Defensible Spending for Public Schools 9780231880657

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DEFENSIBLE SPENDING FOR PUBLIC SCHOOLS

DEFENSIBLE SPENDING FOR PUBLIC SCHOOLS By ARVID J. BURKE,

DIRECTOR OF STUDIES

NEW YORK STATE TEACHERS ASSOCIATION

with an Introduction by PAUL R. MORT,

PROFESSOR OF EDUCATION

TEACHERS COLLEGE, COLUMBIA UNIVERSITY

COLUMBIA UNIVERSITY PRESS NEW YORK • 1943

COPYRIGHT 1 9 4 3

COLUMBIA UNIVERSITY PRESS, NEW YORK Foreign Agent: O X F O R D UNIVERSITY PRESS, Humphrey Milford, Amen Houae, London, E.C. 4, England, AND B. I. Building, Nicol Road, Bombay, India MANUFACTURED IN THE UNITED STATES OF AMERICA

FOREWORD THIS BOOK is an invaluable compilation of materials which should prove of great value to school and municipal administrators, to students of school finance, and to the occasional public-minded citizen who concerns himself with the more basic considerations underlying public policy bearing on education. It provides both an excellent guide to the usual materials in school finance and an excellent digest of materials from sources not readily available to most readers. Part I throws clear light on trends of educational expenditure as related to other governmental expenditures, on the factors underlying these trends, on the factors affecting expenditure levels, and on the nature of the returns obtained for school money. In addition, it summarizes the economic principles bearing on spending school money and shows how various accepted principles, policies, and ideals go together to account for the present status of school expenditure. The reader will find of unique interest the treatment of the changed status of women, of the trend toward urbanization, and of the general rise in living standards as factors affecting expenditure trends. Most readers will be astonished at the rapid unfolding of demands upon schools during the past forty years. In my judgment these pages are among the most enlightening of the entire literature of school finance. Throughout Part I the interdependence of democracy, private enterprise, economy, and public schooling are stressed. The book shows clearly that the survival of both democratic institutions and an individual enterprise economy requires sufficient spending and other conditions essential to achieve the major purposes of public education. Part II deals with the operational problems of spending. Dr. Burke has projected the problems of managing money, of operating the budget, and of spending money safely and wisely over against the control structure. He has treated these problems in such a way that the reader will gain an insight into the fundamental educational issues that underlie the whole problem of spending and from which all of the prudential factors which we have come to associate with money management derive new and vital meaning. Dr. Burke makes it clear that this question of economies in the long run is determined by the quality of the personnel—not only the personnel of the administration that seeks to get a dollar's worth for every

vi

FOREWORD

dollar spent, but the personnel within the classrooms. One can but feel after reading these chapters that we have given all too little consideration to those personnel policies which to so large a degree determine the quality and character of the operating staff of the school system. While this book deals chiefly with prudential aspects of education, it has the unusual quality of recognizing the pertinence of other principles. This in itself is a departure from practice sufficient to make it a noteworthy contribution to its field. PAUL R .

February 12,1943

MORT

PREFACE

PUBLIC SCHOOL EXPENDITURES will have to be justified in the future more than they ever have been in the past. This book defines defensible spending and describes the conditions which must prevail to achieve it. It has five major aims: (i) to center attention upon certain war developments and other trends which will create a serious crisis in public school finance in the coming decades; (2) to oudine the most serious problems to be faced in financing public education; (3) to summarize pertinent background materials which will help communities and states to understand the problems and possible solutions for them; (4) to introduce data from public finance, economics, and history which should be helpful to public school officials in financial management, research, and interpretation during the crisis; and (5) to stimulate the research needed to solve many of the pressing problems before it is too late. The war will create many serious financial problems for public education. New wartime demands are being made upon the schools. Social and economic adjustments, brought about by the war, the rising birth rate which accompanies war, and the return of thousands whose educational careers have been interrupted by the war will place heavy burdens upon the schools in the postwar era. In the meantime, goods and services consumed by schools will become scarce, prices will rise, and Federal taxes for the war effort will weaken state and local tax systems. The effects of the war upon public school finance will be felt for at least another generation. This impact of the war will be accentuated by certain prewar trends, for example, the falling birth rate during the depression, new trends in school attendance, expansion of existing programs especially at the secondary level, unemployment among youth, growth of new educational enterprises, development of suburban areas and declining population of centred cities, burden of public debt, vastly increased expenditures for certain purposes of government such as relief and old age pensions, arbitrary restrictions on public spending introduced during the depression, growing demands for controls upon public spending, increased competition for tax revenues, organized opposition to taxation, tax competition among states, burden of Federal

viii

PREFACE

taxation, and the increased percentage of the national income taken by taxes. New policies and practices already have been introduced. Other changes are being considered. Such trends, problems, and changes, which schools must face during the war and particularly during the postwar era, are given a prominent place in this book. Public school expenditures already have brought the public schools into direct conflict with powerful economic groups. The cost of the war will intensify the conflict. For many years the author has observed the emotionalism, suppression of facts, and distortion of evidence which always accompanies a conflict. Unfortunately, when conflicting interests are organized on a national and state-wide basis, misinformation and misunderstanding soon become widespread. Taxpayers' organizations and students of public finance are conducting studies of public school finance, frequently without the assistance of specialists in school administration. Taypayers' organizations and others not familiar with school finance data very often make errors which may be attributed to lack of knowledge rather than to dishonesty. However, public school expenditures cannot be understood without considering the social, political, and economic ideals, policies, principles, and institutions underlying public school finance. Taxpayers' groups have accused public school groups of being ignorant of elementary economics; and public school groups probably have not been entirely informed on such matters. On the other hand, economic groups have shown a profound ignorance of the economic contributions of public education. Certain economic groups apparently have ignored the democratic ideals underlying many public school expenditures. In the hope that full knowledge of public school expenditure data will eliminate many errors at the source, this book is written. As would be expected in such a struggle, the control of public school spending has become a paramount issue in legislative bodies. New controls have been introduced; old ones have been extended; and others are being demanded. What are the implications of various controls for our way of life? For our political institutions? For public education? Such information needs to be brought together in a book like this one. Management is made the center of the present treatment of public school finance because Federal, state, and local financiad policies depend not so much upon the allocation of control as upon the effectiveness of management. Prudence, economy, and ability to meet new

