LAUSD spends $30K per student

AUGUST 20, 2010

By JOHN SEILER

The research by Adam Schaeffer of the Cato Institute’s Center for Education Freedom seemed shocking: The Los Angeles Unified School District spent $29,780 per student in fiscal year 2007-08. That’s way above the $10,000 as advertised by the school district, and as used in most studies.

The $29,780 per student figure means a class of 25 students would spend $744,500 a year.

I talked to Schaeffer and had him send me his research, which I’ll append to this article. He also pointed to a more comprehensive study he conducted in March, “They Spend WHAT? The Real Cost of Public Schools,” which tracked and compared school-district spending around the country. It includes data on LAUSD that was updated in his more recent research. The earlier study found a wide divergence in total spending in California school districts, such as only $11,215 for Linwood Unified and $20,751 for Beverly Hills Unified.

I also talked to the LAUSD and to Lance Izumi,  Koret Senior Fellow in Education Studies at the Pacific Research Institute, CalWatchDog.com’s parent institute.

Basically, what Schaeffer found was that the LAUSD doesn’t count capital spending, such as from local and state bond measures passed by voters. For example, $1.18 billion was spent in 2007-08 from Measure R, which 64 percent of voters passed in March 2004. And the district spent $668 million from state Proposition 55, also on the March 2004 ballot. According to Ballotopedia, it barely passed with 50.9 percent of the votes. Both were bonds.

Those and similar measures were passed during the boom times of the California economy. It’s a good question whether voters would pass them during the current deep recession. It’s also curious that these bonds, and similar ones, were passed at a time when state and LAUSD student enrollment has been declining.

Why isn’t this money accounted for in the usual per-pupil tallies? “They act as if its ‘bond revenue. Oh, it’s not tax money’,” Schaeffer told me. “What the districts do is like credit card debt. It’s revolving. When you bring it up, they always move the topic of the conversation to, ‘we froze salaries and cut positions’.”

LAUSD responds

I called up LAUSD, talked to Spokesperson Lydia Ramos, and sent her links to Schaeffer’s research. A week later I called her for her perspective. “Essentially it’s going to be difficult to comment,” she replied. “Most school districts don’t count capital funding” in budget reports. “We obviously are doing our best to pass every dollar down to the classroom.”

I pointed out that, when I buy something at Walmart, the price includes the costs of capital spending for buildings. “That’s not how we view our work,” she replied. And she said of the money sent for capital construction from Sacramento, “That’s really a state decision. When no one else does it” – includes capital spending in per-pupil spending numbers. “Why are we perceived as under-reporting when no one uses this methodology?”

I brought up Schaeffer’s number of $29,780 per student and asked if that was correct. “You’re using a methodology that only you are using,” Ramos replied. “No, that’s not accurate. That’s not what we’re doing. I’m going to have to let you go. This is an issue to take up with the state, or your local district, to see what they are doing.” [This is the first time in my 35 years of journalism that an official spokesperson has hung up on me.]

Because LAUSD gets both state and federal tax dollars, its spending is of interest to those outside the district’s boundaries.

Legitimate costs

“Those are legitimate costs to include,” Izumi told me of the capital costs. “They can say they don’t count it. But the specification for those costs always is that they will help kids.”

For example, as Ballotopedia recorded, Prop. 55’s ballot question asked state voters, “Should the state sell twelve billion three hundred million dollars ($12,300,000,000) in general obligation bonds for construction and renovation of K-12 school facilities and higher education facilities?” The bond had almost no opposition. Major funding behind the measure came from the California Teachers Association and the California Building Industry Association.

The cost of Prop. 55 is about $823 million per year, a significant contributor to the state’s current $19 billion budget deficit. LAUSD’s 694,288 students in 2007-08 were about 11 percent of the state’s approximately 6.3 million public-school students.

As to the LAUSD’s insistence on excluding capital costs, Izumi asked, “Would these kids learn the same if they were sitting in the park some place? To not include those costs is only to give half the story about what’s being spent in those schools. If the district had a disagreement with what the Cato Institute put out, then they should engage in argument about it. If the district isn’t willing to engage, then you have to wonder how strong a case they have.

“They didn’t say they disagreed with it. They just said they didn’t include the figures the Cato Institute used. That gives credence to Cato’s methodology. Public schools often aren’t willing to engage in debate.”

