Budget Crises Could Contain Silver Lining

Published March 1, 2009

As educators, parents, and leaders across the country increasingly accept that cuts will likely have to be made to public education because state budget shortfalls simply won’t allow business to continue as usual, a new report by a group representing thousands of state legislators suggests that might not be a bad thing.

The American Legislative Exchange Council’s (ALEC) 15th annual Report Card on American Education: A State-by-State Analysis details the “inputs” and “outputs” of each state’s public education system, outlines popular education reforms, and ranks the 50 states and District of Columbia on academic performance and spending.

Minnesota placed first in ALEC’s ranking, and Washington, DC last. The report card, released in February, is described as the organization’s “flagship publication.”

While some states have shown improvements in their education results, a majority of students across the country still fall well below proficiency levels in mathematics and reading, according to data from the National Assessment of Educational Progress. What has shown marked increases in public education, however, is spending.

“Years and years of increased expenditures for public education have gotten us practically nowhere,” said Andrew T. LeFevre, executive director of the REACH Foundation, a group overseeing Pennsylvania’s tax-credit scholarship program. “Now, states are in a crunch, trying to figure out how to do more with less, which is what they should have been doing all along.”

Bottomless Pit

For decades, Americans have been encouraged to support ever-greater public school spending, LeFevre said. The report card corroborates this in great detail. Since 1982, it notes, U.S. per-pupil expenditures have increased 90 percent. In 20 states per-pupil spending increased more than 100 percent. New Jersey saw a 327 percent increase.

From 1987 to 2007, student enrollment in public elementary and secondary schools nationwide increased 28 percent, while spending for those schools increased almost 70 percent. In 1986, federal funding accounted for 6 percent of public schools’ total revenue; today it is 9 percent.

Little Improvement

Despite these investments, student test results have not shown appreciable gains, according to the ALEC study and government data. Although fourth- and eighth-grade mathematics scores have improved over the past 10 years, reading levels remain largely stagnant. A majority of students still test below proficiency levels in both subjects. From 1998 to 2008, SAT and ACT test scores saw almost no change.

Worse yet, the ALEC study notes, the nation still lags behind other countries’ education standards.

“The status quo in confronting education’s stagnant, in some cases declining, results simply cannot continue,” said Jeffrey W. Reed, director of ALEC’s Education Task Force. “While it’s not only costing children their futures, if you look at current state budgets we just can’t afford it.”

The report recommends popular school choice reforms such as vouchers, tax-credit scholarships, and charter schools as cost-efficient alternatives to funding continual failure. “Because the states can’t spend their way out of problems like they have tried to do in the past, this current crisis may force them to look at such reforms,” said LeFevre.

Preventing Reform

LeFevre and Reed say while reforms are growing in popularity among parents, students, Republicans, and Democrats, the new president and his administration will play a part in setting the tone … and may well prevent states from facing tough choices.

According to the Center on Budget and Policy Priorities, 45 states face budget shortfalls in 2009, and the situation for 2010 looks worse. Although this should force states to economize, manage operations more efficiently, and consider popular reforms, the new Congress and President Barack Obama’s administration could allow business to go on as usual.

In late 2008 Democrat governors from Massachusetts, New Jersey, New York, Ohio, and Wisconsin asked Obama for a $1 trillion bailout to states facing budget shortfalls, part of which would be used to fund education.

“States are not facing budget deficits because they don’t tax enough. The real problem is the fundamental issue of overspending taxpayer dollars,” said Jonathan Williams, director of ALEC’s Tax and Fiscal Policy Tax Force. “Federal bailout dollars for education are not free, since we all know federal funds will be accompanied by costly mandates from Washington. Embracing real education reform is a necessity for states to solve long-term budget problems.”

Status Quo

But governors seeking bailouts could have a new friend in the White House. On top of the $47 billion the federal government provided for public education in 2006-07, Obama campaigned on $18 billion in new spending—including quadrupling the number of Early Head Start participants, budgeting more for Head Start, creating “Early Learning Challenge Grants,” and “encouraging” universal preschool.

Obama also proposed increasing funding for middle-school “intervention strategies,” doubling funding for after-school programs, and recruiting and supporting hundreds of thousands of new K-12 teachers.

“Why bail out and expand an unaffordable, and in many cases, an unsuccessful system, when all data show that strategy does not work?” asked Reed. “Unfortunately, the likelihood of this question being asked at the federal level is slim.

“That is why now, more than ever, state legislators must take up the fight if they want to ensure their students’ success and save their taxpayers some money,” Reed said.

David J. Myslinski ([email protected]) is the legislative assistant for the Education and Health and Human Services Task Forces for the American Legislative Exchange Council in Washington, DC.

For more information …

American Legislative Exchange Council, Report Card on American Education, 15th edition: http://www.alec.org/AM/Template.cfm?Section=Report_Card_on_American_Education