The Phony Funding Crisis

Education Next Issue Cover

Even in the worst of times, schools have money to spend

By Arthur Peng and

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Winter 2010 / Vol. 10, No. 1

20101_12_openChicken Little is alive and seemingly employed as a finance analyst or reporter for an education interest group. If one relies on newspaper headlines for education funding information, one might conclude that America’s schools suffer from a perpetual fiscal crisis, every year perched precariously on the brink of financial ruin, never knowing whether there will be sufficient funding to continue operating. Budgetary shortfalls, school district bankruptcies, teacher and administrator layoffs, hiring and salary freezes, pension system defaults, shorter school years, ever-larger classes, faculty furloughs, fewer course electives, reduced field trips, foregone or curtailed athletics, outdated textbooks, teachers having to make do with fewer supplies, cuts in school maintenance, and other tales of fiscal woe inevitably captivate the news media, particularly during the late-spring and summer budget and appropriations seasons.

Yet somehow, as the budget-planning cycle concludes and schools open their doors in the late summer and fall, virtually all classrooms have instructors, teachers receive their paychecks and use their health plans, athletic teams play, and textbooks are distributed. Regrettably, this story is seldom accorded the same media attention as are the prospects of budget reductions and teacher layoffs.

For a variety of reasons, from one year to the next, schools almost always have more real revenue for each of their enrolled students. For the past hundred years, with rare and short exceptions and after controlling for inflation, public schools have had both more money and more employees per student in each succeeding year. Teacher salaries have increased more than 42 percent in constant dollars over the past half century, while educators’ working conditions, health plans, and retirement arrangements have become ever more commodious. Moreover, school-related revenues and employment levels have increased even when the economy (as measured by Gross Domestic Product or GDP) turned down, unlike what typically happens in sectors such as manufacturing and retail sales, where recessions trigger cutbacks in personnel and profits.

Now, local school funding is apparently more secure than ever before. For the first time in history, the federal government has assumed a dramatic new school-funding role, that of banker of last resort, providing stopgap revenues to the nation’s schools during economic downturns. The Obama administration’s unprecedented injection of billions in federal funding for schools likely ensures that education’s resource cushion will continue for at least the current downturn and possibly for much longer. The notion that the federal government should serve as a fiscal flywheel for schools would have come as a major surprise to lawmakers even during the 1960s’ high point of federal funding for schools.

A Bigger (and Brighter) Backdrop

It is true that occasionally school districts become insolvent and states have to step in and take over. California had a string of costly and highly visible instances in the recent past, with the state having to elbow locally elected school boards aside and install all-powerful administrative overseers in large districts such as Oakland and Richmond. Detroit is the poster child for similar activity in the Midwest (see sidebar). School district insolvencies are rare and most often the result of administrative or school board mismanagement and malfeasance, rather than from the consequence of diminished revenues and systematic budget cuts.

Another Detroit Deficit


A century ago the Detroit Public Schools were among the nation’s leading educational institutions; they now teeter on the edge of oblivion. Enrollments have dwindled to 93,000, roughly half of their 2001 level, as parents have moved or enrolled their children in charter schools. Only 58 percent of enrollees graduate from high school; only

25 percent of 9th graders graduate four years later. Student standardized test scores are among the lowest in Michigan. A Council of Great City Schools report found deficiencies in instruction, data, accounting—the list goes on. The district has 100 vacant schools on its property rolls. The FBI has targeted a school district payroll manager for allegedly embezzling $400,000. When Detroit school employees were asked to pick up paychecks in person, 257 checks were never claimed, presumably made out to ghost employees. A recent audit found staggering waste, from unused vehicles and electronic equipment to health coverage costs for ineligible dependents. In 2002, the Detroit Public Schools had a $103.6 million surplus. Now the district faces a deficit of $259 million and is contemplating filing for bankruptcy protection, a rare occurrence in the history of American public education. More than 2,000 layoffs and 29 school closures have done little to narrow the gap. The district is scheduled to receive $149 million in federal stimulus funds, but only $11 million of this can go toward reducing the deficit.

