Awkward Utopia

Now that we’ve seen what the state is hoping to do in the realm of property tax reform, and why, let’s turn our attention to just exactly how these changes will impact the funding of our schools. This past Tuesday, Dr. Dewey took time away from grading tests to speak with me about this problem. [On a side note, where does one even begin to tackle the grading of a few thousand short answer examinations?] The following comes both from our discussion and the Q&A session at last week’s meeting.

The school system, it is important to note, is funded by property and sales taxes.

The state of Florida already spends 30% less per student than the national average. Perhaps more telling, Florida spends 13% less than other states in the southeast. What is especially disturbing is that we are actually trending downward.

In response, some point to evidence that shows that more money doesn’t lead to better schools. Indeed, it is difficult to determine the impact of money. It’s best to think of funding as necessary but not sufficient. Consider the following equation:

e x S = W x T + other operating expenses, where

• e = expenditures per student
• S = # students
• W = wage per staff member
• T = # staff members.

Since the overwhelming majority of operating costs (80%) are personnel costs, we can simplify:

e x S = W x T

Remember that e and S are constants, so when you increase T you must decrease W. Thus, the class size amendment which requires a greater number of teachers to fulfill is, in effect, a mandate to pay each teacher less. Add in the expected revenue shortfall from property tax reforms (see Part I), and the conclusion arises that we simply can’t afford good teachers.

At this rate — brace yourselves — UGA will soon be a better school than UF.

Right now, law says a county can only be required to pay for 90% of its FEFP spending per pupil. This caps the property taxes that can be collected from a given county at .9 (e x S) where S is the number of students in that county. In 75% of counties, the millage rate already limits the amount of property taxes that can be collected at well below .9 (e x S), so instead of contributing the minimum 10%, the state ends up contributing almost half of spending per pupil, on average. But in counties with high property value per student (eg. Collier County), the 90% limit actually caps the property tax rate below the maximum millage.

If the state increases the amount of spending per pupil, it can tap into that currently-untaxed, taxable value. In those 25% of counties, a $1 contribution from sales taxes from the state allows them to collect $9 in property taxes, and spend $10 more per student. Across Florida, for instance, raising e by $10 would require only $8 per student from the state.

Q: Is the system redistributive?

A: Sorta. Property tax money is not redistributed (at least not across counties). But the percentage of funding that comes from the state is generated by sales tax, which is.

Q: Is part of the problem that retirees don’t care about education?

A: Yes. Retirees don’t have as much of a stake in education where they live. Because most are transplants, their loyalties are with school systems elsewhere – where they and/or their children went to school. Thus, many parts of Florida lack a sense of community.

Q: Are spinoff districts a possible solution?

A: Sure, small unfunded districts are probably preferable to large unfunded districts. However, the people in power have an incentive to keep their domains as large as possible.

Q: Thoughts on No Child Left Behind?

A: It places pressure on states like FL with difficult tests. States have the option of making their test easier in order to comply. It also creates an incentive to spend time/resources on kids who don’t quite pass and none on those who (1) are far from passing or (2) excel.

Q: Are vouchers a possible solution?

A: First, vouchers won’t get anywhere politically. Second, it’s hard to predict a world without public schools. Right now, private schools are only serving the wealthier demographic. Public funding is understandable under certain circumstances. But public production makes economic sense only when something is nonexcludable and nonrival in consumption (eg. the military). Education is not. Even if there is a good argument for public funding of education, it doesn’t need to be state administered. Yes, vouchers could be a solution.

Q: So you’re talking about completely replacing public schools with vouchers?

A: I’m saying many public schools would probably die out if private schools were an option for more people. Maybe they would be able to compete, but probably not.

Q: You mentioned the teachers’ wage curve being flat until the teacher has been around for a long time, at which point it skyrockets. Why is this, and is it correctable?

A: It’s there because union leaders have been around for a long time, and they won’t let it be corrected.

Q: You mentioned that the downward funding trends could soon render UGA a better school than UF. What can we do?

A: Because of Bright Futures, you can’t just raise tuition, so you look to private fundraising.

Q: A recent article made the case that while responsibility for funding Bright Futures falls to the Legislature, setting tuition is the right of the Board of Trustees. Thoughts?

A: The Legislature can always cut other sources of a school’s funding in order to offset the increase in the cost of Bright Futures from a tuition hike.
Q: If you were opening your own private for-profit K-5 school, what would you do differently?

A: I know a lot about the financing of schools and not a lot about the running of them. But teachers have little control over their students. Many 6th graders don’t care about education, and they also know they can get away with anything. Our “every student must have equal access” mentality makes it impossible to remove kids who cause problems. I would change that.

Q: What about merit pay?

A: Unions would never go for it. There is some evidence that suggests real merit pay works, but it’s flimsy at this point. My opinion: we should give principals powerful incentives (eg. lots of money for high standardized test scores) and hiring/firing rights. That is crucial. It works in business, why not education?

Q: Wouldn’t that lead to teachers “teaching to the test?”

A: It’s just a matter of writing a good test. I do it with my large classes.

Q: Can’t the state impose its will against the Unions?

A: Politicians need to get elected by retirees and unions.

Q: Shouldn’t parents care about their kids’ education?

A: Some parents are just lousy. The rest have lots of issues to worry about, whereas union members are single-issue voters. Also, unions make persuasive arguments, like “if we give principals hiring/firing rights it will lead to nepotism.”

Q: But the Teachers Unions didn’t like Jeb Bush and he got elected.

A: They didn’t like the accountability he was trying to impose. Imagine how much they wouldn’t like more dramatic measures. He didn’t cross them that badly. Also, people are sympathetic to school boards, who generally share the same preferences as unions, in this regard.

Q: You said the state education system is highly centralized – what does this mean?

A: If local government had more power to improve a region’s schools (which would, in turn, raise the region’s property values), people would have more of a financial incentive to vote.

Q: Do you favor decentralization? Does this leave poor counties unable to finance their schools?

A: I favor more decentralization — especially smaller schools and districts, and more local funding discretion. But above some base level it should be subsidized by the state.

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“Education is the silver bullet. Education is everything. We don’t need little changes. We need gigantic, monumental changes. Schools should be palaces. The competition for the best teachers should be fierce. They should be making six figure salaries. Schools should be incredibly expensive for government and absolutely free of charge to its citizens, just like national defense. That’s my position. I just haven’t figured out how to do it yet.” Sam Seaborne, The West Wing