Now, Reinvent The Schools

Forget about schools as simply places to teach kids. Devolution is chic in Washington, so now is the time to see schools for what they really are--local government institutions. Some 30% of all civilian government employees in the country, 6 million people, work for the public schools. Some one-third of all state and local spending on goods and services goes to elementary and secondary education. That's upward of $265 billion. Schools are Big Government at the local level, and that is precisely why they are in such a mess.

Reengineering this apparatus, in much the same way Corporate America has been restructured, is critical to providing quality education. Most schools are nothing less than a caricature of an old industrial factory--rigid, top-down, bureaucratic, and rules-driven. It makes for incredible inefficiency. Only 52 cents of the average dollar spent on public education gets into the classroom. Where does the rest go? Nobody knows.

School systems typically have only a dim idea of how much goes where. When Christine Todd Whitman, New Jersey's Republican governor, recently instituted a new accounting system that disclosed costs, school districts discovered they were spending $3,000 to $6,000 per student every year for administration alone. Nationally, per-student spending has gone up 25% over the past decade, adjusted for inflation, without much to show for it. Now we know why, in part.

There are other reasons. Too much government, for one. The suburbs of America are a crazy quilt of independent school districts, each with its own administration and buildings. Paid $100,000 to $150,000 in many regions, top administrators beget managers who beget assistants who beget.... And cities are no better. Local, decentralized school districts are run as patronage machines by local politicians who trade jobs and contracts for votes.

Then there are the teachers, most of them dedicated and talented. Still, teachers have turned to a powerful union for protection, and it has done its job well. At the federal level, the National Education Assn. virtually determines policy on education. At the local level, it has been able to win lifelong tenure for its members, plus a compensation package that is the envy of most working people: 10-week vacations and a gold-plated package of health and pension benefits that disappeared in the private sector long ago. Why? Companies could not longer afford it. Neither can taxpayers.

What can be done to improve educational productivity? Plenty. Site-based accounting can disclose waste and unmet educational needs. Charter schools and vouchers can provide critical competition. Instead of new buildings, both the school day and school year can be extended to pack in more classes. Keeping schools open until 5:30 would help working parents, and extending the school year through July could provide the extra capacity to absorb the growing number of children.

Throwing money at poor education has proven problematic at best. Scores have not improved appreciably despite billions in new funding. Schools are government institutions. It's time to reinvent them.

Before it's here, it's on the Bloomberg Terminal.