Nationally, America’s school-district revenues have long been on an upward trajectory (see Figure 1). Since 1929, per-pupil spending has declined only four times and significantly only twice, once during the Great Depression and once in the midst of World War II. There have been 11 periods during which GDP declined but mean total real per-pupil revenues still increased. The number of employees, teachers, administrators, and others has continually increased for four decades, except for the early 1980s period of declining enrollment and recession. And pupil-teacher ratios have fallen by almost 50 percent due to investments in class-size reduction and an increase in the number of teachers who are not assigned to full classrooms (see Figure 2).


How Is Education So Well Protected during Recessions?

Public schools have long been remarkably insulated from economic downturns. This becomes particularly clear when we compare employment trends in different economic sectors. Figure 3 displays historical (1972–2008) employment information in nine sectors: construction, finance, government, information, manufacturing, professional and business services, retail trade, transportation, and warehousing. Employment levels reflect economic conditions and, except for government (which includes elementary and secondary education), employment levels fluctuate with the economy and the historical trend is modestly upward. Contrast this picture with the much steeper upward slopes in education employment shown in Figure 2.

Unlike other employment sectors, education is protected from the direct effects of economic ups and downs by an interlocking and reciprocally reinforcing set of politically constructed conditions. Among these conditions are 1) education’s privileged legal status in most state constitutions; 2) schooling’s uniquely decentralized operation and diffuse revenue-generation structure; 3) local political dynamics and institutions that foster a favorable fiscal environment for public schools; 4) a multitiered structure for funding schools with complicated intergovernmental funding incentives and reliance on inelastic tax sources, such as property taxes at the local level. Almost no other economic endeavor enjoys such a spectrum of insulating conditions.

Constitutional Privilege. The United States Constitution is silent regarding education and schooling. This omission, taken in tandem with the Tenth Amendment’s reservation of unspecified powers to states and the people, and state-level constitutional provisions, renders education principally a state function. Moreover, state constitutions explicitly assume responsibility for provision of schooling.

State constitutional education clauses are generally of three kinds. They assign the legislature a responsibility for provision of an education system that is 1) “Thorough and Efficient,” 2) “General and Uniform,” or 3) the legislature’s “Paramount Duty.”

The precise language of the state constitution is not as important as the explicit specification of the state’s responsibility for providing education. Criminal justice, transportation, recreation, indigent care, economic development, commercial regulation, and even public safety are not privileged to the same degree. A state can decide to pursue or abolish numerous areas of government responsibility, such as support for prisons, highways, parks, and colleges, or welfare payments. It cannot decide to abandon its K–12 school system. Indeed, several states even have constitutional provisions that prevent less being spent on education in any one year than in a prior year.

Many state courts have made clear that education takes priority when it comes to appropriating funds. Adequacy cases decided in favor of plaintiffs in numerous states, such as Campbell County v. Wyoming, have emphasized that the state has a unique obligation to fund schools at high levels, even if other parts of the budget must suffer.

Decentralized Operation. No modern nation has an education system that is more decentralized or multitiered than the United States. The consequence is that American school systems are buffered structurally and politically against resource competition with other state and local governmental services.

Conceived in the colonial period and evolving well into the 21st century, public education in the United States has relied on 50 distinct state systems that, in turn, delegate selected dimensions of operational authority to more than 13,000 local school districts. The majority of these local districts have property taxing authority; the rest rely on county or municipal governments to generate their share of local revenue.

Local school districts are overseen by boards of education. Most of these, 80 percent, are made up of elected members. The remainder of the boards are appointed by mayors, city councils, or other elected authorities. Regardless of membership selection procedures, these boards place education in a privileged position relative to those publicly provided services that depend on general governments for resources and must compete with other services for their share.

Political Protection. General citizen apathy toward school spending and policy can be partially explained by the costs and effort required for active political participation. School policy and operational matters can be complicated. It takes a great deal of personal time to become informed regarding such issues as racial desegregation, charter schools, curriculum content, testing, graduation standards, geographic placement of a new school, and the configuration of attendance boundaries. These and other education-related issues affect parents and educators more than they do other citizens, particularly those citizens who do not have children enrolled in public school.