PREFACE

ix

demands with the minimum cost will challenge management in the coming decades. Management must be able to defend its financial outlays. Proposals for improving public school management are advanced. Budget making, the foundation of good financial management, is conceived not as the routine preparation of a budget document, but as continuous planning to meet educational needs, weighing these needs against the needs for other essential public and private goods and services. A budget is considered balanced when the maximum educational returns are being secured from all funds which can be made available for public education during a given period of time from Federal, state, and local sources. The realizing of potential economies in present expenditures is stressed both as an important source of revenue for balancing a budget and as a prerequisite to continued public confidence and support. More emphasis is put upon making wise expenditures than upon elaborate systems of accounting and administration so time consuming that they leave litde time for careful planning and wise expenditures. Prudent expenditures are considered more important than elaborate records of unwise spending. Potential constructive economies in school management are summarized. Salary, wage, and personnel policies, which account for most spending in a school budget, are given the attention they deserve. Extensive research, innovation, and discussion on public school finance problems have taken place since 1920. A vast literature has accumulated: research and survey reports, specialized monographs, government documents, books on special aspects of school finance, and a wide variety of bulletins, magazine articles, and other publications. There is much in the recent literature on economics, public finance, or taxation pertaining to the public financing of education. It is not easy, however, for most school administrators, students, and other interested persons to get access to all these sources. Besides materials from a wide variety of sources bearing upon public school spending, there are included in this treatment certain basic materials from the author's own studies that are not included or are not stressed in most treatments of school finance. Public school revenues—taxation, Federal aid, state aid, and local support are not emphasized for two reasons: (1) Most recent books on school finance have stressed the revenue problems of the schools;

X

PREFACE

(2) T h e author has materials for a separate volume on public school revenues to be published when such a book is needed more than it is at the present time. T h e primary purpose of the book is to provide basic background and understanding regarding public school spending. It is hoped that it will promote the intelligent use of detailed finance procedures and techniques summarized in the many good technical books that are available. It is hoped that it will help correct the misunderstandings and misinformation so frequently found in school finance discussions. It is hoped that it will prove to be a valuable reference in a wellbalanced college or university course in public finance or public school finance. T h e author wishes to express his great obligation to the numerous writers and research workers referred to in the text, particularly Carter Alexander, A . B. Caldwell, Leslie L. Chisholm, Frank W . C y r , Arvie Eldred, N. L . Engelhardt, A. B. Moehlman, Paul R . Mort, Milton G . Nelson, John K . Norton, B. F. Pittenger, Alfred D. Simpson, Arthur W . Schmidt, and George D. Strayer. He wishes to acknowledge his indebtedness to the following publishers who have so kindly consented to permit quotation: to the American Council on Education—Equal Educational Opportunity for Youth by N. B. Edwards, State Support for Public Education by P. R. Mort, Research Problems in School Finance by the National Survey of School Finance Staff, The Financing 0/ Education in the State of New York by G . D. Strayer and R . M . Haig; to the Brookings Institution—Government and Economic Life by L . S. Lyon and others, The Financial Condition and Operation of the National Government, 1921-1Q30 by W . F. W i l loughby; to the Bruce Publishing Company—The Control of City School Finances by G . W . Frasier; to the University of Chicago Press— School Revenue and The Management of the School Money by H. C . Morrison; to P. F. Collier & Son Corporation—The Wealth of Nations by A d a m Smith; to the Bureau of Publications, Teachers College, Columbia University—The Cost of Government and the Support of Education by H. F. Clark, Teachers' Salaries by W . S. Elsbree, Public School Business Administration by N. L . and Fred Engelhardt, Federal Support for Public Education by P. R . Mort, Adaptability of Public School Systems by P. R . Mort and F. G. Cornell, Wealth, Children, and Education by J . K . and M . A . Norton; to D . Appleton-Century Company—Economic Principles, Problems, and Policies by W . H. Kiekhofer, Personnel Problems of the

PREFACE

xi

Teaching Staff by E. E. Lewis, Public Finance by H. L. Lutz, Principles of Political Economy by J . S. Mill, Public School Finance by H. P. Rainey; to the Educational Test Bureau—The Legal Implications of the Concept oj Education as a Function of the State by L. O. Garber; to Farrar & Rinehart—Public Administration in the United States by Harvey Walker; to Harper & Brothers—Life Earnings in Selected Occupations in the United States by H. F. Clark; to Harvard University Press—Population, A Problem for Democracy by Gunnar Myrdal; to D. C. Heath and Company—Economics and Ethics by J . A. Hobson; to Henry Holt and Company—Our Economic System by H. G. Hayes, Industrial Efficiency and Social Economy by N. W. Senior, Modern Economic Society by S. H . Slichter; to Houghton Mifflin Company—School Administration by A. B. Moehlman; to the School of Education, Indiana University— The Economic Effect of Education as Shown by the Statements of Economists by H. F. Clark, State Control of Public School Finance by R. W. Holmstedt; to McGraw-Hill Book Company—Public School Finance by P. R. Mort and W. C. Reusser, Education for American Life and State Aid and School Costs by the Regents' Inquiry; to the Macmillan Company—Principles of Economics by A. Marshall, Municipal Administration by W. B. Munro, The Economics of Welfare by A. C. Pigou; to the National Education Association—Standards for Superintendents of Schools and Schools in Small Communities by the American Association of School Administrators, Progress and Problems in Equal Pay for Equal Work by the Committee on Salaries, Teacher Supply and Demand: a Program of Action by the Committee on Supply, Preparation, and Certification of Teachers, The Civilian Conservation Corps, the National Touth Administration, and the Public Schools and Education and Economic Well-Being in American Democracy by the Educational Policies Commission; to the National Industrial Conference Board—The Economic Almanac for 1941-42; to the National Municipal League—State Supervision of Local Budgeting by Wylie Kilpatrick; to the Odyssey Press—Budgeting in Public Schools by C. A. DeYoung; to Oxford University Press—Some Thoughts in the Economics of Public Education by R. H. Tawney; to George Peabody College for Teachers—Trends in Principles and Practices of Equalization of Educational Opportunity by S. H. McGuire; to Prentice-Hall, Inc.—American Public Finance by W. J . Shultz; to the Russell Sage Foundation—Trends of School Costs by W. R. Burgess; to Benj. H. Sanborn & Co.—Administering the Teaching Personnel by D. H. Cooke; to the Tax Institute—Tax Relations Among Governmental

xii

PREFACE

Units; to the World Book Company—Problems in State High School Finance by J . E. Butterworth. Acknowledgment for permitting quotation is also due the following: Leslie H. Chisholm, The Shifting oj Federal Taxes and Its Implications for the Public Schools; Royce S. Pitkin, Public School Support in the United States During Periods oj Economic Depression; F. H. Swift, Federal and State Policies in Public School Finance in the United States. He is extremely grateful to the New York State Teachers Association and its executive secretary, Dr. Arvie Eldred, for making available the time and resources necessary to complete the many studies, upon which the book is based, and the financial assistance, which made possible its publication. He wants to thank his wife, his former secretary, Miss Helen Crosier, his present secretary, Miss Blanche Waterman, and Miss Gertrude Brown for their helpful assistance on details, and Miss Zoraida E. Weeks, Assistant Editor of New York State Education, for editing the entire text. ARVTD J . BURKE

Loudotmlle, New York June, 1943

CONTENTS FOREWORD BY PAUL R . M O R T PREFACE

PART

ONE.

