Showing posts with label education spending. Show all posts
Showing posts with label education spending. Show all posts

Wednesday, July 14, 2010

Do Anti-Immigration Activists Use Funny Math?

Check out THIS article, alleging that illegal immigrants cost California 10.5 billion dollars a year.

The basic premise is that the children of illegal immigrants constitute 15% of the school-age population, which costs California 7.7 billion dollars annually. I call shenanigans.

How does adding an extra 15% to the school-age population add 7.7 billion dollars in expenses? Does that sound right to you? If you increase class sizes, other than extra classroom supplies, how exactly do costs go up by the billions?

At some point, new teachers have to be hired (usually resulting in jobs to American citizens), and new classrooms built, but new construction and new supplies do not cost billions of dollars each year. In short, there is some funny math going on here.

Here's how I think the partisan institute came up with $7+ billion: California's K-14 education programs receive about 50 to 60 billion dollars a year total. Take 15% of that, and you end up with about 7.7 billion dollars, a very rough estimate that doesn't factor in teacher pension costs, lifetime medical benefits, and other undefined wage/benefit obligations.

Remember: 80 to 85% of education funding goes to teachers and administrators (mostly to teachers and teaching staff). That leaves 15% to the kids. 15% of 15% = just 2.25% of total education expenditures--not an additional 15% increase in education costs. A billion dollars is still significant, but it's nowhere near the scary 7.7 billion dollars number.

Another person's response: Fact: illegal immigrants "tax" our system through free schooling, healthcare (going to emergency rooms for simple colds and ridiculous laws forcing hospitals to treat them), and the thousands of examples of illegal immigrants committing crimes and packing out jails. I know both legal and illegal immigrants. Guess which ones care about laws?

If illegal immigrants even cost the system $10 it's too much. THEY ARE ILLEGAL. Not sure what's so difficult to understand about that. Or, do you support rapists rights, too? How about bank robbers? How about people who double park or run red lights?

The article is a brief synopsis of expenses. Do you really need it broken down to understand that it's bankrupting our state? Maybe the public hospitals that have closed down in the Bay Area are example enough. No? How about the school closings?

Response to above: Illegal immigration is a complicated topic, made even more complex by the absence of reliable statistics on tax revenue (which includes sales, gas, and uncollected Social Security taxes). I just worry when anyone singles out a particular group for much of society's woes. Such resentment is easy to inflame into hatred—and easy to exploit.

I will say this: we've had illegal immigration for many decades, and we still managed to have schools and public/county hospitals do well. Thus, it seems that the issues facing schools and county hospitals result from a multitude of different factors, not just illegal immigration. Also, if the children of illegal immigrants do well and become net contributors to the tax base, many of the financial issues relating to illegal immigration become moot. Just my two cents.

Wednesday, June 16, 2010

California Education Spending: Just the Facts

"In 2007, more than four-fifths (82.9 percent) of statewide spending for schools went to pay for the salaries and benefits of teachers and other staff."

From a California Dept of Education affiliated website (Jan 2010): "Although there is some variation, expenditures on salaries and benefits for all employees typically make up 80 to 85% of a district’s budget, with the bulk of it going to teachers." More here.

The California Teachers Association has been the largest lobbyist in California over the last decade and has spent more than $200 million on campaign contributions and lobbying efforts.

Teachers' unions have also been effective lobbyists at the federal level. Unions have received federal money for 400,000 jobs. According to the White House, "Additional federal aid targeted at preventing [teacher] layoffs can play a critical role in combating the [economic] crisis. Such aid would be very cost-effective. There are no hiring or setup costs...The American Recovery and Reinvestment Act of 2009 included some of this aid for 2009 and 2010. The recipient reports filled out by states and school districts show that, last quarter, Recovery Act funds supported more than 400,000 education positions. (White House blog, June 12, 2010)

For more on California politics and government unions, click HERE (Troy Senik, Fall 2009).


Update on June 2012: for a more detailed post on teachers' unions, click HERE.

Update on April 2017: "61 percent of budgetary expenses are related to instruction, followed by 35 percent for support services, 4 percent for food services, and less than 1 percent for enterprise operations. Trying to infer salaries... is tricky, because salaries and benefits will be reflected across the categories, appearing in instruction, support services and enterprise operations. Generally speaking, a school district spends between 80 and 85 percent of its entire budget on salaries and benefits, meaning only 15 to 20 percent remains to address all of the rest of the budget’s priorities and needs... Salaries account for 67 percent of the budget, followed by 22 percent for employee benefits, meaning that school districts have spent close to 90 percent of their instructional budget on staff and benefits."  From https://www.aasa.org/uploadedFiles/Policy_and_Advocacy/files/SchoolBudgetBriefFINAL.pdf



Saturday, July 11, 2009

California's Education and Pension Costs Out of Control

From AP writer Judy Lin:

Funding for K-12 schools and community colleges accounts for roughly half of annual state spending.

Funny how we haven't gotten smarter, but we've definitely gotten poorer. Meanwhile, California's state worker pension fund--which includes teachers' pensions--is still worth $177.7 billion. (Yes, that's billion with a "b.")

After years of staying mostly neutral, the San Jose Mercury News (July 7, 2009) finally issued an editorial opinion asking Sacramento to enact pension reform:

http://www.mercurynews.com/ci_12772192

The unfortunate truth is that the Democrat-controlled Legislature has been too quick to increase pension benefits and will resist reconsidering them unless it's forced to. Now is the time to do that...

Now, because of stock market declines and rising costs of health care, retirement costs are already siphoning $3.3 billion from the state budget, just when California is facing substantial cuts in education and services to the poor. That cost is expected to rise steeply. [Emphasis added]

By the way, in case you're wondering,
state workers get the following benefits: "3 percent of pay for every year worked, up to 90 percent maximum after 30 years for safety officers and 60 percent for other employees." Where can non-government workers get 60% of their salary guaranteed in retirement? If you discover a place that allows non-executives to claim the 60% retirement bracket, let me know. I won't be holding my breath.

Update on July 12, 2009:

For the record, I favor increasing teachers' salaries as long as pension costs are eliminated. Why not replace teachers' pensions with 403b plans (the public-sector equivalent of a 401k)? If a 401k/403b is good enough for a Google/Apple/Target employee, why isn't it good enough for a government employee, too?

The average government worker should not have better retirement benefits than the average non-government worker. Is a secretary or lawyer who works for the government "better" than a secretary who works for Pfizer or Pepsi? I don't think so, especially not when the modern economy is so inter-connected.

Retirement benefits like lifetime pensions and lifetime medical care are inherently unstable because you have to predict how long a worker will live--that's not an easy task. As a result, costs are unpredictable, which makes accurate budget planning difficult. Why not create a budget framework that allows us to definitively ascertain employee costs without worrying about the ticking time bombs of unfunded, unpredictable long-term liabilities?