Government Spending Bait and Switch

New taxes are frequently sold as protecting police, fire, and education, though these together represent barely 25% of all US government spending.  Where does the rest go?  It's a giant bait and switch, made worse by the fact that even within these categories, new headcount is more likely to be added in administrative and overhead roles rather than in promised functions such as "teachers".  This is the subject of my Forbes column this week:

There is a way to reconcile this:   While increases in education spending are sold to the public as a way to improve results in the classroom, in reality most of the new money and headcount are going to anything but increasing the number of teachers.

Let’s start with an example from the city of Phoenix, New York.  Why this town?  Am I cherry-picking?  In fact, I was looking for data on my home town of Phoenix, Arizona.  But I have come to discover that while school districts are really good at getting tomorrow’s cafeteria menu on the web, they are a little less diligent in giving equal transparency to their budget and staffing data.  But it turns out that Phoenix, New York, which I discovered when I was looking for my home town data, publishes a lovely summary of its budget data, so I will use it as an example that helps make my point.

The city’s budget summary for 2012-2013 is here.  Overall, they are proposing a 0.4% increase in spending for next year, which initially seems lean until one understands that they are projecting a 4% decline in enrollment, such that this still represents an increase in spending per pupil faster than inflation.  But the interesting part is the mix.

What are the two things politicians are always claiming they need extra money for?  Classroom instruction and infrastructure.  As you can see in this budget, only two categories of spending go down:  classroom instruction and facility maintenance and cleaning.  Administrative expenses increase 4% (effectively 8% per pupil) and employee benefits expenses increase just under 1% despite a total decline in staffing.  Though I am not very familiar with the program, one irony here is that the fastest growing category is the 8.7% growth (nearly 13% per pupil) in spending with BOCES, a New York initiative that was supposed to reduce administrative costs in public schools.  In other words, spending increases are going to everything except the areas which politicians promise.

I don’t think these trends are isolated to this one admittedly random example.  The Arizona auditor-general recently did a study on trends in education spending in the state.  They found exactly the same tendency to reduce classroom spending to pay for increases in administrative headcounts.

Read it all, as they say.


  1. Tim:

    A couple of points

    BOCES (Board of Cooperative Educational Services) is; per their about page, a method for multiple school districts to develop shared programs and services, reducing cost. In other words, if the program works correctly, it would be relatively less expensive to provide services through BOCES than to develop them duplicatively. Looking at it through this lens, the decrease in instructional budget for the district is offset by the increase in BOCES spending. For example, the Oswego County BOCES provides most of the special ed resources, including paraprofessionals for ID, ED, LD, DHH, and VD classrooms. This is something that an individual school district would be hard pressed to provide on their own at a reasonable cost.

    As noted in the budget, administrative cost drivers programs that are not in the scope of the school district, including Federal and State "Race to the Top" programs. In summary, costs are pushed by things not in their control.

  2. JimS:

    I often field questions from parents along the lines of "spending has increased why are there 35 students in my kid's English class?" I can list at least a dozen administrative positions at our central office (in a town of 30,000) that didn't exist 15 years ago, not to mention the large increase in spec ed identified kids who are legally required to get special services.

  3. Xmas:


    Those special ed classifications are killing schools for sure. Teachers are required to have custom education plans for each "learning disabled" child in his class. A friend of mine who is a teacher is annoyed that his classes went from having one or two students needing plans to one or two student who don't need plans.

    This whole scheme of medicating elementary school kids into docility flags them as special needs students for the rest of their school years. Some parents take advantage of the process to give their children an advantage (special needs means longer test taking times, more time from the teacher, etc.).

  4. Ted Rado:

    One m ore example of "How can you tell if a politician is lying? If you see his lips move."

  5. me:

    It's interesting that the US has worked hard to become a top heavy planned economy instead of an agile state of locally empowered decision makers ever since the USSR went down the drains of history.

  6. drB:

    Same at universities. See

    Faculty at UC System: increase from 6498 (1997) to 8661 (2006)
    Executives/senior management in administration: increase from 1651(1997) to 7825 (2007).

    Now every faculty has his or her senior manager. Most of the "money for education" goes into useless administration.

  7. Daedalus Mugged:

    It has been several decades since I was in a NY high school, and it was not in that part of the state (BOCES is regional) but my understanding was that BOCES was primarily vocational technical training and some special ed (easier issues in the district, harder went to BOCES). Some students did half day classes, half day BOCES. So an increase in interest in Vo-Tech could explain both the increase in BOCES spending as well as the decline in instructional training.

    For students who are not on an elite college track, Vo-Tech is a pretty attractive option. Auto repair or on track for a electrical apprentice program is probably more valuable than 11th grade English, European History or Pre-Calc.

  8. jdt:

    But just a .2% increase in administration allowed them to be so efficient they were able to shave off 3.9% off instruction!

    (I don't actually see it this way, just being playful.)

  9. Dan Hill:

    You mention government agencies wasting money on software and the like for back office functions they should outsource. Google "Queensland Health payroll". It will knock your socks off. Over a billion dollars for a payroll system that only sort of works...

  10. Smock Puppet, 10th Dan Snark Master and CRIS Diagnostic Expert:

    >>>>on software and the like for back office functions they should outsource...{snip}...Over a billion dollars for a payroll system that only sort of works…"

    Ah, I think I see your mistake. Instead of "back office functions", that should be "back end functions". Easy mistake. I'm sure someone got all the back end function they needed. There's no question the taxpayers did.

  11. sch:

    An additional aspect to the growing bureaucracy
    besides layer on layer of federal rules with money
    as the initial carrot to get things rolling is that
    the bureaucrats are almost always upgraded teachers
    who have tenure and are nearly impossible to fire
    so get shuffled around.

  12. DoctorT:

    I was amused by your education example: I attended K-12 public school in Phoenix, New York, a village of about 2400.* When I was in school (1960-1973), Phoenix had the lowest per student budget in the county--primarily because it had the lowest teacher pay in the county. This was not good, because teacher quality was almost as low as the pay. That situation changed during and after the 1980s: teacher pay increased to competitive levels, but administrative costs increased more.

    By the way, BOCES is a county-based system for high school who want to learn a trade such as plumbing, auto mechanics, horticulture, etc. Students in the program spend half a day in their local school and half a day at the county's BOCES facility. Sharing the BOCES training facility lowers the teaching and administrative costs for the individual school systems. A BOCES budget increase *may* be a good thing if it's supporting increased numbers of students in the program--more teens should be encouraged to learn a trade instead of attending college.

    *AFAIK, I was the first graduate of Phoenix Central Schools to become a physician.