UNDERSTANDING

PUBLIC

SCHOOL

SPENDING

I . FACING FUTURE PUBLIC SCHOOL SPENDING PROBLEMS

Major problems; Dynamic nature of problems; Consequences of inertia; Sources of data. I I . GOVERNMENTAL SPENDING AND PUBLIC SCHOOL EXPENDITURES

Analyzing governmental expenditures; Prewar trends in governmental spending; Causes of growth; War outlays; Evaluation of governmental expenditures; Effects of total governmental spending upon public school expenditures; Readings. I I I . PUBLIC SCHOOL EXPENDITURE TRENDS AND THEIR CAUSES

Defining public school expenditures; Upward trend in expenditures prior to 1930; Reasons for increased spending; Depression and recovery, 19301940; War and postwar trends; Readings. I V . VARIATIONS IN PUBLIC SCHOOL EXPENDITURES AND THEIR M E A N ING

Extent of variability; Factors affecting expenditure levels; Expenditure levels and ability and willingness to support schools; Expenditure levels and price differentials; Expenditure levels, population density, urbanism, and district organization; Expenditure levels and educational opportunities; Defensible expenditure comparisons; Readings. V.

POLITICAL

AND

SOCIAL

IDEALS

AND

POUCHES

UNDERLYING

PUBLIC SCHOOL SPENDING

Governmental interest and responsibility; Decentralization; The ideal of equality; The humanitarian ideal and individual worth; The scientific ideal; Changed objectives; The presence and influence of conflicting ideals; Readings. V I . T H E ECONOMICS OF PUBLIC SCHOOL SPENDING

I

Economic meaning of public school expenditures; Economic costs of public schools; General economic contributions of schools; Specific contributions

xiv

CONTENTS to consumption; Specific contributions to production; The war and economic ability to provide public schooling; Readings. PART

VII.

TWO.

CONTROL AND SCHOOL

CONTROL

OF

PUBLIC

SCHOOL

IMPROVEMENT SPENDING OUTLAYS

AND

OF

PUBUC

INTERGOVERN-

MENTAL AND I N T E R I N S T r n j n o N A L R E L A T I O N S

I 71

Growing demandfor controls; Types oj controls; Local control and fiscal independence; State controls; Federal controls; Extreme centralization versus extreme decentralization of control; Coordination and cooperation among local units oj government; Control and the financing oj separate or private schools; Readings. VIII.

CONTROL

OF

PUBLIC

SCHOOL

SPENDING

THROUGH

IMPROVED

MANAGEMENT

210

Meaning and significance oj management; Management oj public school finance analyzed; Projessional preparation jor financial management; Merit appointments; Legal status oj management; Organization and projessional relationships; Technical services; Readings. IX.

CONTROL

OF

PUBLIC

SCHOOL

SPENDING

THROUGH

IMPROVED

BUDGETS

237

Functions oj the budget; Consequences oj poor budgets; Essentials oj sound budget making; The educational plan oj action; The educational plan in the total governmental pattern; Expenditure and revenue plans; Budgetary control; Budgetary procedures and techniques; Readings. X.

P R U D E N C E AND ECONOMY IN P U B L I C S C H O O L EXPENDITURES

264

Prudence and economy defined; Principles oj economical management; Safeguarding expenditures; Accounting jor school moneys; Major potential economies; State action and cooperation to promote prudence and economy; Readings. XI.

I M P R O V E D PERSONNEL POLICIES AND ECONOMICAL EXPENDITURES

301

Aims oj personnel policies; Basic policies affecting salaries and wages; Factors determining salary and wage levels; Salary schedules; Wartime salary adjustments; Readings. XII.

DEFENSIBLE SPENDING FOR P U B L I C SCHOOLS

Dejensible spending defined; Conditions essential jor dejensible spending; Indejensible spending; Maintenance oj public confidence.

335

CONTENTS

xv

A P P E N D I X I . G U I D E TO THE L I T E R A T U R E ON P U B L I C S C H O O L F I N A N C E

351

APPENDIX I I . G E N E R A L BIBLIOGRAPHY

358

INDEX

369

TABLES 1. TOTAL TURES

FEDERAL, BY

STATE,

MAJOR

AND L O C A L

FUNCTIONS

IN T H E

GOVERNMENTAL

EXPENDI-

UNITED

FOR

STATES

THE

YEAR 1 9 3 8

15

2 . T O T A L G O V E R N M E N T A L E X P E N D I T U R E S FOR P U B L I C SCHOOLS AND O T H E R PURPOSES IN T H E U N I T E D S T A T E S , 1 8 9 0 - 1 9 4 0 3. TOTAL TOTAL

PUBLIC

EXPENDITURES,

ESTIMATED

NATIONAL

TOTAL INCOME

TAX IN

17

COLLECTIONS,

THE

UNITED

AND

STATES,

1920-1940

21

4 . S U M M A R Y OF M A J O R F E D E R A L E X P E N D I T U R E S FOR P U B L I C E D U C A TION, 1 9 3 5 - 1 9 4 2

38

5 . G R O W T H OF P U B L I C S C H O O L E N R O L L M E N T AND E X P E N D I T U R E S

BY

D E C A D E S IN T H E U N I T E D S T A T E S , 1 8 7 0 - 1 9 3 0 6. GROWTH

IN

PUBLIC

SCHOOL

40

ATTENDANCE,

ELEMENTARY

AND

SECONDARY, 1 8 7 0 - 1 9 3 0

43

7 . T R E N D S IN T O T A L P U B L I C S C H O O L E X P E N D I T U R E S P E R P U P I L

EN-

R O L L E D IN T H E U N I T E D S T A T E S , 1 8 7 0 - 1 9 3 0 8 . DISTRIBUTION

OF T O T A L

PUBLIC

SCHOOL

44 EXPENDITURES

IN

THE

UNITED STATES, 1 9 1 4 - 1 9 3 0

48

9 . T R A I N I N G P R E R E Q U I S I T E S FOR C E R T I F I C A T I N G T E A C H E R S EXPERIENCE,

TEMPORARY

AND

EMERGENCY

WITHOUT

CERTIFICATES

NOT

CONSIDERED 10.

WEEKLY

WAGES

49 OF L A B O R E R S ,

ARTISANS,

AND

PUBLIC

SCHOOL

TEACHERS, 1 8 7 0 - 1 9 3 0 11.

