Wednesday, September 14, 2016

How Education Can Help Solve the Budget Shortfall

In New Mexico public schools the proportion of costs going to administration is the highest among all states. (see  Yes, the bloated school bureaucracy in New Mexico gobbles up fully $1274 per pupil each year on administration--13% of our per-pupil costs in 2015 of $9734.  This compares with administrative costs of only $400 per pupil in Utah (6% of per pupil costs of $6500) and $348 per pupil in Arizona, $629 per pupil in Colorado, and $485 per pupil in Texas.  Not a single one of our neighboring states spends even half of what we spend per pupil on administrative costs!

Let's dig a little deeper into the data to assess the bang for the education buck in New Mexico compared with other states.   The state with the lowest overall cost-per-student is Utah, at $6500.  Where does Utah rank among all states in K-12 student achievement?  13th, according to Education Week (  Where does New Mexico, which spends $3234 more per pupil, rank?  You guessed it, 49th!  Is there something wrong with this picture?  What about Arizona, which spends $2206 less per pupil than New Mexico?  Arizona ranks 25th in K-12 achievement, way ahead of New Mexico.  There are many other states that beat out New Mexico in student achievement while spending a lot less per pupil.  New Mexico simply isn't getting its money's worth in public education  Putting it differently, if New Mexico spent the same amount per pupil as Utah, we would save $1.1 Billion dollars per year!

If we were to cut administrative costs in half, to $637 per pupil, still higher than any of our neighboring states, we would save $215 million per year.  This would make a substantial contribution to filling in the current 2017 budget shortfall, and does anyone really believe cutting administrative costs down to normal in New Mexico would hurt our already-dismal student achievement?  Might even help!

If we were to take half of that money ($318.5 per pupil) saved and invest it,say, in higher salaries for teachers, our average teacher pay would go up to $50,285, moving New Mexico up from 47th to around 25th in the nation, slightly higher than the average salaries for teachers in our surrounding states.  That would make it easier to attract better teachers, and better students into becoming teachers, and still leave more than $100 million to cut into the shortfall.  Does the legislature have the political ganas (will) to cut this fat, or many other possible cuts out of the education budget, which would likely have little if any effect on student achievement?

In higher education, in spite of lower faculty salaries and lower costs of living, New Mexico appropriates fully $1865 more per full-time student than the national average, placing us in sixth place among all states.  (, Table 7).  Only Wyoming allocates a higher proportion of its budget to higher education.  Moreover, in the past five years total higher educational revenues per FTE in New Mexico have increased 24.9%, more than any other state in the nation.  In spite of this lavish spending, New Mexico ranks 47th among the states in the six-year graduation rate for a BA (, and for the first time in New Mexico history the older generation is better educated than the younger generation.  Every other state improved more than New Mexico in the proportion of the population holding a college degree.  If we were to reduce the appropriations New Mexico makes to higher education down to the national average, still way above Arizona and Utah, it would save New Mexico over $179 million per year. Add that to the $100 million left over after giving teachers a needed raise, and you get $279 million, which goes a long ways toward filling in the shortfall.  It is more difficult to measure higher education administrative fat, but judging from the outrageous salaries of many administrators, there is a lot that could be cut here, too.

There is nothing partisan about cutting fat out of the budget.  In a state doing as poorly as New Mexico has fared economically in the past few years, it only makes sense to use this downturn as an opportunity to create greater efficiency in the taxpayer dollars now lavishly doled out to public and higher education systems that are at the bottom of the barrel among states and that have resisted efforts to address seriously the quality of education in the state.

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