DOCUMENT RESUME ED 438 605 EA 030 239 AUTHOR Damask, James; Lawson, Robert TITLE Public Choices, Private Costs: An Analysis of Spending and Achievement in Ohio Public Schools. INSTITUTION Buckeye Inst. for Public Policy Solutions, Dayton, OH. PUB DATE 1998-09-00 NOTE 56p. AVAILABLE FROM Buckeye Institute for Public Policy Studies, 4100 N. High St., Suite 200, Columbus, OH 45402 ($5). Tel: 614-262-1593; Fax: 614-292-1927; e-mail: [email protected]. For full text: http://www.buckeyinstitute.org. PUB TYPE Opinion Papers (120) EDRS PRICE MF01/PC03 Plus Postage. DESCRIPTORS *Academic Achievement; Correlation; Educational Equity (Finance); *Educational Finance; Elementary Secondary Education; *Finance Reform; *Public Schools; *School District Spending; Student Costs IDENTIFIERS *Ohio ABSTRACT This report sets up a structure for examining the real costs of public education. It defines three approaches of gathering and reporting cost information: narrow (salaries and current expenditures, excluding capital outlays); generally accepted accounting principles (GAAP) (costs are recorded during the period in which they occur); and broad (all inputs in the system, including time, are measured). The paper's aim is to develop a better measure of the cost of public education in three Ohio school districts, and to establish that public schools in Ohio's three largest districts are .suffering from rising costs combined with falling achievement. The document discusses education achievement in the three areas and examines enrollment as a measure of quality. It found no meaningful relationship between overall spending per pupil and student achievement. It states that more solid structures of school organization may be obtained from voucher systems, charter schools, tax credits for tuition payments, and other programs that link rewards directly with parent satisfaction. The text emphasizes that a real program of school choice that gives parents and students more options will instill necessary incentives for improvement in the public schools. Four appendices list GAAP estimates of expenditures, problems with proficiency examinations, and other concerns. (Contains 50 references and notes.) (RJM) Reproductions supplied by EDRS are the best that can be made from the original document. Public Choices, PrivateCosts: An Analysis of Spending and Achievementin Ohio Public Schools ucke e U.S. DEPARTMENT OF EDUCATION Office of Educational Research and Improvement Ynsti ute PERMISSION TO REPRODUCE AND EDUCATIONAL RESOURCES INFORMATION EMIT= """ DISSEMINATE THIS MATERIAL HAS CENTER (ERIC) liThis document has been reproduced as BEEN GRANTED BY received from the person or organization 131 N. Ludlow St. Suite 317 originating it. Minor changes have been made to O Dayton, OH 45402 improve reproduction quality. O (937) 224.8352 Points of view or opinions stated in this TO THE EDUCATIONAL RESOURCES document do not necessarily represent INFORMATION CENTER (ERIC) official OERI position or policy. September 1998 1 BEST COPY AVAILABLE 'Attire* Public Choices, Private Costs: An Analysis of Spending and Achievement in Ohio Public Schools Executive Summary When spending and other school "inputs" are examined for their relationship to the "output" of student achievement, there exists a wide gap between these costs and expected results. Nowhere is this more evident than in Ohio's three largest public schooldistrictsCleveland, Columbus, and Cincin- nati. Enrollment as a Measure of School Quality The urban school districts of Cleveland, Columbus, and Cincinnati have experienced a signature pattern of declining enrollment. For the class graduating in June 1997,the three districts declined in enrollment from 14,663 to 7,130 students between 1990 and 1997a loss of 51.4% of their students. Analysis of School Spending Because schools do not use Generally Accepted Accounting Principles (GAAP), the reported spending per student is vastly underestimated. When miscellaneous expenses, interest expenses, depreciation, and capital outlay are included, annual public school spending per pupil has a median of $6,996 in Ohio's 611 school districts. Using improved GAAP figures, Columbus public schools spent $7,665, Cincinnati public schools spent $10,099, and Cleveland public schools spent $10,962 in fiscal year 1997. Using GAAP, 70 of Ohio's 611 school districts (or, 11.5%) spend more than $10,000 per student. (See Appendix 1.) Spending and Achievement Analysis Overall, school spending, teacher salaries, advanced teacher education, teacher experience, class- room spending, and student-teacher ratios have nodiscernible effect on student achievement in urban school districts in Cleveland, Columbus, and Cincinnati. Solutions Given that traditional reforms such as boosting spending per pupil and reducing class size have little positive effect on student performance, and that school innovation and autonomy do have this desired effect, policymakers and school reformers would be wise to focus on more fundamental solutionslike parental choice in education. 