Modern Public School Facilities: Investing in the Future

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Chairman Miller, Ranking Member McKeon, and Members of theCommittee:

Thank you for the opportunity to provide testimony today oninvesting in school facilities. My name is Neal McCluskey, and I amthe Associate Director of the Cato Institute's Center forEducational Freedom. Cato is a non-profit public policy researchinstitute that seeks to broaden the parameters of public policydebate to allow consideration of the traditional Americanprinciples of limited government, individual liberty, free marketsand peace. Along those lines, today I would like to discuss thebest role that the federal government can play in school facilitymaintenance and construction: That is, no role. I would also liketo explain why widespread school choice is the key to efficientlybuilding and maintaining high-quality school facilities.

I must begin by stating Constitutional principles: theConstitution gives the federal government no authority to makepolicy in education outside of prohibiting de jure discriminationby states and local districts. Nowhere in the enumerated powerslisted in the Constitution will you find the terms "school" or"education," and of course the Tenth Amendment makes clear that"the powers not delegated to the United States by the Constitution,nor prohibited by it to the States, are reserved to the Statesrespectively, or to the people." In addition, contrary to theperception of some jurists and legislators, the "general welfare"clause does not change this. It confers no authority on its own,but simply introduces the specific, enumerated powers that followit. As James Madison wrote in Federalist no. 41, "For whatpurpose could the enumeration of particular powers be inserted, ifthese and all others were meant to be included in the precedinggeneral power? Nothing is more natural nor common than first to usea general phrase, and then to explain and qualify it by a recitalof particulars."

Of course, constitutional problems notwithstanding, the federalgovernment has been heavily involved in education since passage ofthe Elementary and Secondary Education Act in 1965. Thankfully,though, while it has had some involvement in school constructionand maintenance-especially through Impact Aid programs fordistricts affected by federal installations, which will not be thefocus of my remarks-it has never had a major role in funding schoolfacilities not eligible for Impact Aid. It would not be advisablefor Congress to expand its current, limited role. Indeed, forcompelling reasons of both fairness and, more importantly,effectiveness, it should have no role at all.

What are the fairness issues?

The first is the unfairness of redistributing funds fromtaxpayers in districts that have dutifully maintained their schoolsto districts where maintenance needs have been allowed to slideuntil small problems have become big ones. As the U.S. Departmentof Education report Condition of America's School Facilities:1999 noted:

[D]istrict officials attributed declining conditionsprimarily to insufficient funds, resulting from decisions to defermaintenance and repair expenditures from year to year. However,maintenance can only be deferred for a short period of time beforeschool facilities begin to deteriorate in noticeable ways. Withoutregular maintenance, equipment begins to break down, indoor airproblems multiply, and buildings fall into greater disrepair... Thelack of regular maintenance can also result in a host of health andsafety problems, including exposure to carbon monoxide and risk ofphysical injuries. Additionally, deferred maintenance increases thecost of maintaining school facilities; it speeds up thedeterioration of buildings and the need to replaceequipment...

It is important to note that such a redistribution is likely tooccur whether the federal government expands Qualified Zone AcademyBonds (QZABs)-in which federal taxpayers cover the interest onschool construction bonds-or direct federal constructionassistance.

Most likely, whatever increase in federal aid might be proposedwill be targeted, at least at the outset, at districts with highconcentrations of poverty, and justified on the grounds that thosedistricts are underfunded and hence most in need of aid. This, atleast rhetorically, drives most federal education policy, but isinaccurate, and any initiative that takes money from presumablybetter-off taxpayers and gives it to high-poverty districts on thegrounds that it will equalize education spending rests on acrumbled foundation.

Using data from the 2005 and 2007 editions of the Department ofEducation's annual Condition of Education report, we seethat, as expected, per-pupil expenditures are highest in thedistricts in the lowest quintile of poverty-meaning, the districtswith the wealthiest population. In the 2003-04 school year (themost recent with available data), those districts spent on average$10,857 per-student, a figure which includes capital costs. Thesurprising statistic is that the second highest spendingis in the quintile with the highest poverty level, where $10,377was spent per-pupil. Meanwhile, the three middle quintiles are wellbelow the districts with the highest poverty, and this has been thecase since at least the 1989-90 school year, the earliest for whichthe Condition of Education has data. As a result of thisdistribution, it is highly likely that much of the federal taxmoney that would support construction and maintenance inhigh-poverty districts would come from taxpayers whose owndistricts get well outspent by those very districts they are beingforced too subsidize.

