It Is Possible to Spend Too Much on Education

By John R. LaPlante

Education is perhaps the largest use of state taxpayer dollars. But when is enough, enough? The recent court-ordered increases of $290 million in state funding in Kansas may not be the last. Some observers expect the Kansas Supreme Court to require the legislature to add another $568 million next year to a state aid budget that now tops $3 billion. But is it possible to spend not too little, but too much on education?

Education is an oft-cited key to attracting high-paying jobs to a community. Further, it does cost money to run a school, so why not spend more of it? What we need to remember is that what counts is not the total amount spent, but how it is spent.

It’s the rare person who would not like to have more: a bigger house, a better car and nicer furnishings. Although our wants may be unlimited, our ability to pay for them is not. So we compromise. We buy a basic car to have more money available for a nicer house.

People who develop public budgets face the same problem. They, too, will find that increased spending is desirable, but only to a point. Even if you think that teachers are underpaid, for example, you are still unlikely to call for a minimum teaching salary of $1 million a year. At some point, the extra benefit increased spending provides is not commensurate with the cost.

How can lawmakers make the best use of public dollars? How can our society reach the point where we spend the right amount of money on education? It’s through increased reliance on competition.

When companies compete with each other, consumers benefit. Think of the increased power (and price declines) in personal computers over the last 20 years. Or consider that the U.S. Postal Service has improved since it was forced to compete with FedEx and e-mail. Competition brings out the best in organizations. They innovate, find ways to deliver a superior service or product and limit price increases.

Do we have competition in K-12 education? We do, but only in a weak sense. By default, the money collected for each student’s education is earmarked for only one school district. Although there are 300 school districts in Kansas for families to choose from, moving a child from one district to another usually requires that the family move to the new district, which is expensive and disruptive.

Right now, the consumers of education, which include not only students and families, but also taxpayers and businesses, are not receiving the full benefits of competition: lower costs and better student performance.

Can schools compete with each other? They already do at the college level, with each institution offering a different mix of programs, departments and facilities. Public policy promotes that competition by letting families directly control how a portion of our higher education budget will be spent.

Instead of allocating all higher education money in a top-down way to the state’s colleges, Kansas lawmakers allocate money that students can use as scholarships or vouchers. Kansas comprehensive grants, as well as vocational scholarships administered by the Kansas Board of Regents, put purchasing power in the hands of families, not colleges. Institutions of higher education, in turn, must respond to the desires of consumers if they are to receive the scholarship money and other state funds that flow from a student’s enrollment.

When they return to Topeka in January, lawmakers should implement ways of bringing the benefits of competition to one of our most popular and important uses of taxpayer dollars: education. If they do, taxpayers, families, students and communities will reap the benefits.

John R. LaPlante is education policy fellow with the Flint Hills Center for Public Policy, a non-profit, nonpartisan think tank that provides critical information about policy options to legislators and citizens.