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Money for Nothing: Increased School Spending

Opinion Editorial
February 15, 2000

By Linda Gorman

Reader Steve Woznia does not buy the claim that the huge increases in spending on public schools are out of line. In a February 4, 2000, letter-to-the-editor in the Colorado Daily, Mr. Woozier wrote that “The needs of a modern school are much greater than the needs of a school from 100 years ago (or even 20 years ago). Transportation costs, building costs, facility maintenance costs, extra curricular activity costs, and administrative costs have all dramatically increased the cost of a modern school.” So have immigration and special education. Mr. Woznia believes that “Claiming the population of a low-income inner city school is similar to the population of a parochial schools is beyond erroneous; it is naively deceptive.”

In terms of the public policy debate, the “needs of modern schools” are really beside the point. Arguing that inner city kids without books proves that schools are underfunded is like saying that starving North Koreans prove their government needs more resources. In fact, some organizational systems simply do not work as advertised. A great deal of evidence suggests that the U.S. system of centrally planned government schools is one of them.

The Roman Catholic church has run schools in the poorest parts of American cities for over 100 years. In 1990, the RAND Corporation, hardly a statistically nave or purposefully deceptive group, studied New York City high schools.[1] It found that Catholic high schools drawing from the same neighborhoods as New York Citys “zoned” high schools produced higher graduation rates and better test scores at a cost of about $3,500 per student. The Citys cost was $6,700 per student.[2]

A score of other studies has documented similar results.[3] In 1996-97, Washington, D.C., had the largest per-pupil expenditures and smallest teacher student ratios in the nation at $9,123 and 14 to 1 respectively.[4] Despite this, 12% of D.C. public classrooms did not have textbooks at the beginning of the 1996-97 school year. [5] When the city pumped $63 million into roof repairs in the early 1990s, the system spent only 7% of the money on roofs.[6]

At an actual cost per student of only $2,700, Washington, D.C., Catholic schools provided books, a safe environment, and far better levels of academic achievement. The data also show that the most disadvantaged children benefit the most from Catholic school attendance.

Aggregate U.S. school spending was studied by Eric Hanushek and Steven Rivkin for the National Bureau of Economic Research.[7] In 1890, the U.S. spent less than 1 percent of GNP on public schools. By 1990 it was spending 3.4 percent. Some measures show that the postwar growth in educational spending has outstripped even health spending.

Among other things, Hanushek and Rivkin considered the impact of increasing career choice for women, special education, and rising transportation costs. In their opinion, three things have driven public school spending: higher prices for instructional staff, a dramatic decline in pupil-teacher and teacher-staff ratios, and rising noninstructional-staff costs.

That increased spending on items important to the educational elites can produce little improvement was shown in Kansas City. Public schools there continued producing dismal results after 12 years of unlimited funding. [8]  Nationally, in a 1989 article in the American Economic Review, John H. Bishop documented a large and “historically unprecedented” test score decline between 1967 and 1980, a time when spending was going up and the pupil/staff ratio was going down.[9]  Immigrants can not be blamed. At the time, the fraction of foreign born residents was under 7%. Between 1881 and 1930, it ranged from 12 to 14 percent.[10]

What has changed, as even brief histories of U.S. education make clear,[11] is the mission and structure of government schools. When the United States led the world in mass education its schools were more like Catholic ones. They were free of federal control, locally financed, and characterized by a clear focus on providing a no frills, practical, education.

Now that government schools gobble huge chunks of GNP, we get disorder, death education, community gardens, rainforest math, and shockingly high illiteracy rates. One can only conclude that pumping more money into the existing system will simply produce more of the same.

On another topic, note that the federal government is proposing a regulation that would effectively make your medical records its property. Government officials, insurers, and others could then search and use them without your consent. The Association of American Physicians and Surgeons believes that your medical records should be your property. It has set up a web site to inform people and collect public comments. It will submit comments by the February 17 deadline. Visit www.StopBigBrother.org for more information. Public comments matter. Last year they killed the “know-your-customer” rule. It would have required you to explain unusual activity in your bank accounts to the satisfaction of your friendly Federal agent.


[1] Paul Thomas Hill, Gail E. Foster, Tamar Gendler. 1990. High Schools With Character. Document Number R-3944-RC, The RAND Corporation, Santa Monica, California.
[2] Peter M. Flanigan. 12 February 1991. “A School System that Works,” The Wall Street Journal.
[3] For a readily accessible listing of applicable research see Nina H. Shokraii, 30 June 1997. Why Catholic Schools Spell Success For Americas Inner-City Children,” Backgrounder #1128, The Heritage Foundation, Washington, D.C., <http://www.heritage.org/library/archives/backgrounder/bg_1128.pdf> as of 9 February 2000.
[4] Kirk A. Johnson. 7 October 1999. Comparing Math Scores of Black Students in D.C.s Public and Catholic Schools, The Heritage Center for Data Analysis, The Heritage Foundation, Washington, D.C. Note 13, page 3. Available on the web at <http://www.heritage.org/library/cda/cda99-08.html>.
[5] Valerie Strauss and Sari Horowitz. 20 February 1997. “Students Caught in a Cycle of Failure,” The Washington Post, p. A1. Cited in Nina H. Shokraii, Christine L. Olson, and Sarah Youssef. 17 September 1997. A Comparison of Public and Private Education in the District of Columbia,” F.Y.I. number 148, The Heritage Foundation, Washington, D.C.
[6] Michael Powell and Vernon Loeb, 18 February, 1997. “In Lieu of Planning, Patchwork:Students Prepare for the Future in Buildings Bearing Scars of the Past,” The Washington Post, p. A1. Cited in Nina H. Shokraii, Christine L. Olson, and Sarah Youssef. 17 September 1997. A Comparison of Public and Private Education in the District of Columbia,” F.Y.I. number 148, The Heritage Foundation, Washington, D.C., p. 6.
[7] Eric A. Hanushek and Steven G. Rivkin. April 1996. Understanding the 20th Century Growth in U.S. School Spending. National Bureau of Economic Research working paper 5547, Cambridge, MA: National Bureau of Economic Research.
[8] Paul Ciotti. March 16, 1998. Money and School Performance: Lessons from the Kansas City Desegregation Experiment. Washington, DC; The Cato Institute.
[9] John H. Bishop. 1989. “Is the Test Score Decline Responsible for the Productivity Growth Decline?,” American Economic Review, 79, 1, 178-197.
[10] George J. Borhas. 1994. “The Economics of Immigration.” Journal of Economic Literature, 32, 4, p. 1668.
[11] See, for example, Claudia Goldin. August 1999. A Brief History of Education in the United States, NBER Working Paper Series on Historical Factors in Long Run Growth, Historical Paper 119.

Linda Gorman is a Senior Fellow with the Independence Institute, a free-market think tank in Golden, Colorado, <https://i2i.org/>. This article originally appeared in the Colorado Daily (Boulder), for which Linda Gorman is a regular columnist.

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