52

D E V E L O P M E N T OF T H E N A T I O N A L INCOME OF T H E U N I T E D S T A T E S , 1869-1930

12.

13.

P U B L I C S C H O O L E N R O L L M E N T AND E X P E N D I T U R E S IN T H E

53 UNITED

STATES, 1 9 3 0 - 1 9 4 0

56

T R E N D S IN INCOME AND P R I C E S IN T H E U N I T E D S T A T E S , 1 9 3 0 - 1 9 4 0

58

1 4 . T R E N D S IN P U B L I C E L E M E N T A R Y AND S E C O N D A R Y S C H O O L E N R O L L -

15.

MENTS IN T H E U N I T E D S T A T E S , 1 9 3 0 - 1 9 4 0

60

PUBLIC SCHOOL EXPENDITURE L E V E L S BY STATES, I 9 3 0 - 1 9 4 0

65

TABLES

xviii

16. A V E R A G E PUBLIC SCHOOL EXPENDITURES PER PUPIL PER Y E A R IN THE UNITED STATES B Y SIZE OF CITIES AND B Y

METROPOLITAN

AREAS, 1 9 3 5 - 1 9 3 6

67

1 7 . PUBLIC SCHOOL EXPENDITURE LEVELS AND ECONOMIC RESOURCES OF STATES, 1938

76

18. PUBLIC SCHOOL EXPENDITURE LEVELS AND PRICE DIFFERENTIALS AMONG STATES, 1 9 3 0 - 1 9 4 0 19. PUBLIC

SCHOOL

84

EXPENDITURE

LEVELS,

POPULATION

DENSITY,

U R B A N ISM, AND DISTRICT ORGANIZATION BY STATES, 1938 20. RELATIONSHIPS BETWEEN

PUBLIC SCHOOL

EXPENDITURE

88 LEVELS

AND URBANISM IN N E W Y O R K AND N E W JERSEY, 1 8 7 0 - 1 9 3 0

90

2 1 . CONTROLS OF PUBLIC SCHOOL FINANCE INCORPORATED IN STATE I 88

CONSTITUTIONS AND STATUTES 22. MINIMUM

SALARIES

FOR

TEACHERS

COMPARED

WITH

MINIMUM

W A G E BUDGETS FOR WOMEN WORKERS IN INDUSTRY

31 O

23. MEDIAN ANNUAL SALARIES OR INCOMES OF C O L L E G E G R A D U A T E S IN VARIOUS PROFESSIONS OR OCCUPATIONS AFTER BEING OUT OF C O L L E G E EIGHT YEARS, 1935

312

24. ESTIMATED ANNUAL EARNINGS IN SELECTED OCCUPATIONS IN THE UNITED STATES, 1 9 2 0 - 1 9 3 6

313

FIGURES I. A N OUTLINE OF EXPENDITURE MANAGEMENT IN PUBLIC SCHOOLS I I . A N ORGANIZATION C H A R T FOR PUBLIC EDUCATION I I I . T H E PROGRESS OF THE SCHOOL BUDGET

217 231 261

PART

ONE

Understanding Public School Spending

CHAPTER

I

FACING FUTURE PUBLIC SCHOOL SPENDING PROBLEMS MAJOR

PROBLEMS

The American faith. Confidence in public education and its management is the foundation of public school finance. Popular demand for education brought public school expenditures into being. Higher standards and increased demands for public schooling are largely responsible for increases in public school expenditures. Only to the extent that the general public understands these expenditures, retains its faith in public education, and values the results of common schooling will public support be maintained. The educational needs of the United States which have not been met are legion, but they will not be met through the public schools unless the public believes in them. Hence, the most important problem in public school finance is the maintenance of continued confidence in the institutions of public education. The traditional American faith in public education is being challenged from many directions, but its financing is being subjected to the greatest challenge. 1 War and depression with their almost inevitable economic and financial consequences, curtailed or disrupted production, reduced income, increased taxation, and particularly, unemployment, have affected and after the war will again affect, the willingness of the public to pay taxes for the support of schools. Many other causes have contributed to the weakening of the faith of certain groups: religious doctrines; racial, class, economic, and political interests and fears; organized opposition to particular taxes; extreme conservatism, social, political, and economic; lack of understanding of current educational programs and methods, and their financing; organized demands for new social services, such as pensions; failure of the public schools to meet new needs; public failure to realize the values and contributions of public education; inequitable tax systems; unsatisfactory school district structure; the general growth of public 1

See Frederick T . Rope, Opinion Conflict and School Support (1941).

4

F U T U R E SPENDING PROBLEMS

expenditures; lack of understanding of the reasons for increased public school expenditures; knowledge of extreme variations in school expenditures without corresponding knowledge of differences in educational returns; instances of extravagance and waste in public school management; the declining birth rate and enrollment; and the inadequacy of the interpretative efforts of the public schools. The public and the teaching profession must understand the effects of total public spending upon public school spending; the reasons for increased public school expenditures and changes in expenditure trends; the meaning of variations in public school expenditure levels; the principles underlying public school spending; the economic meaning of public school expenditures; and the values, contributions, or returns from public school spending. Among the factors generally misunderstood by both educators and taxpayers are the effects of changed or different living standards upon public school expenditures; the effects of certain social trends, such as the changed status of women; the relationship between expenditures and objectives or services; the influence of price variations among states and communities; the economic costs of public schooling; and the economic contributions of public schooling. Another trend which is not sufficiently recognized in the literature on public school finance is the declining importance of local government as a taxing unit. Through state aid and shared taxes the state government has become the dominant taxing power in many states. In others the Federal Government bears more of the tax burden for the support of state and local government than the state and local units taken together. This trend has introduced new problems relating to the control and support of public education. Unless the revenue system can tap the economic vitality of the nation the public schools will not produce results commensurate with the nation's productive capacity. Unless the revenue system is adequate, stable, and at the same time flexible, equitable, economically sound, and can be easily and economically administered, the public schools will not be able to continue to function as they should. The attitudes of the public toward schools will be conditioned to a considerable extent by the degree of equity found in the tax structure and its administration. The securing of sufficient revenues to keep the educational enterprise functioning at maximum efficiency is an ever present problem. Among the factors which should be studied as part

