John Hood: Breaking up is hard to do
Want to make North Carolina public education more cost-effective?
You should. Even though our state isn’t a big spender by American standards – our total expenditure for elementary and secondary schools of about $9,000 per pupil is lower than the national average – public education is still the single-largest expenditure of state tax dollars. And the “American standard” is far in excess of the world standard. North Carolina alone spends more money per student on public education than do the vast majority of industrialized countries.
Furthermore, the outcomes of education are critically important. States with high-performing students experience significantly faster economic growth than states with low-performing students, reflecting the value of human capital (knowledge and skills) to the 21st century economy. Because economic performance is also related to the cost of government, North Carolina could increase job creation and income growth by either generating the current level of educational achievement at a lower cost to taxpayers or generating higher educational achievement at the current cost to taxpayers.
Of course, the real sweet spot is to be found in doing both: to save money and improve outcomes over time. Fortunately, there are strategies for achieving productivity gains in public education. The obstacles to their implementation are chiefly political, not practical.
A good example would be to break up our sprawling urban school systems into smaller districts. Decades ago, when the school-district consolidation movement began, policymakers assumed that economies of scale – achieving lower overhead and service costs per unit by expanding the number of units under administration – were just as present in public education as they were in other industries.
They were wrong. While there may have been some efficiency gains from merging very small districts, those with just a few schools a piece, public education has proved to be subject to significant diseconomies of scale. Once school districts exceed the 15,000-25,000 student range, both their efficiency and their outcomes tend to suffer.
This is a empirical matter, not speculation. There is now a large body of academic research demonstrating the drawbacks of school-district consolidation. The most recent study I’ve seen, published in The Social Science Journal in 2007, used a large national sample to evaluate the assertion that consolidation results in lower per-student cost and higher student achievement. The assertion proved to be false. Unfortunately, wrote study author Frank Robertson, these empirical findings arrived long after “many American school districts had transitioned from small adaptive affiliations to large sluggish bureaucracies.”
But there is no reason why North Carolina students, families, educators, and policymakers must live with the negative consequences of past political decisions. Local leaders should work with their legislative delegations to design new, 21st-century school districts that are efficient, innovative, and competitive. Mecklenburg and Wake counties, for example, could easily accommodate four or more separate school districts, drawn to include natural municipal groupings and to avoid stark differences of taxable property (keep in mind, however, that the vast majority of public-school spending in North Carolina comes from state funds, not property taxes). Other populous counties such as Cumberland, Durham, Guilford, and Forsyth could certainly accommodate two or three districts apiece.
State government and counties would fund these districts with equal per-pupil allotments, adjusted for student disadvantage or other special needs. On governance, each district could have its own (small) elected board, although my preference would be for county commissions to appoint school boards.
How would such a deconsolidated system function? We don’t really have to guess. Not all states have consolidated their school districts. Many have several districts within county lines, as used to be true in North Carolina. The arrangement discourages sluggish bureaucracy while giving parents more options. The result, according to decades of social science research, is lower cost and higher achievement.
Even North Carolinians who already reside in small school districts stand to gain from the idea by increasing the return on the taxes they paid to the state. In short, it’s time for a break-up.
John Hood is president of the John Locke Foundation, which has just published “First In Freedom: Transforming Ideas into Consequences for North Carolina.” It is available at JohnLockeStore.com.