More on District Consolidation–from Pennsylvania

My friends at Pennsylvania’s Commonwealth Foundation offer another cautionary commentary about district consolidation.

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In the movie Men in Black, Agent K (Tommy Lee Jones) carries a small device that flashes, allowing him to make people forget meeting him (or seeing aliens).  Gov. Rendell may have a similar device, to use on legislators—or on himself.

In his budget address, he called on lawmakers to form a commission to study the issue of consolidating school districts, and present recommendations.  Gov. Rendell seems to have forgotten that the General Assembly commissioned a study on school district consolidation a mere two years ago.

This study concluded that school district consolidation would not be much of a cost saver. While some of the small districts might become more efficient, school districts above 3,000 students tend to be less efficient.  This coincides with research done by Andrew Coulson, who found that districts of about 2,900 students are the most cost efficient. That legislative study concluded that there were only 88 districts ripe for consolidation, into 34 districts, a reduction of 54 districts—a far cry from Governor Rendell’s desire to consolidate 500 districts into 100.

An Allegheny Institute analysis notes that consolidation to 100 districts would mean an average district size of 17,000 students.  Only five districts currently have 17,000 or more students, and spend an average of $14,500 per pupil—about $1,200 more than the state average.  They also note that these districts have some of the worst academic performance in the state.  Research by Jay Greene and Marcus Winters further indicates that having fewer, larger districts results in a higher percentage of student dropout and reduces graduation rates.

Across Pennsylvania, the largest fifth of districts (with Philadelphia excluded) spend substantially more per pupil than those middle-size districts. The per-pupil costs in the smallest fifth of districts are also above average, but those districts’ combined budgets account for only about 6% of total spending.  Where school districts are concerned, the evidence suggests the opposite: consolidating small and medium-sized districts into larger districts would reduce efficiency and increase costs to taxpayers.

Spending Per Pupil by Pennsylvania School Districts 2007-08
Districts By Enrollment	Avg. Enrollment	Total Expenditures	Instruction	Support Services	Non-Instructional	Construction and Debt
Top 100	7,334	$13,686.68	$7,909.17	$3,975.20	$186.59	$1,615.72
Second 100	3,480	$12,898.78	$7,271.51	$3,806.27	$218.29	$1,602.71
Middle 100	2,281	$12,395.51	$6,902.11	$3,680.88	$223.41	$1,589.12
Fourth 100	1,508	$12,528.66	$7,026.49	$3,706.68	$249.84	$1,545.65
Bottom 99	856	$13,793.50	$7,581.23	$4,056.78	$268.18	$1,887.31
Districts By Enrollment	Avg. Enrollment	Administration	Business	Maintenance of Plant	Student Transportation
Top 100	7,334	$749.46	$137.30	$1,178.83	$705.28
Second 100	3,480	$730.25	$160.50	$1,134.01	$688.30
Middle 100	2,281	$759.00	$169.48	$1,089.09	$693.42
Fourth 100	1,508	$754.77	$176.89	$1,089.69	$721.48
Bottom 99	856	$932.68	$235.24	$1,149.85	$740.82
Exclude largest (Philadelphia) and smallest (Bryn Athyn) districts in PA
Source: Pennsylvania Department of Education; Calculations by the Commonwealth Foundation

Why would consolidation fail to achieve the cost savings Gov. Rendell hopes for? While measures such as bulk purchasing and cross-district health trusts are sensible cost-savings measures, these can already occur without consolidation.  It’s possible that some administrative savings might materialize, but it won’t help that some superintendents will become “assistant superintendents” and others will expect large raises.   The notion that larger districts have fewer administrators per pupil runs counter to experience.

The single largest school cost item (about half of every district’s budget) is teacher salaries and benefits.  These would become standardized over the newly merged districts.  Does anyone believe that salaries will be standardized at any level lower than the highest prevailing in the county?

As long as school board directors can negotiate contracts in secret and vote on them without any chance for public comment, it hardly matters whether the district represents a small area or a large county.

