February 26, 2015

Education Spending

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K–12 education. Elementary and secondary education in Florida is provided by Florida’s 67 school districts, but while it is administered by local governments (i.e., school districts), more than 55 percent of K–12 school expenditures comes from the state.[1] The K–12 system saw a considerable increase in enrollment during the 1990s, but it slowed in the first decade of the 21st century. Table 9 shows that enrollment went from about 2 million in 1993/94 to 2.5 million by 2001/02. A decade later, 2011/12 enrollment was only slightly higher at 2.7 million, and actually lower in 2011/12 than it was in its peak year of 2005/06. During the 1990s, it was common for enrollment to grow by 2 percent to 3 percent a year, whereas since 2005/06, enrollment growth has only been a fraction of a percent each year, and was even negative in some years.

One measure of the quantity of educational services provided is the pupil/teacher ratio, and the two right-hand columns in table 8 show that Florida has not been far away from the national average over the entire time period. The pupil/teacher ratio peaked in 2002/03, and perhaps not coincidentally, in 2002 Floridians approved a citizen initiative constitutional amendment to limit class sizes in K–12 schools. The limits are 18 students in a class up through third grade, 22 students in grades four through eight, and 25 students in grades nine through twelve. This constitutional limit on maximum class sizes places a burden not only on the instructional budget but also on the construction budget, because additional classrooms might be needed to accommodate the constitutionally required cap on class size.

Looking in table 9 at the years before the 2002 class size amendment, one can see the enrollment growth ranging from about 2 percent to more than 3 percent each year and understand why class sizes were expanding. Part of Florida’s growth included school-age children, and the frustration of parents who were sending their children to increasingly crowded schools resulted in that citizen initiative amendment. Comparing Florida’s average class sizes to the national average, Florida was only one or two students above the national average at that time, but in rapidly growing areas, classes could have had more students.

Demographic trends helped curb the increase in class sizes across the state, as student enrollment never grew by more than 2 percent a year after the 2002 amendment was passed, and for three consecutive years, statewide enrollment actually declined. It was not much larger in 2011/12 than it was when the class size amendment was passed.

Looking back to table 8, it does not appear that the class size amendment had much of a long-run impact on K–12 education spending. Spending did rise slightly to above 20 percent of total expenditures for a few years, but in 2012/13, the 18.8 percent of expenditures going to K–12 education was about the same as when the amendment was passed.

Table 10 shows that expenditures per pupil have increased significantly throughout the period. Expenditures in 2002/03 were $6,729, and they increased by 45 percent to $9,752 by 2011/12. However, this increase in spending did not even keep up with the national average. The national average in 2002/03 was $7,734 per pupil and increased by 53 percent to 11,864 per pupil by 2011/12. Florida’s per pupil expenditures were 87 percent of the national average in 2002/03, and had fallen to 82 percent of the national average by 2011/12. It is interesting to note that over that time period, Florida’s pupil/teacher ratio had gone from above the national average to below it, while its expenditures per pupil had fallen relative to the national average.

Measuring the output of schools is a difficult task, so the production of education is often judged by measuring inputs rather than outputs. One measure of inputs is the pupil/teacher ratio, and by this measure, Florida looks good, having gone from above the national average to below it. Another frequently cited measure is expenditures per pupil, and here Florida has consistently been below the national average and in fact has fallen over the past decade relative to the national average. However, looking only at inflation-adjusted expenditures per pupil, Florida has shown substantial increases—just not as substantial as the rest of the nation. Of course, expenditures show the cost of educating students, not the benefit, so this measure is problematic in any event.[2]

Measurement of student progress is the motivation behind standardized testing for students, something Florida has done for decades. In 1998 Florida adopted the Florida Comprehensive Assessment Test (FCAT) to evaluate student progress in a standardized test that enables comparisons from year to year, and across schools. Standardized testing has been controversial because of the claim that teachers then “teach to the test” rather than providing a more general education that emphasizes critical thinking over facts and procedures that will be tested. The national push toward standardized testing was reinforced by the 2001 No Child Left Behind Act that tied federal funding to learning standards. States were free to set their own standards, but in 2010, the Florida legislature voted to leave the old FCAT behind and adopt the nationwide Common Core Standards, which are taking effect in the 2014/15 school year.

A big part of the push for standardized testing is to make teachers accountable for their performance in the classroom.[3] Parents complain about teaching to the test, and teachers complain that student performance is determined at least as much by students’ home environment as by what happens in school. Nonetheless, accountability seems to have strong political support. In the 2014 session, the Florida legislature passed legislation that evaluates teachers annually based on their students’ performance on standardized exams and restructures salaries so that high-performing teachers can earn more than others, even more than those with more seniority. Newly hired teachers will no longer be able to earn tenure but will be hired on annual contracts, all with the idea that accountability will improve teacher performance.

Needless to say, teachers’ unions do not like the new system, and the Florida Education Association has filed a lawsuit arguing that the new law is unconstitutional.[4] But Florida has a majority-Republican House and Senate and a Republican governor. Teachers’ unions typically support Democrats over Republicans, so the governor and majority in the legislature can figure that the new laws will not cost them many votes because those who oppose the new system would not have voted for them anyway.

