Friday, July 26, 2013


I'll venture to say that the moral dimension Americans struggle with most is that of "fairness."  We start to develop a sense of it as little kids, as illustrated in a recent series of TV commercials by Ally Bank:

As the Founding Fathers drew up the blueprint for the great experiment of American democracy, they knew that there would be times when simple majority rule might not be fair. So they created the judicial branch as a counterbalance to the legislative branch, with the idea that a Congress could be prevented from enacting laws that violate the Constitution - in particular laws which infringe upon the rights of individuals.

The debate about the funding of public schools in America is a conversation about fairness as well. The challenge is that there are many perspectives about what is fair. Some of those are:
  • We're a capitalist society, so individuals should be free to choose where their kids go to school and how much they're willing to spend for their kids to get the quality of education they desire. Poor folks should work harder and make better choices. It's not clear that we even need government involved in education - can't private enterprise solve this problem?
  • Our public education system should be the 'great equalizer' in our society, giving all kids an equal opportunity to succeed in our economy, regardless of the financial resources of their families. People should be taxed progressively (the higher the income, the higher the tax rate), but the money should spent equally - the same amount per student in every school. Perhaps the best way to accomplish this is with a federal school system.
  • Let's have some kind of middle ground:  Determine the amount of money required for every kid to get a "thorough and efficient" education, and use the tax system to redistribute wealth as necessary so that every school district has at least this amount of money to work with. It's okay for more affluent districts to tax themselves more and spend more, as long as the poorest districts get enough.
The first two are the extremes of course. The first would be characterized by most as being the far-right conservative position, while the second is the far-left liberal perspective. Their perspectives on what is "fair" are pretty clear, but not at all compatible.

The third viewpoint is the center of the bell curve - an opinion with which most Americans would agree. It's also the language of Ohio's Constitution, and of the Ohio Supreme Court decisions in the DeRolph case. However, there is still a great range of opinion allowable in that definition, and the debate is far from over.

The July 13, 2013 edition of the Columbus Dispatch ran a story about school funding fairness in Ohio. Accompanying the story was this chart:.

click to enlarge

Note the statement under the title: "...certain types of districts benefit more than others."  This is a comment about fairness. We can also observe that the way the numbers are presented in this chart are influenced by the writer's political leaning.

One's eyes are drawn to the percentages, and it looks like the story the author wants to tell is that the "wealthy suburban" districts got a big pay raise, while the rural districts were shortchanged once again. But here's another way to look at that data:
click to enlarge
I think you might agree that from this perspective, the small number of "wealthy" districts didn't get much in the way of new money at all. The percentage increase for the wealthy districts is larger because the denominator of the fraction is smaller to start with. In dollars, the wealthy districts will receive $230 additional per student, while the urban districts will get $630 more.

This analysis also leaves out any discussion about the amount of state income taxes paid by the residents of these various types of communities. Here is a chart which shows the school funding received from the state expressed as a fraction of the state income tax paid, for an example district in each category:

click to enlarge

Note that each of these school districts is a "net receiver" of funding - they receive more school funding than they pay out in state income taxes. The sole exception is the so-called Wealthy Suburb - which Hilliard is considered to be by the State of Ohio.

I've used New Albany as the example for the chart. They receive 4¢ of state funding for every dollar of income tax paid. In the case of our school district - Hilliard City Schools - this fraction is 39%. In other words, for every dollar in State Income Taxes we collectively pay, the State of Ohio sends back 39¢ to help fund our school district.

Is that fair?

Whether or not you think it is, the relative allocations depicted in the chart above are unlikely to change. Districts like ours will continue to be viewed as the "cash cows" by all the others, who also hold the majority of the seats in the General Assembly.

The consequence, as I have long expressed here, is that the Hilliard Schools community is largely on our own from a funding standpoint. Regardless of this small adjustment in our funding in the new state budget, it will remain true that as our spending rises, nearly all the new money will need to come from local sources - primarily residential homeowners.

And as our incomes rise, most of the additional tax money collected by the State of Ohio will go elsewhere.

Fair or not, that's the political reality. This makes it ever more important that the voters in our community understand how the school district spends the taxpayers' money, and that the expectations of those voters for programs and services are matched by a willingness to foot the bill. This must always include a conversation about the compensation and benefits costs of our faculty, staff and administration...

... which is another important conversation about fairness.


  1. I've never understood the Republican notion that free enterprise is the cure for every problem. It shows a lack of understanding of history and human nature. The regulations we have in place now are the direct result of bad actors exploiting people and resources.

    I've also never understood their aversion (at least theoretically) to any sort of government action. To me its analogous to socket wrenches. I say to myself, "Think of all the stuff I can build with these." Where a Republican would say, "This socket set has impinged on my freedom to use fasteners of my choice".

    That's not to say our gov't doesn't do a lot of stupid things, but each action needs to be evaluated on its own merit.

    The Democrats, on the other hand, seem to have trouble talking about the real issues; that enough money and programs will fix everything.

    My wife and I used to commute through the Bottoms on our way to downtown. We would always look around, shaking our heads, saying things like "These kids don't have a chance". No amount of education spending if going to be effective in that environment. Hard truth..

    1. My economic philosophy is that appropriately regulated markets do a better job of allocating resources than does central government. Put another way, I believe that there is less societal risk when economic flows are the result of millions of self-serving decisions which are small in scope than a few decisions of nationwide scope made by politicians.

      The role of regulation is to act as a circuit breaker, to prevent economic stampedes from wiping out the herd.