If cost savings is truly a goal for Pennsylvania schools, a good first step would be greater transparency.  The public should have access to greater information about how school districts spend tax dollars and adequate information as contracts are being negotiated. SchoolBoardTransparency.org was launched with just such a goal in mind.

Another good step is expanding school choice options, which cost far less than traditional public schools.  Charter and cyber schools typically cost taxpayers only about 70% of the cost of district-run schools, while Pennsylvania’s Education Improvement Tax Credit sends students to the school of their choice with scholarships worth less than one-tenth the cost of traditional public schools.

Gov. Rendell hopes that lawmakers forgot the research finding consolidation would not provide savings to taxpayers.  His plan fails to address real reform that can reduce costs and improve the quality of schools.

Homeschools Save the U.S. $4 – 10 Billion Each Year

Homeschoolers pay taxes just like anyone else, yet they don’t put their children in public schools. If they did, the demand on school budgets would be much higher–according to one estimate, $4 to $10 billion higher each year.

Have you thanked a home-schooler today?

School Choice Across the Nation

How many ways can governments provide school choice to parents? More than you think. The Flint Hills Center for Public Policy has released my report on the subject, called School Innovations Across the Nation. You can get it (PDF) here.

The report discusses four areas of school choice:

1. Charter schools
2. Tax credits and tax deducations
3. Vouchers
4. Virtual schools

You’ll find an explanation of why some parents like charter schools, and a small sampling of the varieties of charter schools. But for the most part the report doesn’t seek to argue for these innovations or talk about evidence for why they can be useful. While those are worthy topics, to be sure, the report has a more basic purpose, that of describing how states have set up these innovations.

For example, in Kansas, if you want to start a charter school, you have to get the approval of the local school board. In effect, a charter school is nothing more (or nothing less) than an alternative school operated by the district.

But did you know that in some states–including those with a good record on education, such as Minnesota–allow people to petition a university, private foundation, or alternative state board of education if they want to start a charter school? There are many benefits to such arrangements.

In addition, some states let corporations and/or personal income tax filers get a tax credit for education. Give money to a scholarship-granting organization, and get a credit. The organization, in turn, gives a scholarship to a child wanting another option. What a great way to contribute to the education of a needy child!

That’s a short introduction. Read the report and you’ll find out more about the ways that Kansas can open the horizons of children.

Research Note: School Choice Boosts Achievement

Here’s a note from my friends at the Texas Public Policy Foundation:

Since the start of the Horizon program nine years ago, Edgewood ISD test scores and graduation rates have increased and more than 90% of program participants have gone on to college. Public and private school students alike have thrived under school choice in San Antonio.

To see a report on the program (PDF file), click here.

Some Education Bills to Promote Transparent, Honest Spending

Here’s an idea that is worth watching. The text is taken from Kansas Votes:

House Bill 2239 (Implement statewide USD accounting system)
Introduced by Rep. Kevin Yoder (R) on February 3, 2009, in his role as committee chair, to require the Kansas State Board of Education to develop and implement a uniform system of financial accounting for all school districts (USDs). The accounting records maintained by each USD must be coordinated with the statewide accounting system and must show expenditures for each attendance center in the USD. It must also allow USDs to report any other information required by state or federal law, including other particular information detailed in the bill.
http://www.kansasvotes.org/Legislation.aspx?ID=77242

State taxpayers have a significant investment in school districts, no matter where they live. A uniform accounting system helps citizens understand what’s going on, and to compare districts. KSDE already offers guidance for district-level accounting, but a focus on schools would be useful.

There’s another measure dealing with transparency of district spending:

Senate Bill 226 (Publish legislative votes, USD budget data on state website)
Introduced by Sen. Jay Emler (R) on February 5, 2009, in his role as a committee chair, to require the Kansas Department of Administration to include on its public access website a record of each legislator’s vote on any bill during the legislative session, updated on a daily basis, and starting with 2009 legislative session. The bill also would require all school districts to develop annual reports that detail their district’s bond debt payments, salaries of all district employees, contract payments, and more, then submit their reports to the Kansas Secretary of Administration for publication on a state website by September 1, 2010.
http://www.kansasvotes.org/Legislation.aspx?ID=78707

Districts do report some financial information on the KSDE web site, but this legislation would expand the scope of disclosure. Disclosure in the spending of the public budget is good.

