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Tue, 17 May 2005
We received a note:
And for the record II, the Governor did not reduce education funds. His FY06 Budget proposes a 2.1% ($15 million) increase in direct aid over FY05--not counting increased teacher retirement funds, school construction funds, intervention funds for the department of education, charter school funding, and support for the Metropolitan and Davies schools.
The word "cut" is problematic, and should probably be banned from the policy lexicon, since people disagree about its definition. When a Governor or President cuts some program, what does that mean? Does it mean less money? Less money after you take inflation into account? Does it mean a decrease in the program, or just a decrease in the program's rate of growth?
The complaint is made above that the Governor's budget this year contains a 2.1% increase in funds that go to a school's bottom line. According to the Bureau of Labor Statistics, inflation is currently running around 3.1%, and all the predictions I know of are for it to increase over the next year, as fuel prices and health care costs continue to drive up other prices. So is this an increase or a cut?
What's more, the CPI is meant as a measure of how hard it is to balance a household budget, using a typical mix of groceries, more durable stuff, and services. As a measure of how expensive it is to run a school, it's only a rough guide. Schools do buy carrots, for example, but — unlike households — they also buy pensions for retired teachers, professional development services, as well as copy machines, public liability insurance, and those funny little signs that say the floor is wet. It's not at all obvious that the CPI is a good measure of the prices of these items. It's harder to get cost efficiencies in something as labor-intensive as education compared, say, to finding efficiencies in manufacturing cars, and it's natural to expect that the prices of the labor-intensive good rise faster. This is not necessarily a good thing, and funding expenses like this with slower-rising taxes is a problem that needs to be solved, but I don't think this problem can be solved by sweeping it under the CPI rug.
(Here, incidentally, is a report outlining some of the reasons school costs have risen dramatically since the 1960's. The authors suggest using a "Net Services Index" to track inflation, and they present a way to make one.)
And all talk of indices aside, it was crystal clear to the Governor that pension costs were going way up this year (20% increases, a bit less than a quarter of which is discretionary and could be made to vanish with the stroke of a pen) and that health insurance costs are continuing on their merry way to the heavens, too. My town's schools, for example, were hit with $1.2 million in increased pension costs, around $300,000 of which isn't necessary, while the Governor's budget offers us just $50,000 more in state funding to deal with it. For this kind of largesse we should be grateful?
President Bush is currently using the same semantic obfuscation to sell his Social Security plan. "It's not a cut," say his defenders. "Just a decrease in the rate of growth." Well, the recent history of linguistics shows that one can argue points of semantics for a long time without resolution. One is more likely to find agreement on the actual outcomes of actions. So here are some outcomes. Under the current system, or under the Bush plan, the dollar amount of my pension will be more than I'd get if I was 65 today, so the President feels free to characterize his proposal as not-a-cut. But under the current plan, I will see around 36% of my working income in my Social Security check when I retire. Under the Bush plan, I'll see around 20%. Who cares what you call it?
Meanwhile, state tax revenues are up, and the state income tax is up over 7% from last year (which was up 10% from the year before). And yet, under the Governor's budget — which isn't a cut, remember? — the school in my neighborhood will be closed, and my daughter will move to a different school, to save money. (To be fair, it's the Town Council's budget, too, and they're playing the same game.) Everything you could characterize as a frill — library books, music, language classes — is on the chopping block. Really, who cares what you call it?
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