Public School Spending in FY 2012: A Red State Comparison

As discussed in this post

the latest education finance data from the U.S. Census Bureau shows that New York’s public school spending per student is sky-high, not only in the suburbs but in Upstate New York and even New York City, even adjusted downward downstate for the higher cost of living here, and even compared with adjacent Northeastern states such as Connecticut, Massachusetts, and New Jersey. Although you’d never know it by all the propaganda being put out, primarily by the teachers’ union, claiming that New York’s taxpayers and children deserve less because we aren’t paying enough.

To put New York’s spending in even greater perspective, how about a comparison with a state where public school spending in general, and spending on teachers in particular, really is low? Let’s compare New York with right-wing, low-tax Oklahoma. A few charts and commentary may be found below.

First, let’s briefly review New York’s spending, before repeating the same numbers and charts for Oklahoma.

In FY 2012 public school spending per student averaged $12,023 in the U.S. as a whole, compared with $22,846 in New York City, $23,642 in the Downstate suburbs, $18,171 in the Upstate Urban Counties, and $19,262 in the Rest of New York State. With a downward adjustment for the higher cost of living and average private sector wage downstate, New York City’s spending falls to $17,835 per student, less than in Upstate New York but still 48.3% higher than the U.S. average. The figure for the Downstate Suburbs is reduced to $18,456.

New York’s public school spending is also sky-high relative to other parts of the high-tax, education-oriented Northeast. The $18,171 per student spent in the Upstate Urban Counties, $19,262 in the Rest of New York State, $17,835 in New York City (adjusted) and $18,456 in the Downstate Suburbs (adjusted) compares with just $15,554 in New Jersey (adjusted), $15,188 in Connecticut (adjusted), and $12,809 in Massachusetts (adjusted). These states have schools that are, or average, far better than those of New York City and as good as those in other parts of New York State.

We’ll show the chart for New York and nearby states again here.

Chart 2

Now, on the same scale, with the same color scheme, let’s show the level of public school spending per student for the state of Oklahoma overall, its two largest cities, Oklahoma City and Tulsa, and two “good school” suburbs of those cities, Edmond and Jenks. “Instructional” (mostly teachers) wages, salaries and benefits are the bottom two categories on the chart, with the U.S. average indicated by the horizontal line.

Chart 1a

The spreadsheet with these numbers in tables is here.

Oklahoma Census Public School Finance Per Student

In the chart the per-student spending data for Oklahoma has been adjusted upward by 17.5%. Private sector wages are relatively low in that state, and Oklahomans can’t be expected to pay as much in taxes for schools as New Yorkers or even average Americans. On the other hand, the cost of living is also relatively low in Oklahoma, in part because the other guy is also earning less and can pay less for housing. To put private sector payroll per worker and public school spending per student back in proportion for a fair comparison with the U.S. average, one has to conclude that Oklahoma’s spending is worth 17.5% more. But even with that adjustment, Oklahoma’s spending is low compared with the U.S. average, and very low compared with New York.

In FY 2012 public school spending per student averaged $12,023 in the U.S. as a whole. Before adjustment the Oklahoma averages were $8,558 per student overall, $9,615 in Tulsa, $8,300 in Oklahoma City, $8,208 in Edmond, $9,559 in Jenks, and $8,494 in the rest of the state.

Now let’s adjust for the cost of living, the data in the charts. With an upward adjustment for the cost of living , Oklahoma’s average spending is increased to $10,058 per student, still 16.3% lower than the U.S. average. Tulsa, with $11,300 per student, is a relatively high spending district in the state, but it is still 6.0% lower than the U.S. average and 36.6% lower than in New York City (adjusted). The other adjusted figures are $11,234 for Jenks, $9,755 for Oklahoma City, and $9,646 for Edmond.

Oklahoma’s low school spending is correlated with relatively low taxes. As I showed in the spreadsheet attached to this post,

Oklahoma’s state and local taxes equaled just 8.4% of state resident’s personal income in FY 2011, the fourth lowest in the country behind South Dakota, Tennessee, and Alabama. The national average was a state and local tax burden at 10.3% of personal income, about where it has been for a long time. I estimate the state and local tax burden at 15.8% of personal income in New York City and 13.5%, on average, in the rest of New York State, vastly higher than in Oklahoma.

So that’s their choice – lower school spending for lower taxes. In fact, Oklahoma politicians want to cut taxes more. In New York, in contrast, the teachers’ union and advocates demand even more school spending.

