A Need To Think Differently About Education Funding

The 18th century English lexicographer Samuel Johnson famously discovered virtue in the prospect of being hanged in the morning because said circumstance “concentrated the mind wonderfully”. Similarly public officials all across Colorado will be having their minds concentrated wonderfully as they commence what one described as the “budget year from Hell”.
In August Governor Ritter and state legislators learned that worsening revenue collections had created an additional 60 million dollar hole in the current year’s budget. Now that looks like the “good old days” in light of the recent announcement by chief legislative economist Natalie Mullis that the 60 million dollar hole had exploded into a canyon sized $257 million dollar gap and coming soon was a jaw dropping $ 1.1 billion dollar shortfall for 2011-2012.
In previous recession budgets the state had limped along by traditional resorts to one time savings, raiding cash funds, and federal dollars while awaiting the return of robust revenues.
Now the gargantuan size of the current shortfalls make abundantly clear that future budget making in Colorado will require an entirely different way of thinking to deal with an entirely new financial environment. Equally clear is that the fiscal crisis we face is as much a result of metastasizing entitlements as it is of collapsing revenues. While Colorado is not in the class of such basket cases as New York, New Jersey, Illinois, or California this is a difference of degree not of kind.
In the August budgetary rebalance Governor Ritter ruled out any cuts to education, but now in light of the new numbers, his budget director Todd Saliman said it would be “difficult to address that $ 257 million shortfall without impacting K-12”. Very true, and it will be even more true when we get to the looming $1.1 billion shortfall for 2011-2012. Saliman’s remark is a simple reflection of the fact that any serious address to the State’s mammoth budget crisis is impossible without a determined effort to constrain the one expenditure area that already consumes fully one half of Colorado’s state budget, and is the lion’s share of all local expenditure as well.
Historically we have not thought of education as an entitlement program, but it assuredly is. Like Social Security, Medicare, and Medicaid it represents a permanent obligation of government monies embedded in both law and public expectation. Also like the others it has through incremental growth over time reached a point of absolute unsustainability at anything like the rates of increase it has seen in recent decades.
The startling disconnect between education costs and reality was underlined by a recent Washington Post article by highly respected economics writer Paul J. Samuelson who noted that between 1970 and 2008 though national student population only increased by 8% the number of teachers increased by 61 %. In a similar vein he reported that between 1955 and 2007 student teacher ratios had fallen from 27-to-1 to 15-to-1. Accordingly there is little surprise in the U.S. Bureau of Labor Statistics report that per pupil expenditure in K-12 education increased –adjusted for inflation- 134% between 1975 and 2005.
A central cause of these exploding costs is the fact that public school educators- the largest single employee classification in the country - have created over time a structure of job security, compensation, health, and pension benefits far surpassing those enjoyed by the average American, and as Colorado’s PERA woes illustrate is imply unsustainable in its present form.
So, what is to be done? Can a different way of thinking identify a model of public education that’s effective, cost effective, and sustainable? Assuredly yes. There are useful models near and far.
The largest private systems in the country are parochial schools which deliver a basic and widely admired educational product at 62% of public school per pupil cost.
Look further afield at other industrial nations that are thrashing us educationally today and will thrash us economically tomorrow. The vibrant democracies of Singapore, Taiwan, South Korea and Japan average 68 % of U.S. cost. Several European countries come in at 70 to 80%
In the past we never seriously looked at these alternatives because it was politically difficult, and –well- we didn’t have to. Now, it will still be politically difficult, but reality is saying we have to.

Former Colorado Education Commissioner (1997-2007) William Moloney’s columns have appeared in the Wall St. Journal, USA Today, Washington Post, Philadelphia Inquirer, and Baltimore Sun, and is a contributing editor to A Line of Sight. This column appeared in the Denver Post on October 3, 2010.