Is $19,000 Per Student Enough to Run a School?

Time for another “THE SCHOOLS HAVE NO MONEY!” report from the WaPo:

The largest-ever infusion of federal cash is flowing into public school classrooms this year in the form of new programs and thousands of restored jobs. The stimulus package – $100 billion over two years – comes with similarly sized expectations…

Even with the extra cash, the survey found, many schools are focused on survival…

In Fairfax County, stimulus funding saved about 274 positions, but class size ratios still increased by half a student

Poor schools!

And Fairfax. Desperate, struggling Fairfax only has about $3.3 billion to play with this year. How are they supposed to keep the system running with just $19,000 per student?

Considering the fact that the estimated national median private school tuition is around $4,800 $6,200, maybe they could just let parents and taxpayers keep, say, a third of that money to spend on education themselves.

Voila, no budget problem!

FTC to Protect Us from Multi-Colored Beer Cans

bud lightRecently Anheuser-Busch  hit upon the marketing idea of selling Bud Light beer in cans decorated with the college-team colors.  As the Federal Trade Commission (FTC) doesn’t have much else to do - it’s not like there’s been say fraud going on in the mortgage market - it quickly turned its attention to the issue, expressing “grave concern” that these team-colored cans would encourage underage and binge drinking.

As quoted in the Wall Street Journal,  FTC attorney Janet Evans said “this does not appear to be responsible activity.”  What’s not responsible is the FTC wasting taxpayer resources wondering what color beer cans we are drinking out of.  When I was an underage drinker, the last thing on my mind was the color of the can.  The ultimate purpose of the marketing campaign is to shift demand away from boring, non-team color beer cans toward team color cans.  If beer drinkers (or can collectors) get some pleasure out of a certain colored can, where’s the fraud or deception in that?

The real purpose of FTC’s interest is revealed in the comments of the Licensing Resource Group, which represents the colleges in protecting their logos.  Almost all the colleges that have asked Anheuser-Busch to stop selling the cans have cited trademark concerns.  Yet none of the cans have any team logos.  While no one would dispute the right of a college to control the use of its team logo, is it really reasonable to conclude that the colleges also own the rights to the use of certain colors?

The Real Cost of College Aid

I’ve been giving a lot of attention to the Student Aid and Fiscal Responsibility Act lately (including in this new interview and Monday’s daily podcast) because it is the biggest thing going on in education right now. Even more important, it is a revolting example of bankrupting, political business as usual that is flying below most peoples’ radar.

Touted as miracle legislation that will reduce the deficit and create or expand numerous government programs – including increasing Pell Grants at a rate faster than inflation –  CBO estimates show that SAFRA would actually end up costing taxpayers tens-of-billions of dollars over the next decade. And now, it turns out, even those estimates may be too conservative.

Today, Inside Higher Ed reports that buried in the OMB’s “mid-session review” – the document released yesterday predicting a record-destroying $1.6 trillion federal deficit for FY 2009 – is the projection that Pell Grant funding will cost $27 billion more over ten years than predicted just a few months ago.  That’s based, importantly, on big recent increases in college enrollment that could very well decline as the economy recovers. But with President Obama pushing to get more and more people into college, it offers yet another, powerful reason to conclude that far from saving taxpayers money as the bill’s supporters claim, SAFRA is going to cost them bundles.

More here:

Federal Pay: Response to the Critics

My post yesterday on federal worker pay generated a large and aggressive response from federal workers, both in my inbox and on websites such as Fedsmith.com. (See also Federal Times and Govexec). Here are four points raised in criticism:

First, people accuse me of producing distorted data somehow. Actually, it’s essentially just raw Bureau of Economic Analysis data, but the data is usually overlooked by the media because I don’t think the BEA puts out a press release on it. Anyway, the average wage data is from BEA Table 6.6D. The average compensation data is simply total compensation (Table 6.2D) divided by the number of workers (Table 6.5D).

Second, people argue that reporting overall averages for wages and compensation is somehow illegitimate. People email me comments like “my federal salary is only $50,000, yet you claim that federal workers make $79,000.” All I can say to folks like this is that there must be a federal worker out there making $108,000 who balances you off.