Higher education. Florida has 12 universities plus 28 state colleges in its state university system. The state colleges began as two-year community colleges but now all offer four-year degrees and most have changed their names (for example, from Santa Fe Community College to Santa Fe State College). The higher education system has evolved and expanded as people around the state have expressed a demand for colleges in their local areas. Responding to this demand is a good example of shortsightedness in politics, because there is not much initial cost involved in establishing a new university. The physical plant must be planned and built before the university goes into operation and the long-run costs show up. Meanwhile, politicians get credit for establishing local higher education options for their constituents, so there is a great incentive to do so without budgeting for their long-term costs. In 1955 Florida had three state universities (University of Florida, Florida State University, and Florida A&M University), and the number has continued to expand from there.

Most recently, Florida Polytechnic University was established in Lakeland because a powerful state legislator wanted a university in his district.[5] Interest group politics explains the proliferation of universities in the state, and the creation of state colleges out of community colleges is a result of mission creep, as the administrators in former community colleges wanted to expand their domain and offer four-year degrees.[6] Many of these state colleges are in areas that are already served by the state university system.

The rising cost of college has been a national issue, and Florida has seen some increase in its tuition. Adjusted for inflation, average tuition and fees in Florida’s universities have risen from $2,231 in 1990 to $3,509 per year in 2010, an increase of 57 percent.[7] For state colleges, tuition and fees were $1,314 in 1990 and $2,521 in 2010, an increase of 92 percent. Still, the price is low compared to the cost of higher education in other states. Fighting higher state tuition, Governor Rick Scott has vetoed legislation to allow tuition to rise—a politically popular stance—while also overseeing substantial cuts in state funding.[8] In 1990 state funding per student in higher education was $8,012; it had fallen to $6,150 by 2010. In 2006 funding per student was slightly above $10,000, so state funding per student in higher education has declined by nearly 40 percent in a few years. Looking more broadly at education funding per student, it is interesting to compare the figures in this paragraph with those in table 10: per-student funding for K–12 education has exhibited major increases while funding per higher education student has declined precipitously.

Much of the decline in state funding for higher education, while policymakers at the same time hold the line on tuition increases, is driven by the perception (not entirely incorrect) that the value of a college education lies in the receipt of the degree more than in the learning that takes place. Many employers specify that they are hiring college graduates even for jobs that do not require the skills that a college education provides. This decline in state funding has driven universities to become more entrepreneurial, looking to outside grants and to donations for funding. And, as any college student will affirm, class sizes are large—sometimes with hundreds of students—and at universities many classes are taught by graduate students. These may be sensible strategies if it is the degree rather than the education that is valuable. Politicians can tout the number of graduates the system is turning out while keeping tuition affordable and reducing state funding at the same time.


[1] The geographic boundaries of Florida’s 67 school districts are identical to the boundaries of Florida’s 67 counties, but the school districts are separate governments and are not part of the county (or city) governments. They have separate budgets and separate elected leaders. School board members are elected; school district superintendents are elected in some districts but appointed in others. Whether they are elected or appointed seems to make little difference in the performance of the school systems. See Mark Partridge and Tim R. Sass, “The Productivity of Elected and Appointed Officials: The Case of School Superintendents,” Public Choice 149 (October 2011): 133–49.

[2] Andrew J. Coulson finds that higher levels of expenditures do not lead to better student performance in “State Education Trends: Academic Performance and Spending over the Past 40 Years” (Cato Institute Policy Analysis 746, Cato Institute, Washington, DC, March 18, 2014). Dan Lips, Shanea Watkins, and John Fleming come to the same conclusion in “Does Spending More on Education Improve Academic Achievement?” (Heritage Foundation Backgrounder 2179, Heritage Foundation, Washington, DC, September 8, 2008). Most studies find that higher spending levels on education do not produce better student outcomes.

[3] See Andrew Ujifusa, “Teacher, School Accountability Systems Shaken Up,” Education Week, June 11, 2014; and “Use of Data in Florida’s School Accountability System and Educator Evaluations,” Florida Department of Education, June 22, 2012.

[4] See “SB 736—The Student Success Act Outlines How Florida Teachers Get Paid,” State Impact, National Public Radio, accessed October 7, 2014, http://stateimpact.npr.org/florida/tag/senate-bill-736.

[5] See Kim Wilmath, “Scott Approves Bill Creating Florida Polytechnic University,” Tampa Bay Times, April 20, 2012.

[6] For a classic analysis of bureaucratic mission creep as administrators seek to increase their domains and budgets, see William A. Niskanen, Bureaucracy and Representative Government (Chicago: Aldine-Atherton, 1971).

[7] Figures in this paragraph come from the Research Institute on Social and Economic Policy, “Florida’s Great Cost Shift: How Higher Education Cuts Undermine Its Future Middle Class” (2012). Dollar figures are adjusted for inflation and are in 2011 dollars.

[8] Aaron Deslatte, “Gov. Scott Vetoes 3% Tuition Hike, $368M in Projects,” Orlando Sun Sentinel, May 20, 2013.