Budget & Tax, Education

State figures underreport school spending by billions

October 20, 2022

Ray Carter

Although the Oklahoma state government reports per-pupil spending for every public school district, billions of dollars in school spending on facilities and related costs are omitted from that calculation, even though those expenses are part of the true cost of providing an education.

As a result, Oklahomans cannot easily obtain a true picture of school funding, and some administrators have used the artificially low statistic to downplay the level of funding at their school.

Experts say Oklahomans deserve more transparency.

“If taxpayers have to pay the money, I think the Department of Education is duty bound to report the total,” said Ben Scafidi, a professor of economics and director of the Education Economics Center at Kennesaw State University who has been analyzing public-school spending and staffing for more than 30 years. “You don’t need somebody to tell you to do it. That should just be a matter of course.”

“When it comes to government accounting—and education is the prime example of this—it’s almost impossible to get a true bottom line on anything,” said Byron Schlomach, an economist and researcher who previously examined Oklahoma’s school-funding formula.

Legislation signed into law in 2017 changed how the Oklahoma State Department of Education (OSDE) calculated per-pupil expenditures. The law stated that the calculation of per-pupil expenditures “shall not include expenditures” such as facilities acquisition, construction services, debt service, and property expenditures.

That exclusion removed nearly $2 billion in public-school expenses from the calculation of per-pupil spending in the 2021 state budget year.

The superintendent at one of Oklahoma’s largest school districts recently sidestepped a question about school spending by downplaying the importance of accounting for all expenses.

At an Oct. 12 Rotary Club meeting, a citizen asked Tulsa Superintendent Deborah Gist about the gap between the amount of money spent per student in Tulsa schools and the district’s academic outcomes, noting Tulsa had only 9 percent of students testing proficient or better on core academic subjects in the 2020-2021 school year even as the district spent “about $12,000 per student per year.”

Gist responded, “First of all, I would ask you to check your facts because we do not spend $12,000 a student—unless you want to pull in money that we spend that Tulsans provide for us to build buildings and so forth.”

Despite Gist’s suggestion to the contrary, her questioner’s statement that Tulsa schools spent “about $12,000 per student per year” was not wildly inaccurate even when the building costs referenced by Gist are excluded.

OSDE reports that Tulsa spent $11,801 per student in the 2020-2021 school year, the most recent for which data is posted, even without accounting for facilities acquisition, construction services, debt service, and property expenditures.

And the per-pupil figure is significantly greater when those expenses are included.

A data tool created by the Oklahoma Council of Public Affairs accounts for most school spending based on state records and provides Oklahomans the ability to obtain a more comprehensive per-pupil expenditure figure for each public school district. The OCPA data tool accounts for the expenses omitted by OSDE’s estimate.

OCPA’s data tool shows that Tulsa’s per-pupil expenditure was $16,979 in the 2020-2021 school year.

A similar trend is apparent in the Oklahoma City district, which the OSDE reports spent $13,106 per student. That figure rises to $16,484 per pupil after accounting for various capital outlay spending.

At times, the difference between the state-reported figure and the true per-pupil expenditure is even more dramatic, even at districts the state acknowledges have high levels of per-pupil funding. OSDE reported that the Balko district spent $26,000 per student, which is far above the cost of tuition at even the most elite private school in Oklahoma. But the district’s true per-pupil spending is even greater, totaling $52,558 per pupil in the 2020-2021 school year.

Similarly, OSDE reported the Burlington district spent $22,611, but the true figure was $28,310.

Balko and Burlington are among several dozen districts that receive so much funding from local property tax sources that they do not receive state appropriations due to Oklahoma’s funding formula, which tries to equalize funding statewide.

Scafidi said many state departments of education across the nation underreport per-pupil spending by omitting significant financial categories.

When Scafidi calculated the true per-pupil education spending in Georgia, he found the state-reported figure excluded roughly $3.5 billion in total spending, compared to the $2 billion omitted from Oklahoma’s official state per-pupil calculation.

“This is ridiculous,” Scafidi said. “Enron did this. People went to jail for underreporting their costs. Why do we let public schools get away with that? We would never tolerate that in the private sector.”

In the 2020-2021 school year, there were 171 public school districts in Oklahoma with per-pupil funding greater than $14,000 after accounting for spending excluded from OSDE estimates.

Out of the more than 500 public-school districts in Oklahoma, only 42 had per pupil spending below $10,000 per student that year. And no traditional public school district in Oklahoma spent less than $8,453 per student.

While rural districts are common on the list of schools spending at least $14,000 per student, the state’s two largest traditional districts—Oklahoma City and Tulsa—are also included along with many other large and/or suburban districts, such as Jenks, Union, Bixby, Stillwater, Muskogee, Pryor, Western Heights, and Catoosa.

Overall, more than 171,000 Oklahoma students attended a school district that spent more than $14,000 per student in the 2020-2021 school year with more than 128,000 students attending a school that spent more than $15,000 per student.

Those per-pupil rates are well above the typical tuition at Oklahoma private schools, even though private-school tuition must cover most associated expenses of providing education, including building-related expenses excluded from OSDE’s per-pupil calculation for public schools.

According to a review of 41 Oklahoma private schools conducted by the website Private School Review, the average private school tuition in Oklahoma is $6,576 per year for the current 2022-23 school year. Out of the 41 private schools reviewed, only four had tuition that exceeded $14,000 per year.

The differences between private-school tuition rates and public-school per-pupil funding defy common stereotypes.

“This whole idea that somehow or other private schools are rich while public schools are impoverished, it’s just a myth,” Schlomach said.

Lara Schuler, senior director of Catholic education for the Archdiocese of Oklahoma City, said private schools are incentivized to keep costs affordable.

“The cost to educate is about $7,800 to $8,000, roughly,” Schuler said. “That’s an estimate across all of the schools that we have. Tuition can range anywhere from $4,800 to $7,000 (or) $7,500, depending on the school and if they are getting a parish subsidy helping them to pay for that tuition. They’re apples and oranges, a little bit. The public sector, their drive is always to get that per-pupil cost up. They always want to see that number increase. And our objective is to keep that number low.”

In a prior research project, Schlomach said he estimated the full cost of providing an education to a child and contacted other researchers who had attempted the same thing elsewhere to compare notes. Regardless of location, he said researchers consistently found the amount spent in public schools exceeded the estimated cost of providing a quality education.

“When you cost out what it would take to provide a good education to kids, you cannot spend all the money that they are spending in the public schools,” Schlomach said. “You can’t figure out how they do it.”