

30% 25% 20%

50.0%

17%

15% 10% 5% 0%

0.0%

Students

Total Staff

Teachers

Sources: Digest of Education Statistics and https://nces.ed.gov/ccd/tables/AFGR0812.asp

Other Staff 9

During the 1970 - 1992 Staffing Surge United States HS Graduation Rates Declined Significantly 70%

100.0%

60%

58%

78.7%

50%

73.7%

36%

40% 30%

21%

50.0%

20% 10% 0% -10% -20%

Students

Total Staff

Teachers

-8%

Other Staff 0.0%

Sources: Digest of Education Statistics and https://nces.ed.gov/ccd/tables/AFGR0812.asp

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Preview: “Beyond the Staffing Surge" United States, FY 2009 to FY 2013 1.0%

Students

All Staff

Teachers

All Other Staff

-1.0%

-2.3% 11

-3.5%

SURELY STUDENT ACHIEVEMENT TANKED DURING THE 2009 – 2013 STAFFING RETREAT …

RIGHT? 12

During the 2009 - 2013 Staffing Retreat National Reading Scores Increased Slightly 0.0%

350

Students

Total Staff

Teachers

Other Staff

-0.5%

285

284

300

-1.0%

-1.0%

-1.0%

250

-1.5% 200 -2.0% 150 -2.5%

-2.3% 100

-3.0%

50

-3.5%

-3.5% -4.0%

0

13 Sources: Digest of Education Statistics and http://nces.ed.gov/nationsreportcard/subject/publications/main2012/pdf/2013456.pdf

During the 2009 - 2013 Staffing Retreat National Math Scores Were Unchanged 0.0%

400

Students

Total Staff

Teachers

Other Staff

-0.5%

-1.0%

305

305

-1.0%

300

-1.0%

-1.5%

-2.0%

-2.5%

200

-2.3%

-3.0%

100

-3.5%

-3.5% -4.0%

0

14 Sources: Digest of Education Statistics and http://nces.ed.gov/nationsreportcard/subject/publications/main2012/pdf/2013456.pdf

During the 2009 - 2013 Staffing Retreat United States HS Graduation Rates Increased Significantly 0.0%

100.0%

Students

Total Staff

Teachers

Other Staff

-0.5%

-1.0%

90.0%

-1.0%

-1.0%

81.0%

-1.5%

-2.0%

-2.5%

80.0%

74.7%

70.0%

-2.3%

-3.0% 60.0% -3.5%

-3.5% -4.0%

50.0%

Sources: Digest of Education Statistics and https://nces.ed.gov/ccd/tables/AFGR0812.asp

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OKLAHOMA V U.S.

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Growth in Public School Students and Personnel United States, FY 1992 to 2013 44% 36% 28% 18%

Students

Total Staff

Teachers

Source: National Center for Education Statistics at the U.S. Department of Education: 1994 Digest of Education Statistics Table 40; 1995 Digest of Education Statistics Table 84; 2014 Digest of Education Statistics Tables 203.20 and 213.20

Other Staff 17

Growth in Public School Students and Personnel Oklahoma, FY 1992 to 2013

33%

21% 14% 11%

Students

Total Staff

Teachers

Source: National Center for Education Statistics at the U.S. Department of Education: 1994 Digest of Education Statistics Table 40; 1995 Digest of Education Statistics Table 84; 2014 Digest of Education Statistics Tables 203.20 and 213.20

Other Staff 18

WHAT IF OKLAHOMA HAD INCREASED NONTEACHING STAFF AT THE SAME RATE AS ITS INCREASE IN STUDENTS? • WOULD HAVE SAVED OKLAHOMA PUBLIC SCHOOLS OVER $294,100,000 PER YEAR IN ANNUAL RECURRING SAVINGS. • WHAT COULD OKLAHOMA PUBLIC SCHOOLS DO WITH $294.1 MILLION PER YEAR? • PROVIDE 36,771 STUDENTS WITH $8,000 SCHOLARSHIPS TO ATTEND THE SCHOOL OF THEIR CHOICE • GIVE EVERY OKLAHOMA TEACHER A $7,042 RAISE • REDUCE STATE OR LOCAL TAXES 19

PUPIL-TOTAL STAFF RATIOS, FY 2013 8.1

8

U.S.

