Rotherham: This Has Been a Golden Era of Education Spending. Our Aging Population Is About to Put an End to It, Whatever Politicians Do

Spend a few minutes on education Twitter or listening to the loudest special-interest voices, and you’d think the future of public education hinges on whether Mitch McConnell, Nancy Pelosi and the president can agree to another stimulus deal. That’s just a short-term Washington game — that will likely soon have a new roster of players. It’s the long game on fiscal policy that should be most worrying school leaders.

It’s obvious that American schools need more funding right now. Live instruction costs more during a pandemic, and while so far the economic impact of COVID-19 on schools is not as dire as predicted, we’re not out of the woods yet — by a long shot. And unless you’ve been sleeping since March, you’ve probably noticed how the coronavirus has laid bare various inequities that pervade our education system.

Still, it’s easy to forget we’re living in what’s been a golden era of education spending. Since World War II, the demographic emphasis of public expenditures has been on the young. Whether it’s the GI Bill, many Great Society programs or school funding propelled by well-organized teachers unions, the K-12 spending curve has been consistently, as the Rolling Stones might say, going up up up up up.

There is a durable myth in the education world that we haven’t gotten much for that spending. That’s wrong. While reasonable people can disagree about specific impacts, overall, we’ve built a more inclusive school system that doesn’t simply overlook a lot of kids. But that debate misses the point — the nation’s demographic focus is changing.

The Census Bureau projects that by 2034, Americans 65 and over will outnumber those under 18. That’s unprecedented. As my colleague Jennifer O’Neal Schiess explains, state tax dollars pay for a range of services, with the largest proportion in most states going to K-12 public education. As the older population grows, we’ll see more states going the way of Pennsylvania, Massachusetts, Connecticut and Illinois, all of which spent more on Medicaid than K-12 education in 2018. Most states have a balanced budget requirement, so as health care costs take up a larger share, school budgets will have to shrink unless taxes increase.

The challenge will be especially stark in the Northeast and Midwest. In Pennsylvania, the senior population is growing 20 times faster than the overall population. According to its Independent Fiscal Office, the annual cost of providing senior programs is increasing twice as quickly as the revenue sources that fund them. This will create downward pressure on other categories of spending.

As the population grows older, there will also be considerable challenges with managing retirements costs and pensions, both of which could impact state budgets. In 2018, half of all states experienced growing pension debt, meaning future obligations they have promised but not yet paid for. These higher costs typically mean that states will have less money to fund other public services, including education.

The common assumption around the education world is that there is always more money. And there are some measures to raise funding for schools via various tax schemes on the ballot in states like Arizona and California. How they fare with the electorate will be an important signal about the public appetite for raising taxes to pay for new education spending.

Regardless of what happens at the ballot box, schools will also have to focus on productivity and efficiency in ways that have been uncomfortable in the past. We’ve focused on teacher quantity over teacher quality — in other words, more teachers rather than better paid-ones. The education system also resists differentiation in order to get better results — for instance, increasing the size of math classes while making English classes smaller to accommodate more focus on writing. Constrained resources will force hard conversations about these and other choices.

Those conversations are happening. My Bellwether colleagues, for instance, recently published an entire series about the looming fiscal crisis for education. They’re right to sound the alarm on what’s happening today. But we can’t just focus on the here and now and miss education’s fiscal forest for its most visible trees. As dire as things seem today, it’s just a skirmish in the coming war for resources.

Andrew J. Rotherham is a co-founder and partner at Bellwether Education, a national nonprofit organization working to support educational innovation and improve educational outcomes for low-income students, and serves on The 74’s board of directors. In addition, among other professional work, he is a contributing editor at U.S. News & World Report, writes the blog Eduwonk.com, teaches at The University of Virginia and is a senior advisor at Whiteboard Advisors.

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