Sunday, June 6, 2010

Analysis: The Underfunded Schools Myth

By MICHAEL VAN BEEK | June 4, 2010

A common claim by Michigan's public school establishment and its political allies is that, despite spending $20 billion annually on education, our schools are "underfunded." Comparisons to other states and to historical funding levels show that the claim is unsubstantiated and misleading.

The underfunding myth rests on an assumption that there exists some known "price" for a public school education that taxpayers are failing to meet. In fact, no such figure exists. All we have are the amounts actually spent on schools and the knowledge that they have consistently increased each year for at least the last five decades.

According the National Center for Education Statistics, the per-student operating cost of Michigan's public schools nearly quadrupled from 1960 to 2007, from $2,991 in 1960 to $11,337 in 2007, as measured in 2007 dollars. Therefore, insinuations by the school establishment that its funding has undergone some dramatic decline in recent years should be taken with a large grain of salt. (These per-pupil operational expenses do not include school buildings and other capital spending.)

In addition, Michigan taxpayers transfer a greater proportion of their income to public schools than all but one state (Vermont). Figures from the Bureau of Economic Analysis (and reported by the National Education Association) show that some $55 out of every $1,000 in state personal income is consumed by our public school establishment. Vermont residents pay $56 per $1,000, and the national average is around $43 per $1,000. Residents in Nevada pay the least, $32 per $1,000 of personal income.

There are other ways of comparing public school price and value. Some types of tax-supported schools cost much less to operate than others. Michigan's public charter schools cost on average $2,200 less per pupil in 2007 than conventional schools. Put another way, public charter schools provide essentially the same service at a 25 percent "discount." Rather than accepting the "underfunding" myth, perhaps taxpayers should complain about being overcharged.

The real reason for school money troubles is not "underfunding," but a failure to contain employee costs that comprise about 80 percent of operational budgets. As long as school boards continue to agree to contracts that grant school employees, particularly teachers, automatic pay increases and lavish benefits packages that outpace comparable private-sector averages and the ability of taxpayers to support, schools will never have "adequate" funding. FULL STORY

Most School Health Care Plans Are Too Expensive For Michigan

By MICHAEL VAN BEEK | Feb. 9, 2010

School district health care database available at depts/epi/insurance.aspx
If the goal of Michigan's public education system is to provide employees with outlandishly expensive health insurance, our school districts are remarkably successful. But if educating children is the mission — as it should be — some difficult decisions need to be made. As tax revenues decline along with the state's economy and population, schools must decide whether to cut programs or control health insurance costs.

The Mackinac Center recently surveyed all 551 conventional school districts about their employer-provided health insurance costs in 2008-2009. The results were eye-opening. The cost of the average family plan for teachers was 39 percent higher than the statewide average for the same type of plan. Teachers on average contributed 4 percent to their own health care premiums, compared to the state average contribution of 22 percent. In more than 300 school district plans, teachers did not contribute anything to their own premium costs. FULL STORY

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