That No. 50 ranking? It's built on incomplete data

The Arizona Republic
Monday, June 22, 2015
Sean McCarthy

Everyone gets excited when Arizona is ranked last in something.

Those fixated on the recent Census Bureau education report should have found it curious that it shows a decrease in Arizona students between 2012 and 2013. The reason? The Census Bureau only tracks charter schools whose charter holder is a government entity.

Roughly 80 percent of Arizona's charter school students — 112,000 of them and the corresponding funding — are not captured by the report. At least $1.3 billion in total revenue for Arizona K-12 schools is missing from the Census report.

That won't substantially alter Arizona's per-pupil spending ranking, but it reinforces the trend of using incomplete data to narrate an incomplete story.

Lost in the K-12 spending conversation is any relevant context to explain the statistics and their limitations. The oft-quoted citation of No. 50 in "state only" spending is irrelevant in a state that relies heavily on equalized local property tax dollars. But it's perfect for those looking to obfuscate the discussion.

The causal link between Arizona's low rankings in per pupil spending is massive student growth during a period in which every state grew its K-12 expenditures.

All but two of the 13 fastest growing states in K-12 enrollment over the last two decades (above 18 percent) appear in the bottom third of per-pupil spenders. This includes Georgia, Florida, California, Colorado, Texas, North Carolina and other growth states.

The two exceptions are Virginia and Washington; and their commonality is they rank near the top in percentage of population age 18-64. Consider the taxation disadvantage Arizona faces when it is No. 49 for percentage population age 18-64. Arizona is the only state to rank near the top for both percentage under 18 and above 65 years of age.

There is useful data which depicts the current challenge. While there was just 9 percent total Arizona K-12 enrollment growth between 2005 and 2013, there was 70 percent growth in charter enrollment. The total number of teachers has increased an amazing 30 percent, largely a result of charter growth.

Recently, most district public schools have had either flat or declining enrollment. Districts face budgetary pressure with increased pension contributions, health-care premiums and special education costs while many battle formulaic cuts because of enrollment trends.

Couple that with the biggest recession in Arizona history, where the base support level remained flat for several years, and the present strife begins to make sense.

Instead of wringing hands over rankings that lack accuracy, cost of living adjustments and context, policymakers should focus on matching the finance structure to the current landscape of Arizona's public schools.

The school choice model has tipped and its popularity is creating major impacts on education finance. It's time to implement a system conducive to this dynamic environment.

Sean McCarthy is senior research analyst at the Arizona Tax Research Association.