Next is a measure to make sure that districts are getting the money they deserve for children from low-income families:

House Bill 2307 (Check family income for “at risk” school funding status)
Introduced by Rep. Clay Aurand (R) on February 6, 2009, in his role as committee chair, to require the Kansas State Board of Education to review whether any ineligible students have been incorrectly identified by their school district as meeting the family low-income criteria of the National School Lunch Act. If their family income exceeds that program’s limit on September 20 of any year, the school district would not be able to claim additional state aid for that student as an “at-risk” enrollee that year.
http://www.kansasvotes.org/Legislation.aspx?ID=79134

That seems pretty simple. If the district is going to receive money for “at-risk” students, those students ought to actually be “at risk.” Currently, “at risk” means “low income,” which is not necessarily the same as at risk. Some children from high-income families are for a variety of reasons not excellent students, and some students from low-income families do a great job in school. But whatever our measure of “at risk” is, government owes it to taxpayers to make sure that the label is accurately applied.

Follow Education Legislation on Kansas Votes

Kansas Votes is a new web service of the Flint Hills Center for Public Policy. You can follow legislation and do many other interesting things related to the process of making our laws.

You can, for example, search legislation by topic, such as education. Right now, there are 76 bills (none have passed) under consideration that deal with education. Some are K-12, while others address higher education.

If you create a user account, you can also receive updates on selected bills or even topics.

So check out Kansas Votes. Our system of government depends on an informed public. Kansas Votes can keep you informed.

Improved Performance Leads to Increased Parental Demand for Charter Schools

If parents are given school choice, will they select the schools with the best sports teams and snazziest physical plants–or will they focus on academics?

James VanderHoff looked at charter schools in New Jersey to answer that question. Charter schools are public schools that supplement the traditional public school. For a variety of reasons, VanderHoff looked at not merely the attitudes of parents who have children in a charter school, but parents who want to get their children into a charter school, but can’t.

As it turns out, New Jersey is a good test case, since it is the only state to report on the wait lists at each charter school. Yes, there’s such a demand for charter schools–free, public schools–that many parents put their children on a waiting list.

“The value parents place on charter schools,” VanderHoff writes, which is “measured by the number of students on an admission wait lists, depends primarily on their academic effectiveness, measured by test scores.”

If a charter school increases its test scores by 10 percent, its waiting list will increase by 60 to 100 percent.

VanderHoff makes clear that not all charter schools are equal. Some do well, and others do not. Not surprisingly, “the research results on the effectiveness of such schools has been mixed.” So too has been the research on whether charter schools improve (through the force of competition for students) the performance of nearby traditional public schools.

You can read VanderHoff’s report (PDF) in the Fall 2008 issue of the Cato Journal.

A Warning from Pennsylvania About District Consolidation

My friends at the Allegheny Institute for Public Policy warns Pennsylvania residents about expecting too much from efforts to consolidate school districts there. My own thoughts after their words.

The Governor’s recent budget message had a proposal that is cause for concern. He wants to explore the possibility of consolidating the state’s 500 school districts to something he thinks is more manageable, say 100. The Governor claims this will achieve efficiency and reduce the tax burden on property owners.

Some background: Currently there are more than 1.7 million public school students in the Commonwealth’s 500 districts. If the number of districts were to be reduced to 100, that would mean each district would have more than 17,000 students on average. As of 2007, the Department of Education showed that only seven districts contain more than 13,000 students—Philadelphia has over 200,000 and Pittsburgh’s enrollment is just above 26,000. There are 78 districts that enroll more than 5,000 students, while the vast majority of districts (432) have fewer than that. Thus, the consolidation proposal will increase the average district size enormously.

If the Philadelphia and Pittsburgh districts are any indication of the effects of creating larger districts, taxpayers and parents of students should be wary. The Pittsburgh Public School District currently spends approximately $20,000 per student with district-wide reading and math proficiencies around 50 percent and several high schools with proficiency scores under 20 percent. Meanwhile, the Philadelphia District spends $15,000 per pupil and has district-wide proficiency levels under 50 percent. The notion that bigger districts will mean lower costs and better performance is not supported by the state’s two largest districts.