3 The Buckeye Institute for Public Policy Solutions is a public policy research and education Insti- tute, or think tank. As an independent, nonprofit, nonpartisan organization, its purpose is to provide Ohio's leaders and citizens with new ways of thinking about problems facing our state and local communities. By widely distributing and publicizing its ideas and research, the Institute encourages more policymakers and opinion leaders to embrace new approaches to solving problems. The Institute's uciceve work focuses on five primary areas: education, taxes and spending, privatization, regulatory issues and economic development, and health care. To maintain the highest level of integrity, the Institute nsti ute accepts no requests to conduct contract research or programs for businesses. All research projects and FOR PUBLIC POLICY i,440. SOLUTIONS programs are determined by the staff and Board of Research Advisors. The Institute receives no government funding for its activities. All funding comes from the generous contributions of many individuals and foundations, along with limited general support from businesses. The Buckeye Institute gratefully acknowledges the following people for their contributions to this report. Project Supervisor:Richard Leonardi Reseachers:James Damask, Jeffrey Williams Writers:James Damask, Robert Lawson Editors:Samuel Staley, Richard Leonardi Research Assistant:Mark Sheffler Board of Research Advisors: Dr. Douglas K. Adie, Department of Economics, Ohio University Dr. David Mayer, Law and Graduate Center, Capital University Dr. Mark Altieri, Department of Accounting, Kent State University Dr. Abraham Miller, Department of Political Science, University of Dr. Robert Baird, Department of Economics, Case Western Reserve Cincinnati University Dr. Dennis Miller, Department of Economics, Baldwin Wallace College Mr. Tom Bell, School of Law, University of Dayton, Dr. Henry Moon, Department of Geography and Planning, University Dr. William Bogart, Department of Economics, Case Western Reserve of Toledo University Dr. Andrew Morriss, School of Law, Case Western Reserve University Dr. Michael Bond, Department of Finance, Cleveland State University Mr. Dorien Nunez, Management Advantage Corp., Cincinnati, Ohio Mr. Jim Coons, Huntington National Bank, Columbus, OH Dr. Deborah Owens, College of Business Administration, University of Dr. Gregory Delerneester, Department of Economics, Marietta College Akron Dr. James Child, Department of Philosophy, Bowling Green State Dr. William Peirce, Department of Economics, Case Western Reserve University University Dr. Gina Dow, Department of Psychology, Denison University Dr. Robert Premus, Department of Economics, Wright State University Dr. Michael Ellis, Department of Economics, Kent State University Dr. Henry Rennie, Department of Economics, Heidelberg College Dr. David Forte, Marshall School of Law, Cleveland State University Fr. John Putka, Department of Political Science, University of Dayton Dr. Ralph Frasca, Department of Economics, University of Dayton Dr. John Rapp, Department of Economics, University of Dayton Dr. Janice Gabbert, Department of Classics, Wright State University Mr. Bradley Smith, Law & Graduate Center, Capital University Dr. Lowell Gallaway, Department of Economics, Ohio University Mr. Michael Solimine, College of Law, University of Cincinnati Dr. James Gaston, Department of History, Franciscan University of Dr. John Soper, Department of Economics, John Carroll University Steubenville Dr. Samuel R. Staley, The Buckeye Institute, Dayton, Ohio Dr. Melvin Greenball, Department of Accounting, The Ohio State Dr. Anthony Stocks, Department of Economics, Youngstown State University University Dr. William Irvine, Department of Philosophy, Wright State University Dr. Bradley Thompson, Department of Political Science, Ashland Dr. John Kelley, Department of History, Shawnee State University University Dr. Robert A. Kohl, Department of Economics, Defiance College Dr. Richard Vedder, Department of Economics, Ohio University Dr. Robert Lawson, Department of Economics, Capital University Mr. Joseph Zoric, Department of Business Administration, Franciscan Dr. Brad Martin, Department of Criminal Justice, University of Findlay University of Steubenville For more information on the Buckeye Institute, please contact: The Buckeye Institute for Public Policy Solutions 131 N. Ludlow Street, Suite 317 Dayton, OH 45402 (937) 224-8352 Fax: (937) 224-8457 www.buckeyeinstitute.org