Edifice Complex: Where Has All the Money Gone?

Executive Summary

From the 1986-87 to 2005-06 school years, taxpayer spending on Pennsylvania’s government-run K-12 schools increased from $6.6 billion to almost $22 billion—a 72% increase after adjusting for inflation. Between 1996-97 and 2005-2006, Pennsylvania’s public schools added over 43,000 staff—teachers, administrators, and support staff—while enrollment increased by only 26,000. Thus, for every new student, schools added 1.6 staff.

With such large increases in spending, one would think Pennsylvania’s public schools are successfully educating millions of children. However, according to the 2006 average SAT college entrance exam scores, Pennsylvania ranked 47th in the nation. Even adjusting for participation rates, students in the Commonwealth rank near the bottom. On another measurement of academic progress, the National Assessment of Educational Progress, the U.S. Department of Education reveals that many Pennsylvania students are performing below their grade levels.

Pennsylvania schools are underperforming not because they spend too little, but perhaps because of how they spend their money. Many school districts suffer an “Edifice Complex,” putting school construction ahead of children’s instruction. From 1996-97 to 2005-06, overall public school spending increased 59% (32% after adjusting for inflation), a 51% increase in instructional expenditures, a 62% increase in administration and support services, and a whopping 103% increase in spending on construction and debt.

While Pennsylvania teachers are, on the whole, reasonably well paid—Pennsylvania public school teachers earn, on average, 149.96% of the mean county-wide salary—there is seemingly little tendency for higher spending districts to target resources to the classroom. Indeed, high spending districts spend a lower percentage of total expenditures on instruction while spending a higher percentage on construction.

Most disturbingly, the authors found a surprisingly strong inverse correlation between the percentage of total education spending going to construction and that going to instruction. In other words, school districts that choose to spend more on construction end up spending less on instruction.

These spending trends may help explain why an increasing number of Pennsylvania parents are choosing cyber schools. Nearly 16,000 students enrolled in Pennsylvania public cyber schools in 2006-07. Public cyber schools offer students many on-line resources, and provide frequent interaction with teachers via on-line lessons and assignments. This allows students to remain at home, which significantly reduces costs.

Despite popularity among parents and students, public cyber schools have come under increasing attack from school boards and some legislators. Legislation introduced by Representatives Karen Beyer and Greg Vitali would limit public cyber schools’ independence and reduce funding for cyber school students because, as cyber critics claim, these schools are unaccountable and are taking too much money from public school districts.

Unfortunately, these detractors are misinformed, as public cyber schools adhere to every accountability and performance measure that public schools do, and more. Cyber schools are authorized and held accountable by public bodies, must take the state’s standardized tests and report the results, and cannot impose religion or discriminate in admissions. In addition, public cyber schools must periodically renew their charters (and can be closed down for failing to perform). They are also held accountable by the education marketplace, as funding is based on attracting and retaining students, rather than political decisions in Harrisburg. Ultimately, charter schools must appeal to parents and students or they will go out of business—performance incentives that do not exist in traditional public school districts.

In addition to higher accountability standards, Pennsylvania’s public cyber charters receive significantly less funding than the $11,485 that traditional public schools spend per-pupil. Public cyber schools spend, on average, $8,137 per-pupil—only 71% of what school districts spend. Even ignoring construction and debt, cyber schools get far less funding for current expenditures, spending only 77% of what school districts do.
Public cyber schools offer many benefits to students:

• Public cyber schools provide an individualized education to students who are gifted, ill, or have special needs.
• Cyber schools empower students and capture their enthusiasm.
• Cyber schooling fosters stronger academic relationships between students, teachers and parents.
• On-line education increases communication between students, teachers, and parents.
• Cyber schooling encourages student responsibility for academic success.
• Cyber schools frequently offer greater safety and fewer distractions for students.

Public cyber schools help school districts by:

• Reducing overcrowded classrooms and lowering class sizes.
• Mitigating the need for new construction.
• Increasing per-pupil spending in district schools.
• Encouraging innovation.
• Attracting and retaining difficult-to-educate students from districts to offer them a personalized curriculum.

Instead of attacking cyber schools, school reformers should attempt to harness the benefits of the public cyber school model. All schools must become more focused on instruction, better equipped to handle individual students' needs, and more reliant on parental involvement. To achieve this end:

• Families should be able to choose the public school they send their children to, and schools should compete to attract students.
• State and local funding should follow the child-schools should only receive funding when families choose to send their children there.
• All public schools should have charters that have to be renewed periodically. When schools fail to perform up to standards, they should have their charters revoked.

By adopting these types of reforms, school boards can perhaps find a cure for their “Edifice Complex” and start focusing on what is best for their students.