I Want a School!

I had one of those Wow! moments a few weeks ago when I came across a new policy analysis by Adam Schaeffer at Cato. The analysis took a close look at actual school district budgets from the nation’s five largest metropolitan areas and the District of Columbia.  Schaeffer found that, on average, these districts spend 44% more than officially reported.

In addition to the fact that the official reports are so wrong, two things are striking about this study.  First, the variance across metro areas is huge.  For instance the DC schools spend over $28,000 per student, Chicago about $16,000, and Phoenix around $12,000.  (The actual and reported numbers for the LA schools are shown in the figure below.)

Second, how in the world does one spend $28,000?  Suppose I were an educational entrepreneur and were given $28,000 per student.  I could start a school for 400 students with the following lavish annual expenses:

* A $10 million dollar building with a 5% mortgage

* 1 teacher per 20 students at $100,000 each

* 5 special needs teachers/counselors at $100,000 each

* 1 aide in each class at $50,000 per class.

* A principal at $200,000

* 10 additional staff members at $50,000 each.

* Medical/pension package for all employees equal to 45% of salary

* A material budget at $2,500 per student (those would be some kickin’ textbooks and lab materials)

* A maintenance budget of $1 million

* Utilities of $500,000

* A $2,000 transportation allowance per student

* Free lunch for everyone!

Every teacher and student in the state would want to go to this school—and I would still reserve 15% of my revenues for profits of over $1.7 million!  My budget surely leaves things out, but there is enormous wiggle room here to cover any hidden expenses.

No wonder the education establishment doesn’t want to face market competition.

2 thoughts on “I Want a School!

  1. My local New Jersey school district is in dire straits, it claims, and, though it has cut everything it possibly can, it still needs a tax increase to meet its “basic educational obligations” to its students.

    Then we discovered this: The school district provides full health and retirement benefits to all employees, even part-time employees, at no cost to the employees. They pay zero dollars for a plan that gives them, for example, a zero deductible plan for family health insurance. They pay a small co-pay, and then everything else is “free”–i.e., paid for by someone else, like me.

    My own employer offers such a plan as an option to me. It would cost me nearly $1,000 per month to pay for it. Because I cannot afford that, I opted for a significantly less Cadillac-like plan, for which I still pay approximately $450 per month. And these people pay nothing?

    I guess it is hard to blame people for making the most of their situation. If they can get others to pay their way in life, well, then many of them are going to do it–unbecoming though it is. But what is especially galling is the pervasive dishonesty. Please, let’s not pretend it is anything other than what it is. It is not “for the children,” it is not for “educational responsibilities”: It is to line their pockets at others’ expense. Period.

    1. Gail Collins (who I often disagree with but still love to read) declared in her latest column that Gov. Christie is “currently declaring war on the [New Jersey] teachers with a ferocity that would make you think they were in cahoots with the fake breast cancer charities and crooked mortgagers.”

      This because he wants to forgo scheduled raises for a year and to pay a mere 1.5% of their medical insurance for one year. According to the WSJ, education enrollments in K-12 education have gone up 3% over the past 8 years, but education expenses have risen by more than 16%. I would guess (but don’t know) that a large part of the increase has been health insurance premiums.

      Paying 1.5% of premiums for a year is “ferocious?”

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