F U T U R E SPENDING PROBLEMS

5

of the revenue problem are the decline of revenues from the permanent school funds, the inadequacies and weaknesses of the general property tax, possible reforms in the general properly tax and its administration, the consequences of too much reliance on the local property tax, the decreasing importance of local government and even state government as a taxing unit, potential state tax sources, possible improvements in state tax systems and state aid, the growing importance and potency of the Federal tax structure, and Federal aid. With these should be included the following: state limitations on and controls over local property taxes, tax exemptions, overlapping tax districts, tax competition among local units of government and among states, organized pressure for tax exemptions and tax favors, organized opposition to taxes, the incidence of Federal taxation, lack of tax coordination, competition among governmental services for tax support, the inevitable adverse effects of a given tax or tax reform upon individuals and interests, "earmarking" revenues for specific purposes, and similar factors which affect both the revenues and expenditures of the public schools. Structure of government and control. The removal of many of the causes of possible diminished faith in public education, its management, and financing, and the attainment of conditions conducive to adequate support and maximum economy in the future depend largely upon the reorganization of state and local governments. The adaptability of the school system in meeting new needs; facilities for interpretation of the educational program, its costs, and its contributions; an equitable tax system; greater equalization of educational opportunity; prudent management; adjustment to declining enrollments; and efficiency and economy in general require a governmental structure which will foster such objectives. Governmental reorganization is a paramount problem of public school finance. The allocation of control over education and public school budgets is one of the most serious problems of public school finance in the United States. If a centralized structure is created for purposes of economy and efficiency, it may sacrifice the potential adaptability of a decentralized structure. If certain centralizing tendencies prevail, the expensive decentralized structure will be retained after the reasons for its existence have disappeared. If centralization is generally disapproved for a small state with a population of 500,000, why should it be defended for a city of 500,000? If public education is a state func-

6

F U T U R E SPENDING PROBLEMS

tion, why should it be made fiscally dependent upon local government? Why should states permit extreme decentralization to persist at the expense of children's educational opportunities and the prudent expenditure of state and local tax revenues? What about Federal control? T h e Federal Government in extending financial aid has exercised direct and indirect controls over state and local educational policies and programs. In recent years it has been moving in the direction of Federally supported and controlled educational activities in the several states. W h a t are the respective responsibilities of various units of government in financing public education? How can responsibilities and functions best be allocated? What are the minimum specifications for a satisfactory unit for public school budget making, control, taxation, and financial management? What principles should govern the relationships among overlapping units? How should the finance function be organized in a unit of school government? Should schools not under public control be given tax support? Management. The prudent handling and economical expenditure of all public school funds and the prevention of unnecessary expenditures are essential for attaining maximum educational returns, for securing maximum equality of educational opportunity and adaptability, and for retaining public confidence in the public schools. Professionally competent and efficient management can provide the most services and make the best adaptations to new needs with the least increase in revenues. Such management establishes safeguards, controls, procedures, and techniques for obtaining the maximum utilization of all personnel and property; for obtaining and protecting all revenues or income to which the school system is entitled; for employing, retaining, and improving-in-service the most competent and efficient personnel; for realizing every potential economy in the operation and functioning of the system; and for making the most prudent purchases possible. However, in management it is extremely easy to overelaborate the machinery and routine and defeat the ultimate objective—the careful planning and wise spending of public school revenues. It also is easy to overemphasize the purchasing program and to give insufficient attention to personnel, the major item of expenditure in a school system. No problem is more deserving of emphasis in public school finance than that of prudent, efficient, and economical management. T h e wise spending of public school funds involves a great m a n y difficult and oftentimes baffling problems. W h a t are the respective

F U T U R E SPENDING

PROBLEMS

7

responsibilities of state and local units of administration? Is state action necessary to achieve maximum economy? What kind of action? What can be accomplished without state action and cooperation? What are personal services worth? W h a t personnel policies and salary and wage policies are necessary to achieve the results desired? How can maximum use be made of available personnel and materials? What are the major economies possible in local management? How can school expenditures be adjusted to fluctuations in income and prices? Budget making. Responsibility for public school budget making (whole or part) may be allocated to the Federal Government, a state, a municipality, or a special district or corporation. Yet, the extent of educational provisions made, the maximum returns for money spent, the adaptability of the school system, public understanding of the needs and contributions of public education and the reasons for certain activities and expenditures, the balance between public school expenditures and expenditures for other governmental services, the securing of needed revenues, and prudent and economical management will be governed not by the allocation of responsibility alone, but by the background, professional skill, thoroughness, competence, and careful planning and management revealed in the public school budget. Budget making is one of the most fundamental problems in public school financing. Centralization, Federal aid, equalization schemes, and new tax sources will not assure better educational opportunities and continued public support unless the budgetary process is functioning properly. Budget making involves such problems as these: What are the relative values of public school activities and other governmental activities competing with them for support? What are the present and future financial implications of educational objectives and policies? What do social and economic trends mean for public education and its financing? How does a given schedule or program affect expenditures? W h a t does a given procedure or method of attaining an objective cost? How does it compare in effectiveness with other methods? What does a given activity cost? What are the educational provisions which are not being made and why? How do they compare in value with certain activities now carried on? How much revenue can be secured from Federal, state, and local sources this year? Next year? Five years from now? W h a t must be done locally to increase revenues from Federal and state sources?

8

F U T U R E SPENDING DYNAMIC NATURE

PROBLEMS

OF PROBLEMS

Public school finance never can be conceived independent of the structure and functioning of the economy, government, and financial institutions of which it is but a part. Changes in economic life, financial institutions, governmental structure, spending, debt, tax policies and practices, and prices, all have implications for public school finance. T h e y create the problems of public school finance. T h e r e is no permanent or lasting solution for most school finance problems. Because government is dynamic; because economic life and taxpaying capacities change; because financial institutions are extremely imperfect and subject to great improvement; because educational objectives, needs, principles, and practices are not static; the facts, principles, procedures, and techniques of public school finance themselves are not fixed. Indeed, the problems of public school finance have changed since this book was originally undertaken. T h e w a r has introduced new problems, has made some dormant, and has accentuated others. However, many of the pressing problems will persist for decades. In the meantime the principles, structure, procedures, methods, or techniques for solving such problems may undergo drastic changes. Some of the possible lines of development are suggested. T h e need for continuous research or experimentation will be recognized. Breadth of vision, understanding, vigilance, imagination, inventiveness, and general managerial competence will be required to solve these problems. Throughout the book the emphasis is placed upon the selection, preparation, and continuous improvement of management. W h a t is needed is a type of management which will not have to depend upon stereotyped procedures and techniques. Adaptability and continuous research will become the most essential qualities or characteristics of future management. CONSEQUENCES

OF INERTIA

Immediate consequences. Some of the immediate consequences of failure to face and solve pressing public school expenditure problems are: ( i ) inability to make adjustments to changed conditions, such as unemployment among youth, conditions requiring increased attention to health and physical fitness, or conditions demanding a greatly expanded vocational education program; (2) creation of new independent agencies to provide such essential services and the resulting