Here is what really surprised me about public school spending in Oklahoma. If one adjusts upward for the local cost of living and the ability of taxpayers to pay, its spending on everything EXCEPT teachers is higher than the U.S. average. It’s only a red state for teachers!

Chart 2b

Non-instructional current (not debt service or capital) spending averaged $4,181 per student in the U.S. The Oklahoma average was $3,631 per student, but adjusted upward for the lower cost of living and private sector pay that is $4,267, or higher than the U.S. average. Also well above the U.S. average after adjustment are Tulsa ($5,030), Oklahoma City ($4,829), and Jenks ($4,479). Edmond was below the U.S. average at $3,800, while the rest of the state as a whole hit the U.S. average almost exactly. (As a reminder in New York non-instructional spending is well below the U.S. average after adjustment for the cost of living in New York City despite very high spending on custodians and school buses, but sky high in other parts of New York State).

So what does this leave for instructional (mostly teacher) wages, salaries and benefits per student in Oklahoma, as shown by first two categories in the first Oklahoma chart? Not much.

Even adjusted downward for the cost of living New York City’s instructional spending per student still totaled $10,638 per student, which means that in the aggregate the city’s teachers were paid 87.6% more per student than the $5,672 per student for all teachers in the U.S. And far more than the $7,111 per student for New Jersey teachers, the $7,160 for Connecticut, and the $6,049 for Massachusetts. Instructional spending was about as high in other parts of New York State, on average.

Even adjusted upward, Oklahoma averaged $4,408 per student in instructional wages, salaries and benefits, 22.3% below the U.S. average and far less than half the average for New York City. Per student instructional compensation was $4,385 in Tulsa, $4,441 in Oklahoma City, $4,082 in Edmond, $4,057 in Jenks, and $4,429 in the rest of the state. All far below the U.S. average, even father below the good-school Northeast, and less than half the excess spending in New York.

To sum it up, on an unadjusted basis New York City spent $272,500 in instructional wages and benefits per 20 students. The average for Oklahoma was $75,000. New York City’s per student spending on teachers is nearly four times higher!

One difference is pensions. As I showed in this post, soon to be updated with 2012 data

New York City’s powerful teacher’s union has cut a series of political deals in Albany to vastly inflate the pensions teachers received, compared with what they were promised when they were hired. To the point where those teachers in on the deals get one year in retirement for each year worked (25/55), with an inflation adjustment for their pension, taxpayer funded health insurance in retirement, and no state and local taxes on their pensions.   New York is a high tax state? Not for retired public employees. And, lest anyone forget, the unions are pushing a bill in Albany to pretend that pension income isn’t there when deciding if they qualify for property tax relief as “poor seniors.” So in addition to not paying state and local income taxes, retired public employees wouldn’t pay much in property taxes either. Moreover New York’s retired teachers get Social Security in addition to their pensions.

As a result of all the retroactive pension increases and “incentives” over the years, and cuts in required employee contributions, the Center For Retirement Research finds that New York City’s teacher pension plan was one of the most underfunded in the U.S. in FY 2013 at just 55.6% funded. Future New Yorkers will not only have to pay for the pension benefits teachers earn in the future, but also half the benefits they earned (or at least got) in the past too.

This despite the fact that city residents already pay more in taxes for public employee pensions than anyone else on the planet. Based on Census Bureau data I’m working on for FY 2012, NYC teacher pension contributions average $55,200 per 20 students that year. And as the funded ratio shows (and given the likelihood of even more retroactive pension increases), that wasn’t enough. Oklahoma averaged $56,974 in instructional wages and salaries per 20 students, meaning that NYC spent almost as much per student on retired teachers as Oklahoma did on active teachers.

Meanwhile, the Oklahoma Teachers Pension Fund is only 57.2% funded according to the CRR, also one of the worst in the U.S. Not because of retroactive pension increases – the pensions of Oklahoma teachers have been retroactively cut over the years. But because Oklahomans have not paid for the pensions the state’s teachers were promised to begin with when they were hired. Promised in lieu of Social Security, which many of them will not get, thus saving taxpayers 6.2% of payroll. Public employee pensions are exempt from state income taxes in Oklahoma as in New York. But then again Oklahoma teachers have done almost all of the paying in for their pensions, while New York City teachers have done almost none of it.