Third, people argue that a better analysis would be to compare similar jobs in the private and public sectors, rather than looking at overall averages. I agree that that would be very useful. Unfortunately, the BEA data is not broken down that way. At the same time, the BEA data provides the most comprehensive accounting for the value of employee benefits of any data source. Benefits are a very important part of federal compensation, and so that’s why I look to the BEA data.

Fourth, many people argue that the federal government has an elite workforce with many highly educated people. Certainly, that’s an important factor to consider. However, that is the reason why I focused on the pay trend over the last eight years. The federal worker compensation advantage rose from 66 percent in 2000 to 100 percent in 2008. Has the composition of the federal workforce really changed that much in just eight years to justify such a big relative gain? I doubt it.

A final consideration is to look at a “market test” of the adequacy of compensation in the public sector–the quit rate. The voluntary quit rate in the federal government is just one-third or less the quit rate in the private sector (Table 16 near the bottom here).

That is strongly suggestive of ”golden handcuffs” in federal employment. While many federal workers probably grumble about their jobs (as many private sector workers do), they know that the overall package of wages, benefits, and extreme job security (Table 18 here) is very hard to match in the competitive private market, and so they stay put.

U.S. to Share Biometric Data With Foreign Countries

In the name of fighting identity fraud, the U.K. Home Office has entered into a biometric data-sharing agreement with Canada and Australia.

“The USA will be joining the agreement shortly, and New Zealand is considering legislation to join in the near future,” they say.

It would be nice to learn what commitments have been made to the U.K., justifying this statement.

LA School District Vote Shows Further Cracks in Education’s Berlin Wall

America’s large urban school districts are often the lowest performing, least efficient, and most resistant to change. The poster children for this reality are perhaps Detroit and Washington, DC, but the Los Angeles Unified School District (LAUSD) has long been in the running as well.

Yesterday, there was a sign that LAUSD would like to get out of that race for the bottom: the district’s school board voted 6 to 1 in favor of a plan that would hand up to a third of its public schools over to private management. Ignoring for a moment the question of how well this policy will work, it is categorically, undeniably, a sign of change. In the past, such private contracting arrangements in large districts have usually been the result of state or mayoral takeovers. This is the first case that comes to mind in which the plan was the product of an elected school board that has just had enough with its own administrators’ unsatisfactory performance.

Keep in mind that school board elections suffer low-turnout, and that support for candidates is dominated by public school employee unions looking out for their own members’ salaries and job security. If THAT process can produce such a clarion call for parental choice, competition, and diversity in educational provision, times ARE changing.

Now let’s stop ignoring the question of whether or not it will work. There’s not a whole lot of research on the subject. The most recent and detailed review of a similar contracting-out arrangement in Philadelphia, by Harvard’s Paul Peterson and Matthew Chingos, finds that non-profit management organizations in the city underperformed the district somewhat in reading and math, though the reading difference was statistically insignificant. The same study found that for-profit management organizations outperformed the district in both subjects, though the reading difference was again statistically insignificant.

Honestly, though, I don’t think anyone believes that the LAUSD plan was the result of a painstaking comparison of all the policy options and the choice of the one most supported by the empirical research. It is a cry of frustration with the status quo, and an implicit recognition of what most people already know: monopolies are bad at giving consumers what they want at a reasonable cost; choice and competition drive up quality and drive down costs in every other field, so why not bring them to bear in education? And finally, the LA school board’s action represents a desire to get something done NOW, that is actually within the board’s power to accomplish.

My sympathies are with the board members who are trying to make a positive difference within the system we have, but the question for voters and legislators is: why stick with the status quo at all? Why not open up the field of education to all the freedoms and incentives of the free enterprise system, rather than trying to cobble together a pale, ad hoc immitation of it? Because what the massive body of international scientific evidence shows is that the freest, most market-like education systems are the ones that outshine public school systems by the greatest margins.

A New Book from David Boaz? Tax Tips for Democrats

Okay, well maybe Tax Tips for Democrats won’t ever make it to the publisher, but while speaking at Cato University this summer, David Boaz offered a few tips to any more Democrats with tax problems who are thinking about joining the current administration.

“Some people say the best thing about electing a Democratic president is all the back taxes we collect from their appointees,” says Boaz. “It helps to balance the budget.”

Watch the whole thing:

C-SPAN 2 will air Boaz’s talk on the state of freedom in America this Sunday at 11:30 AM EST.