F U T U R E SPENDING PROBLEMS

9

institutional rivalry; (3) widening inequalities in educational opportunities and disparities in ability to support schools, which become widely publicized; (4) surveys, investigations, gossip, news, editorials, speeches, and other publications exposing actual or alleged waste; (5) perpetuation and intensification of tax injustices and inequities, for example, in property taxation; (6) adoption of piecemeal remedies for the evils and inequities without removing their causes; (7) increased activity by groups opposing public education or not particularly interested or informed about public education, using all the foregoing facts as ammunition; and (8) ill-conceived retrenchments in state and local public school spending which do not correct fundamental evils and which often increase waste, inefficiency, inequalities, and tax injustices. Ultimate consequences. The ultimate consequences of decades of neglect of school financial problems are: (1) a school system which is outmoded, far behind the times, lacking in adaptability, gradually losing vitality, and giving way to new, up-to-date, adaptable, and vital institutions; (2) a gradual loss of public confidence and a consequent slackening of support which hastens the deterioration of the institution; (3) a consequent deterioration in the social, political, and economic life of the nation which decreases ability to support schools and maintain high cultural and living standards; (4) a loss of faith in a democratic society, democratic government, and a private enterprise economy; and (5) the development of different social, political, and economic philosophies and institutions. SOURCES OF

DATA

All the data needed for the solution of public school finance problems are not available. Many of the research studies which should be undertaken are mentioned in the chapters which follow. However, much can be accomplished by using the experience and data already available in the literature. T o summarize the available data relative to the major problems of public school spending is the purpose of the remainder of this book. It is supplemented by a guide to the literature and sources of information on public school finance and a long bibliography with specific chapter references regarding each problem discussed. The guide (see Appendix I) reviews the major research studies completed to date and lists indexes, periodicals, statistical series,

IO

F U T U R E SPENDING P R O B L E M S

and other sources of information relative to public school finance. Attention is called to certain characteristics of the bibliography and chapter references, (i) Full bibliographic data for each reference is given in the General Bibliography (Appendix II). (2) Footnotes give only enough bibliographic detail to locate the reference in the General Bibliography or in any library catalogue. (3) Each reference is assigned a number in the General Bibliography. Chapter readings refer only to the author and the number of the reference. (4) Books that are especially helpful in studying the revenue problems of the schools are starred in the General Bibliography.

CHAPTER

II

GOVERNMENTAL SPENDING AND PUBLIC SCHOOL EXPENDITURES ANALYZING GOVERNMENTAL

EXPENDITURES

Difficulties of analysis. The analysis of total governmental expenditures into allotments for various purposes is necessary for understanding, appraisal, and policy formulation. The amount which can be spent for public schools depends in part upon expenditures for other governmental purposes and vice versa. For this reason local, state, and Federal analyses of governmental spending have been prepared. On the basis of such comparisons public school expenditures and other governmental expenditures have been defended and attacked. Increases or decreases have been urged, using such evidence. Yet, there are certain limitations of the data which often make such generalizations invalid. The analysis and comparison of expenditures for various governmental purposes involves three very serious limitations. In the first place, most governmental activities serve several purposes and all classifications are arbitrary. Secondly, most services are provided by overlapping units of government, or more than one unit participates in their financing. And finally, the compilation of statistics is made difficult and inexact owing to differences in definitions, accounting, records, and reports. There are few governmental activities which promote only one purpose. Most of them have multiple objectives, many of which are the same as those of some other governmental service. Public education, hospitals, public health, sanitation, water supply, recreation, and public assistance to the disabled and unemployed are all classified as separate activities, but they all promote health. Education, police protection, fire protection, traffic control, highways, correction, health, sanitation, water supply, and public assistance, all help protect life. Education, police protection, fire protection, planning, zoning, public utilities, beautification, highways, correction, and public assistance, all help protect property and enhance its value.

ia

G O V E R N M E N T A L SPENDING

Education departments and public schools promote industry, agriculture, and commerce; departments of industry and labor, agriculture, and commerce carry on educational activities and promote other objectives of education. There are no generally accepted categories for classifying public expenditures. 1 Hence, any separation of governmental functions is arbitrary and misleading. If education is separated from other governmental activities for purposes of comparison, due recognition must be given to the many purposes of government promoted by public education. Public schools are sometimes financed by Federal, state, county, and municipal authorities; and each of these units supports independent educational activities. The same is true of most other governmental activities. In New York state certain governmental activities like police protection are provided by the state, 57 counties, 59 cities, 932 towns, and 554 villages. In cities police protection is supplied by the county and the city; in the villages, by the state, county, town, and village; in the towns, by the state, county, and town. In cities and villages there may be a school district not conterminous with the municipality and in towns there may be special, non-conterminous districts for education, health, lighting, water, fire protection, sewerage, and other purposes. In analyzing expenditures in any unit of government, the proportionate share of the expenditures of activities carried on by overlapping units must be added to the expenditure for those activities in the unit under consideration. The fact that public education statistics are gathered by a state agency, which issues totals for the state and its constituent school districts, has often led to misleading comparisons. The approximate total expenditure for public schools in a municipality often is compared with only part of the city expenditure for protection, health, relief, or some other service, a large part of which is provided by some overlapping unit of government. The expenditure of the other units is omitted in the comparisons. Clark summarizes the difficulty as follows: For it is soon found that cost may be paid by two or more tax divisions, or two divisions may support different parts of the same function. For instance, highways may be built by the state or by the town, or they may be built by the state and the town working together, or by the state, county or town in other combinations.2 1

See H. L. Lutz, Public Finance (3d ed., 1936), p. 33. ' H. F. Clark, The Cost oj Government and the Support oj Education (1934), p. 4.

GOVERNMENTAL

SPENDING

13

T h e extent of overlapping can be seen in the following statistics on the units of government in the United States—127,108 school districts, 20,262 towns or townships, 16,366 cities or incorporated villages, 8,580 special districts, 3,053 counties or parishes, and 48 state governments.' T h e third difficulty is largely a statistical one. Although agreement upon a general classification such as education or protection may be reached, there is no assurance that all units of government include the same expenditures under each. Debt service for schools may be included under education or placed in a separate, general municipal category called debt service. Certain health services may be charged to the school accounts or they may be classified under public health. T h e care of the physically handicapped may be charged to education, to charities, or to public health. Lighting school buildings may be included under education or general government. Pensions for school employees may be charged under education or under fixed charges for the entire municipality. Furthermore, no matter what the classification, lack of uniformity in definition decreases the reliability of the statistics on expenditures. Differences in the fiscal year, extreme variations in recording, accounting, and reporting expenditure data, especially in the smaller units of government, also create limitations. Cautions in interpretation. T h e arbitrary nature of expenditure classifications, the fact of overlapping service areas, and the statistical inadequacies make analyses of governmental expenditures almost worthless, except for showing the approximate division of governmental financial outlays and indicating trends in expenditures, providing the same definitions and categories are compared. Comparisons by themselves do not prove that too much or too little is being spent under any one classification because there are great diflerences in governmental services. Many are available services, that is, available to the few who may happen to need the service on a given day. Fire protection, police protection, hospitalization, and most other governmental activities fall into this category. Certain other governmental activities are continuous and must be supplied every day to a large number of citizens, sometimes for many hours daily. Education, which must supply a highly technical personal service six to eight hours every day for 180 days every year for 25,000,000 children, is not comparable with such a category as recreation, which is an available 1 W. Andenon, The Units of Gooernmeni in the United States (1934), p. I.

