Investing Big in Public Education
Strategies for Funding a World-Class Public Education System
Civic Way resumes its look at public education in America, highlighting broad themes that affect every state’s public education system. This essay is about funding public schools. In upcoming essays, we will tackle other major issues facing public education—teachers, civic education, school choice and accountability. The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.
An investment in knowledge always pays the highest return. – Benjamin Franklin
Introduction
Whether we like it or not, most of us need a car. And cars are costly, not just to buy but to fuel and maintain. Pandemic-era cost surges have forced many to forego newer cars and preventative repairs. So, we chase the lowest gas prices, defer maintenance and hope for the best.
Writ large, this has been our nation’s approach to funding public education. Pinching pennies and kicking big decisions down the road, all the while trusting that somehow public education will get better. That we can compete globally without year-round schooling. That good teachers will keep teaching despite low pay and oppressive cancel culture laws. That we can offset funding gaps solely with efficiency measures.
Worse yet, national extremist groups are promoting voucher and scholarship programs to divert tax dollars from public schools to private schools. These brazen tax grabs, deceptively labelled school choice programs, will exacerbate the funding gap facing public schools in those states. And, coupled with the end of federal pandemic aid, hinder our ability to ensure a high-quality public education system.
A Fragile Foundation
Most public education funding studies focus on K-12 programs. This overlooks a fundamental fact, that education begins much earlier than age five. Under-investing in pre-K programs forces educators to spend more time on remedial measures in elementary school. Ultimately, it forces states and localities to invest even more in public K-12 schools just to maintain mediocre outcomes.
The US childcare system is woefully underfunded. It forces most families to scramble for increasingly unaffordable childcare options. Due to funding limits, public childcare programs cannot meet total demand[i]. The system’s heavy reliance on inadequate private sector offerings has created widespread service gaps, especially in rural areas, a harbinger of what expanded school choice programs could do to K-12 education.
Nationally, our childcare system is deeply flawed. The Bipartisan Policy Center reports a large gap between childcare needs and capacity. The Annie E. Casey Foundation’s Kids Count Data Center found that over half of all children aged 3-4 aren’t enrolled in preschool[ii]. And these gaps are even more acute among the states[iii]. All in all, our childcare system is a fragile foundation—and lost opportunity—for our children.
Apples and Oranges
One of the many scams of the so-called school choice movement is its commoditization of public schools. In comparing public schools to private and home schools, it treats their academic offerings as commodities that families can comparison shop like TVs or pillows.
This approach could not be more disingenuous. It ignores the essential community building role of public schools. In many areas, especially rural areas, public schools are community anchors. They provide jobs for residents, after-school programs for children, and emergency shelter for everyone. They teach children about citizenship. Private schools may offer competitive academic and career preparation programs for some, but only public schools can prepare us all for self-governance in a democracy. Communities are not commodities.
The underfunding of public schools as community builders did not begin with the school choice movement. The bipartisan reform leaders, for instance, focused on accountability metrics to the exclusion of community factors. For decades, enrollment-centric state funding models have largely ignored the role of public schools in building community, increasing civic literacy and strengthening democracy.
Our Waning Investment in Public Education
How much has American public education spending increased? The Reason Foundation has reported that nearly every state increased per-pupil revenues—unadjusted for inflation—from FY02 to FY19.[iv] However, failing to adjust for inflation is misleading.
Our public education investment, adjusted for inflation, has not fully recovered from the Great Recession. For years, many states exhausted reserves and cut per-pupil funding. This forced local school districts to cut school days, staff and services. By 2017, nearly ten years after the recession, state support for K-12 schools remained below pre-Great Recession levels in about half the states. By 2020, when the pandemic arrived, K-12 funding still remained below pre-Great Recession levels in many states. From 2008 to 2020, inflation-adjusted public education funding—and funding effort—remained stagnant or declined in several states[v].
From 2020 to 2021, average state spending per pupil increased by over six percent. However, the pandemic slammed districts. Costly new mandates (e.g., social-distancing and remote learning). The loss of over 460,000 employees. Closures. Federal pandemic relief aid like the American Rescue Plan, CARES Act and Elementary and Secondary School Emergency Relief (ESSER) helped many districts regain their footing[vi].
Education spending does not in and of itself improve academic outcomes. Many non-academic factors—nutrition, poverty, housing and health—influence academic achievement. In Chicago, for instance, where per pupil spending exceeds the national average, less than ¼ of middle-school students test at or above proficiency in reading and math. Generally, however, more money means better teachers and more ample resources. This is one reason why so many private schools are ardent universal voucher supporters.
