Jay P. Greene's Blog

(Guest Post by Matthew Ladner)

The early 1980s punk rock band Fear famously destroyed the set of Saturday Night Live (the gif above is from their SNL performance-SNL’s invitation to Fear to perform and bring some fans having been one of the greatest really terrible decisions of all time). In any case, Fear had a song called Let’s Have a War. Like most punk bands of the era Fear was out to frighten the parents of 15 year olds and draw attention to themselves with outrageous antics. The lyrics of Let’s Have a War (not to be confused with another Fear classic Bomb the Russians) as I recall went something along the lines of:

Let’s Have a War!

Jack up the Dow Jones!

Let’s Have a War!

It can start in New Jersey!

Ok Ladner where are you going with this? Right, so a refrain in the song:

It’s Already Started!

So out here in the Arizona cactus patch, the looming age of (relative) financial austerity and efficiency has already started. The people who work in the school system feel very grouchy about it, but where things stand today is much better than the recent past.

So let’s go back to the world of 1992 Arizona (blue columns). Arizona operated as a high-tax state in those days and the school districts were almost the only game in town (Arizona has always had a low rate of private school attendance).  The state had a majority Anglo K-12 population in those days, but unfortunately those Arizona Anglo students weren’t terribly skilled on average at reading English. Now mind you, they had proficiency rates 2.8 times higher than Arizona’s Hispanic student population at the time, but that provides little comfort.

What does this translate to today, in 2015, now that the class of 2000 have aged into the prime working years of their mid 30s? Let’s just say that many firms find it necessary to recruit nationally when searching for job candidates. No one was hoping for an overall reading proficiency rate in the low 20s in 1992, but we got it anyway.

Now let’s look at the 4th grade reading scores for the Class of 2021 (red columns). While these results leave a great deal to be desired, they are profoundly improved over the 1992 4th grade results. Arizona closed the gap for Anglo students with the national average, but failed to do so with Hispanic students.

Hispanics now constitute a plurality of Arizona K-12 students. A 17% reading proficiency rate constitutes a looming catastrophe for the Arizona of 2030 and beyond. Thus while we should recognize the fact that Arizona’s academic outcomes have improved greatly, we should also recognize that the state has a desperate need for still greater gains. Note however that all of those nasty policies that Diane Ravitch hates: standardized testing, charter schools, private school choice, etc. all started phasing in around 1994 in Arizona, and that the 2013 NAEP had the highest average scores in state history despite funding cuts and a large transition in student demographics. This does not constitute final glorious victory, but certainly progress.

Arizona is a relatively poor state with an unusually small working age population (lots of old retirees and young kids). Rapidly growing states tend to rank towards the bottom of state rankings of per pupil funding, and will do all the more so if lots of the state has either retired or is still in school. Arizona does have a large number of wealthy retirees, but let’s just say that many of them have other residences in addition to their get out of the cold spot, and this means they have the opportunity to avoid paying Arizona income tax.

The Great Recession was an elbow in the face to Arizona’s housing dependent economy followed by a swift kick to the head. (To you non-Gen X readers this is mosh-pit imagery consistent with the punk rock theme of this blog post). Once the federal stimulus money ran out real declines in per-pupil spending commenced. This document from JLBC shows that the inflation adjusted spending per pupil in the Arizona public school system dropped from $9,438 in 2007 to $7828 in 2014. 

Outrageous! Horrible! Get a rope!

Slow down on the lynch mob. The 2007 number basically represented the height of the property bubble and all of the funny money that it brought flowing into state coffers. Arizona had spent far less than that per pupil in the past, and the height of a bubble does not make for a good mental entitlement point. When the state had money, it increased K-12 spending. There has been joy before, there may be joy again, but the state can’t spend money it doesn’t have.

Of course we could raise taxes. This however is governed by a little thing called democracy. We had a governor’s election in 2014. One candidate promised to balance the state’s spending and revenues without raising taxes. The other claimed that he would not raise taxes but also campaigned on increasing K-12 spending. Arizona elected candidate A (Doug Ducey) by an overwhelming margin. A few years earlier, the school district industrial lobbying complex put a painfully convoluted ballot proposition to increase taxes for education spending on the ballot. The public rejected it by a huge margin. We have regular elections for state legislature. The voters have continued to elect a pretty conservative bunch and well, they had other options available to them.

Arizona voters did endorse a sales tax increase almost a decade and a half ago to increase the state’s base funding amount to inflation. The interpretation of this provision is currently a matter of legal dispute between the legislature and the industrial complex, but the resolution seems unlikely to result in a game changing amount of funding regardless of the outcome. Arizona doesn’t have a game changing amount of money to give to schools within the tax structure that voters have both explicitly and implicitly endorsed.

More importantly, Arizona’s 2013 NAEP scores were not only higher than 1992- they were higher than 2007. Between 2007 and 2013 Arizona NAEP trends: 8 point gain in 4th grade math, four point gain in 8th grade math, three-point gain in 4th grade reading, five point gain in 8th grade reading.  The proper term to describe an increase in outputs with decreased inputs: efficiency gain.

The folks working in the schools feel very grouchy. Unlike the risible bellyaching before the onset of the Great Recession (when spending increased and everyone had enrollment growth) they have a much more serious case to make in the current context. Running a school district in Arizona right about now is not an easy task- your per pupil funding has declined and your student count is more likely than not to be dropping. Tough decisions lie ahead on a worryingly large number of half-empty district facilities. You are having a tough time finding teachers as your Baby Boomers retire.

It’s already started in Arizona. Currently we are in year 5 of what you can either view as an age of austerity, or an era of improving efficiency depending on whether you view matters through a provider or a taxpayer lens. The Census Bureau projects large increases in Arizona’s youth and elderly populations over the next 15 years.

It’s not likely to get any easier. Arizona’s need for more effective and cost effective education delivery will continue to grow over time regardless of how much we choose to lament the need for change.