Public Schools “Flush with Cash”?

In his inaugural address, President Donald Trump declared that public schools are “flush with cash.” That phrase confirms something I’ve always suspected. President Trump has never been inside a public school.

The public schools I know generally have old fashioned waxed tile floors—work done by a custodian after the children leave at the end of the day.  The trash is emptied, and the cafeteria tables are set up for the free breakfast provided these days for hungry children who qualify. Then the tables are folded up and lined tight against the wall to allow the children to have gym class in the all-purpose room before lunch is set up. The stale aroma of fish sticks lingers through the afternoon gym classes and, if the school is in a bit wealthier community, into the band class that is also set up some days every week in the same all-purpose room.

“Flush with cash” describes the people crowding the sidewalk in front of Bergdorf’s on Fifth Avenue and the people in tailored overcoats we keep watching while they ride down the escalator in the gilded Trump Tower.  But referring to any public school as “flush with cash” is one of those falsehoods Kellyanne Conway has taken to calling “alternative facts.”

In his speech Trump trumpeted one of the classic anti-public school talking points of those who want to trash and privatize public schools—that although we are dumping tons of money into our schools, our schools haven’t moved the needle on test scores.

It’s true that overall on the one test that is trusted, the National Assessment of Education Progress (NAEP), scores have not risen astronomically. While the black-white test score gaps have narrowed, the huge gap in achievement among children whose family income is in the top ten percent and those in the bottom ten percent is now 40 percent wider than it was in 1970.  That is surely consistent with the real fact—documented in academic research—that children’s standardized test scores are affected in the aggregate by the wealth or poverty of their families and the economic conditions in their communities.

What about school spending?  Richard Rothstein studied this back in the 1990s in reports published by the Economic Policy Institute.  Here is what he explains in Where’s the Money Gone?, his report on school spending between 1967 and 1991: “(T)he share of expenditures going to regular education dropped from 80% to 59% between 1967 and 1991, while the share going to special education climbed from 4% to 17%.  Of the net new money spent on education in 1991, only 26% went to improve regular education, while about 38% went to special education for severely handicapped and learning-disabled children. Per pupil expenditures for regular education grew by only 28% during this quarter century—an average annual rate of about 1%.”

Rothstein later updated his study to cover the years from 1991-1996.  In Where’s the Money Going?, Rothstein documents that,”(R)eal per pupil spending across the nation was roughly stable over the 1991-96 period, growing by only 0.7% (or 0.14% on an average annual basis).  This was a significant slowdown from the growth in per pupil spending of 61% (0r 2.0% on an average annual basis) from 1967-1991.  In the most recent period, some districts have actually had to reduce regular per pupil education spending in response to the combined pressures of enrollment growth, inflation, and shifting priorities toward spending on special populations… The share of spending on regular education is shrinking. By the 1996 school year, regular education accounted for only 56.8% of all school spending, down from 58.5% in 1991.  Special education spending grew to 19.0% of all school spending in 1996, up from 17.8% in 1991.  School lunch and breakfast programs grew to 4.8% of total school spending in 1996, compared to 3.3% in 1991.  Bilingual education programs grew to 2.5% of total school spending in 1996, up from 1.9% in 1991. The shift of spending away from the regular education program continues a trend observed over the 1967-91 period. However, in an era of stagnant overall school spending, such as the 1990s, this shift has translated into an actual reduction in regular education spending per pupil in several school districts.”

These numbers, now 20 years old, reflect that after the Individuals with Disabilities Education Act passed in 1975, a significant percentage of school funding was used to create programs for children the schools had not previously served.  And as the number of English learners has grown, significant funding has shifted into programs to serve these students.