Hence, school district politics, including those surrounding funding issues and taxation, tend to be dominated by self-interested coalitions of parents and school district employees. For these constituents, the costs of becoming informed and actively participating in school district decisionmaking are low relative to the benefits to be gained. Employee-parent coalitions tend to dominate local school-board elections and ballot measures regarding school funding (see “The Union Label on the Ballot Box,” research, Summer 2006). Their self-interest and favorable predisposition provide schools with political protection against budget cuts when the overall economy turns down.

Several other political elements favor school funding. District employees, those with the most direct interests in sustaining or elevating school spending, are frequently well organized politically. Employee groups can offer sympathetic candidates greater campaign resources than other school-related constituencies. Union members are probably the voters most predisposed to turn out at an election and to vote. These dynamics provide schools and school spending with local advocates who are politically sophisticated and well resourced for campaign purposes.

Opponents of increased school spending or higher taxes for schools can be mobilized and on occasion dominate an election. This was dramatized in the 1978 enactment of California’s famous tax-limitation provision, Proposition 13. Usually, however, incremental increases in proposed school budgets represent only a fractional addition to local property-tax rates. When property owners anticipate paying only a hundred or so additional dollars in the forthcoming year, they may be unwilling to make the effort needed to oppose the increase.

There is an additional political dynamic contributing to the preservation of local school-funding levels. A frequent metric, however misguided, for measuring school quality is the amount of money a district spends per pupil annually. Many posh suburbs actively compete on this dimension, proudly proclaiming their per-pupil-spending status ranking relative to competitor districts. Citizens, parents, and others who have purchased homes in such districts perceive the value of their property to be linked to high spending levels and accordingly acquiesce to advocates’ entreaties for more money.

Finally, in most states, education employee unions have the right to bargain with school boards and to embed collectively derived agreements regarding salaries and working conditions into legally enforceable multiyear contracts. These extended contracts, often bridging or outlasting economic recessions, act to buffer threatened revenue reductions.


Multiple Revenue Sources. Schools are highly resource dependent, but they are not dependent on a single source. The distribution of revenue-raising responsibility over federal, state, and local governments contributes to education revenue stability (see Figure 4).

Three trends of note can be discerned in this graphic. First, one can see that initially, local funds were the dominant source of district revenues, with states and the federal government being only minor partners. In most places, local district and municipal revenue has been generated through property taxation, and this arrangement has assisted in insulating schools from economic ups and downs. Property taxes are relatively inelastic when the economy swings up. It takes assessors two to three years to capture escalating property values and, thus, to give school districts the full measure of benefit from economic growth and housing inflation. However, this same inelasticity protects schools during economic downturns when property owners continue to pay those same taxes, even if their income is reduced, as assessors do not reduce property values in a timely manner.

The second trend began in the post–World War II era, as state funding supplanted and matched or slightly exceeded local revenues. This pattern resulted, at least partially, from the “equal protection” litigation movement launched in the 1970s, in which state courts determined that rectifying once-gaping spending inequalities between districts was the states’ responsibility. While remedies might have left local funding as the principal revenue source for schools, state legislatures chose instead to provide funding centrally from state coffers and to reduce the relative contribution of localities.

Even in the face of the current recession, state governments are raising taxes to cover deficits. This may actually reflect an additional explanation for how well schools have done in the past: States are required to have balanced budgets, so they raise taxes when times are tight and then keep the new rates when the money flows again. Local governments and school districts do not have the luxury of deficit spending.

Reliance on state funds is a double-edged sword, however. State revenues dampen interdistrict inequalities but, since they typically derive from sales and income taxes, these revenues are also more closely linked to economic fluctuation and more volatile than property tax receipts. Dependence on state funding also places education in a more competitive resource arena. Local school boards concern themselves, and focus their taxing authority, only on education issues. State legislatures, education’s privileged constitutional position notwithstanding, have to consider a far wider range of services and responsibilities in deciding who gets what.