There is one more piece of the story. Do New York City taxpayers, and Oklahoma taxpayers, get (or not get) what they deserve based on what they are willing to pay relative to what they have? You certainly have advocates complaining about low school spending in Oklahoma.

Like leaks in a levee, teacher shortages are springing up faster than Oklahoma school districts can respond” they complain. “Now, instead of shortages mainly in math, science and special education, schools are grappling with vacancies in all departments and grade levels, according to lawmakers and district recruiters.” Because of “increased competition in surrounding states” such as Texas and northwestern Arkansas, states that offer “better salaries and more classroom resources.”

But guess what? According to the head of the United Federation of Teachers Mike Mulgrew, even at the sky high spending levels described above New York City teachers were leaving for better jobs as well – except for those who weren’t good enough to get better jobs.

In other words, despite a massive increase in compensation for teachers NYC is still having the same problems attracting and retaining good teachers as it did 20 years ago when its schools were underfunded. Because the UFT has used its power to ensure that almost none of that increase in funding goes to starting and early career pay, and most of it goes to the retired.   So it could continue to claim that NYC deserves lesser teachers because it doesn’t pay enough.

And what about the morale of those who remain?

Tulsa Public Schools prekindergarten teacher Sommer Lyons, who works at ECDC Reed School, said she has considered moving to New York City. Lyons makes $34,100 a year as a fourth-year teacher and also works an extra 15 hours on weekends waiting tables at a Chinese restaurant.”

Lyons, a Teacher of the Year candidate, said New York’s average teaching salary of $75,279 has made her contemplate leaving her friends and family for better economic opportunities. The average teacher pay in Oklahoma is $44,128. While the cost of living is higher in New York City, Lyons said that would not be enough to outweigh the extra $31,000 she could potentially earn.”

She’s right, as my figures that adjust for the cost of living show. Moreover, as a young teacher she probably doesn’t know (and certainly no one has an incentive to tell her) that the way things are going she may end up destitute in old age, without either a pension or Social Security in Oklahoma. Because if the Oklahoma pension plan continues to be underfunded, it will be drained to provide benefits to existing retirees until nothing is left for those coming after. With the crisis coming long after today’s politicians are gone.

In New York, in contrast, the United Federation of Teachers, not content with pensions that were vastly more generous than their neighbors received, have already irrevocably scored increases that are so expensive that they may succeed in leaving the city so broke that Bag Ladies are left to die on the street, as in the 1970s (after a previous round of retroactive pension increases). The lesson learned by the unions at the time – take as much as you can get away with, because others (generally those worse off) will suffer the consequences. New York City public employees are not required to live in New York City (by state law), and a large share of the best off live elsewhere.

“It makes me feel a little resentful,” Lyons said of the discrepancy. “We are called on to teach. We will keep doing our jobs regardless of pay, and legislators know that.”

Guess what Sommer? According to the union’s pronouncements New York City teachers should be resentful too, and their work should reflect that fact that they aren’t getting what they deserve. It seems 23 percent of them, those who voted no on the latest contract, even after the union claimed it was the best those greedy city taxpayers would give them, agree.

That contract will increase cash pay by 20 percent over the next few years compared with the data cited above — pension costs are likely to rise as well.  If Wall Street doesn’t continue to throw off ever more tax revenues and the stock market does not continue to rise from re-bubble levels, even more service cuts, class size increases and tax increases will result.

Most New York City teachers also do their job, like those in Oklahoma, but only because they are “called on to teach.” Not because they are required to. Given that resources are scarce, and given the total cost to fire a teacher that does little more than show up the minimum amount of time and go through the motions under existing contractual and legislative arrangements, I’d say the UFT has arranged for its members not to have to do anything more than that. Costs including the years when teachers could retaliate for being scrutinized by doing nothing at all, as the process moves along, the administrative time to document their lack of work, the formal process to get rid of a teacher, and the court case afterward.

I’m sure that Oklahoma also has plenty of teachers who cannot or will not do their jobs, because Oklahomans won’t pay enough to replace them with those who can and will do their jobs, and must take whoever they can get (like NYC in the late 1990s).

And yet I know that New York City has plenty of teachers who don’t do their jobs, because the union won’t allow them to be replaced with those who will. And now the UFT is demanding an evaluation system that will pretend otherwise, but not change that essential fact. And is certain to get it. Who cares, if the campaign contributors and other influential people can make a phone call and get their child transferred to the class with the teacher who is called to teach, leaving some other child with the teacher unwilling to wait until age 55 before retiring?

