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Manhattan Institute

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Stop the Train


Stop the Train

April 4, 2006
EducationPre K-12

The governor and Legislature are moving forward like a steaming locomotive in a special session to throw more money at public education.

They seem eager to do this despite not knowing exactly where the money from the last increase went; despite indications that it was not used in productive ways; and despite solid evidence that simply spending more has little effect on student achievement.

The governor and legislators may blame the state Supreme Court for driving the train, but there are three equal branches of government, not one dominant branch. Taxpayers may demand that the governor and Legislature wrestle the controls away from the court and stop the train before it drives over a cliff of financial and educational irresponsibility.

Just two years ago, the state Legislature responded to the court’s ruling that school spending was inadequate by passing an enormous increase. Between 2003-04 and 2004-05, total revenue for public education in Arkansas increased from $3.2 billion to $4 billion.

According to the Annual Statistics Report, more than $400 million in new money came from the state, almost $100 million came from local taxes, $27 million came from the federal government and more than $300 million came from a newly created “other” category consisting of loan proceeds and asset liquidation. Even if we exclude these other dollars we are talking about more than a $500 million increase in a single year.

Because the only amount of spending that satisfies school districts is “more,” and because they have found the court more compliant than the Legislature, districts urged the court to reopen the adequacy case and order further increases. Apparently enjoying its new extra-constitutional role as a policy-making body, the court once more ordered the Legislature to raise education spending even though it found the previous level of spending to be adequate. In doing so, the court seems to believe that schools have a constitutional right to annual spending increases at least as big as inflation.

If we continue down this track, education spending will eventually eclipse total state revenue. But the governor and Legislature seem to be eager to hop aboard and are considering adding more than $200 million for school operations and facilities.

All of this extra spending would be fine if schools really showed signs of needing the money and if there were evidence that spending more would help improve student achievement. Neither is the case. It is hard to understand how Arkansas schools could need an additional $200 million on top of the more than $500 million they just received when they had $573 million in unspent funds as of October 2005. And these reserve balances have increased by more than $100 million over the last five years, meaning that schools are socking away more money in the bank even as they beg for more.

In addition, policy makers are ignoring the bulk of social-science evidence that shows little or no relationship between school spending and student achievement. This may seem counterintuitive, since normally you get what you pay for. But schools are neither rewarded nor punished for the wise use of new resources, so they aren’t particularly likely to use new dollars in effective ways. New money tends to get put toward existing programs, bringing more of the same. This means it’s likely that students in low-performing schools will continue to perform at low levels.

Perhaps extra spending would help improve student achievement if the spending were earmarked for effective programs. This was the advice that outside consultants Lawrence Picus and Allan Odden were paid to provide (to the tune of $300,000). Their recommendations included using new money for merit pay for teachers. But the only use that the court and the Legislature have made of the Picus and Odden report is to justify the 2004-05 increase.

Neither the court nor the Legislature seems very concerned that schools appear to have largely disregarded Picus and Odden’s recommendations about how additional spending could be used effectively. Frankly, the Legislature isn’t entirely sure how districts spent the extra money, so they paid Picus and Odden an additional $400,000 to study exactly where the last round of increases went. But their report is not expected until August, and legislators are rushing to spend the money now.

The Legislature is on track to spend first and find out the answers to their questions later. Taxpayers would probably prefer that any extra spending actually help students, even if that means stopping the train.