Beyond the questionable assertion that bigger is better, there are a number of interest groups that are likely to create serious obstacles; first the teachers’ unions. If, for example, five districts are to be merged and they have teacher contracts with widely different pay scales and benefit packages, it could be very expensive to bring the lower paid teachers to the level of the higher paid district’s teachers. And, it is certain that the higher paid teachers will never agree to pay cuts. The equalization of pay rates will undoubtedly raise costs to taxpayers. Moreover, teachers will be strongly opposed to any plan that calls for reducing the number of teachers. And how will the new district deal with seniority issues? Not well if the airline experience is any guide. Add to the salary cost the need to equalize benefits, time off rules, etc., and the costs begin to become prohibitive. Indeed, it is the advent of strong teacher unions since the 1960s that have forever changed the landscape in terms of further consolidation such as had occurred previously.

The Governor will also likely find resistance in many if not most communities across the state. Consolidating small rural districts so that the new district has a much larger number of students will likely require students, especially high school students who will be concentrated in perhaps just two or three locations, to travel very long distances each school day. Parents will rightly be concerned over the busing of their children such large distances and away from familiar surroundings. Thus, they are potentially strong opponents of consolidation on the vast scale contemplated by the Governor.

There are several Pennsylvania counties with fewer than 2,000 students. A consolidation to get to a district of just 6,000 to 7,000 would of necessity cover a huge geographic area. Local governance would be extraordinarily difficult.

Then too, many existing districts are very proud of their schools, sports teams, bands, etc. and will not look favorably on having their identity taken away in a massive consolidation.

In those school districts where the ability to provide adequate local financial support is simply not there, it might make sense for the state to look for consolidation opportunities. But the notion that a massive, widespread and far–reaching consolidation of school districts is the right answer is simply misguided.

If the Governor and his education experts want to do something truly meaningful to save money and produce better education results, why not introduce real change? Create a voucher program that would give parents the choice of where to send their children, including private schools. The voucher would be funded by the state and the local district at 75 percent of the instructional cost reported by the district. Poorly performing schools would have to do better or lose students to the point of being forced to close. Bear in mind that the Pennsylvania Constitution requires the state to provide a system of thorough and efficient education. It does not require the state to operate a public school monopoly.

The proposal to reduce the number of school districts in the Commonwealth by 80 percent to cut expenses will undoubtedly meet with substantial resistance. Some of it based on valid argument, some not. But the important point is that the consolidation proposal is a distraction intended to prevent policy makers from dealing meaningfully with the costs of education and the extremely poor performance in many districts. Introducing competition and choice into the system makes enormous sense. Unfortunately, the powerful groups who dictate education policy in the state are committed to making sure reasonable reforms never happen.

My own take: There are certainly substantial costs of and difficulties in consolidating districts, as the essay above points out. If saving money is the big concern, policy makers can save taxpayer money by letting parents take a portion of education funds to private schools, which generally spend less than public schools.

The Limits of District Consolidation

My friends at the Commonwealth Foundation point out the limits of school district consolidation. They cite yet another author on the subject, who offers some wise counsel:

“the notion that creating larger administrative units will significantly reduce the actual number of administrators runs counter to experience.  It won’t help that some superintendents becomes “assistant superintendents” if everybody involved expects raises.”

Worth Noting: Few States Set World-Class Standards

It’s easy to have “excellent” schools if your standards are low enough. That’s the argument of an article in the Summer 2008 issue of Education Next. Paul E. Peterson and Frederick M. Hess took a look at the standards used by each of the 50 states and compared them with the National Assessment of Educational Progress.

Roughly speaking, if the state’s performance on its own standards were roughly similar to its performance on the NAEP, the state scored an A.

Kansas scored a C-, suggesting that it’s suffering from grade inflation. It’s similar to an argument we made in the report “Does Kansas Grade Itself on a Curve?“