      The problem seems to be when we let the politicians twist the regulatory knobs back and forth, in spite of the fact that few, if any of them know what they're doing - other than trying to serve the masters who contribute to their campaign funds.

      I just spent a week on a "mission trip" with a partner church in Franklinton (it's not "the Bottoms" these days!). Within that one block, I was solicited for a "date", saw the tension of a drug deal gone bad, had some stuff ripped off, and watch the police choppers orbit overhead, every night.

      I also met a young mother named Tess who had cleaned up and was making a nice home for her kids. I met a young father who was raised in a family whose business is prostitution and drugs, and who had himself been a dealer, yet decided it was time to man up, clean up, and break the cycle before his own kids became part of it.

      And I got to spend some time with a kid named Robert, who was polite, inquisitive, smart, and eager to learn. We can't just let Robert and those like him become the next generation of felons because they see no other choice.

      I know the Columbus schools in that area well: Avondale, Dana, Sullivant. There are some excellent teachers there, and they have good resources. It's not an education spending issue. It's that kids like Robert rarely get a glimpse of what the world looks like outside of that environment, or what you have to do to get out.

      I wish he could hop on a bus and come to one of our schools...

  2. Oh and I won't be taking any lessons in fairness from a business that used political favor to become a bank holding company so that it could receive bailout money...

  3. It's fascinating to see how many people want to "kill the goose that laid the golden egg" by rejecting the policies that made us one of the richest and most successful nations in history. What sets the American system apart is (or at least was) free enterprise. Just ask the Soviet Union.

    Our education system was the best in the world until recently not by virtue of bloated education bureaucracies telling teachers how to teach, or courts forcing minimum funding levels, or teachers' unions protecting teachers and not students, or centralizing education expenses at a state and federal level as is done currently. Our rise to material success coincided WITHOUT state and federal intervention.

    It's ridiculous to think that money, for one thing, is the solution to inner-city education problems, which are 90% cultural in nature. If you're a student who cares about your education in a majority African-American school you are ostracized and said to be "acting white". How in the world does money overcome that sort of shaming? Good grief, wake up folks. "Fairness" is not denominated in dollar bills.

    1. Our country is not just a melting pot of cultures, it's a melting pot of political and economic philosophies. That's a good thing because it forces us to try combinations of things which have never been done before.

      But people being what we are, we tend to ride a good thing to excess, and never really get back on the right track without some kind of crisis.

    2. Anon- What is this 'free enterprise' you speak of? For your reference:

      Yet another example of the cognitive dissonance of the Republican Party: Jeffersonian ideals, Hamiltonian policies.

    3. T, please don't confuse the Republican Party with real republicans...

  4. The Ohio School Boards Association weighs in as well, via this article in the Lima newspaper. They too have the political challenge of trying to represent the large number of rural and urban "receiver" districts at the same time they are supposed to represent the few suburban "donor" districts.

    Perhaps this is why the suburban districts have formed their own lobbying organization, called the Alliance for High Quality Education, of which Hilliard Schools is a member.

  5. Paul,

    Thanks for your analysis and though on this topic. It kindof reminds me of the "10 men go out for dinner - who pays what" story (see below).

    Steve B.

    Suppose that every day, ten men go out for dinner and the bill for all comes to $100.If they paid their bill the way we pay our taxes, it would go something like this:
    The first four men (the poorest) would pay nothing like they do now with the present income tax structure.
    o The fifth would pay $1.
    o The sixth would pay $3.
    o The seventh would pay $7.
    o The eighth would pay $12.
    o The ninth would pay $18.
    o The tenth man (the richest) would pay $59 of the bill.

    So that is what the ten men decide to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you all are such good customers I am going to reduce the cost of your daily meal by $20”. Dinner for the 10 men now costs just $80...
    The group still wanted to pay the bill the same way that they paid their taxes so the first four men were unaffected. They would still eat for free. But what about the other six men -- the Paying customers? How could they divide the $20 windfall so that everybody would get his “Fair Share”?

    They realized that $20 divided by six is $3.33. But they subtracted that from everybody’s share, then the fifth and sixth man would each end up being paid to eat their meal…So, the restaurant owner suggested it would be fair to reduce each mans bill roughly the same amount; and proceeded to work out the amounts each man would pay.
    o The fifth, like the first four now paid nothing (100% savings).
    o The sixth man now paid $2 instead of $3 (33% savings)
    o The seventh man now paid $5 instead of $7 (28% savings)
    o The eight man now paid $9 instead of $12 (25% savings)
    o The ninth man now paid $14 instead of $18 (22% savings)
    o The tenth man now paid $49 instead of $59 (16% savings)
    Each of the six was better off then before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings…
    “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man “but he got $10”…“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. Its unfair that he got ten times more than me!?”“That’s true”, shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploit’s the poor!”The nine men surrounded the tenth man and beat him up…

    The next night the Tenth man did not show up for dinner, so the Nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half the bill!

    And that Boys & Girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just might not show up anymore. In fact, they might start eating overseas where the atmosphere is somewhat friendlier…David R. Kamerschen, PH.DProfessor of Economics University of Georgia

  6. In this recent editorial, the Akron Beacon-Journal joins the "it's not fair" bandwagon, saying:

    "What Fleeter has discovered about the formula in the current budget is that these (poor rural) districts receive comparatively smaller increases in state funding. Take wealthy suburban districts: Funding climbs 14.2 percent. Urban districts? A 15.3 percent increase. And poor rural districts? Up 8.1 percent."

    Again, percentages tell only part of the story, as the chart above shows...