by Garion Frankel

Do public schools spend money responsibly? Where you live will likely determine your response.

Someone from a property-wealthy district with clean schools, minimal debt, and a variety of advanced classes will likely affirm that their district is handling money well. Someone from a property-poor district with dilapidated facilities, debilitating debt, and few amenities will likely mistrust their district’s spending habits. This pattern shows in school bond results — in Washington wealthier districts are far more likely to pass bonds than poorer districts since voters trust their schools to use the money well.

Contrary to popular belief, however, America’s education woes do not stem from a lack of money. Baltimore, for instance, has the fourth most funded large school district in the country, spending north of $21,000 per student. Yet, the district is scandal-ridden, with 23 schools having no students proficient in math. In general, American school spending is 38 percent higher than in other developed countries, many of which have higher student achievement.

Clearly, much to the dismay of districts who constantly clamor for additional funds, increasing spending hasn’t solved our academic problems. It has, however, led to massive financial waste. Unfortunately, there is no single answer that could fix that. There are only trade-offs: You can regulate the problem, forcing schools to spend on ineffective items; or you can allow local control, with schools spending lavishly to secure praise and prestige.

It’s clear that federal involvement has turned education finance into a quagmire. Consider Title I, which injects more than $10 billion federal dollars meant to aid disadvantaged students into schools each year. Washington tightly controls the use of this money, leading schools to spend on safe but ineffective academic solutions like staff development and after-school programs. Extensive regulation contributes to other ubiquitous sources of fiscal woes, like out-of-control (but mandatory) teacher pension spending and preposterously-high administrative salaries.

In fairness, there’s not much districts can do here. A school cannot legally say “no” to public oversight, and many poorer communities do not generate enough revenue through property taxes to be able to decline onerous state and federal grants. Moreover, statutory regulations impose additional burdens on public schools.

These often require public schools to get everything approved through their government overseers, and they are usually impossible to circumvent. For example, school districts under these regulations are typically required to pay a minimum salary and open their doors for a minimum amount of time each year. In Kansas, districts can’t even buy boiler insurance without receiving express statutory permission.

These regulations get expensive quickly. Some school reform advocates have argued that school finance should be deregulated in an effort to give districts added flexibility and to enable ingenuity. The theory suggests that schools could direct sources where they matter most.

But there’s little indication that districts would do much better if they were given complete financial autonomy. La Joya Independent School District in Texas is, by all metrics, struggling to serve its students. 88 percent of La Joya students are considered at risk of dropping out of school, and only 33 percent are considered college-ready in both reading and math. In the mid-2010s, the district was flush with cash due to state assistance, and had an opportunity to invest in programs that could have made a difference for its students.

Instead, they spent $20 million to build a commercial water park, which loses $250,000 annually. They also bought a golf course, which loses another $300,000 annually.

Other examples of fiscal mismanagement abound: $1,200 for a hypnotist in Amelia County, Virginia; an over-budget $70 million football stadium (right next to another football stadium) in Katy, Texas; $3,500 for a retirement party in Seattle, just as the district was beginning to increase class sizes; and a real estate empire of vacant buildings in Newark, New Jersey.

The money for every one of these purchases could have been better spent elsewhere. Amelia County could have rebuilt the district’s student enrichment programs. Seattle could have contributed to a teacher signing bonus. Katy could have directed its bond towards reinforcing the district’s defenses against severe weather. Newark could have followed a court order demanding that the district repair its facilities.

Responsible uses of public funding may not be as flashy as an ultra-modern football stadium or a luxury retirement party, but they do benefit students. Updated HVAC systems, efficient school bus routes, and adding washer/dryer units to educational facilities are relatively low-cost uses of public funds, and each of them ensure that students are safe and comfortable at school.

Unfortunately, school boards have little incentive to prioritize a new HVAC system over a fancy new gym. Voters are more likely to respond to a dazzling amenity they can see and interact with than to an upgrade that unnoticeably improves a school’s day-to-day functionality and safety. If we assume that a given school board member’s goal is to get re-elected, then the choice becomes obvious. Debt comes later, ideally after that member’s tenure is over. The support and adulation for the new amenity comes now.

That is not to say we should not try to improve financial efficiency and transparency. Perhaps expanding school choice could encourage districts to set their house in order. Maybe a renewed focus on financial accountability could help stem the tide of nonsense.

But until then, if we want to have an honest conversation about school finance, we have to start by acknowledging trade-offs. Top-down controls create added costs and prevent officials with local knowledge from using funds in ways they know would help. Conversely, local control encourages and enables self-interest and blatantly political projects that in no way contribute to student achievement.

In other words, districts like to pretend that throwing more taxpayer money at problems will eventually fix them. That will never stop. But until reformists realize that schools are subject to the same laws of economics as everyone else, very little will change.

Originally published by the American Institute for Economic Research. Republished with permission under a Creative Commons Attribution 4.0 International License.

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