Who Pays for Education and What It Proves

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Yesterday, I had an interesting Sunday Twitter conversation when local policy guru Gary Sasse suggested that Rhode Island should replace its notion that “tax incentives and real estate deals” are game changers and instead focus on “education, education and education.”  By way of agreeing, John Ward of Woonsocket asserted that Rhode Island is last in the country when it comes to state funding (“participation”) in public education, suggesting that this points to the problem of our high property-tax burden, to which Sasse added the specific that RI ranks 44th in portion of school funding coming from the state.

That raises an interesting topic — one of those that illustrates both how slippery statistics can be (advising caution about their use) and how useful such data points can be for narrowing down what people find to be important and what they believe would change things for the better.  Such exercises may be the only way really to advance policy discussions.

Although I couldn’t get anybody to point me to a specific source, I think they were referring to a Census report from last June that breaks down state-level 2013 education funding by use and by source.  Indeed, according to Table 5 in the report, Rhode Island is 44th  on the list for the percentage of public elementary and secondary school funding that comes from “state sources.”

The problem, for John’s property tax point, is that Rhode Island improves a little, moving to 42nd, when it comes the percentage of funding that comes from “local sources.”  More importantly, the states that rely more on local revenue (which is presumed, in the conversation, to be a bad thing holding Rhode Island back) are more-directly comparable to Rhode Island as a regional matter: Connecticut, Massachusetts, New York, and New Jersey.

Another dimension of the ranking that Sasse original cited can’t be ignored — namely, the amount that each state spends in total.  Rhode Island’s funding from local sources is 7th highest (not counting Washington, D.C.), behind its near neighbors.  But our state funding is hardly back-of-the-pack, at 21st, and is supplemented by the 9th-highest federal funding.  In other words, that original percentage (state portion of funding) results from the facts that (1) the state spends so much in total and (2) the local governments add so much more into it.

Now, I’m definitely not one to deny that the state forces much of this cost onto localities, through funding mandates and laws in favor of labor unions that drive up local costs.  But that doesn’t mean the answer is to shift the excessive burden from local taxpayers onto state-level taxpayers, much less that doing so would be a game-changing economic development move.



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