The third trend pertains to the federal contribution. In 1965, the federal government launched its most significant education endeavor when the Johnson administration initiated the Elementary and Secondary Education Act (ESEA). Appropriations from this legislation pumped federal spending all the way up to 8 percent of total school revenues. The No Child Left Behind Act (NCLB) is the 2001 version of the ESEA. This statute did not dramatically increase federal funding for education, at least as a percentage of total revenue. It did, however, usher in a completely new era of accountability in education.

Prior to 2009, the highest historical rate of federal contribution to education had been 10 percent. The Obama administration’s economic stimulus plan ($44 billion for schools now flowing under the American Recovery and Reinvestment Act [ARRA] of 2009) dramatically alters this trajectory and contributes to a more evenly balanced revenue portfolio for schools. The federal government is becoming less and less a junior partner, and more and more an equal partner, in the tripartite American method of funding schools.

Why the Ever-Present Fiscal Doom?

If school revenues have enjoyed such remarkable stability, why the persistent appearance of fiscal calamity? One reason is that school-district budget cycles are imperfectly synchronized with state and federal legislative appropriations processes. The fiscal year for state and local governments routinely begins on July 1. It is increasingly rare for legislative bodies to enact spending bills much in advance of this date. School districts are legally obligated to have balanced budgets and cannot balance anticipated expenditures through deficit financing. As local school boards begin their winter and spring budget planning, they and their administrative officers perceive state and federal fiscal uncertainty and publicly discuss, as state “sunshine” statutes mandate, their contingencies for budget cutting.

Since some 80 percent of school-district budgets are absorbed in personnel costs, local school boards, when pressed fiscally, quite naturally give consideration to personnel cutbacks and salary freezes. State statutes make it necessary to inform school employees, usually in April or May, if there are to be layoffs. Sensing financial vulnerability and needing to comply with personnel notification deadlines, school districts issue layoff notices and hold mandatory public hearings, even if the probability of actual personnel layoffs is slender. Such public threats trigger a media frenzy, alarm employees and parent advocates, and exacerbate, yet again, the prevailing public perception that schools are headed for fiscally stringent times.

The likelihood of resource reductions is remote. However, it is a rare education reporter, teacher who receives a layoff notice (however unlikely to be acted upon), or parent who was expecting to have the highly regarded but layoff-vulnerable Ms. Jones for her 3rd-grade child in the fall, who sees the matter in historical perspective or with objectivity.

What Has All This Money Produced?

The ever-increasing cost of public education would engender less controversy if the product had improved apace. The United States expects much of its schools. Preparation for career, college, and citizenship; personal health and hygiene knowledge; racial and gender equity; leisure and aesthetic appreciation; social mobility; scientific sophistication; safe driving practice; and sex, alcohol, drug, reproductive, and environmental awareness are all part of the booming, buzzing, and sometimes antithetical public discourse that assigns purposes to the nation’s schools. Still, there are two fundamental dimensions on which schools must maximize performance in order to make progress toward all other desired education outcomes: 1) children learning to read and 2) students completing high school. Viewed longitudinally, America’s schools have not done well on these dimensions.

Reading scores on the National Assessment of Educational Progress (NAEP) have been level for four decades. Graduation rates, as recently calculated by economist and Nobel laureate James Heckman, display the same regrettable pattern as reading scores. For a half century, nearly one-third of the nation’s high-school students have failed to graduate with their class each year. That average masks much lower historical rates for black and Hispanic students than for white students. Many who do not graduate from high school subsequently obtain high-school equivalency credentials, such as the General Equivalency Diploma (GED). Still, more than 1 million adolescents each year have somehow not been retained by the nation’s schools.

Will the Schools’ Fiscal Privilege Persist?

If one were to place bets based on past evidence, the odds favor America’s public schools to operate next year with at least as much and probably with somewhat more money and a larger and (modestly) better-paid labor force than they had in 2009. The dramatic escalation of the federal government’s revenue contribution, to close to 15 percent of education’s national total, almost guarantees that mean per-pupil revenues will not decline in 2010.