How about efficiency?

First of all, the major reason that buildings are poorlymaintained, especially in large, urban districts, is not a lack offunds. In addition to the telling statistics about which districtsactually spend the most money, we know that overall, Americaneducation is not underfunded. According to the Organization forEconomic Cooperation and Development's Education at a Glance:OECD Indicators 2006, we spend more per-pupil in elementaryand secondary education than any member country save Luxembourg,Norway and Switzerland. Overall, according to U.S. Department ofEducation Statistics, real K-12 public school per-pupil fundingnationwide increased from $4,077 in 1965 to $11,016 in 2003, a 170percent increase.

And the increases are not just in the aggregate. Using data fromthe 2007 Education Department report An Historical Overview ofRevenues and Expenditures for Public Elementary and SecondaryEducation, by State: Fiscal Years 1990-2002, we see that realfacilities acquisition and construction expenditures per pupil rosefrom $481 in 1990 to $903 in 2002, an 88 percent increase. From2000 to 2006 districts completed construction projects totalingmore than $145 billion according to School Planning andManagement's 2007 Construction Report, an amount exceedingboth a 1996 GAO estimate that $112 billion would be needed to bringall school facilities to "good overall condition," and a 1999National Center for Education Statistics estimate of $127 billion.Even accounting for inflation from the 1999 estimate, $145 billionshould have ended the facilities problem with a billion-or-so leftover. Yet, apparently, it didn't.

Ultimately, the facilities maintenance and construction problemis largely one of inefficiency, waste, and mismanagement. Asresearchers like John Chubb, Terry Moe, and William Ouchi have wellestablished, many districts-especially large, urban districts-arehopelessly hidebound by bureaucracy, slow to move and incrediblyinefficient when they do. The negative results have been seen mostconcretely in stagnant academic achievement despite massiveinfusions of money, and while aggregate, systemic data aboutconstruction and maintenance success is not available, it stand toreason that district dysfunction affects maintenance andconstruction much like it affects academics. The anecdotal evidenceabounds in cities all over the country, but consider just twoexamples. The Washington, DC, public schools have rampantmaintenance failures and a lengthy job backlog despite per-pupilexpenditures well in excess of $14,000, a problem Chancellor Rheehas attributed largely to central office bureaucracy. Or witnessthe Belmont Learning Complex project in Los Angeles, which from thestart was plagued by community conflicts over its use and design,but really fell apart after half the school was built and it wasdiscovered to be on an environmentally unacceptable old oil field.The school was eventually completed, but not without gigantic costoverruns.

In far too many cases, the money that should be reachingengineers, electricians and plumbers-just like the money thatshould be reaching students-simply doesn't get there.

In addition to the very real problem of necessary maintenanceand construction not getting done, there is a good chance that atleast some of the deficiencies we see reported are overstated, andsome of the construction and spending that is done is unnecessary.Concerning the former, it is important to note that much of ourbasis for assessing national school facility need comes fromprincipal and district self-reporting. Both Conditionof America's Public School Facilities: 1999 and PublicSchool Principals Report on Their School Facilities: Fall 2005use self-reported data on school conditions, and it is at leastpossible that some people who run schools and work in them willoverestimate problems. At the very least, the assessments aresubjective and almost certainly inconsistent from one school toanother. There is also considerable anecdotal evidence that whennew schools are built, they aren't necessarily done withcost-control or core academic needs in mind. Consider the new T.C.Williams High School in Alexandria, Virginia, of Remember theTitans fame. Opened this year $25 million over budget, the newT.C. Williams boasts television studios, a black-box theater, and aplanetarium-hardly basic needs.

