Why Education Spending Goes Up

We are well into the town’s budget creation process for the 2012-13 fiscal year and that means that the Board of Education (BOE) has approved its requested budget and forwarded it to the First Selectman.  It also means that people have already started to call for reducing the increase, with some people calling for no increase in spending and some even calling for a reduction in spending in real dollars.  Does this make any sense? 

We know that in our own lives the prices that we pay for things goes up all the time.  The federal government even tracks these increases in the Consumer Price Index (CPI). My guess is that most people don’t like these increases, but we understand that they are real.  Why then do we find it strange and hard to accept that municipal or education spending would increase? 

I think part of the problem is that we don’t discuss the underlying reasons for the increases in costs.  Much of the public commentary is based on comparisons such as spending should not increase because enrollment is decreasing or because of what some other town is doing.  Other comments like spending should not increase because taxes in Monroe are too high, or because the economy is bad, or because we need to spend more on municipal items, do nothing to address the causes of increases in costs. 

We have lost sight of the fact that the dollars we spend (or propose to spend) actually purchase specific quantities of goods, services, and skills at a given cost per unit.  Until we start talking about the increases in the per-unit costs, we can never have a real dialog. 

In the education system, employee costs are by far the largest group of expenses and account for about 80% of the budget.  Of these costs, salaries are the largest element.  Most employees are covered by union contracts.  These contracts generally are three years in length and with rare exceptions there is always an increase year to year in the cost per person.  I understand that many people don’t like unions; don’t like the state laws under which contracts are negotiated; and don’t like these ever-increasing salaries.  Never the less, these increases are real and they are known well in advance. 

Medical costs make up another large block of the employee costs.  Most of us have seen the increases in the costs of medical care for ourselves and our families.  We have heard or read that medical costs are rising faster than most every other area of spending.  Therefore there is, or should be, little surprise when these costs go up within the education system.

The education system also has contracts for services such as bussing.   Here too costs generally go up.  Re-biding the contract has slowed the pace of increases in the past, but the overall trend is higher costs. 

How about utilities?  While these can be more variable – more ups and downs year to year - than other expenses, the reality remains that when they do rise, there is little anyone can do about.  The school district is already in a buying consortium to leverage high volume, lower cost purchasing power. 

Then there are rules, regulations, laws, and mandates – partially funded and unfunded – that have to be followed.  In the school system Special Education may be the largest single type of expenditures in this group.  If new students move into the district or if existing students need more services or more costly services, the school system is required to supply it.  

There are other examples that could be listed, but these cover the bulk of education spending. Since the per-unit cost of goods, services, and skills to be purchased are going to continue to increase, we need to start talking openly, truthfully, and in detail, about what we need or want to purchase and what trade-offs can be made, as well as potential impacts from those trade-offs.  To be sure, talking about the details of a $70 million-plus total town budget or a $50 million-plus education budget is difficult.  However, if we are ever going to have a truly civil public discourse based on real facts and information, then we have to start talking about the specific, detailed, elements of the budget.