There is no effort here to dispute the reality of the current recession. State and local tax receipts, heavily dependent on consumption and income, were down 4.6 percent for the first quarter of 2009 over the prior year. Still, per-pupil revenues will likely continue their historical upward trajectory. The unprecedented ARRA stimulus recovery allocation for education only strengthens this prediction.

Although the current economic crisis has several dimensions previously unseen—the pace at which employment and housing sectors crumbled, the speed at which credit disappeared, the intensified economic interdependence of global markets, and the stunning magnitude of plummeting personal and institutional wealth—the federal government’s monetary and fiscal recovery plans were enacted into policy with remarkable speed. Congressional willingness to subsidize the economy was never higher. And the international community coordinated stimulus spending as never before.

Also, during early April 2009, the U.S., European, and Asian stock markets seem to have bottomed out and turned up. Job losses, while continuing, are slowing. Nationwide unemployment, at 9.3 percent as of this writing, is still lower than at its post–World War II peak of 10 percent in the 1982 recession, and gives no indication of coming close to catastrophic Great Depression rates. In April 2009, prices of goods and services were down and consumer confidence unexpectedly climbed, modestly, upward.


Balancing all these factors leads to the projections in Figure 5, which provide a bounded estimate of national total operating revenues per pupil through 2020. These high and low projections, based on 2006–07 dollar spending, are the result of calculating historical rates of least and greatest growth and applying those rates to create low and high projections until 2020. Specifically, the low projection, which would produce $9,519 in per-pupil spending in 2020, is based on an average growth rate of 0.1 percent, similar to the period from 1991 to 1996. The high projection, which would produce $13,208 in per-pupil spending in 2020, is based on an average growth rate of 2.45 percent, similar to the period from 1997 to 2004. (Readers should keep in mind that these figures are in 2006 dollars and the actual per-pupil dollar amounts in 2020 would be higher.)

The major assumption here is that the federal government’s stimulus contribution to K–12 schooling will approximate $90 billion. The $37 billion in the stimulus package that is intended to offset reduced state and local education revenue in 2009 will cushion what would otherwise likely have been the first significant per-pupil spending reduction in 60 years.

A New Fiscal Stability

Whether measured on a per-pupil basis or as a percentage of Gross Domestic Product, support for public schools is stronger in the United States than in most other nations. Moreover, this condition has persisted for many decades. A unique set of constitutional, structural, financial, and political arrangements ensures that school systems and professional educators are buffered from revenue losses when the economy declines. State rules surrounding local school-district budgeting procedures contribute to the opposite impression, making it appear that schools are in a perpetual financial crisis.

The 2009 ARRA stimulus package may portend an entirely new source of fiscal stability for America’s schools. When the economy turns down, the federal government may serve as the major fiscal backstop for public education.

James W. Guthrie is professor of public policy and education at Vanderbilt University and director of the Peabody Center for Education Policy, where Arthur Peng is research associate.

Comment on this article
  • […] The school funding crisis is “phony,” writes James Guthrie, a professor of public policy and education at Vanderbilt,  in Education Next. Chicken Little reporters highlight “budgetary shortfalls, school district bankruptcies, teacher and administrator layoffs, hiring and salary freezes, pension system defaults, shorter school years, ever-larger classes, faculty furloughs, fewer course electives, reduced field trips, foregone or curtailed athletics, outdated textbooks, teachers having to make do with fewer supplies, cuts in school maintenance,” etc. But real spending on education keeps going up, even in recessions, while the number of students stays about the same. For the past hundred years, with rare and short exceptions and after controlling for inflation, public schools have had both more money and more employees per student in each succeeding year. Teacher salaries have increased more than 42 percent in constant dollars over the past half century, while educators’ working conditions, health plans, and retirement arrangements have become ever more commodious. […]

  • […] how about a little context? Along comes Vanderbilt University professor James Guthrie with a new piece in Education Next that effectively breaks through the scare tactics and lays the foundation for a serious, honest […]

  • karlwheatley says:

    Interesting article, and yes, even in the poorest districts, there is often money poorly spent, but there are other places where money is still needed.

