April 19, 1999
The method we use to fund public schools continues to create controversy, and public commentary about it continues to add confusion to the debate.
The discussion fails to illuminate because it seldom relates spending to performance. Recently we heard through the media that, in the last decade, the proportion of property taxes dedicated to education shot up 50%. But the focus of the reports became the provincial government's cuts to education funding, with no mention of the different size of the school market.
The province spends less on schools because there are relatively fewer students. Over the last 40 years, the average class size in Manitoba has declined by a third, from an average of about 25 pupils per class in 1960 to about 17 today. Imagine the fate of a private enterprise that kept increasing its budget in the face of such a market decline.
The total money now allocated per student is very close to its historic high in real dollars. From 1985 to 1995, a decade of declining student loads, school boards expanded their budgets by an average of almost 1.5% a year, after inflation. Stingy we are not.
Given this, the reasoning of the number crunchers who oversee the provincial budget seems pretty sound. Slight decreases in the share of tax dollars allocated to public schools over the last five years made sense.
The people who actually disperse the money, the school boards, made no such adjustments. They maintained Cadillac spending when a Volkswagen level was appropriate. The difference is reflected in the gargantuan property tax bills that bedevil Winnipeg homeowners.
Why did the system fail to adapt?
It's a complex question, but it comes down to the issue of accountability. School board trustees almost never get voted out of office. Even though they are responsible for nearly half of the crushing property tax load, most ratepayers don't even know their names. Why should they make tough budget choices when they can simply pass on higher costs without a political penalty?
When trustees sit down to sign contracts with their staffs, they bend with the wind. Fledgling local politicians, who typically start their careers at the school board level, are no match for the experienced, professional union negotiators who represent service providers. The size of the workforce therefore remains static, and its pay levels ever higher, even in the face of a declining market.
How do we fix the problem? By reconnecting the link between funding and production.
The first step is to reconfigure the funding. If the Province took over sole responsibility for education spending, the unaccountable middlemen, school board trustees, would lose the power to transfer the cost of poor decisions to the hapless property taxpayer. The Province already maintains strict control over curriculum and standards, so why shouldn't the buck stop there? Eliminating the education portion of property taxes would produce an immediate economic turnaround in the City of Winnipeg, and swell the Province's surpluses.
Next, decentralize the production of school services. Instead of block funding divisions, the Province could send the parents of each child a credit for use in the school of their choice. Responsibility for staff levels and pay would come down to the school itself, a system known as School-Based Management. Those teams that ran an efficient, effective operation would attract support, while those who did not would fail. The magic of competition would shake out excessive costs.
Winnipeg's largest School Division, it has been charged, overspends millions of dollars just for janitorial services. In the face of abysmal test scores, is it unfair to say that the cost of basic schooling is similarly overpriced?
Not at all.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."