Improving Our Schools: Funding

Welcome to the first of a multi-part series where we're going to take a look at the American school system and see if we can find ways to improve it.  We're all affected by the effectiveness of the educational system and its ability to produce well-educated, capable workers and leaders for the future.  Even if we don't have kids (at least for myself and many others, not yet), how the country progresses will be determined by how the young people around us are educated and grow into adults; making that education process as effective as possible benefits us all.

First, though, a quick note in defense of the US educational system.  If you're a US citizen and pay any attention to the news, you've probably heard much talk about how US public schools, well, suck.  The general narrative is that compared to private school students or students in foreign countries, the average US public school student is underachieving, failing to stack up to foreign competition or even the more effective teaching methods offered by private schools.

Well, that's just not the whole truth; as Trent of The Simple Dollar noted back on one of his much earlier posts, the cause of this seeming disparity is Simpson's Paradox.  In a nut shell, private school students seem much more successful than public school students because their personal qualities (socio-economic status chief among them) mean that they would succeed no matter where they are schooled.  Similarly, unlike the US, most foreign countries divide students into segments; the academically higher achieving ones are sent to high school (and get counted in studies that compare their performance to other students around the world), while the less accomplished students are sent to vocational technical schools (and are conveniently ignored).  Take those factors into consideration, and suddenly US public schools don't look so bad.

Of course, ‘not as bad as they first look' is hardly the sort of goal we want to set for our education system.  (To say nothing of the fact that, if we need to set aside the performance of poor or otherwise ‘disadvantaged' students for our national scores to look good, we apparently have a problem ensuring they get a proper education.)  That's why we still need to find ways to improve our schools, starting with…


Fitting for a blog about personal finance, our first area to consider is how our schools get their money.  An effective funding system can ensure that our schools have the resources needed to survive and innovate; an ineffective one will doom our schools to a slow downward spiral.  To ensure a more equitable and effective means of distributing funding, here's a few suggestions:

-End Property Taxes: One of the most common mechanisms to fund schools is through property taxes, and it's also rife with problems.  Since property taxes are linked to the value of the property you own, rather than the amount of money you earn or spend, they end up hitting the elderly or others on fixed income the hardest.  They can dry up when property values take a hit, as they have these past few years.  Property taxes ensure that the students of the wealthiest parents, the ones who can afford the most expensive houses in the most expensive districts, have the nicest, most expensive schools to attend.  (There's also an argument to be made that property taxes mean that the government really owns your property; if you fail to pay every year, year after year, the government can come in and take your property, selling it to collect back taxes).  Ending property taxes, replacing them with a sales or income tax specifically to fund schools, will eliminate these problems.

-Divide the money (mostly) equally among students…: As mentioned, property taxes ensure that the areas with the most expensive property have the nicest school system.  We get into something of a repeating loop, where students go to schools that have fewer resources, have fewer opportunities, get lower paying jobs, move to areas with lower property values, and the cycle ends up repeating for their children.  We can break this cycle by dividing the money taken in by our new sales or income tax among all the children in the state, increasing the opportunity for children from poor families to get a quality education.  There won't be anything stopping well-off families from spending more on their children's education if they want (in fact, as we'll see in just a bit, it'll be easier for not so well-off to move their children to more effective schools), but there will be a minimum amount available to fund every child's education.

-…And provide a bit extra for special cases: Let's be honest: there are some students who have needs beyond those of other children of the same age.  Physical disabilities, mental handicaps, or emotional problems are issues that can prevent children from getting a quality education; providing extra funds will both help the schools to provide the extra staff or other support needed, and (hopefully) help keep the special needs child from being ignored.  (Might I add that, as someone who was (and I hope, still is) considered ‘gifted', a little bit of extra funding for schools with gifted students to allow them to stretch their mental muscles would be appreciated.)

-Attach the money to the children, not the school: This is a biggie.  If we're going to ensure that each child gets the same amount of money spent on their education, we want to be sure that is goes toward educating that child.  If a child goes to a private school, the money the state is putting towards his education follows him to help offset tuition.  If another child is home-schooled, the money (or at least a portion of it) goes to her parents to help compensate for the expenses involved.  If a family wants to send their children to a different school district without leaving their current house, the money follows their children, not their residence.  As John Stossel notes, we'll increase competition and make educators and administrators work to improve their schools to draw in more students.

-Expand the choice of schools: A continuation (or natural extension) of the above point; there's not much point in giving students and their parents the ability to move their children to other schools if there are NO other schools.  Given that the school system, for the whole of its existence, has been effectively a monopoly, with residents having few options other than their local school districts, setting up real competition will take some time and money.  Directing some money away from existing schools and toward viable alternatives, at least until we can have a more reasonable competition, seems like the best way to expand the options available.

-Tie funds to performance: Unfortunately, sometimes parents make decisions about schooling for their children for reasons other than trying to ensure the best possible education for them; these sorts of situations are only going to increase if we add the possibility of parents trying to ‘home-school' themselves into a fortune at their kid's expense.  Being sure to regularly test the progress of all children in an impartial, fair manner (admittedly, a challenge in and of itself), with published results and, particularly in cases where parents attempt to home-school their children, the loss of education funds until the children are put into a more successful education system, will help to ensure that only the highest quality education is allowed.

There, several ways to alter the means by which we fund our schools, (hopefully) leading to a better, more productive school system as a result.  Join me again later this week when I look at how to improve things for teachers and make a more vibrant school curriculum.

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