June 5, 2014 at 1:00 am

EDUCATION REFORM

Who should run Michigan schools?

Michigan local public school districts spend more than $17 billion annually on K-12 education — an average of $11,500 per student. While these expenditures have decreased over the past 10 years, labor costs (specifically health insurance and pension payments) have increased. This has resulted in a decrease in the number of teachers, counselors and staff, which has reduced the quality of Michigan’s public education system. Three changes that would increase efficiency and improve educational outcomes for Michigan children include:

■ Establishing a state-run agency that develops master facility plans for school districts.

Ohio has a state-run agency, the Ohio Facility Construction Commission, with the expertise and incentive to make capital investment decisions (e.g., building construction, renovations, etc.) based on objective cost-benefit analysis. My experience with the East Lansing School District suggests that Michigan has superintendents and school boards with little or no expertise making these same decisions, which has resulted in a wasteful over-investment in capital. For example, East Lansing hired an architectural firm that developed a facility plan; unfortunately, expenditures were based not on need but on the borrowing capacity of the district. This plan called for capacity of more than 3,900 students when resident enrollment had decreased to 2,650 and resulted in a $53 million bond referendum. Although defeated, the vote on this referendum was close because those who stood to gain financially (the architecture firm, the construction firm, a school bond trader and others) were the largest contributors to the pro-bond campaign.

The result of all this? While Michigan and Ohio spent similar amounts per pupil from 2002-10, wealthier Michigan districts spent 29% more on capital expenditures per pupil than comparable Ohio districts. If these Michigan school districts had spent the same as their Ohio counterparts, they would’ve saved over $250 million annually — which could have been used to hire more qualified teachers instead of paying architects, construction firms, bond traders, consultants and lawyers. If these resources were spent hiring qualified teachers, Michigan could have decreased its average student/teacher ratio of 18.6 and approached Ohio’s ratio of 16.9. Perhaps this would allow Michigan students to perform as well as Ohio students. Compared to other states, Ohio ranks between 12 and 18 in National Assessment of Educational Progress exam performance while Michigan most often ranks between 30 and 37.

■ Allow local residents to more easily supplement the general fund, from which teachers are paid, through local property taxes. Proposal A imposes restrictions on the ability of local communities to raise property taxes for school district operating expenses. There are “loopholes” in Proposal A that a number of wealthy, financially sophisticated school districts take advantage of to supplement their general fund. These alternatives are not equally available to all wealthy districts and not feasible to poorer districts. Allowing school districts to supplement their general funds through local property taxes will allow districts to more efficiently spend resources. To address equity concerns, Michigan should distribute a larger portion of state funds to the poorer districts.

■ Consolidate while allowing local decision making. Superintendent Mike Flanagan has discussed consolidating administrative functions across local school districts and suggests that this would result in significant savings. Flanagan has also stressed that he is not proposing that local school districts close or merge. While consolidating administrative functions may result in cost savings, greater efficiencies could be achieved if school districts were consolidated and the functions and resources of intermediate school districts were integrated within these larger districts. Fewer districts would also reduce the number of school administrators and school board members, allowing districts to keep the more qualified candidates. Consolidation does not mean that schools should be closed or that the administration of these larger districts should dictate and standardize policy across all schools within a district. Instead, principals, parents and teachers should have input on how resources are spent and be encouraged to adapt their curriculum to their specific students’ needs.

Many of the changes being proposed to Michigan K-12 education will result in reduced funding and worse student outcomes. Rather than continuing to starve public education, let’s make the necessary changes to increase the efficiency and efficacy of the education system. Michigan taxpayers might even be willing to invest more resources in K-12 education if their return on this investment increases.

Mike Conlin is an economics professor at Michigan State University.