Last week Thursday, The Grand Rapids Press reported Senator Patty Birkholz (R-Saugatuck) is producing a bill to make inefficient school districts pay. Big time. Those districts that spent more than 28 percent of their total budget on “non-instruction support services” (aka administrative) costs would lose 5 percent of their state aid.
By her own admission this is a work in progress.
“We know there are some questions about what is included. My thought was, ‘Let’s put it out there and get the discussion started.’ I consider this in flux.”
The senator proposes several rationales for the measure: it is a way to force schools to target spending towards students and not staff; it is a way for a cash strapped state to find more ways to save money; and oh yes, it is a carrot to encourage consolidation. Given the Republican-led State Senate insistence on making cuts in the education budget, this measure is at the least ironic. The presumed problem of the state budget rests not at the State Legislature, but at the profligacy of the school districts.
Oh, if only it were that simple.
The concern for the cash strapped state is especially touching. As the article tucks in at the end, Birkholz’ figure of 28 percent is not derived from analysis, but represents the median figure portion for all districts with more than 1,000 students. So half are immediately consigned to failure. In this light, the measure looks less like educational reform and more simply like a state-led clawback of appropriations. Quite literally, we get to balance the budget on the backs of the students.
But the use of a median as dividing point is only the first of several other sins.
More fundamental is the notion that school districts function with basically the same fiscal constraints. In this view, costs vary directly with enrollment. Not only that, but income for each pupil would be the same; Grand Rapids would be the same as Forest Hills or Caledonia. However, administrative costs are not student-, but program-dependent something Birkholz and her staff indirectly acknowledge. By excusing districts with less than 1,000 students from the measure they acknowledge that administrative costs are not directly variable to student enrollment, but in fact have a fixed nature. So instead of moving smoothly with district size, they move in step or tiered fashion.
The failure to exclude the small district points to the third failure of the proposal: cost consolidation. Most commentators agree that Michigan maintains too many school districts. But when you exclude the small district from consideration, you simply exclude the one avenue for real administrative gains. You also remove the carrot from any push to consolidation. With no penalty, there is no reason to change.
How much can be saved? A recent New York study (2005) suggests that consolidation of small districts can save anywhere from 9 to 28 percent. This won’t help with the Michigan budget or the Birkholz clawback, but if we want to put Michigan schools on a better foundation, this is one place to start.