It may surprise some to learn that, in fact, we rank at the top of the international charts when it comes to education spending. In 2000 (the latest available data), the Organization for Economic Cooperation and Development (OECD) calculated that the United States spent significantly more than any other industrial democracy, including those famous for generous social programs.
In primary education, on a per-pupil basis, the United States spent 66 percent more than Germany, 56 percent more than France, 27 percent more than Japan, 80 percent more than the United Kingdom, 62 percent more than Belgium, and 122 percent more than South Korea. High school figures were similar.
Despite this spending, the United States ranked fifteenth among the thirty-one countries that participated in the OECD’s 2000 Program for International Student Assessment (PISA) reading exam. Ireland, Iceland, and New Zealand were among those that outperformed us while spending far less per pupil. The results in math are equally disquieting: on the 1999 Trends in International Mathematics and Science Study, the United States ranked nineteenth of thirty-eight participating countries. Most troubling is that America’s standing actually deteriorates as students spend more time in school.
Not only are we investing education dollars without adequate return, but we are actually spending even more than we think. School accounting guide-lines would bring smiles to an Enron auditor. Unlike private-sector businesses, public-school bookkeeping systems exclude such major costs as property acquisition and capital construction when computing “current expenditures.”
UCLA business professor Bill Ouchi has calculated that, in New York City in 2001-02, debt service, school construction, and renovation added $2,298 per pupil to the $11,994 in reported current expenditure--meaning that the district actually spent upwards of $14,000 per student. In Los Angeles, the true per-pupil cost in 2001-02 was $13,074, compared to the $6,740 reported by the district.
A reasonable estimate is that widely reported per-pupil spending figures represent only 70-80 percent of what the United States spends on education. Harvard economist Caroline Hoxby has estimated that in 2000 we actually spent more than $9,200 per pupil, compared to the widely reported “official” figure of $7,392.
From 1995-96 to 2003-04, U.S. public education spending grew by more than 53 percent, from $287 billion to more than $440 billion. In California, which for three years has wrestled with massive budget shortfalls, personnel costs outstripped revenue growth in thirteen of the state’s twenty largest school districts between 1996-97 and 2001-02. Sacramento had enrollment growth of 4 percent, revenue growth of 33 percent, and yet increased personnel costs by 41 percent--the result of more employees (many of them non-teachers), more generous salaries, and more opulent benefits. In short, public school personnel costs are out of control. They are even outpacing the constant growth in school revenues. This helps to explain why so many school system officials feel strapped amidst what the rest of the world would regard as ample, rising budgets.
