What % of education dollars should be spent in the classroom?
Tue January 18, 2011 1:00 pm

Fiscal watchdog (and a few other descriptions) Michael Quinn Sullivan of Empower Texans raises the issue today of education spending and how much of every dollar should be spent "in the classroom":

[S]erious discussions must be had about the role of government, and expectations for the outcomes desired with each dollar spent. For example, 50% of each dollar in education is spent outside the classroom. With the “state” funding nearly 60% of the education bill (“locals” pay the other 40%), we should be directing those dollars into the classroom, not bureaucratic bloat.

Sullivan has boldly gone where many have gone before, including Rick Perry and his onetime protagonist, former comptroller Carole Strayhorn. This issue was quite a battle leading up to the 2006 gubernatorial election. In August 2005, Perry issued an executive order requiring school districts to limit their spending on non-classroom expenses, including buses, teacher training and administration, to 35 percent of their budgets. This proposal was part of an unsuccessful attempt to pass a new school finance law in a special session. School districts immediately protested that Perry's order amounted to an unfunded mandate.

At the time, according to the Houston Chronicle,
Texas school districts were spending about 60.4 percent of their money on classroom instruction.

When Perry first signaled his intention to impose the 65% edict, Strayhorn fired off a letter to education commissioner Shirley Neeley. It included this passage:

I am a staunch supporter of public education in Texas, and I wholeheartedly believe that Texas taxpayers deserve to know how their money is spent, and that it is being spent wisely. Fiscal responsibility is more important now than ever before. This rule, however, sets up a system where a district's demographics, growth patterns, and other conditions beyond their control can result in failure. It will mislead the public and will hamstring good districts with bad public policy.

Mike Falick, a Spring Branch ISD trustee, blogged about the issue:

While [the 65% rule] sounds good on its face, the definition of "instruction" or what is included in the 65% Rule, is problematic because the following were not included in the definition of "instruction:" Administration, Plant Operations & Maintenance, Food Services, Transportation, Instructional Support, including Librarians, Teacher Training and Curriculum, and Student Support, including nurses and counselors.

[Note to readers: These omissions are the reason why the 65% rule created an unfunded mandate.]

Ultimately, the Texas Education Agency's implementation allowed school districts to meet the requirement by posting the district's check register online, something Spring Branch began doing in November 2006.

As you can see from the ultimate resolution, the 65% rule was all theatre, no substance. Its determination of what did, or did not, pertain to the classroom was arbitrary. Without transportation, students can't get to the classroom. Without counseling, their performance in the classroom will suffer. Without food service, students' health will be affected. Without libraries, students' ability to read will be impeded. Wihout administrators, you can't even keep attendance records, much less all of the other paperwork the TEA requires.

So what has happened to the 65% rule? It's dead, a stake having been driven through its heart by House Public Education committee chair Rob Eissler at the committee's first meeting last session. Falick, citing the Quorum Report, reported its expiration in his blog:

Chair Rep. Rob Eissler (R-The Woodlands) told the House Public Education Committee today that the much-maligned 65 percent rule approved by executive order three years ago likely is a thing of the past. Gov. Rick Perry issued an executive order in August 2005, requiring that school districts expend at least 65 percent of operational funds on instruction in the classroom. In comments to the committee today, Eissler said he had met with Perry to discuss the new accountability system proposal and told Perry the 65 percent rule didn’t fit into the committee’s new vision of school accountability. Perry agreed, Eissler told the committee. Hence, it’s a pretty good bet the 65 percent standard, still being phased in as part of the state’s financial accountability system for school districts, will either be removed or neutralized in FIRST, the state’s financial accountability system for local school districts. “We need to set better rules,” Eissler told the audience.

Apparently Sullivan wants to restart the debate over whether there should be a one-size-fits-all policy for how much of the education dollar should be spent in the classroom. As the mid-decade debate over the 65% rule shows, (a) one-size-fits-all policies do not make sense when you are dealing with more than eleven hundred school districts of varying demographic characteristics, and (b) the policy has been shown not to work. It was a bad idea when Perry proposed it, and it is a bad idea now.

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