School Dropouts, Politicians and the Funny Arithmetic of State Budgets

Every time a student drops out of public school, taxpayers save money. That’s one fewer student, at an annual savings of more than $11,000 per year from state and local sources.

You might argue those kids will cost the state a lot of money someday, either as prison inmates, welfare recipients, or as part of an expanding number of weak links in the labor chain when employers come looking for educated workers.

But the immediate result is that the dropouts save money. And politicians respond to immediate things. Not to kick anyone in particular, but when was the last time you saw a Texas governor or legislator with a 10-year plan? A five-year plan?

When the economy is bad and the favored political trope is no new taxes, no new spending, budgeting is a short-term exercise. Lawmakers stop talking about new programs and such, focusing instead on voters’ demands to keep government as inexpensive as possible. The punishment for doing anything else is as close as the March primary.

The dropout problem has a longer fuse. The reward for fixing it is somewhere in the future, way past the next election.

The public schools are on a 13-year clock, starting with kindergarten and ending with the fourth year of high school. The budgeteers are on a two-year clock that starts and ends in even-numbered years. Their horizons are determined by the election calendar. Politicians are actually pretty responsive. They react to the things that will hurt them, politically, and to the things that will help them, politically. And the judgments they’re concerned with are those delivered by voters.

In fact, there is a disincentive to fix the dropout problem, because it would force lawmakers to make cuts in other parts of the budget or to find new revenue. It sets up like something from the science fair: Suppose you got 181 lab rats and gave them cheese if they saved money and threw them out into the streets if they spent it.

Dropout rates don’t initially look like a budget issue, but if you could wave a wand and end it today — keeping every student in school for the full 13 years — you’d be spending a lot of money. You would be a street rat.

How many dropouts are there? That’s a political fight, to some extent, for another day. But for illustration, go with these numbers, courtesy of the Texas Education Agency: In the 2008-09 school year, 40,923 students in grades 7 through 12 dropped out of school, and in the 2009-10 school year, 34,907 students dropped out. Total spending per student in the 2009-2010 school year was $11,567, including capital spending (operating expenditures per student — the total cost per student excluding buildings, computers and the like — were $8,572 per year).

The state pays school districts according to attendance. If fewer students show up, the state spends less.

Based on total spending, it would cost state and local taxpayers $473.4 million annually to educate that first group of dropouts. The second group would add $403.8 million to the annual nut. Only want the operating costs? That would be $650 million per year.

Since Texas has a two-year budget, and the state’s share of operations is about 43 percent of the total, that particular set of dropouts "saves" the state about $560 million every two years.

Keep in mind that the numbers are based on a two-year sampling of dropouts from six grades — 7 through 12 — and that adding dropouts over time at least doubles the number and could triple it. And remember that the number of dropouts is a matter of some dispute and that these numbers could be low.

The point here is that the policy problem of kids dropping out of school is actually a boon to budget writers if the budget writers are in a bind. It’s money they don’t have to produce at a time when government revenue is in higher-than-normal demand.

It’s a variation on Jonathan Swift’s "Modest Proposal". We’re not eating the children to save money on their welfare — just letting them out of school early.