    Unfortunately, as a homeschooling parent and a teacher educator, I see that the accountability movement is driving costs upward. We pay extra for tests that are no better than teachers’ judgments, and lose classroom time in the bargain. There are crazy incentives for all involved to push more kids into expensive special education, and reflecting “haste-makes-waste,” the accelerated curriculum in the early years means we’re are spending vastly more than anyone needs to spend on helping kids learn to read and then remediating the problems often caused by these misguided and expensive reading programs. Regardless of their clever labeling, a lot of so-called “scientifically-based” teaching methods are just throwing good money after bad.

    Most kids can learn to read well if we follow a handful of guidelines and have a library card, but we spend boatloads of money on unnecessary materials. Why? We’re following the wrong education paradigm.

  • MVB says:

    How can one compare the number of teachers to the growth in the industrial sector? The number of teachers depends on the number of students, not the GDP. Even using per pupil spending can’t account for the geographic distribution of students which affects transportation or the destruction of the middle class which affects meal subsidies (free and reduced lunch).

    The statistics cited don’t include changes in legislation or the passing of compulsory education laws. They don’t account for legislative changes (unfunded mandates) or cultural shifts. The statistics don’t account for the massive expansion in special education or ELL education. How much is being spent on standardized testing now? That money, which only finds its way into the pockets of testing companies, has no effect on the education of students. It can be included in a per pupil calculation, but it’s money that never finds its way to the classroom in any meaningful way.

    All in all this is a a very slanted analysis. I’d give a D for impressive use of meaningless stats and graphs, but complete lack of critical thinking.

  • […] such implication would be difficult to defend. As you can see in the above graph (from an Education Next article by Arthur Peng and James Guthrie), education spending has skyrocketed in real terms precisely […]

  • Dr. John R. Morton says:

    I am dumbfounded that scholarly writers in a scholarly magazine are so incredibly inept in understanding what we as superintendents in school districts have had to endure every day since the economic downtown began. We started our school year nearly $1.4 million down and are now at $2.3 million in total reductions. Class sizes have increased, especially at elementary, positions have not been filled, and instructional support has been diminished.
    Public schools are being threatened at rates never before contemplated. I am at a loss to understand how that constitutes a “phony” funding crisit.

  • Charles R. Williams says:

    Interesting that the explosion in health care spending is a national problem while the explosion in spending on k-12 education is not.

    The root cause of the problem is the monopoly power enjoyed by government-run schools. While public schools do not make a profit, monopoly power is expressed through increases in compensation of unionized staff and increases in staffing levels. The answer is vouchers and tax credits.

  • […] Leave a Comment This week the Detroit News reported on one of the measured reactions Michiganders have to proposals to address that state’s budget crisis: Local public school districts have too little funding to provide a quality education, according to 60 percent of voters surveyed in an exclusive Detroit News/WXYZ (Channel 7) poll released Tuesday. Only 23 percent of respondents said the taxes and fees paid for public education are “too high”; 60 percent said they are about right, and 12 percent said “too low.” What’s missing from the story? Any mention of how many dollars Michigan already spends per pupil, or whether that amount was disclosed to the people polled. I’m guessing it wasn’t disclosed that (according to NCES data) in 2006-07 Michigan spent more than $11,600 per student on K-12 education. Or else the results of the new public opinion survey might have been somewhat different. Why do I say that? Research released earlier this year and highlighted in Education Next shows that the information about actual spending changes public opinion by 10 percentage points. When researchers Martin West and William Howell conducted their study, the average respondent thought schools spent $4,231 per student when the actual figure was over $10,000. Without the critical element of disclosing the actual per-pupil funding figures to respondents, those formulating public policy in Michigan should not read much into the poll results. Instead, they should begin to wonder if just maybe they’re facing a phony funding crisis. […]

  • […] Guthrie and & Arthur Peng  have a most interesting article (The Phony Funding Crisis) in the latest issue of one of my favorite periodicals, Education Next. Instead of accepting the […]

  • Robert Clegg says:

    Could someone put this in a global perspective? How much is being spent per pupil in China and India that are outperforming us?