For its $29,780 spent per student, LAUSD’s graduation rate is 40.6 percent, second worst in the country.

John Seiler, an editorial writer with The Orange County Register for 20 years, is a reporter and analyst for CalWatchDog.com. His email: [email protected].

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Appendix: Los Angeles Unified School District Budget Data, Fiscal 2007-08:

			2007-08	2007-08
		C (bond) or DS?	Authorized Amounts	Estimated Amounts	Comments	Source
			(millions)	(millions)
	General Fund – Regular Program		6,270.5	5,919.4		pdf p 325-355	http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/LAUSDNET/OFFICES/CFO_HOME/BSFPD_HOME/SUPERINTENDENT’S%2007-08%20ADOPTED%20FINAL%20BUDGET.PDF
	General Fund – Specially Funded		1,313.5	1,288.3
	Adult Education Fund – Regular		211.9	189.0
	Adult Education Fund – SFP		55.8	55.8
	Child Development Fund – Regular		117.8	106.4
	Child Development Fund – SFP		46.4	46.4
	Cafeteria Fund		334.5	334.5
	Deferred Maintenance Fund		200.3	50.2
	Building Fund – Proposition BB	C	124.9	94.6	NB some amounts in these funds are from state or local matching, i.e. not necessarily from bond revenue
	Building Fund – Measure K	C	1,094.5	929.5
	Building Fund – Measure R	C	2,905.5	1,183.5
	Building Fund – Measure Y	C	1,516.0	505.6
	County Sch Facilities Fund – Prop 1D	C (state)	703.2	358.0
	County Sch Facilities Fund – Prop 55	C (state)	1,337.9	667.9
	County Sch Facilities Fund – Prop 47	C (state)	710.4	260.4
	County Sch Facilities Fund – Prop 1A	C (state)	28.9	28.9
	Special Reserve Fund		258.3	190.5
	Special Reserve Fund – CRA		19.5	2.5
	Special Reserve Fund – FEMA		9.9	5.9
	Special Reserve Fund – FEMA – Haz Mit		2.8	2.8
	Capital Facilities Acct Fund		233.3	183.3
	State Sch Bldg Lease/Purch Fund		8.0	7.0
	Building Fund	C	2.2	1.2
	Bond Interest & Redemption Fund	DS	542.2	542.2
	Capital Services Fund	DS	39.7	39.7
	Tax Override Fund	DS	0.1	0.1
	Health & Welfare Benefits Fund		849.1	849.1
	Worker’s Compensation Fund		125.6	125.6
	Liability Self-Insurance Fund		17.0	17.0
	Annuity Reserve Fund		0.0	0.0
	Attendance Incentive Reserve Fund		0.1	0.1
			19,079.8	13,985.4
NB	Early Childhood Educ.		136.6			p. 111-87 or pdf p. 225	http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/LAUSDNET/OFFICES/CFO_HOME/BSFPD_HOME/SUPERINTENDENT’S%2007-08%20ADOPTED%20FINAL%20BUDGET.PDF
			19,080.0		discrepancy with 19079.8 must be due to rounding
	minus Adult Education funds and Early Childhood Educ.		18,675.7			From the ’08 CAFR
									Total Governmental Funds ((Actual) Expenditures)
	minus Adult Ed and Interfund Transfers		18,467.1			Debt service – principal			200.514
						Debt service – bond, COPs, and capital leases interest			334.525
	total DS		582.0			Debt service – refunding bond issuance cost			6.02
	principal payments*		215.7	*NB this is an approximation for principal payments using actual ’08 expenditures — see right					541.059
						Principal payments as fraction of total actual debt service expenditures			0.370595
	total local-bond-fund capital spending		5,643.1
	ADA K-12 figure		612,655.0			pdf p 437	http://notebook.lausd.net/pls/ptl/url/ITEM/55752D9E45A920BCE0430A00021020BC
	Stated per pupil spending		10,053.0		their calculation uses ADA figure of 653,672.41	pdf p 153	http://notebook.lausd.net/pls/ptl/docs/PAGE/CA_LAUSD/LAUSDNET/OFFICES/CFO_HOME/LAUSD%20CAFR%20FY2007-2008WO.PDF
				Disparity
			minus Interfund Transfers and  Adult and Early Childhood Ed.
			Per-pupil $	Disparity
	Total K-12 per pupil spending		30,142.7	200%
	no principal payments		29,790.7	196%