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OPINION | DANA KELLEY: Money-quality disconnect

by Dana Kelley | April 30, 2021 at 3:09 a.m.

In introducing his $1.8 trillion American Families Plan, President Joe Biden tossed around a number of spending programs in the $200 billion range.

At the federal government scale, that might seem like chump change when held up against a nearly $30 trillion national debt. But it's important to remember that with only about 145 million federal taxpayers in the U.S., every couple hundred billion dollars in new spending equates to roughly $1,400 each.

Don't worry, the president said he's not going to directly tax the middle class to pay for his progressive spending largesse. What he neglected to mention is that higher taxes on corporations and the uber-wealthy individuals who control them is typically passed on indirectly to consumers in the form of higher prices.

A dollar less--or $1,400 less--in the pocket is still less, regardless of how it's taken out.

The president wants to "invest" trillions of our tax dollars; he used the word investment more than a dozen times in his speech. But the key consideration to evaluating investments is ROI, the return they generate.

The main problem with government investment--as opposed to private investment--is that it's habitually missing the ROI metric. The government's essentially unlimited access to cash (print more currency or raise tax revenue) obscures its reliance on return as a criterion.

Government's perspective on returns is normally caged in nebulous concepts, rather than real dollar recovery like private investments require.

"Improving health care for veterans," for example, is not the same as more empirical goals like specifically reducing wait times for tests or admissions, or bringing costs down beneath the industry average, or processing claims at a rate on par with other providers.

Indeed, for too many politicians, improving health care for veterans is accomplished by simply spending more money on health care for veterans! Money, the government-saves-us mindset contends, automatically improves quality.

In reality, that attitude creates a money-quality disconnect.

Government's instinct is to throw money at every problem, and oftentimes, the lack of accountability regarding money as invested is the problem itself.

A glaring-for-generations example of this is education, which is included in Biden's plan. He wants to add two years of "free," i.e. taxpayer-funded, preschool to the schooling we already provide. Any in-depth examination of public schools across the country reveal some of the worst ROI scenarios imaginable.

Money invested in education can be measured in various ways; per-pupil spending and teacher salaries are two of the most common. The return on education investment can also be analyzed according to a variety of outcomes; test scores and graduation rates are frequent indicators.

Ideally, schools that spend the most per pupil and pay the highest teacher salaries would produce superior results. That's not what happens at all.

In Detroit public schools, the typical teacher is paid $60,000 and the per-pupil expenditure is around $16,000. Yet Detroit eighth-graders, in which the district has already invested more than $120,000, scored 30 points below the large-city average in math, and 23 points below in reading, according to the Nation's Report Card. Detroit fourth-graders were even worse: 29 points below in both math and reading.

Less than 5 percent of eighth-grade students were at or above proficient in math, less than 7 percent in reading. The graduation rate for the Detroit district is 77 percent.

In contrast, the Miami-Dade school district in Florida pays its teachers on average about $45,000 and spends $9,600 per pupil. Its students lead among large-city districts in math (two points above average) and reading (seven points above average) scores for eighth-graders. More than 27 percent of Miami-Dade eighth-graders are at or above proficient in math, and nearly 32 percent score that high in reading.

Its fourth-graders do even better: 11 and 13 points higher than the large-city average for math and reading, respectively, and 47 and 38 percent at or above proficient in each category. Miami-Dade's graduation rate is 89 percent.

For apologists who'll cry foul because Detroit's poverty rate is higher than Miami's: free- and reduced-lunch-eligible students in Miami-Dade score 20 points higher than Detroit's overall proficient percentages.

Adding two years of public preschool is a gamble, not an investment. Which preschool flavor will our tax dollars buy, Detroit or Miami-Dade? In those all-too-common districts that overspend and underperform, it would only be wishful investing that won't benefit children or deliver value for taxpayers.

There's evidence that "high quality" preschool programs work. But there's also evidence that students of those programs backslide if they move into low-quality public schools, and plenty of evidence that overpriced poor-quality preschools are worthless.

Bringing accountability to public schools, with domineering teacher unions and bloated bureaucracies often focused more on special-interest policies than learning, is no easy task. But it should be at least worth mentioning in any national discussion on education.

Coming fresh off the financial stresses of a pandemic, during which poor decision-making by schools is already under well-warranted scrutiny, is no time to add more money or kids to that system.

Dana D. Kelley is a freelance writer from Jonesboro.


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