Re: My Write, Feb. 13, page 4
In his column, Bill Bauer gets his analysis of the School Board’s recommendation to increase slightly the number of interdistrict school permits completely wrong. Bauer observes that our school district’s average spending per student approaches $10,000 and that the state provides about $5,300 per student. He then concludes that each additional student would lose the district $4,700.
Bauer totally misses the crucial distinction between average and incremental costs. A sizable portion of a school district’s costs are fixed, meaning that they don’t vary as small numbers of students are added or subtracted. Fixed costs include personnel in the district’s central office, administrative and support staff at individual schools, the costs of operating and maintaining our buildings, and even some teachers. For instance, adding small numbers of students would not require that the district hire additional music, art or physical education teachers. While fixed costs contribute to the average cost of educating students, they do not add to the incremental cost of educating small numbers of additional students. The main contribution to the incremental cost of educating additional students comes from classroom teachers: if the district wishes to keep class sizes the same, new teachers must be hired to serve the additional students. In some cases, buying additional books could be necessary, but in districts where enrollment has been declining, like ours, there are enough books. So let’s do the analysis correctly.
A conservative assumption is that our district would need to hire or retain one additional teacher for every 25 additional permit students, who would generate $132,500 (25 X $5,300) from the state. The average cost of a teacher in our district is about $80,000, including salary and benefits. However, the additional teachers hired or retained to serve these students would tend to be younger than average, and would probably cost $65,000-$70,000. Thus every 25 additional students would generate a surplus of $60,000-70,000 ($132,500 in additional revenue minus $65,000-$70,000 in additional teacher costs) that could be used to provide services to our current students. Another way to look at it is that adding 25 students would generate enough revenue to enable the district to hire or retain two teachers — one would be needed to serve the new students, but the other would serve students who are already here.
It is hard to comprehend how the flaw in Bauer’s analysis was not obvious to him. If his analysis were correct, losing students would be profitable for school districts (the flip side of his mistaken belief that districts take a loss when they add students), and districts around the state would be trying to reduce their enrollment. Instead, as Bauer surely knows, declining enrollment is disastrous for school districts’ finances, and districts do everything they can to hold on to students.
Finally, it is essential to understand why our district is considering adding a small number of permit students. Ten years ago, there were about 12,700 students in our district, with more than 2,600 of them (21 percent) on permit. At that time, the board developed policies specifically intended to deal with overcrowding in our schools and reduce the proportion of permit students. Under the new policies, our district’s enrollment fell to 11,500 students three years ago, with about 1,500 of them (13 permit) on permit. Due to the severe budget cuts from the state — this year we are receiving approximately $15 million less than we should be getting — the board has tried to maintain enrollment at 11,500 for the past three years. Unfortunately, however, our enrollment has continued to drift downward and this year stands at 11,344 students, with 1,300 of them (11.5 percent) on permit.
In an ideal world, our district would not add permit students. In the real world, however, policymakers are called upon to consider difficult trade-offs and make difficult decisions. By adding a small number of permit students to put the brakes on our declining enrollment, our district can blunt the additional increases in class sizes and program reductions that are likely to be required as a response to the state’s remorseless cuts to school funding.
José Escarce, M.D., Ph.D is a member of the Santa Monica-Malibu Unified School District Board of Education.
