Cato analysis cites CCUSD in call for financial transparency legislation

By Linda Bentley | March 17, 2010

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ëCave Creek has the highest spending of the three Phoenix districts we examinedí
CCUSD – On March 10, Adam Schaeffer, a policy analyst with the Cato Institute Center for Educational Freedom, released a report titled: “They Spend WHAT? The real cost of Public Schools,” which he says documents “spending figures as provided by school officials and reported in the media often leave out major costs of education and thus understate what is actually spent.

Schaeffer reviewed district budgets and state records for five largest metropolitan areas in the country plus the District of Columbia, which revealed per-pupil spending, on average, is 44 percent higher than officially reported.

Based on the 2005-2006 totals from the National Center for Education Statistics updated to 2009 dollars, Schaeffer points out state and local governments are spending “well over $500 billion on public K-12 education” and said, “A sobering 27 cents of every dollar collected at the state or local level is consumed by the government-run K-12 education system, while only 8 cents support Medicaid.”

According to Schaeffer, education spending is the most “serious burden on state budgets” and will “remain the most delicate and important state spending item with which tax and budget reformers must contend.”

“To get control of a budget, you need to know how much you make, how much you spend and what you’re spending it on,” said Schaeffer, the basics for every financial planner and the key to fiscal responsibility.

Although K-12 education claims nearly a third of state and local revenues, Schaeffer says most citizens and politicians have no idea how much is being spent at a per-pupil level.
How much is enough?

That’s a question Sonoran News has repeatedly asked throughout the years each time advocates of more taxes promote overrides and/or bonds.

Schaeffer says, “Citizens need to know how much is being spent per child in order to judge whether the district has enough money to educate a child. If a district is spending $30,000 per child, surely that is enough to ensure a quality education. If the schools are nonetheless in disrepair and the kids can’t read, then there is good reason to suspect that a massive share of that money is being wasted.”

His findings note, although Phoenix metropolitan area schools spend less than many other big-city districts, the average real per-pupil spending figure of $11,800 is 27 percent higher than the average $9,300 Phoenix districts claim to spend.

Additionally, Schaeffer cites “real public school spending is 75 percent higher than the estimated median private school spending of just under $7,000.

Cave Creek Unified School District was called out specifically in Schaeffer’s report with per-pupil spending of just under $14,000 ($13,929), the highest of the three districts examined. Paradise Valley Unified School District came in second, spending $12,312 per student, with Deer Valley Unified School District spending the least at $9,365 per student.

However, the per-pupil spending figures publicly stated by CCUSD, PVUSD and DVUSD are $9,024, $9,883 and $8,323, respectively.

That means CCUSD is spending 54 percent more per pupil than reported, while PVUSD is spending 25 percent more than reported and DVUSD is spending 13 percent more.

Schaefer used the published “Fiscal Year 2007-2008 Annual Report for the Arizona Department of Education” for CCUSD’s published pre-K-12 spending.

For real spending, he calculated CCUSD’s total 2008 pre-K-12 budgeted expenditures as the sum of appropriations for every account fund except Community Education from the “07-08 All Funds Summary.”

In California, Los Angeles Unified School District, while reporting per-pupil spending of $10,000, spends just over $25,000 per student, 151 percent higher than officially reported, constituting the highest gap in the study.

Schaeffer said, “This disconnect between official accounting and reality raises troubling questions regarding democratic control of public institutions and the ability of citizens to determine whether or not they are getting what they are paying for.”

Especially during difficult economic times, Schaeffer wrote, “[W]e must ensure every dollar is accounted for and used efficiently. Citizens are losing their jobs and their homes, government services are being cut, and taxes are being raised. This is no time to lose track of how more than one quarter of all state and local tax dollars are spent. There is no excuse for opaque and unaccountable public institutions in times of plenty, but our current economy makes this urgent.”

Charter schools cannot issue bonds and therefore have little room to fudge their reported spending.

For example, Foothills Academy had an annual budget of $1.8 million for FY 2008-2009 with 229 students, which is per-pupil spending of $7,820.

Schaeffer used the median private school tuition rather than the average, so as not to skew numbers by averaging in elite schools or extremely expensive schools that cater to children with severe disabilities, to come up with estimated average costs of private school tuition. Those numbers were further adjusted for each of the metropolitan areas he reviewed.

For Arizona that number was $6,770, which placed per-pupil spending for CCUSD 106 percent higher than private school tuition, 82 percent higher for PPUSD and 38 percent higher for DVUSD.

Schaeffer has drafted the Financial Transparency in Education Act, legislation that would require each local education provider in the state to create and maintain a searchable expenditure and revenue website that includes detailed data on revenues and expenditures and per-pupil spending.

Schaeffer believes taxpayers should have easy access to details of public school district spending and that easier access to and storage of that data would increase transparency in public school financial matters, citing it is neither difficult nor prohibitively expensive to make such data available on the Internet.