How does our public education investment compare to other nations? The US spends a smaller percentage of GDP (5.0 percent) on education than other developed nations (5.6 percent)[vii]. The end of ESSER funding won’t help[viii]. In states with universal vouchers, the public schools will receive even less support. This could diminish our global ranking and severely hamstring the ability of public schools to reverse pandemic learning losses.
The Scourge of Funding Disparities
The pandemic exposed the shocking fiscal disparities that characterize America’s public education system and plague many states and school districts. Years of underfunding left strained staffing, aging facilities and outmoded technology, and made it that much harder for underfunded schools to respond to the pandemic.
The public education spending disparities among states are striking[ix], even after adjusting for regional cost differences.[x] 2022 Census Bureau data showed that state per pupil expenditures ranged from $9,670 in Idaho to $27,504 in New York[xi]. In other words, the highest funded state spent 2.5 times more per pupil than the lowest funded state. There also are significant state disparities in funding effort[xii]. The funding effort of the top five states was twice that of the bottom five states[xiii].
In many states, especially those with relatively low state funding, their heavy reliance on local property taxes spawns significant funding inequities. These inequities hammer low-income districts. In Cook County, Illinois, for example, the wealthiest districts spend three times more per pupil than the poorest districts. And when public school funding suffers, the resulting cuts tend to hit poorest districts the hardest.
Some states adopt progressive state funding models to address this imbalance, but many states do not. Only about one-third of the states provide more state and local funding for poor school districts than wealthy districts. Most states have flat or regressive funding models.[xiv] In many states, the courts have ruled that property tax dependent systems violate state constitutions. However, even where the litigants have agreed to a settlement plan, some states have defied judicial funding mandates.
Inadequate Planning
The funding disparities notwithstanding, virtually all states share one common flaw—the absence of long-term planning. With few exceptions, state legislatures fund public education on an annual or biennial basis. This short-term focus prevents public school districts from doing any meaningful long-term planning.
One rare exception is the North Carolina General Assembly’s recent decision to make a ten-year funding commitment to its universal voucher program. Even as it delayed the approval of the state’s biennial budget well beyond the fiscal year start—and left 115 local school districts twisting in the wind—it found the time to take a long-term look at funding private and home schools.
Recommended Strategies
To prepare our nation for an increasingly competitive global landscape, we must start electing leaders at all levels who will invest in our public education system. Our national investment strategies should include the following initiatives (see earlier Civic Way essays on childcare and public schools):
Adopt a national per-pupil funding goal that reflects the best work of state education experts, courts and commissions (e.g., North Carolina’s Commission on Access to Sound Basic Education)
Design a model public education funding system that satisfies foundational criteria such as adequacy (sufficient dedicated resources to meet the funding goal), effort (commensurate with economic capacity), equity (distributive fairness), stability (reliability), flexibility and accountability.
Increase federal and state public education funding as needed to meet the per-pupil goal using dedicated revenue sources (e.g., high-bracket estate, inheritance, corporate and income tax surcharges).
Build a public childcare system in all 50 states that will prepare all children for elementary school, including a public childcare system for infants and toddlers from low-income families and a free public year-round universal pre-kindergarten network for children aged three to five years.
Design a model state funding distribution system that reduces property tax dependency, improves cross-school district fairness and recognizes the community building role of local school districts.
It is highly unlikely that the US will have sufficient resources to increase its investment in public education as some states divert billions of dollars to private and home schools. It is absolutely critical that states suspend or curtail the funding of private and home schools until public schools—traditional and charter—are adequately funded and academic standards and accountability measures are universal.
A New National Investment Commitment
There is mounting apprehension about the fiscal cliff facing the nation’s public school districts. When the federal pandemic aid (ESSER) ends in September 2024, the nation’s public schools will lose $60 billion in ESSER funds, the equivalent of at least $1,000 per student. School districts serving high-poverty communities will suffer the most, but all districts will be forced to consider draconian cost-saving measures.
There is a second fiscal cliff facing many public school districts. In the 17 states enacting universal voucher programs[xv] or expanded voucher/scholarship programs,[xvi] billions of public tax dollars will be diverted from public to private schools (and in some cases home schools). If these programs were really about school choice, the states enacting them wouldn’t divert funds from public schools, they would fund both.
If the two fiscal cliffs have a silver lining, it is that they will bring a sense of urgency to one of the most critical questions facing our nation—What will it take to build a world-class public education system? We can make that investment now or, as we do when deferring maintenance on cars, we can pay a lot more later.