Tuesday, May 31, 2011

A Lesson in Causality

From The Oregonian:

John Tapogna, president of economics consulting firm EcoNorthwest and a seasoned researcher of school spending statistics, said the prospects for Oregon schools to return to above-national-average spending -- or to feel they've shed the constant need to cut back offerings, jobs or both -- are dim.

The main reason Oregon spends less is that Oregonians earn less than the national average -- so they have less to spend. As a whole, Oregonians consistently contribute 4 percent of their collective income to public schools, he said.

Oregon's economy and per-capita income would have to grow faster than the nation's to make it natural for Oregonians to increase their spending on schools faster than the nation, he said. And that's unlikely, according to the state economist and others.

Now how could Oregon make resident incomes grow faster?  I wonder...


ericfruits said...

What's really missing is that beginning in 2003, many school districts moved PERS obligations into side accounts. This has the effect of moving compensation spending off the "current expenditures" book onto the "payments to other governments" book.

If you add those pension obligation bonds back into current expenditures (where they arguably belong), Oregon's spending per student would be above the national average.

Ben Price said...

Accounting tricks? You'd be right about that... if every other state in the union didn't do the exact same thing.