School choice programs are needed to save America's public schools

America's public school systems are going bankrupt, as they pour money they don't have into programs that enrich employees at the expense of students.

The Los Angeles Unified School District could face an estimated $422 million budget shortfall in 2019. Baltimore's schools are $130 million in the hole. Illinois officials recently failed to make a scheduled payment to K-12 schools for the first time in history.

These districts and many others across the nation are strapped for cash due to grotesque financial mismanagement. School systems continue to lavish employees with benefits packages that defy reason – even though such spending is unsustainable and diverts resources away from students. 

State and federal lawmakers shouldn't continue to throw money towards broken school systems. Instead, they should offer school-choice programs that empower students to escape dysfunctional districts.

The Los Angeles Unified School District is a case study in misplaced priorities. Given the district's impending funding crunch in the 2019-20 academic year, one would expect it to be focused on advancing its educational mission – and thoughtful about how it spends money. 

But time and again, the demands of unionized school employees have trumped the interests of students. 

Last summer, the Los Angeles Board of Education agreed to provide health benefits to 4,200 part-time workers, including playground aides and teachers' assistants. The Service Employees International Union, Local 99 – one of the city's most politically influential unions – represents these workers. These perks will cost $16 million annually and will almost certainly require cuts to classroom funding. 

Such profligate giveaways are hardly unusual in Los Angeles. In 2007, for instance, the district extended health benefits to cafeteria workers, an action that created a cafeteria budget deficit. 

Similarly, Chicago's school board prioritizes employees over students. Between 2001 and 2015, the district's contributions towards teachers' pensions rose an astounding 618 percent. Over that same period, spending on textbooks fell by more than a third while spending on classroom supplies dropped by 60 percent.

Chicago's problems will no doubt continue. Nearly half of the newly allocated $450 million for Chicago Public Schools will go to teacher pensions next year.

The same pattern is evident in Baltimore. The city provides teachers with generous contracts that include perks like full-time day care. To help pay for these benefits, Baltimore City Schools recently implemented funding cuts totaling roughly $150 per pupil. And the city still faces a $100 million unfunded pension liability for school workers. 

These examples of fiscal mismanagement aren't isolated to major cities. Excessive spending on employee benefits is a systemic problem in public school districts in most states. 

Look to Georgia. The state already spends almost $2,000 less per student than the national average. Meanwhile, the rate of government contributions to Georgia's teacher pensions has doubled since 2012. Georgia allocated an additional $223 million to its teacher pension system earlier this year. 

Also consider Connecticut. It is estimated that the cost of teacher pensions will increase by roughly 365 percent over the next 14 years. Given that the state recently proposed cuts in funding for over 130 districts, funneling more cash into benefits plans – when per-student spending is bound to decrease – demonstrates the misplaced priorities of policymakers.

California's teacher and school-employee pension systems are another money pit. Two in three districts are on track to face massive budget deficits due to generous pension deals. Some districts' pension contributions rose 250 percent from 2006 to 2016. 

As one San Jose school district employee lamented: "If this path continues, there's no way we can provide services to students." 

The list goes on. The epic fiscal mismanagement displayed by public school systems across the country results from the lack of competition to the government's near monopoly on K-12 education. In such a situation, special interests, not students, wield power.

What to do?

Parents and students should be empowered with school-choice tools, such as education savings accounts, tax credits and vouchers to escape mismanaged school systems and provide incentive for those systems to improve.

Lance Izumi is Koret senior fellow in education studies and senior director of the Center for Education at the Pacific Research Institute.

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