Matt Wingard

Summary

Calculating the true per-student cost of public education in Oregon is complicated, but taxpayers have a right to expect government to be transparent about spending and to provide honest figures — calculated from a taxpayer’s perspective.

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No other question in public education seems to start an argument more than this one. It shouldn’t be so hard for taxpayers to get an answer to this question. But it is.

“If you ask how much the state spends, or how much a district spends, you will get an answer that is technically correct; but it will not include all the money being spent on our children.”

One reason is that school groups tend to see spending from an “inside” perspective, rather than a taxpayer’s perspective. From the inside, it matters whether the money comes from the state, the feds, the local Educational Service District or local property taxes. There are different pots of money and they pay for different things. Most education insiders hear “spending,” and they immediately think about their own particular budget.

From a taxpayer’s perspective, none of this matters, since all the money comes from them. They just want to know how much tax money public schools spend to educate the kids.

This is why you have to be careful about exactly how you phrase the question. If you ask how much the state spends, or how much a district spends, you will get an answer that is technically correct; but it will not include all the money being spent on our children.

The Oregon School Boards Association has even created a two-page primer to help persuade the public to ignore some spending:

Part of the confusion comes from calculating a per-student figure from an “all funds revenue” budget instead of an “operating revenue” budget. An all-funds budget (the bigger of the two) is misleading because it includes money that is counted twice, or is transferred between accounts — which isn’t “new” money. All-funds revenue also includes bond money used to pay off construction debt. An operating revenue budget shows a truer picture of resources per student, especially in comparisons to other states. In fact, the National Center for Education Statistics uses only operating revenue budgets.

(http://www.osba.org/hotopics/funding/12Kmyth.pdf)

The OSBA is correct that money should not be double-counted. However, the claim that construction debt should be ignored is dubious. School Districts never like to include the capital construction bonds in their per-student spending. Their explanation is that this money isn’t “fungible” (meaning they can’t spend it on day-to-day activities) within their annual budgets. This is true.

Capital construction bonds are loans used to pay for school building construction and/or remodeling. When the taxpayers pass these bond measures, the districts get a lump sum for construction and then spend the next decade or two paying back the loan (with interest) using money collected from property taxes.

“…[T]he real spending figure per-student in Oregon was $10,260 in the 2003-04 school year.”

So should this annual loan repayment be included in the per-student spending figure in Oregon?

Of course it should. These are basically mortgage payments.

The OSBA document uses figures from four years ago and calculates per-student spending in Oregon at $8,560. They freely admit that they aren’t counting $1,700 spent on capital construction.

So, the real spending figure per-student in Oregon was $10,260 in the 2003-04 school year.

Of course, the figures used by the OSBA don’t match the figures given by the Department of Education, which just proves how hard it is to get reliable information on school spending. Even The Chalkboard Project’s Open Books website (http://www.openbooksproject.org/) does not count capital construction/expenditures when calculating the per-student figures listed on their site.

To my knowledge, the OSBA has not updated their calculations to include more recent school spending figures. But according to their own basic numbers, the per-student figure was more than $10,000 four years ago, even though they use the same numbers to produce a lower number.

The State of Oregon still does not provide a simple and accurate per-student spending figure defined as:

All Taxpayer Money Spent on Public Education in Oregon
————— (Divided By) —————–
The Number of Public School Students in Oregon

Taxpayers have a right to expect government to be transparent about spending and to provide honest figures — calculated from a taxpayer’s perspective.

Matt Wingard is Director of the School Choice Project at Cascade Policy Institute, Oregon’s premier public policy research center. To read other publications of the School Choice Project, visit www.cascadepolicy.org.

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5 Responses to “How Much Does Oregon Spend Per Student?”

  1. Mark Anderson April 16, 2008 at 10:34 am #

    The author makes a good point — total costs to taxpayers/ratepayers/bondpayers is important to the ‘bottom line’. Of course, ultimately, one also wants to compare ‘apples to apples.’ A uniform measure of costs has been difficult to determine, much less propose and enforce. Government accounting standards differ from others, and nowhere is this more glaring than in cost accounting: governments generally look only at a particular budget cycle’s ‘income’ (grants, allocations, etc.), not costs, because they don’t have the accounting discipline of evaluating costs relating to revenues (profits). This is similar to the argument about comparing ‘salaries,’ which almost always ends up being an ‘apples to oranges’ comparison, because total compensation/costs need to include benefits encompassing both short term (health care, etc.) and long term (investments in pensions, etc.), but often don’t.

  2. Mike December 8, 2011 at 5:59 pm #

    The author makes a good point — total costs to taxpayers/ratepayers/bondpayers is important to the ‘bottom line’. Of course, ultimately, one also wants to compare ‘apples to apples.’

Trackbacks/Pingbacks

  1. Cascade Policy Institute - Oregon Public Policy » The Power of Choice in Virtual Charter Schools - June 30, 2009

    [...] Much Does Oregon Spend Per Student?,” Cascade Policy Institute, April 16, 2008, available at http://www.cascadepolicy.org/2008/04/16/how-much-does-oregon-spend/. The Department of Education calculates expenditures a little differently but concluded that, on [...]

  2. Cascade Policy Institute - Oregon Public Policy » Learning from Others: Education Tax Credits are a Win-Win - November 24, 2009

    [...] about as much per student as the cost of her tuition at the private school she currently attends (about $10,000). Yet, her family will not even receive a tax break to help keep her in the school of her choice. [...]

  3. Cascade Policy Institute - Oregon Public Policy » School Choice Makes “Cents” for Oregon’s Budget - March 31, 2010

    [...] in Oregon-where Cascade Policy Institute reports the average cost per public school student is more than $10,000-if a program were created in which students could [...]

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