    I find it a classic mistake to compare one’s budget crisis to others in the US that are failing while others (I’m guessing) are doing it better for less in other countries.

    What’s the global comparison. Hmm, is it asking too much to rank global achievement and spending together in a chart? ; )

  • Heidi says:

    I am amazed by this article. I teach in a public high school in Illinois were we have just had to cut teachers because the government hasn’t yet paid our district the money we are owed. All across Illinois teachers are being cut. At what point is our government going to realize we are going to continue being outperformed by countries like China until support is given to school systems. It seems to me that people who think adequate amounts of money are already being placed in public schools have never taught in one!

  • Education Next says:

    The following was submitted as a letter to the editor:

    James Guthrie and Arthur Peng examine the apparent phenomenon in which schools, while claiming continual underfunding and budget cuts, continue to open their doors and educate students. As logical as their argument sounds, we believe it comes from the 30,000 foot level and differs from what is experienced on the ground.

    The authors seem to assume that, faced with an economic downturn, states will respond to their constitutional mandate and other pressures and automatically raise taxes. Our studies suggest that instead, many states have played a shell game with American Recovery and Reinvestment Act (ARRA) funds, backfilling cuts to education with those one-time dollars.

    Over the past year, the American Association of School Administrators has monitored the impact of the economic downturn on public schools from the ground level. Our fall 2009 survey found that the financial crisis continues to threaten and impact the progress and stability schools have enjoyed in the past. Responding from 49 states and the District of Columbia, school district leaders observed they have yet to see concrete indicators of a rebound in the nation’s economy: When asked how ARRA dollars impacted their state and local revenues, 83 percent reported that ARRA dollars did not represent a funding increase. More than one-third (35 percent) of respondents were unable to save core teaching jobs as a result of ARRA monies.

    America’s schools were not immune to the most recent economic downturn. The funding crisis is far from phony. Looking forward, the 2010–11 and 2011–12 school years pack a one-two punch, with school district leaders facing the end of ARRA dollars and answering tough questions about programs and personnel that have been (and will be) cut, while trying to figure out what, if any, economic recovery is in store at the state and local levels.

    Robert S. McCord
    University of Nevada at Las Vegas
    Noelle M. Ellerson
    American Association of School Administrators

  • Education Next says:

    The following is Guthrie and Peng’s response to the letter above:

    The civility of the McCord and Ellerson rejoinder is appreciated. Moreover, their self-reports of school-district financial shortfalls are no doubt heartfelt.

    However, the 30,000-foot perspective for which we are impugned is the more accurate view. We report objectively derived federal government–calculated national averages over a century. The long-run overall pattern is crystal clear: America has supported its public schools plentifully for a century. Nothing McCord and Ellerson say refutes this.

    By crying fiscal wolf year after year, in the face of contrary data, public school advocates deceive taxpayers and avoid the four-decade reality of stagnant student performance and woeful mismanagement in places such as Detroit.

  • joi defaux says:

    I’m amazed at this article too. but the author is in the same ranks as economists declaring we are in a ‘jobless recovery period.’ How Orwellian can ya get???

    Here in Illinois, we’ll be looking at 27-32 kids squished into one classroom next year with nearly all school districts having to cut back and make really difficult program cuts.

    I’m personally hoping to see the Teacher’s Union disbanded and bring back teaching to a white collar profession instead of a “I can’t do that because its past 3:15, our contracted rush to the doors time” or “Sally is a poor teacher because she clearly puts too much time into her work, thus making me look mediocre ” type culture the Union grew in their perverted petri dish.

