Jason Bedrick | January 13, 2014
Financial Transparency Needed in Public Education
Do you know how much it costs to educate a student in Oklahoma? It’s likely more than you think.
In Oklahoma the total annual cost per pupil is $8,630 on average, according to the most recent data from the National Center for Education Statistics (2009-10). However, according to the Oklahoma State Department of Education (OSDE), the average per-pupil cost was just $7,760 that year.
Why the discrepancy? Despite referring simply to “per pupil expenditures,” the OSDE actually only publishes operating per-pupil expenditures, omitting some big-ticket items like paying off debt for school buildings.
A business that acquired a loan from a bank while understating its expenses would be in serious trouble, yet state education departments routinely understate the costs of public schools. It’s no wonder that a recent Harvard study found that the public’s average estimate of the annual cost per public-school student nationwide was less than half what is actually spent.
Here are a few ways that the OSDE could be more transparent with its data:
Report at least 10 years of total per pupil expenditure (PPE) data in accessible reports. Oklahoma is one of the 25 states that does not report total PPE figures. As of last December, the OSDE only published a few years of operating PPE in outdated reports titled “Average Daily Attendance,” which is not where most citizens would look for such data. Now it appears that even those reports are no longer posted on the website.
Report more complete expenditure data. Oklahoma provides data on total spending, capital expenditures, and aggregate salaries but is missing data on pensions. Moreover, the reports generally cover only four to eight years and are sometimes a few years out of date.
Report multiple years of average employee salary data. Oklahoma admirably publishes salary and benefit data for every superintendent and principal in the state. However, the OSDE provides only one year of data and does not include statewide averages for comparison. The OSDE provides the salary schedule for teachers but does not provide data on the average salaries or benefits actually paid.
Financial transparency is essential for sound decision-making. To fully understand public school spending, citizens require complete and timely data in an easy-to-analyze format.
Awareness about public school spending has implications for the public discourse over public education. The aforementioned Harvard study showed that the public’s underestimation of how much public schools cost affects the public’s spending preferences. When the citizens are informed about the true cost of public education, they are significantly less likely to support an increase in spending.
Likewise, the widespread misperception that private schools cost more per pupil than public schools likely affects the public’s support for school choice programs. A greater awareness that school choice programs can save money would likely translate into greater public support for school choice. Indeed, Florida policymakers have wisely sought to demonstrate exactly that. The Florida legislature’s nonpartisan Office of Program Policy Analysis and Government Accountability (OPPAGA) estimated that Florida taxpayers save $1.44 for every dollar of revenue reduced by the state’s scholarship tax credit program, which is similar to Oklahoma’s Equal Opportunity Education Scholarships program.
Financial transparency is important in a democracy for its own sake, but school choice advocates should be particularly concerned about ensuring that the public is fully informed regarding the cost of public education. At a time when state and local budgets are severely strained, it is crucial that spending decisions reflect sound and informed judgment.
Jason Bedrick (master’s degree in public policy, Harvard University) is a policy analyst with the Cato Institute’s Center for Educational Freedom. He is the author of “Cracking the Books: How Well Do State Education Departments Report Public School Spending?”
Jason Bedrick is a policy analyst with the Cato Institute’s Center for Educational Freedom. Bedrick has extensive policy research experience, including detailed legislative development and analysis. He previously served as a legislator in the New Hampshire House of Representatives and was a research fellow at the Josiah Bartlett Center for Public Policy, where he focused on state education policy. Bedrick received his Master’s in Public Policy, with a focus in education policy, from the John F. Kennedy School of Government at Harvard University. His thesis, “Choosing to Learn,” assessed the scholarship tax credit programs operating in eight states including their impact of student performance, fiscal impact, program design, and popularity.