[Vision2020] Identifying the Real Costs of Public Education

Mon, 15 Dec 2003 08:51:07 -0800

This is a multi-part message in MIME format.

------=_NextPart_000_00E1_01C3C2E8.94832610
Content-Type: text/plain;
	charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable

Identifying the Real Costs of Public Education

Author: George A. Clowes
Published: The Heartland Institute 12/01/2003

Public Education As a Business: Real Costs and Accountability, by Myron =
Lieberman and Charlene K. Haar (Scarecrow Press, 2003; 232 pages; =
$32.95; ISBN: 0810847191)

In a speech to the American Society of Newspaper Editors in Washington, =
DC on January 17, 1925, President Calvin Coolidge said, "[T]he chief =
business of the American people is business." If Coolidge were speaking =
to newspaper editors today he would likely say, "The chief business of =
the American people is education."

Education, indeed, is one of America's largest industries. In the fall =
of 2002, some 78 million people in the U.S. were involved in providing =
or receiving formal education, with total expenditures for public and =
private education from prekindergarten to graduate school estimated to =
be nearly $700 billion for the school year 2001-02. About 60 percent of =
that total, or $423 billion, was spent on public and private elementary =
and secondary education.

However, as an important new book demonstrates, the largest component of =
that spending-public education-understates the actual costs by a =
significant amount. Although the exact amount of the understatement is =
often difficult to quantify, the nature of the understatement is =
detailed in Public Education as a Business: Real Costs and =
Accountability, by Myron Lieberman and Charlene K. Haar, who are both =
with the Education Policy Institute in Washington, DC and the Social =
Philosophy and Policy Center at Bowling Green State University in Ohio.

While accurate reporting of costs in private-sector businesses has =
become a major public policy issue in recent years, accurate reporting =
of costs in the public sector "is usually taken for granted," the =
authors point out. That, they make clear, is a big mistake.

Lieberman and Haar identify three kinds of costs that are not included =
in the figures provided by government agencies and cited by the media as =
current per-pupil expenditures in public elementary and secondary =
schools:

  a.. Costs met by educational government agencies, such as costs for =
capital outlays, interest, debt service, unfunded pensions and other =
post-retirement costs, plus expenses met by public school foundations;
  b.. K-12 education costs incurred in noneducational public agencies, =
such as tax collection agencies, prisons, Indian reservations, and =
Department of Defense and Department of State schools;
  c.. The nongovernmental costs of K-12 public education, such as the =
cost of remedial education paid for by parents.
These cost omissions are significant. For example, the authors contend =
that excluding capital outlay, interest, and debt service leads to a 15 =
percent or more underestimate of the per-pupil cost in average daily =
attendance in public schools. Also, a 2001 study estimated that =
eliminating unfunded public employee pension liabilities in Oregon could =
add $1,207 per year to per-pupil costs for the next 40 years.

Because of its subject matter, Public Education As a Business is not an =
easy book to read, except perhaps for accountants and financial =
analysts, but it is a book that should be read widely. Although its =
insights will be helpful to public school officials and school reform =
advocates, they will be particularly enlightening to education reporters =
and education policymakers, for whom the book should be required =
reading.

"It is ... remarkable," note the authors, "that so little attention has =
been paid to the erroneous government statistics on the costs of public =
education."

------=_NextPart_000_00E1_01C3C2E8.94832610
Content-Type: text/html;
	charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 6.00.2800.1276" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=3D#ffffff>
Identifying the Real Costs of Public=20
Education
<DIV>Author: George A. Clowes Published: The Heartland=20
Institute&nbsp;12/01/2003 </DIV>
Public Education As a Business: Real Costs and Accountability, =
by=20
Myron Lieberman and Charlene K. Haar (Scarecrow Press, 2003; 232 pages; =
$32.95;=20
ISBN: 0810847191)
In a speech to the American Society of Newspaper Editors in =
Washington, DC on=20
January 17, 1925, President Calvin Coolidge said, =93[T]he chief =
business of the=20
American people is business.=94 If Coolidge were speaking to newspaper =
editors=20
today he would likely say, =93The chief business of the American people =
is=20
education.=94
Education, indeed, is one of America=92s largest industries. In the =
fall of=20
2002, some 78 million people in the U.S. were involved in providing or =
receiving=20
formal education, with total expenditures for public and private =
education from=20
prekindergarten to graduate school estimated to be nearly $700 billion =
for the=20
school year 2001-02. About 60 percent of that total, or $423 billion, =
was spent=20
on public and private elementary and secondary education.
However, as an important new book demonstrates, the largest component =
of that=20
spending=97public education=97understates the actual costs by a =
significant amount.=20
Although the exact amount of the understatement is often difficult to =
quantify,=20
the nature of the understatement is detailed in Public Education as a =

Business: Real Costs and Accountability</I>, by Myron Lieberman and =
Charlene K.=20
Haar, who are both with the Education Policy Institute in Washington, DC =
and the=20
Social Philosophy and Policy Center at Bowling Green State University in =

Ohio.
While accurate reporting of costs in private-sector businesses has =
become a=20
major public policy issue in recent years, accurate reporting of costs =
in the=20
public sector =93is usually taken for granted,=94 the authors point out. =
That, they=20
make clear, is a big mistake.
Lieberman and Haar identify three kinds of costs that are not =
included in the=20
figures provided by government agencies and cited by the media as =
current=20
per-pupil expenditures in public elementary and secondary schools:
<UL>
 <LI>Costs met by educational government agencies, such as costs for =
capital=20
 outlays, interest, debt service, unfunded pensions and other =
post-retirement=20
 costs, plus expenses met by public school foundations;</LI>
 <LI>K-12 education costs incurred in noneducational public agencies, =
such as=20
 tax collection agencies, prisons, Indian reservations, and Department =
of=20
 Defense and Department of State schools;</LI>
 <LI>The nongovernmental costs of K-12 public education, such as the =
cost of=20
 remedial education paid for by parents.</LI></UL>
These cost omissions are significant. For example, the authors =
contend that=20
excluding capital outlay, interest, and debt service leads to a 15 =
percent or=20
more underestimate of the per-pupil cost in average daily attendance in =
public=20
schools. Also, a 2001 study estimated that eliminating unfunded public =
employee=20
pension liabilities in Oregon could add $1,207 per year to per-pupil =
costs for=20
the next 40 years.
Because of its subject matter, Public Education As a Business =
is not=20
an easy book to read, except perhaps for accountants and financial =
analysts, but=20
it is a book that should be read widely. Although its insights will be =
helpful=20
to public school officials and school reform advocates, they will be=20
particularly enlightening to education reporters and education =
policymakers, for=20
whom the book should be required reading.
=93It is ... remarkable,=94 note the authors, =93that so little =
attention has been=20
paid to the erroneous government statistics on the costs of public=20
education.=94</BODY></HTML>

------=_NextPart_000_00E1_01C3C2E8.94832610--