Oklahoma 20

PUPIL-TEACHER RATIO, FY 2013 16

16.1

U.S.

Oklahoma 21

FY 2013, Pupil-­‐Non-­‐Lead Teacher RaDo 15.8

16.2

U.S.

Oklahoma 22

OKLAHOMA IS NOW A “TOPHEAVY” STATE • IN FY 2014, OKLAHOMA PUBLIC SCHOOLS EMPLOYED 1,675.5 MORE NON-TEACHERS THAN TEACHERS.

• THAT IS, LESS THAN HALF OF THE FTE EMPLOYEES IN OKLAHOMA PUBLIC SCHOOLS ARE LEAD TEACHERS.

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ALL THESE DATA ARE PUBLICLY AVAILABLE • ALL THESE DATA ON STAFFING COME FROM STATE DEPARTMENT OF EDUCATION REPORTS TO THE NATIONAL CENTER FOR EDUCATION STATISTICS AT THE U.S. DEPARTMENT OF EDUCATION

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TEACHER “SHORTAGE” • HIRING TEACHERS THROUGH ALTERNATIVE ROUTES IS NOT NECESSARILY A BAD THING • GEORGIA—2.5 GPA; CONTENT FIELD; PASS BASIC SKILLS, CONTENT, AND PEDAGOGY TESTS—THEN YOU MAY TEACH IN GEORGIA. • OKLAHOMA—“IN YOUR FIRST THREE YEARS IN THE PROGRAM, YOU MUST COMPLETE 18 CREDIT HOURS OF PROFESSIONAL EDUCATION COURSES” HTTP://TEACH.COM/STATES/BECOME-A-TEACHER-INOKLAHOMA#ALTCERT

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ALTERNATIVE LICENSURE OF TEACHERS • NO ONE IS FORCED TO HIRE ANY SPECIFIC ALTERNATIVE TEACHER • MAKE THE ALTERNATIVE TEACHER POOL LARGER SO THAT PUBLIC SCHOOLS CAN HIRE THE BEST TEACHERS BY ANY MEANS NECESSARY • LET THE PUBLIC KNOW THAT ALTERNATIVE TEACHERS ARE WELCOME VIA A MARKETING CAMPAIGN • EDUCATE PUBLIC SCHOOL LEADERS ON ALTERNATIVE TEACHERS 26

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FISCAL EFFECTS OF SCHOOL CHOICE ON STATE AND LOCAL BUDGETS

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IT IS STRAIGHTFORWARD TO DESIGN A SCHOOL CHOICE PROGRAM THAT SAVES THE STATE MONEY …

MAKE STATE FUNDS THAT FOLLOW THE CHILD LESS THAN AVERAGE STATE SPENDING PER STUDENT. 29

THE FISCAL EFFECTS OF SCHOOL CHOICE PROGRAMS ON PUBLIC SCHOOL DISTRICTS

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WHEN SOME STUDENTS LEAVE TRADITIONAL PUBLIC SCHOOLS VIA SCHOOL CHOICE, ARE STUDENTS WHO REMAIN IN PUBLIC SCHOOLS HARMED? • THEY ARE NOT HARMED ACADEMICALLY, AND THEY MAY BENEFIT ACADEMICALLY.

• HOWEVER, DO STUDENTS WHO REMAIN IN TRADITIONAL PUBLIC SCHOOLS HAVE FEWER RESOURCES AVAILABLE FOR THEIR EDUCATION? 31

• THE FISCAL EFFECT OF A GIVEN SCHOOL CHOICE PROGRAM ON LOCAL SCHOOL DISTRICT BUDGETS IS MORE COMPLICATED THAN IT IS FOR STATE BUDGETS. • SPECIFICALLY, SCHOOL CHOICE PROGRAMS THAT ALLOW SCHOOL DISTRICTS TO RETAIN FUNDING FOR ANY FIXED COSTS WOULD NOT HARM THE FISCAL HEALTH OF PUBLIC SCHOOLS OR DECREASE RESOURCES AVAILABLE TO STUDENTS WHO REMAIN IN PUBLIC SCHOOLS. 32

