John Hood: Breaking up is hard to do

Jan. 29, 2013 @ 02:13 AM

RALEIGH — Want to make North Carolina public education more cost-effective?
You should. The future of our economy is at stake. States with high-performing students experience significantly faster economic growth than states with low-performing students. But because economic performance is also related to the cost of government, North Carolina could increase job creation and income growth by either generating the current level of educational achievement at a lower cost to taxpayers or generating higher educational achievement at the current cost to taxpayers.
Of course, the real sweet spot is to be found in doing both: to save money and improve outcomes over time. Fortunately, there are strategies for achieving productivity gains in public education.
A good example would be to break up our sprawling urban school systems into smaller districts. Decades ago, when the school-district consolidation movement began, policymakers assumed that economies of scale — achieving lower overhead and service costs per unit by expanding the number of units under administration — were just as present in public education as they were in other industries.
They were wrong. While there may have been some efficiency gains from merging very small districts, public education has proved to be subject to significant diseconomies of scale. Once school districts exceed the 15,000-25,000 student range, both their efficiency and their outcomes tend to suffer.
This is a empirical matter, not speculation. There is now a large body of academic research demonstrating the drawbacks of school-district consolidation. The most recent study I’ve seen, published in The Social Science Journal in 2007, used a large national sample to evaluate the assertion that consolidation results in lower per-student cost and higher student achievement. The assertion proved to be false. Unfortunately, wrote study author Frank Robertson, these empirical findings arrived long after “many American school districts had transitioned from small adaptive affiliations to large sluggish bureaucracies.”
But there is no reason why North Carolina students, families, educators, and policymakers must live with the negative consequences of past political decisions. Local leaders should work with their legislative delegations to design new, 21st-century school districts that are efficient, innovative, and competitive.
Mecklenburg and Wake counties could easily accommodate four or more separate school districts. Other populous counties such as Cumberland, Durham, Guilford, and Forsyth could accommodate two or three districts apiece. State government and counties would fund these districts with equal per-pupil allotments, adjusted for student disadvantage or other special needs.
How would such a deconsolidated system function? We don’t really have to guess. Not all states have consolidated their school districts. Many have several districts within county lines, as used to be true in North Carolina. The arrangement discourages sluggish bureaucracy while giving parents more options. The result, according to decades of social science research, is lower cost and higher achievement.
Even North Carolinians who already reside in small school districts stand to gain from the idea by increasing the return on the taxes they pay to the state. In short, it’s time for a break-up.

John Hood is president of the John Locke Foundation and author of “Our Best Foot Forward,” a book on North Carolina’s economy. It is available at Representations of fact and opinions are solely those of the author.