Rich School, Poor School

January 8, 2002 |
The legacy of localism prevents both parties from accomplishing what they really want in the education sphere.
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The much-hyped but disappointing bipartisan education bill that President Bush will sign into law today reveals the extent to which both political parties are caught in a trap that prevents them from addressing the deepest problems in our elementary and secondary education system. The trap is the legacy of localism in school funding, which creates dramatic disparities in per-pupil funding across the country.

Schools in Mississippi spend an average of $4,000 a year on each student; in New Jersey, the comparable figure is more than $9,000 -- even after adjusting for differences in the cost of living. Disparities of this magnitude are also common within many states. They result from our antiquated practice of financing schools primarily through state and local taxes, which translates vast socioeconomic differences between neighborhoods, counties and states into vast differences in school funds.

This legacy of localism binds the neediest students -- and our elected leaders -- in countless ways. First, it quite literally traps students who live in the poorest neighborhoods into inferior schools with marginally qualified teachers, large classes and crumbling buildings. At the same time, it ties the hands of our national leaders. How can any president claim to be the "education president" when less than one-tenth of school funds actually come from the federal government? As long as school financing is determined locally, Washington will never have a significant role in education policy. This puts Congress and the White House in untenable positions, given that education reform is the top priority for many voters.

Caught in this trap, leaders from both parties have perfected the art of substituting symbolism for substance. The new bill includes requirements for annual school testing that will undoubtedly confirm what we already know: that some of our schools, particularly in suburbs, are terrific, but many others, particularly in inner cities, are appalling. This attempt to set national standards can hardly be meaningful when there are profound disparities across the land in what schools can spend. The bill also sets a timetable mandating that teachers be proficient in the subjects they teach, but there is no enforcement mechanism to ensure this proficiency. The bill does provide marginal increases in funds to the poorest school districts, but not nearly enough to begin leveling the playing field nationwide.

The legacy of localism also prevents both parties from accomplishing what they really want in the education sphere. For Republicans, the ultimate goal is school choice. For Democrats, it ought to be ensuring equity in educational opportunity. Neither of these goals is attainable given the minuscule role of the federal government in financing schools. The only way to achieve relative parity in per pupil expenditures nationwide is for the federal government to step in as the leading source. This step would also be required to reach the Republican goal of meaningful school choice.

Broadening school choices is a politically appealing idea, but it cannot be accomplished until a considerable degree of equality in school finances is attained. President Bush, for example, proposed federal financing for vouchers of $1,500 to help children escape failing schools. This may be the best he could do given the limited funds at his disposal for education, but the subsidy amounted to only about a quarter of the cost of educating the average child, and his proposal was dropped.

In order to enable both parties to achieve their educational priorities, America must take the bold step of equalizing school funds nationwide, by severing the link between school financing and state and local taxes. While this may sound like a radical idea, most modern democracies finance primary and secondary education mainly through the federal government. In the American context, the politically feasible approach would be to pursue national equalization of school funding together with a real system of school choice.

Critics may be quick to argue that national equalization of funding could undermine local control. But by combining this equalization with school choice and stipulating that the money flow directly to parents rather than to school bureaucracies, Congress would ensure that parents would be empowered at the expense of the school bureaucracies. The end result would not so much be to shift control from the local level to the federal level, but rather to shift it from school boards to individual families.

Can the federal government afford to take primary responsibility for school financing? One possibility would be to create a new progressive national consumption tax, with the revenues to be rebated directly to the states on a per-pupil basis, provided that the states reduced their taxes commensurately. Through this kind of revenue sharing, equalization of school financing could be achieved without increasing taxes overall, unless we as a nation decide to bring all school districts up to the spending levels in New Jersey.

Until our national leaders muster the courage to address the financing problem that lies at the heart of our educational predicament, America will remain stuck with an education system that confines our options to little more than rhetoric and symbolic remedies.

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