ALL COSTS ARE EITHER FIXED OR VARIABLE Total Expenditures Per Student

Fixed Costs

Variable Costs

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- Capital Expenditures - Interest - General Administration - School Administration - Operations & Maintenance - Transportation - "Other" Support Services - Instruction - Student Support - Instructional Staff Support - Enterprise Operations - Food Service

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HOW TO DIVINE WHICH OF THESE COSTS ARE FIXED? • IF A SIGNIFICANT NUMBER OF STUDENTS LEFT A PUBLIC SCHOOL DISTRICT FOR ANY REASON FROM ONE YEAR TO THE NEXT, IS IT FEASIBLE FOR THE DISTRICT TO REDUCE THE COSTS OF THESE ITEMS COMMENSURATE WITH THE DECREASE IN ITS STUDENT POPULATION? • USING 4 SCHOOL DISTRICTS IN GEORGIA, I ANALYZED HOW THEY WERE ABLE TO REDUCE EXPENSES WHEN THEY LOST STUDENTS FOR REASONS NOT RELATED TO SCHOOL CHOICE. 35

Fixed Costs (in short-run)

- Capital Expenditures - Interest - General Admininstration - School Admininstration - Operations & Maintenance - Transportation - "Other" Support Services

Variable Costs

(in short-run)

- Instruction - Student Support - Instructional Staff Support - Enterprise Operations - Food Service

Money that follows the child that is less than this amount improves the finances of school districts--even in the very short-run.

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WHAT ABOUT OKLAHOMA? • IN FY 2009, OKLAHOMA PUBLIC SCHOOLS SPENT AN AVERAGE OF $8,716 PER STUDENT. • USING THE METHODOLOGY IN MY REPORT, 67.2% OF THIS $8,716 ARE SHORT-RUN VARIABLE COSTS ($5,861).

• THE OTHER $2,855 PER STUDENT ARE SHORT-RUN FIXED COSTS THAT THE STATE COULD LET SCHOOL DISTRICTS RETAIN WHEN THEY LOST STUDENTS VIA SCHOOL CHOICE. • IN THE LONG-RUN, ALL COSTS ARE VARIABLE.

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THUS, ANY SCHOOL CHOICE PROGRAM IN OKLAHOMA WHERE $5,861 PER STUDENT OR LESS FOLLOWS A CHILD TO THE SCHOOL OF HIS OR HER CHOICE IMPROVES THE FISCAL SITUATION OF A PUBLIC SCHOOL DISTRICT, ON AVERAGE. AND, STUDENTS WHO REMAIN IN PUBLIC SCHOOLS WOULD HAVE MORE RESOURCES DEVOTED TO THEIR EDUCATION. 38

KEEP IN MIND …

BY LETTING SCHOOL DISTRICTS RETAIN FUNDS FOR STUDENTS THEY NO LONGER SERVE,

THEY WILL BE GETTING PAID FOR STUDENTS THEY NO LONGER SERVE!!!!

HOW MANY OTHER INDUSTRIES HAVE THAT “BUSINESS” MODEL? 39

IF SCHOOL DISTRICTS SAY THEY CANNOT REDUCE COSTS WHEN THEY LOSE STUDENTS, THEN… • THEY ARE SUGGESTING THAT ALL OF THEIR COSTS ARE FIXED. THUS …

• THEY SHOULD NOT GET EXTRA FUNDING WHEN THEY ADD STUDENTS—BECAUSE ALL OF THEIR COSTS ARE FIXED. 40

FRIEDMAN REPORTS ARE AVAILABLE …

WWW.EDCHOICE.ORG 41

SO WHAT DOES ALL OF THIS MEAN FOR YOU? • YOU CAN DESIGN SCHOOL CHOICE PROGRAMS THAT SAVES THE STATE OF OKLAHOMA MONEY AND LEAVES MORE RESOURCES FOR STUDENTS WHO REMAIN IN PUBLIC SCHOOLS. • OR, YOU CAN GIVE MORE STATE FUNDING TO PUBLIC SCHOOLS AND WONDER WHY THE BUREAUCRACY GROWS AND STUDENT ACHIEVEMENT DOES NOT.

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