Contributors
Lance T. Izumi - Contributor
[Courtesty of Pacific Research Institute]

Lance Izumi is Director of Education Studies for the Pacific Research Institute and
Senior Fellow in California Studies. He is a leading expert in education policy and the author of several major PRI studies. [go to Izumi index]

How Important Are Education Funding Comparisons?
Selective statistics…
[Lance T. Izumi] 2/24/05

A recent RAND report showing that California’s per-pupil spending lags behind the national average has become a key weapon for education interest groups. But there are problems with the report that warrant caution.

First, RAND uses comparative data collected by the National Education Association (NEA) and the National Center for Education Statistics. RAND acknowledges that data collected by these organizations often omit significant spending items: “Comparisons with other states provide a valuable but limited perspective. States may put large investments into activities that are not counted in the NEA data or other data. For example, California has directed substantial funds to professional development for teachers and additional instructional time outside the regular school day. These monies are not included in the NEA data for California or any other state.”

In the current fiscal year, California will spend more than $380 million on teacher professional development programs and more than $360 million for instructional programs outside of the regular school day. California will also spend around $600 million on adult education – an amount also not included in the NEA figures.

Further, for part of the time period used in RAND’s study, California alone among the states counted excused absences in its average daily attendance (ADA) calculations, which inflated the state’s ADA figures relative to other states. ADA measures the number of pupils attending school each day averaged over the course of a year. RAND acknowledges that dividing spending by an inflated ADA likely overestimates the difference in per-pupil funding between California and other states.

Finally, the RAND report says that because of Proposition 13, the 1978 measure that limits property taxes, California’s per-pupil funding “has been consistently at or below the national average.” The implicit argument is that California should be at or above the national average and that Prop. 13 is responsible for preventing the achievement of that goal.

Prop. 13 opponents have seized on this argument, with the head of the Los Angeles teachers union saying: “We thought Proposition 13 would kill us all at once. It hasn’t. It has killed us slowly.” Yet, blaming Prop. 13 is a red herring.

According to the Legislative Analyst’s Office (LAO): “While comparisons to the national average may have illustrative value, the analytic basis for pursuing the national average as a spending goal is unclear. The level of spending necessary for California to provide quality K-12 programs depends on many variables, and may be higher or lower than the national average.”

The LAO concludes that California “should be concerned more with how its students perform rather than on how state spending compares with other states.” “Research and experience,” says the LAO, “suggest that how we spend available education resources is at least as important as how much we spend on education.” Unfortunately, as recent scandals and exposes have shown, there’s significant waste and mismanagement in California education spending.

From 1992-93 to 2002-03, inflation-adjusted total education revenues per pupil in California increased by nearly 29 percent. Rather than faulting Prop. 13 and making irrelevant comparisons to other states, the state’s priority should be to reform the way tax dollars are spent to better impact student achievement. As the LAO rightly points out, the state must reform the structures and incentives in the K-12 system “to assure that all educational funding is spent to maximum effect.” CRO

copyright 2005 Pacific Research Institute