14

G O V E R N M E N T A L SPENDING

and sometimes impersonal provision for the few who happen to be free to use the facilities at a given time. Many governmental services are of such a routine nature that they can be performed by an unskilled laborer. Others require skills varying from the manual to the most complex intellectual and technical. T o compare the per capita cost of garbage removal with the unit cost of research in preventive medicine without allowing for this difference in quality is folly. The categories themselves, unless they are carefully interpreted, tend to exaggerate the costs of certain activities and minimize the cost of others. For example, general government and education include a variety of different kinds of services, as shown in Chapter I I I , but sanitation, recreation, health, and hospitals are often treated as separate categories, and protection and corrections are often classified separately. 4 Analyses of national totals. If we assume some arbitrary, uniform classification of governmental expenditures, national totals are most satisfactory for showing the proportion of total expenses devoted to each class. The limitation of overlapping service areas is automatically removed from such totals. The figures, it is true, are no more valid and reliable than local practices will allow them to be. Nevertheless, they present a fair approximation of the expenditures for various categories of service, providing allowance is made for grants, transfers, subventions, or loans made by one unit to another. Such a comprehensive summary of Federal, state, and local governmental expenditures for the year 1938 is presented in Table 1. This shows that roughly about 2,413 millions of dollars of public expenditures were devoted to education out of an 18,199 million total, or about 13 percent. According to the 1941 data referred to in Table 1, public education expenditures were only about 1 o percent of the total for that year. The amount spent for public education in 1941 was exceeded by expenditures for national defense, relief or welfare, debt service, and social security and was followed closely by expenditures for highways and streets. It should be remembered, however, that these amounts are estimates, not exact amounts, owing to the factors enumerated. It will be seen that the 1938 figures in Table 1 vary from others presented in Table 2. * Sec W. W. So per, "Cost of Education Compared with Other Governmental C u t s , " in American Educational Research Association, Practical Values of Educational Research (>93 8 ). PP- 6 0 ff-

G O V E R N M E N T A L SPENDING

15

T A B L E I . T O T A L F E D E R A L , S T A T E , AND L O C A L G O V E R N M E N T A L E X P E N D I T U R E S B Y M A J O R F U N C T I O N S IN T H E U N I T E D S T A T E S FOR T H E Y E A R

1938"

EXPENDITURES IN MILLIONS

State and Local Total

CLASSIFICATION OR FUNCTION

Education Highways and streets Agriculture and natural resources National defense Protection Relief, welfare, social security Net additions to social security reserves Health and hospitals Interest Unclassified Total expenditure Repayments of debt Grand total

Federal $

State

Local

National Total

Percent of Total

818 900

$1,418 510

$2,236 1,410

$2,413 1,670

'3-3 9.2

3 566

76 12 704

1,076 1,622 748

5-9 8.9

44

73 12 138

3,182

637

266

903

3.085

17.0

489 36 926 902 7,626

5'6 270 121 738 4.223 '35 4.358

5'6 535 7«3 2,739 9.844 664 10,508

1,005

5-5 3' 9.0 20.0 96.0 4.0 100.0

'77 260 1,000 1,610

65 7.69'

$

265 592 2,001 5.6al 529 6,150

57« 1,639 3.641 ' 7,47° 729 18,199

4«

Source: U. S. Treasury Dept. See New York Times, Aug. 28, 1939 or T a x Foundation, Tax Facts and Figures (1941), p. 41. Grants-in-aid are not duplicated. For 1941 data ice U. S. Bureau of the Census, American Government Expenditures, 1941.

4

State and local analyses. A total of state and local expenditures for various categories is more satisfactory than either a state or a local total by itself. As in the case of a national total care must be exercised to count grants, transfers, loans, or subventions only once. For example, state aid for public schools should be included only once. If it is included in state expenditures, it should be excluded from the local total. Table i contains the total state and local expenditures of all forty-eight states. O n the average about 21 percent of total state and local spending went for public education in the year 1938. Because of the limitations enumerated, totals for states or municipalities alone will not be presented in detail. The United States Bureau of the Census has published annual summaries for the states since 1915, with the exception of years 1933 to 1937, and for cities of 30,000 population from 1898 to 1932. Since 1932 the data on cities have been limited to cities of over 100,000 population. In the last summary for states (1939) approximately 24 percent of the total cost

i6

G O V E R N M E N T A L SPENDING

payments for states was classified under public education; of this percentage about 18 was for grants-in-aid to school districts and 6 for educational activities provided by the state itself.6 On the basis of the census figures for cities, the Research Division of the National Education Association issues circulars on school expenditures as compared with total city expenditures for cities over ioo,ooo. Public education expenditures represented about 29 percent of total city expenditures in these cities in 1 9 3 8 / Unfortunately, state aid is not excluded from the figures; cities and school districts are not always conterminous; and there are variations in what is included under public school expense in various cities. (In so far as possible the Bureau of the Census tries to include school elections, annuities to retired employees, medical service, free lunches to indigent pupils, operation of public playgrounds, and legal and auditing services under city expense.) PREWAR

TRENDS

IN GOVERNMENTAL

SPENDING

General growth. Students of public finance, especially since 1850, have found that increasing governmental expenditures are a characteristic of modern civilization, industrialism, and nationalism. Lutz says: " T h e rapid increase of public expenditures has been the dominating fact in the recent financial experience of every country in the world."' On the basis of national figures alone (state, provincial, and municipal or local expenditures not included) public expenditures (in dollars adjusted to the 1 9 1 3 purchasing power of money in each country) for 1929-1930 were nearly double the prewar level in Italy, over twice as high in France and Germany, nearly three times as large in England, and increased over threefold in the United States. 8 The trend has been universal; the poor, the small, and the totalitarian as well as the wealthy, the large, and the democratic nations have been affected. 9 In peace, depression, and especially in war, the same trends have gone on. Growth in the United States. Continuous series of data on total national, state, and local public expenditures in the United States have been available only since 1923. Prior to that time the National In• U. S. Bureau of the Census, Financial Statistics of States, ¡$39, (1941), II, 4. • National Education Association, Research Division, School Expense Compared unth Combined City and School Expense, 1938 (Circular No. 5, 1941). 7 Lutz, op. cit., p. 41. • T a x Research Foundation, Tax Systems (8th ed., 1940), p.363. ' Lutz, op. cit., p. 49.