The UFT has suggested that bad teachers should leave the profession.  Voluntarily, it seems.  But there are no jobs where they would be able to get as much for as little, so why should they go?  It is the teachers who actually do their jobs, particularly for children for whom there is little parental support, who might find the job tough and other opportunities attractive.

Meanwhile in Oklahoma:

Some lawmakers agree Oklahoma’s education is underfunded and teachers are underpaid. But they add there is just not enough money available for much more.

Rep. Earl Sears, R-Bartlesville, said he empathizes with the struggles of teachers like Lyons, but other residents also must make hard decisions about where to live and what career to pursue.”

In other words, if you were an idiot and went into teaching, don’t come crying to me! But in fairness I also discouraged my children from going into teaching in New York, because thanks to all the UFT “screw the newbie, flee to Florida” deals they’d end up killing themselves trying to make up for what the kids didn’t learn (from the savvy teaching milking the system) the prior year, taking home less in cash, and getting less of a pension – all to pay for those the union actually represents – the grifters and those cashing in and moving out.

Sears, who sponsored an income tax-cut bill opposed by many teachers, said the need for more education funding comes at a time when the state is in a fiscal pinch. More funds also are needed for public safety, mental health and corrections. Sears believes that a friendlier tax climate will attract more private companies to Oklahoma, generating more economic growth and a bigger tax haul.”

It hasn’t worked yet, but why not double down?

So what is the point of this discussion? Two things:

First, political people, paid flacks and noisemakers of all types want to talk about the attitude of teachers and their unions, and the funding of the schools and treatment of teachers and children, the same way everywhere in the country. And want to talk about taxes the same way everywhere in the country. As if things were the same everywhere in the country.

But a quick comparison shows it isn’t so. Some interests are better off and some are worse off in different parts of the country. And it seems that whoever is better off, rather than having a sense of gratitude and a willingness to make good on what they are getting, instead seems to gain an even greater sense of entitlement and demand even more. With no willingness to consider the impact on those who would be left with less.

So it is for New York’s public employee unions and advocates for lower taxes in Oklahoma. And that means someone who is honestly concerned with those on the outside of the room ending up on the wrong end of the deals should have a very different view in New York and Oklahoma. How can being a “progressive” mean the same thing in both places? A century ago “progressives” fought for better government against both monopolistic robber barons and political machines.

Second, since the UFT has arranged for New York City’s teachers to in fact be volunteers, given what they don’t have to do, I want them told just how good they have it. Rather than have their sense of resentment and entitlement inflamed by demonstrably false assertions that the’ve been ripped off.  Make them face it, even if they don’t want to. Let every teacher see the data I have posted. Let every taxpayer and parent see it to. Have it mailed to them. Every year. The new teacher contract is signed and approved, so telling everyone how high the level of spending was even before it would not constitute “negotiating in the press.” The supposed labor relations sin of letting the serfs who will be forced to pay know what they are paying for.

If the serfs did know, maybe we wouldn’t have to hear the lies about how ripped off people who have power are, the way we have to hear the complaints of the poor, put-upon Wall Street executives. We are going to get ripped off. We’ve the serfs, and if we don’t like it get the hell out –and if that means less in tax revenues they’ll just stick it to those who remain even more. I get it. What I would say to the political/union class (and for that matter the executive/financial class) is stop pretending otherwise and lying to us, and to yourselves as well.

Moreover I don’t want to hear any bullshit about how everyone is working together to make New York City’s schools better. We’ve heard it all too many times before, only to have that propaganda replaced by resentment, acrimony, and demands for even more money soon after the latest retroactive pension increase was approved. A cover for those retroactive pension increases was the only reason to pretend things could get better to begin with. By now those who have been paying attention ought to know the game. It is always the next few $billions that will provide NYC with the same class sizes and quality as the rest of the Northeast, since the previous few $billions are not going for “uncontrollable costs.”

I’ll believe it is otherwise when every newly-hired New York City teacher, rather than a green recruit, is a “teacher of the year candidate” with three or four years experience somewhere else. And every New York City teacher who doesn’t think they have a fair deal, because they aren’t getting as much as the other people who matter (Wall Street and celebrities on TV I guess) is sent to fill the vacancies in somewhere like Oklahoma.