But what do more recent numbers tell us about trends in the funding of schools?  Last October, the Center on Budget and Policy Priorities (CBPP) updated its regular reporting on trends in state-by-state expenditures.  While federal funding for schools makes up only about 10 percent of all school finance, the states contribute over 40 percent, which means that trends in state funding significantly affect local school programming. Here is CBPP’s most recent conclusion: “Public investment in K-12 schools—crucial for communities to thrive and the U.S. economy to offer broad opportunity—has declined dramatically in a number of states over the last decade. Worse, most of the deepest-cutting states have also cut income tax rates, weakening their main revenue source for supporting schools. At least 23 states will provide less ‘general’ or ‘formula’ funding—the primary form of state support for elementary and secondary schools—in the current school year (2017) than when the Great Recession took hold in 2008… Eight states have cut general funding per student by about 10 percent or more over this period.  Five of those eight—Arizona, Kansas, North Carolina, Oklahoma, and Wisconsin—enacted income tax rate cuts costing tens or hundreds of millions of dollars each year rather than restore education funding… Thirty-five states provided less overall state funding per student in the 2014 school year (the most recent year available) than in the 2008 school year, before the recession took hold.  In 27 states, local government funding per student fell over the same period, adding to the damage of state funding cuts.”

Finally, in a recent November 2016 report, Exploring the Consequences of Charter School Expansion in U.S. Cities, Bruce Baker, the Rutgers school finance expert, warns that rapidly expanding privatization through the authorization of new charter schools is destabilizing a number of urban public school districts where the education marketplace is rapidly growing. Privatization is President Donald Trump’s proposed cure for what he believes are the financial and academic woes of our public schools.

Here is Baker’s warning: “If we consider a specific geographic space, like a major urban center, operating under the reality of finite available resources (local, state, and federal revenues), the goal is to provide the best possible system for all children citywide, given the resources available… Chartering, school choice, or market competition are not policy objectives in-and-of-themselves.  They are policy alternatives—courses of policy action—toward achieving these broader goals and must be evaluated in this light…  Of particular concern are those cases in which revenues are declining rapidly with enrollment decline, putting the squeeze on districts to reduce expenditures more rapidly than costs (potentially leading to significant annual deficits)… Of particular interest here is whether the reduction of enrollments from students transferring from district to charter schools leads to a manageable decline in total revenues, given declining enrollments of host districts.”

Baker concludes with a warning we should take seriously: “At the very least, federal and state policies intending to stimulate further charter growth must no longer be quality or integrity blind, assuming that market forces will induce necessary corrections.  The federal government in particular, in recent years, has poured significant funding into the expansion of chartering in states that have exhibited systemic failures of financial oversight coupled with weak educational outcomes.  The federal government has also through facilities financing support for charter schools, aided in the transfer of previously publicly held capital assets to private hands, as well as aided in the accumulation of privately held debt to be covered at public expense… There may come a time when policymakers and the public at large tires of the recent wave of charter expansion, becoming (even) more wary of tradeoffs that have been made.  Any significant reversal of course, reemphasis on district schools, tighter restriction on and mass closure of charter schools, is now encumbered with major logistical and financial barriers.”

In less technical terms Moody’s Investor Services has warned that charters threaten to destabilize their public school disricts—parasites destroying their hosts—particularly in big cities that were devastated by the foreclosure crisis.  for the Washington Post describes Moody’s conclusions: “While charters are everywhere — in at least 41 states — they tend to make up a bigger share of total enrollment in urban areas. And some urban districts face a downward spiral driven by population declines. It begins with people leaving the city or district. Then revenue declines, leading to program and service cuts. The cuts lead parents to seek out alternatives, and charters capture more students. As enrollment shifts to charters, public districts lose more revenue, and that can lead to more cuts. Rinse, repeat.”

Our society has historically been distinguished from many others by our aspiration to educate all of our children. Hiring real live, professionally credentialed teachers to educate 50 million children is likely to be pretty expensive.  Of course some tech entrepreneurs dream we can find a way to do it all online with scripted curriculum, and politicians like Donald Trump imagine we can find a way to save money by undermining teachers unions and ceasing to pay adequate salaries to the over 3 million teachers who now serve in our public schools.  Beware, because both of those ideas are really part of the agenda behind the lie that our public schools are “flush with cash.”

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