Myths Regarding Education Funding

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Hint: It Is Not About the Children or Their Academic Outcomes

All too often, especially in election years, we hear candidates make promises they cannot – or will not – keep. They claim they can lower property taxes without proposing spending cuts or indicating where the dollars would come from to replace the reduced funding source. With specific regards to education funding, they typically do not address expenses, academic achievement, or even mention children. They simply appeal to the masses with empty promises that don’t hold up to scrutiny.

 

We will address some of the common myths regarding New Hampshire’s education funding.

Myth #1: A greater share of state dollars vs property taxes is a more effective and equitable way to fund education.

Truth #1: Other states have increased the state portion of education funding and promised it would lower local property taxes. In fact, the overall tax burden increased. Take a look at Connecticut. Over 25 years ago, Connecticut implemented an income tax with promises it would reduce property taxes. Now their income tax has increased almost 2.5%, going from the original 4.5% to nearly 7.0%, and Connecticut has the third highest property taxes in the nation.

Myth #2: An increase in the state portion of education funding would not impact New Hampshire’s public-school model of local control.

Truth #2: Dollars usually come with strings attached. If spending decisions are moved further away from taxpayers, it becomes harder to control spending and bureaucrats are less responsive to taxpayers’ concerns. Small towns across the Granite State hold annual meetings to discuss warrant articles as well as the town and school budgets. Decisions are made by the local residents at those meetings and at the ballot box. These board members are available at these meetings and at regular ones throughout the year to address residents’ concerns. Although NH has a citizen state legislature, they are another step removed from the local governance level. The further we shift away from local control and decision-making, the harder it is to ever get it back.

Myth #3: Higher spending will result in higher academic performance.

Truth#3: There is no evidence to support the claim that more spending will produce better academic outcomes. A 2014 study by the Cato Institute shows that “the performance of 17-year olds has been essentially stagnant across all subjects despite a near tripling of the inflation-adjusted cost of putting a child through the K-12 system.” The study also found that “the correlation between spending and academic performance changes of the past 40 years, for all 50 states is 0.075.”

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This can also be said for New Hampshire. The goal of the Claremont decisions was to minimize significant disparities among communities to fund an “adequate education.” Since the Claremont decisions, average expenditures have risen roughly $10,000 per pupil for all NH towns. The Claremont decisions have only raised the cost – but not the quality – of a public education. This is a failed 20-year program. The formula does not have to be adjusted; it needs to be eliminated.

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With the current formula, local property taxes provide approximately 60% of local districts’ funding. State dollars are roughly 35% and federal sources are the remaining 5%. Further, public schools claim that nearly all costs are fixed, but in truth, roughly 72% of costs are variable.

Per the state Department of Education, the average per-pupil cost of a K-12 education is over $15,300. If we also consider operating, tuition, transportation, and other expenditures, the average cost exceeds $18,200 per pupil. Compare this to the national average of $13,100 per pupil.

New Hampshire’s costs continue to rise despite the continued decline of student enrollment. In 2008-2009, there were 197,956 students in all grades. As of the 2017-2018 school year, there were nearly 20,000 fewer students or 178,328 enrolled statewide. For the years 2012 to 2017, enrollment was down 10.3% across the state.

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By comparison, NH’s chartered public schools operate entirely on state funding, $6,636, plus any federal grants and fundraising they can manage to pull together. They are not funded by local property taxes like district schools.

Also, compare this to the average cost of private education. Per a 2012 study by the Josiah Bartlett Center for Public Policy, the average tuition for private elementary schools is approximately $6,300 and $9,300 for high schools. That is a fraction of our public-school costs.

 

If more funding or an increase in the state portion of funding is not the answer, what is?

As a state, we have an obligation to fund each child’s education, but that does not require it be provided only by local district schools. If we focus on children, not buildings, we do not have a funding problem.

Our existing charter and private schools operate at a fraction of the cost of our public schools. It is easy to see the difference: public school at $15,000 per pupil vs private school at $9,300 and charter school at $6,600 per student. Schools of choice must be more responsive to families otherwise they risk losing enrollment. When their enrollment declines, so does their revenue. That does not currently happen for public schools.

Local district schools receive state dollars based on an Average Daily Membership (ADM, or the number of students enrolled) as well as a big portion of local property taxes. They keep local property tax dollars whether or not local resident children are enrolled in their schools.

Here is a simplified example. To make the math easy, let’s say districts receive $1,000 to educate each child. The local portion is $600, the state portion is $350 and the federal portion is $50. If Jesse and Chris are enrolled at their local district school, the public school receives $2,000 for the two students. If Chris leaves the district to transfer to another district or to a charter school, the $350 follows the child to the other public school. If Chris transfers to a private school or is home educated, the state pays nothing to the education provider. The original district where Jesse still attends now has the state funding for him at $1,000 plus the $600 from Chris’ departure that remains in the district. This is not a hardship to the public district at all and in fact results in more money available on a per-pupil basis.

Educational opportunities also have a positive impact on academic achievement for participating students as well as those that remain in their local district schools. Per an EdChoice 2016 meta-study,

Eighteen empirical studies have examined academic outcomes for school choice participants using random assignment, the gold standard of social science. Of those, 14 find choice improves student outcomes: six find all students benefit and eight find some benefit and some are not visibly affected. Two studies find no visible effect, and two studies find Louisiana’s voucher program—where most of the eligible private schools were scared away from the program by an expectation of hostile future action from regulators—had a negative effect. Thirty-three empirical studies (including all methods) have examined school choice’s effect on students’ academic outcomes in public schools. Of those, 31 find choice improved public schools. One finds no visible effect. One finds a negative effect.”

If we focus on children, instead of the bricks and mortar buildings where classes are held, NH does not have an education funding problem. Many children, particularly those in low-income households, are trapped in their zip-code assigned schools. If we remove that restriction, families are empowered to select the best educational opportunity that fits their children’s needs and are incentivized to do so efficiently and with maximum benefit to the child’s needs.

If New Hampshire is truly committed to supporting education and giving children the best opportunities for success, then we have an obligation to provide more opportunities to children beyond their designated district bricks and mortar schools.

Originally posted at SchoolChoiceNH.org