The real cost of public education

Published 10:17 pm Wednesday, September 8, 2010

We’ve been treated to hand wringing all year over the school budgets for this fall, which are supposedly inadequate, under funded, unacceptable. But what you think you know about K-12 education spending is wrong; we’re not spending too little, we’re wasting too much.

I’d like you to guess how much we spend per child in Suffolk public schools and then in the state of Virginia overall. Have the number?

How does it match with the real numbers? Suffolk spent about $11,800 per student in 2009. And across the state we spent on average over $13,000 to educate one child for the school year.

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Don’t feel silly if you guessed far lower than the real figure. According to a December 2009 poll of Virginians by the Friedman Foundation, nearly half of the respondents thought we spend $6,000 or less to educate a child each year. About one in five people thought we spend less than $3,000. Only 6 percent of the public guessed in the right spending range.

It’s so simple as to seem trivial. 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. We know that K–12 education is the biggest single cost to state and local governments, eating up close to a third of their revenues. And yet most citizens and politicians have little or no idea how much we are spending on education at a per-pupil level.

American taxpayers spend around $600 billion a year on K-12 public education. A sobering 27 cents of every tax dollar collected at the state or local level is consumed by the government-run K–12 education system, compared to only 8 cents for Medicaid.

In Virginia, 29 cents out of every state or local tax dollar collected is spent on public K-12 education. In the seven years between 2002 and 2009, per-pupil spending in Virginia increased 44 percent, according to state data. When we account for inflation, it’s increased a 21 percent.

And these figures leave out a large but completely unknown amount of capital expenses and debt payments that cities and counties spend on behalf of public schools but which never make it onto the school district books or into the state’s accounting.

Education spending is the single most serious burden on state and local budgets. And since runaway education spending is a major cause of our state and local budget problems, it’s the best place to look for serious savings as this fiscal crisis continues to unfold.

But school district officials and many politicians aren’t upfront about the kinds of resources we devote to education. And without a clear idea of spending levels in public and private schools, it’s hard for the public and policymakers to know whether the current system is cost-effective or to assess the fiscal impact of expanding families’ options with private school choice programs.

Based on federal data we estimate the typical private school in Virginia charges just under $7,000, and many far less. Government schools, at $13,000, spend a whopping 88 percent more. Private school choice programs, in other words, aren’t just a proven way to increase student achievement; they are a great way to save a huge amount of money.

In Florida, for instance, the state’s education tax credit program that funds private school choice saves huge sums every year. The state gains $1.49 in savings for every $1 it loses in tax revenue according to a 2008 fiscal impact analysis by the government’s Office of Program Policy Analysis & Government Accountability. That’s one reason almost every Republican, 42 percent of Democrats, and more than half of the black caucus voted for a dramatic expansion of the education tax credit program.

We spend more than enough on K-12 education in Virginia. It’s just not being spent effectively. Virginia’s children, families and taxpayers deserve a better, more efficient system of education.

Adam B. Schaeffer, Ph.D., is a policy analyst with the Cato Institute’s Center for Educational Freedom, and author of the March 2010 Cato Institute paper, “They Spend WHAT? The Real Cost of Public Schools.” Contact him at