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Report Contests Huge Boost in School Dollars

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Researchers aiming to debunk charges that public schools are a sinkhole for taxpayers' money said last week that school spending has increased much less in recent decades than is widely believed.

The nation's spending on schools climbed 61 percent in the past quarter-century, not doubled, as has been previously thought, says the report issued by the Washington-based Economic Policy Institute.

Moreover, only 28 percent of the new dollars devoted to education during those years was spent on regular classrooms. Programs targeted for a narrow slice of students--including the disabled and students with limited English proficiency--absorbed about 60 percent of the new money, the report says.

The findings dispel the notion that schools have been lavished with money while only improving marginally, Richard Rothstein, the report's author, said at a press conference here.

"The widespread belief in some kind of 'productivity collapse' in schools, with vast resources poured into schools with no results, is not just wildly exaggerated," he said. "It is wrong."

Many education leaders welcomed the report by Mr. Rothstein and consultant Karen Hawley Miles as confirmation of their own views of the trends in school spending.

"Schools get tagged with the cost when money really goes for other services," said Albert Shanker, the president of the American Federation of Teachers, "so it looks like education costs are going up."

But some researchers questioned the data, Mr. Rothstein's methodology, and the political agenda of the epi, a liberal think tank.

"You've got to consider the source," said Herbert J. Walberg, a research professor of education at the University of Illinois at Chicagosic. "If it was an independent university or economist saying this, I would take it a little more seriously."

Taking On School Critics

Mr. Rothstein's research is cited in The Manufactured Crisis, a recent book by David C. Berliner and Bruce J. Biddle that portrays much of the criticism of public schools over the past decade as unfounded. (See Education Week, Sept. 13, 1995.)

The new report is not the EPI's first research to counter the arguments of public school critics.

In 1990, the institute disputed the claim of members of the Bush administration that the United States spent more on education than other industrial countries did.

The epi findings were hailed by some, but lampooned by administration aides as mixing "apples, oranges, and moonbeams to produce an indigestible concoction."

Three years ago, the epi began looking at figures cited by such public school critics showing that the nation's spending had doubled in the past quarter-century, said Jeff Faux, the think tank's president.

"We get curious when everybody believes something but there is no empirical data to support it," Mr. Faux said at the press conference.

In his research on school spending, Mr. Rothstein rejected the use of the Consumer Price Index, the federal government's inflation measurement that tracks changes in the retail prices of a constant set of goods and services, because he believes it underestimates inflation's effect in education. Instead, he devised another index that he argues is better suited to labor-intensive service industries such as schools, where prices grow faster.

Using this index, the $200 billion jump in school spending between 1967 and 1991 translates to a 61 percent increase in real dollars, not 100 percent.

His new index may not be perfect, Mr. Rothstein said, but "it is a much better way to look at education spending" than the cpi.

Auto Care and Schools?

But the new inflation index has raised eyebrows among economists and school-finance experts. Eric A. Hanushek, a professor of economics and political science at the University of Rochester in New York, said he was puzzled by the other services that Mr. Rothstein lumped in with schools in devising his new index.

"I don't see auto repair and personal care as being very close to the cost structure of schools," said Mr. Hanushek, a leading critic of the belief that increased school spending is needed to produce greater achievement.

A second aim of Mr. Rothstein's research was to measure spending over those 25 years against the new inflation index in nine districts: Anne Arundel County, Md.; Bettendorf, Iowa; Boulder, Colo.; Claiborne County, Tenn.; East Baton Rouge, La.; Fall River, Mass.; Los Angeles; Middletown, N.Y.; and Spring Branch, Texas.

In those districts, Mr. Rothstein calculated, spending on "regular" education--dollars that paid for teacher salaries, school libraries, textbooks, curriculum development, and other traditional education activities--grew by an average of only about 1 percent a year from 1967 to 1991. In Los Angeles, the report says, regular-education spending actually dropped by 3.5 percent over those years.

New Students, New Costs

Meanwhile, spending on special-education programs in the districts boomed, accounting for an average of 39 percent of the new dollars. In Fall River, Boulder, and Middletown, the special-education programs absorbed almost half of all the new dollars spent by the districts.

The increases resulted from changes in federal disabilities law that brought many new students to the schoolhouse door who once were cared for in hospitals or at home, Mr. Rothstein said. "The bulk of this new spending is for students who would not have been in the system in 1967."

Since major federal disability-rights laws passed in the 1970s, "we've been signing off on special-education out-of-district placements that can cost $80,000 and $90,000 each," said James Gibney, the superintendent of the 12,300-student Fall River district. "In some districts, you could have a budget item overnight of well over $1 million."

The report's findings that 40 percent of new spending went to special-education programs also appear to jibe with a recent study by professors at the State University of New York at Albany on spending in New York state.

Still, some finance experts said that not all schools have seemed especially burdened by special-education mandates.

"Schools have absorbed these funds with great vigor," Mr. Walberg of the University of Illinois contended. "Many school administrators and school boards try to get as much of these funds as possible."

For More Information

Copies of "Where's the Money Gone?" are available for $2 each from the Economic Policy Institute, 1660 L St. N.W., Washington, D.C. 20036; (800) 374-4844.

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