OSPRI says: "Regionalize? Be careful of what you wish for."
As more towns and schools scramble for cost savings, the call for "regionalization" seems to be gaining momentum. However, new research by the Ocean State Policy Research Institute (OSPRI) shows that, at least with education, it would probably increase costs.
"It's a very easy pitch to say 36 school districts with 36 superintendents are more expensive than five regionalized districts with five superintendents. Unfortunately, it's not true," said OSPRI President William Felkner. "I bought it too, until I saw the data."
The U.S. Department of Education's National Center for Education Statistics' (NCES) latest published data (The 2007 Digest of Education Statistics that reports extensively on the 03-04 school year) show that Rhode Island school districts on average spend 7.9% of their current expenditure budgets on administration and supplies, the 2nd lowest of any state.
Administration and the "economies of scale" derived from combined purchasing are the two items touted to deliver savings from regionalization and Rhode Island already appears relatively lithe in these departments. Even on a per pupil basis, RI spending in these areas is lower than most of the nation and in the top 20 when looking only at "general administration" which are the costs for school district management including the superintendent's office.
"Using a business model, consolidation of services makes sense," Felkner said. "But when government mandates such actions and higher levels of governance are created, accountability suffers and costs rise."
Rhode Island has experience with regionalization and it has ballooned both administrative costs and per pupil costs. Taxpayers of regional districts have not seen savings nor has the state.
When comparing fully regionalized districts to similar size town districts we find that regionalized districts have the highest per pupil costs. One example is the Chariho Regional School District which was put together from three towns to make a school district whose student body is the same size as neighboring Westerly. But, the supposed economies of scale are nowhere on display in Chariho where administration costs per pupil are $825, forty percent more than the $589 spent in Westerly.
Indeed, when it comes to administration costs, the supposed venue for obvious savings, they are well above the median in ALL the regionalized districts.
"When it comes to schools, the solution is not 'streamlining, streamlining, streamlining,' it's 'salaries, salaries, salaries,' and the way to reform salary and benefits is through transparency. Give taxpayers a window on exactly how their money is spent, before, rather than after committing to the spending - as reflected in the East Providence School Committee's proposal for negotiating contracts in public."
The same NCES data source shows that 58.8 % of RI school budgets are devoted to teacher salaries and benefits, the nation's 6th highest. An evaluation of per pupil salary and benefit spending jumps that rank up to the 2nd highest in the nation. And if one wonders what methods might be effective at holding the line on teacher salaries, transparency or regionalizaton, just look at what teachers' unions say. They object to the former and embrace the latter.
Finding a light at the end of the tunnel, Felkner said, "If every taxpayer knew that the average raise for teachers in their first 10 years of service is 10.5%, I seriously doubt that those double digit raises would continue for very long."
While education salaries are growing, it could be worse.
Presumably, teachers and their union representatives are well aware of the fact that state government FTE costs went up 35% from 2000-2006 inclusive, while teacher salaries in RI only increased 16.6%. The notion that Rhode Island's individual districts would see costs savings from sophisticated statewide or regional negotiations is certainly drawn into question by these figures. This doesn't mean that there is not more work to do on salaries, staffing levels, and results in RI, it simply suggests that regionalization in education is no panacea and likely would lead to higher costs and less taxpayer accountability.
"It is likely that when regionalization occurs, the taxpayers become disconnected from the management of their schools and costs spiral out of control due to a lack of accountability," said Felkner. "Only when armed with information and access will taxpayers be able to regain control. While we may not always win when negotiating on the municipal level, we NEVER win on the state level."
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