  • mim says:

    I would like the authors to address or at least acknowledge the context of the funding comparison. Back in the 70s, when I went to school, the Principal came to my classroom to paddle the slow girl who had some behavioral issues. My cousin who was Down Syndrome received no schooling at all. As a society, we have to decide if we believe in no child left behind or if we want to leave behind some children and beat the rest into submission. Educating everybody costs more money; it is hard to get around that.
    Of course there is plenty of waste in school districts, but I still trust the teachers who say they don’t have materials or access to technology. Just as we don’t ignore the soldiers who clamor for protective armor even though their superiors overpaid on a machine part, we shouldn’t ignore teachers who say they need more manpower and materials to educate all of our children.

  • Rebecca Burlingame says:

    The main problem I have with public schools is the fact that even those who graduate and have enjoyed the experience, no longer have ways to work meaningfully in their own communities unless they go for more formal education. To me, this twelve years of effort is a complete waste as a result. What’s more, many people can no longer afford to own homes not because of the monthly payments, but because of the additional property taxes they would have to pay. The sacrifice of property taxes would be worthwhile if the high school graduate were actually able to be considered credentialed enough to gain work.

  • Amber says:

    I believe certainly that some districts cynically play the budget crisis violin every June, with excellent timing and good results. However. We can’t generalize the view from 30,000 feet, nor from the ground.

    Perhaps we can agree with Rebecca’s premise, the graduates American high schools are turning out who are hitting the workforce are NOT finding jobs that allow them the ‘luxury’ of paying property taxes [that fund local school district]. And more than half of college-bound graduates now have to take remedial courses before they can start their 4-year degree, thus postponing their property-tax payment too.

  • Milan Moravec says:

    Sorry Tale of Chancellor’s Office UC Berkeley: easily grasped by the public, lost on University of California’s leadership. The UC Berkley budget gap has grown to $150 million, & still the Chancellor is spending money that isn’t there on $3,000,000 consultants. His reasons range from the need for impartiality to requiring the consultants “thinking, expertise, & new knowledge”.
    Does this mean that the faculty & management of UC Berkeley – flagship campus of the greatest public system of higher education in the world – lack the knowledge, integrity, impartiality, innovation, skills to come up with solutions? Have they been fudging their research for years? The consultants will glean their recommendations from faculty interviews & the senior management that hired them; yet $ 150 million of inefficiencies and solutions could be found internally if the Chancellor & Provost Breslauer were doing the work of their jobs (This simple point is lost on UC’s leadership).
    The victims of this folly are Faculty and Students. $ 3 million consultant fees would be far better spent on students & faculty.
    There can be only one conclusion as to why inefficiencies & solutions have not been forthcoming from faculty & staff: Chancellor Birgeneau has lost credibility & the trust of the faculty & Academic Senate leadership (C. Kutz, F. Doyle). Even if the faculty agrees with the consultants’ recommendations – disagreeing might put their jobs in jeopardy – the underlying problem of lost credibility & trust will remain.

  • Sara says:

    It is sad how that has been budget cuts for schools which effects education funding. Teachers are being laid off and classes are being over crowded.

  • […] has lost its shine.  Our public education system is failing the next generation we are hoping can pay today’s bills.  Our energy policy appears aimless and disconnected from our economy’s need to grow.    Our […]

  • […] 5. How can we be certain that budget-induced innovations that O’Carroll refers to will be good innovations? It is more difficult than she suggests to find historical examples of budget difficulties in education; spending has been on a steady rise across the board over the last century. […]

  • […] 5. How can we be certain that budget-induced innovations that O’Carroll refers to will be good innovations? It is more difficult than she suggests to find historical examples of budget difficulties in education; spending has been on a steady rise across the board over the last century. […]

  • […] A few years ago (when I was still 5, hmmm…) I brought your attention to a similar Education Next piece written by Mr. Guthrie, well before he assumed the school leadership role in Nevada. Back then, he effectively debunked the “phony funding crisis.” […]

  • Randall emery says:

    To the people who whine of classrooms being overcrowded at 30 students, I clearly recall growing up in rooms with six rows wide and five rows deep. Has the 3:30 bell ringing established such a rush to get home that we need to reduce our workload? Heaven forbid going to a year round school. Show me a private sector company that can be profitable and stay closed 30% of the time and I will eat my hat.

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