It is important to note that states are not necessarily goodstewards of construction funds any more than districts are. NewJersey recently had a major scandal concerning its SchoolConstruction Corporation, which was established to build schools inlow-income, so-called Abbott districts. This entity madesuch moves as paying local governments more than $67 million to buyland already owned by the public; selecting sites on which to buildschools containing heavy environmental contamination; and payingprivate contractors more than $217 million above originallycontracted amounts.

There is very good reason to be highly skeptical that anyfunding mechanism in our current education system will result inefficient and effective school construction and maintenance. But asmuch as it may seem like it, I am not here to simply tell youwhat's wrong in school construction and maintenance, exhort you todo nothing about it, and then go on my merry way. I have asolution. Congress must cease federal intervention in schoolconstruction, refrain from getting more deeply involved, andindividual Members of Congress should exhort their states and localdistricts-which have proper authority over education-tolet all parents control education funding for their children bytaking it to any school they wish, public or private. Schoolchoice-letting markets work-is the key to getting good, safe schoolbuildings, just as it is the key to academic success.

First, consider basic, human motives. When a school getsfunding-and its employees get paid-regardless of whether or not theschool building is in good condition, the incentives to vigilantlyconduct painstaking maintenance are small. Sure, the building mightnot be a great place to work, but a paycheck is coming regardless,and getting tough problems fixed and regular preventativemaintenance done can often be very hard. When schools don't have tocompete they don't have to care nearly as much about theirbuildings as schools that have to earn customers, and have to look,sound, and smell as conducive to effective learning as possible. Avisit to Eastern Europe offers plentiful examples of how poorlyconstruction and maintenance worked under non-competitive incentivestructures.

As touched on earlier, the other problem with top-down controlis that large organizations invariably have big bureaucracies, andbig bureaucracies invariably make action inefficient and slow. In asystem of choice with autonomous schools, in contrast, schools canrespond very quickly to their needs, not having to perpetually fillout extensive paperwork to get work approvals, supplies, andmaintenance personnel from huge, distant home offices.

The superiority of private provision of education when it comesto facilities is not just theoretical-it has been established bothin the United States and abroad. Here are just three examples:

  • In Arizona, the director of Cato's Center for EducationalFreedom, Andrew Coulson, found that when asked the same corequestions as were asked of public school officials in Conditionof America's Public School Facilities: 1999, private schooloperators reported that their schools were in much better conditionthan public schools nationwide (Arizona public school data was notavailable). And this was not a result of having "better"students-Arizona's private schools reported better conditions ofsuch things as foundations, ventilation, and electrical power whichcould not be easily affected by such student behaviors asvandalism. Perhaps most impressively, the private schools were ableto do this despite spending much less per pupil than their publiccounterparts (taking into account all sources of revenue, notsimply tuition).
  • In New Orleans, by early November after Hurricane Katrina threeprivate schools were back up and running in the city's especiallyhard-hit East Bank, and eight of the city's Roman Catholic schoolswere operating. None of the city's traditional public or charterschools, in contrast, had yet reopened. By the Spring of 2006nearly 20,000 students were enrolled in private schools, well abovethe number in public schools.
  • Extensive research by British professor James Tooley hasdocumented that private schools found throughout some of the mostimpoverished slums in the world provide superior conditionscompared to government-run schools. Tooley has found that privateschools in places like Hyderabad, India, Ga, Ghana, and Lagos,Nigeria, are more likely to provide such things as drinking water,fans, electricity, toilets, and libraries than government schools.Similar findings have been reported for these and other countriesby other researchers. Why? The private schools have to compete forstudents.

So what should Congress do to ensure that the nation has thebest possible school facilities? Essentially, nothing. The bestthings that Congress as a whole can do is leave school facilityfunding and policy making to states and local districts, and thebest thing that individual members of Congress can do is take upthe bully pulpit and exhort your states and districts to enactwidespread school choice. Then, all school managers will have theincentives to keep up with necessary maintenance, and when newbuildings truly are needed, they will be built with maximumefficiency and effectiveness.

Thank you again for the opportunity to provide testimony, and Ilook forward to your questions.

Neal McCluskey

Committee on Education and Labor
United States House of Representatives