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December 25, 2008

How Much Do We Spend?

One of the most common conversations I have with people about education reform goes something like this:

Me: What do you think the biggest problem is with our public schools?

Mr. Spendmore: We don't spend enough money.

Me: How much do you think we spend now?

Mr. Spendmore: Uhh... I don't really know.

In 2009, I hope that education reformers talk more precisely about how much money we are spending.  Let's look at New York City.  From the City's Department of Education website, we learn:

"For the school year 2008–09, the Department of Education’s total budget is $21.05 billion, including $3.45 billion to pay pensions and interest on Capital Plan debt. The Department will spend $17.6 billion on the day-to-day operations of the school system."

Now, some people would like us to ignore the pensions and interest on debt, because these amounts don't go towards directly operating the schools.  This is a financial maneuver that is crushing or will soon crush many city and states around our country.  These pensions and debts were created by past commitments to workers and other past borrowings.  Today, as we pay off the old liabilities that are coming due, we are building up future pension (and other) liabilities.  Perhaps someone could calculate the present value of those future liabilities.  I would bet that they are significantly greater than the current costs of our old commitments.  Without doing that work, I think the total budget of $21.05 billion is, most likely, a conservative estimate as to how much money we are spending.  I encourage others to help me to estimate these numbers more accurately. 

From another document on the DOE website, we learn that there are approximately 1,035,300 students enrolled in the system.  That comes out to $20,332 per pupil.  

Do I have this right?  I encourage readers to help us arrive at the best estimate possible. 


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