Cutting Education Budgets Further Weakens the U.S.

Indiana, like most states, is facing a budget crisis, and Governor Mitch Daniels (President Bush’s former Budget Director) recently proposed cutting $300 million from K-12 education budgets—3.5% of the total. This came on the heels of some searing stories in the Indianapolis Star about the dismal state of public schools in the city.

The Governor argued that he “had no choice.” But I am always wary when someone makes that assertion. We always have choices. The issue is priorities, not a lack of choice. Indiana had no difficulty, for example, raising $720 million to build a new professional football stadium.

Money alone will not solve the problems of public education in Indiana, or in the U.S. But inadequate funding is one of the problems, and budget cuts will simply exacerbate those problems. One reason that the U.S. is falling behind globally in education, and why Indiana is lagging nationally, is because of low levels of funding for education. According to U.N. figures, the U.S. ranks 45th among the countries of the world in public spending on education, as a proportion of the economy. Among the 50 states Indiana ranks #33 in per capita expenses for K-12 education (U.S. Census Bureau data).

It should be no wonder, then, that our schools perform so poorly compared to others, both globally and nationally. The high school graduation rate in Indiana is 73%, placing us in the bottom half of the 50 states. Even worse, Indianapolis ranks dead last among the nation’s 50 largest cities in high school graduation rates

Our spending on education is low, in large part because our state revenues are low. While there has been a big hullabaloo about property taxes in the state, they are overall low compared to other states. As a proportion of household income, they rank 34th among the 50 states. Indiana’s income tax rate is also low, especially given the “flat” rate of 3.4%. Most states have “bracketed” tax rates (as for federal income taxes), which require wealthy people to pay a higher rate than poor people. Almost all such states have top brackets above 5% of income.

So we are getting what we pay for. We have low taxes, low funding for public education, and poor schools. One choice—a necessary one in my view—is to raise taxes, especially on those who can most afford it, and begin providing funding that the schools deserve. We have choices.