G O V E R N M E N T A L SPENDING

17

dustrial Conference Board prepared estimates for the years 1890, 1903, and 1913; and Newcomer prepared estimates for the years 1910, 1915, and 1920. 10 All such figures, however, should be regarded as estimates showing only approximate trends and relationships. T A B L E 2 . T O T A L G O V E R N M E N T A L E X P E N D I T U R E S FOR P U B L I C SCHOOLS AND O T H E R P U R P O S E S IN T H E U N I T E D S T A T E S ,

EXPENDRRURES IN MILLIONS

Total

YEAR 1890 1903 19IO

1

855 C >»57O C

1926 1930

A.834D A,9«9C 3.79 D 10,317" 8,918« 10,196 E 11,192 '

«934 1938

12,984' 16,488'

'94°

18,745'

I9«3 I9«5 1920 1923

Public Schools' $ 141 253 426

Other »

7'4 I,3I7 2,408

522 605 1,036 1,701 2,026

2.397 3.104 9.281

2,3« 7 1,720 2,223 2,300

8.875 11,264 14,265

7.217 8,170

I6,445

1890-1940*

PERCENT OF INCREASE OVER

PERCENT PUBLIC SCHOOL

1890

EXPENDITURES

Schools

Other ARE

79 202 270

85 237 236

329 635 1,106

335 1,200

',337 ',543 1,120 ',477 ',53'

9 " 1,044 ','43 ',478 «,898 2,203

OF TOTAL 16.5 16.1 150 '7-9 16.3 10.0 19.1 '9-9 20.7 '3-3 '3-5 IA.3

* National, state, and local total. Public school» include public elementary and secondary schools only. Figure* prior to 1993 include payment! on indebtedness and duplication«; they are not exactly comparable with figura after 1933; they show only approximate trends and relationships. They vary somewhat from the figures cited in footnote " f " below. b Preliminary. c National Industrial Conference Board, Cost of Government in the United States, 1934-1936 (1937). P-5d Mabel Newcomer, Financial Statistics of Public Education in the United States, 1910-19x0 (Educational Finance Inquiry Commission Report, Vol. V I , 1934), pp.i 1 - 1 3 . ' National Industrial Conference Board, Cost of Government in the United States, '935-1937 (1938), p. 4. ' National Industrial Conference Board, The Economic Almanac for 1941-1943 (1941), p. 358. * U. S. Office of Education figures.

Certain trends seem clear from the foregoing estimates. Up until the First World War, increases in public school spending and spending for all other governmental purposes taken together paralleled each other rather closely. During the First World War total expenditures, exclusive of public school expenses, increased at about double the rate for public school expenditures; but during the prosperous 'twenties school expenditures gained on total expenditures for other 10

See Table 3 for citations.

i8

GOVERNMENTAL

SPENDING

purposes. During the depression and just before the Second World War other expenses again increased much faster than those of the public schools. Prior to the entrance of the United States into the First World War the percentage of total governmental expenditures devoted to public schools remained relatively constant (around 16 percent). T h e percentage dropped to around 10 during the peak of wartime spending (prior to 1920), increased to over 20 in the decade 1920-1930, but has been decreasing since then. Analysis of trends. When total governmental spending is analyzed by units of government, four other noteworthy trends become evident. (1) Federal expenditures dropped somewhat after the first war, but between 1927 and 1940 they more than trebled. In 1929 only about 26 percent of total expenditures were Federal; in 1940 over 50 percent were. (2) State expenditures have grown steadily since 1890. In 1940 they were three times what they were in 1922; yet, the percentage of total spending done by states has remained relatively constant. (3) Local expenditures increased only about a third between 1922 and 1939; in fact, in 1936 they were far below the peak reached in 1929. From the major spending unit (51.5 percent of the total in 1923) local government dropped to second place by 1934, and spent less than 30 percent of the total for 1940.11 (4) T h e percentage of total state and local expenditures devoted to public schools decreased from almost 28 percent in 1926 to only about 23 in 1936." Since 1936 the percentage has increased to a little over 2 5 . " When total governmental spending is analyzed by functions, the following facts are revealed: between 1930 and 1936 increased expenditures for relief, war, and certain other governmental functions decreased the percentage of total governmental expenditures allotted to public education. According to Heer the percentage decreased by about a third between 1930 and 1936.14 In 1936 expenditures for war, relief, and probably for streets and highways each exceeded expenditures for public schools. Debt service came very close to the amount spent for schools.15 T h e pattern for 1938 may be seen in T a b l e 1. A view over a long period reveals that there has been a gradual For the figures given above gee The Economic Almanac for 1941-1943, p. 358. Derived from the table referred to in footnote : 1 and Table a. " Ibid. 14 C. Heer, Federal Aid and the Tax Problem (The Advisory Committee on Education, Staff Study No. 4, 1939), pp. aa ff. " Ibid., p. 23. 11 u

GOVERNMENTAL

SPENDING

19

expansion of the older functions of government including the promotion of peace, order, security, justice, and education; and an accelerating expansion of government into social welfare and economic activities—health, sanitation, conservation, transportation, recreation, regulation and promotion of production and distribution, public utilities, welfare, social security, and public works. 16 Shultz puts it this w a y : As far back as colonial times education was accepted as a government function. A passion for "internal improvements" during the first third of the nineteenth century led states to construct highways and canals; later the states assisted railroad and banking development. Free hospitalization, maternity assistance, old-age pensions, and unemployment insurance are expansions upon earlier rudimentary poor relief. Agricultural aid has assumed protean forms. Group disasters are now held to be matters of public concern, and relief of the victims through governmental agency a social obligation. The Federal Government has become the major purveyor of credit. T.V.A. is discussed sis a fore-runner of still greater "control" projects . . . And consideration is being given to the suggestion that a long term public works program be maintained to give relief employment." Between 1903 and 1930 the greatest increases in state expenditures took place in highways (about 5,000 percent), development and conservation of natural resources, interest, outlays, protection, and health. 1 8 Between the same two dates 146 cities over 30,000 population showed the greatest increases in recreation, education, charities, hospitals, correction, health, and sanitation. 18 T h e increase in governmental expenditures has not been uniform for all categories. Some have even decreased, at least for a time. W a r expenditures have been subject to extreme fluctuations. During the depression (1930-1935) expenditures to public schools were not the only ones curtailed by state and local governments; highways, general government, protection, correction, health, and recreation expenditures were reduced in N e w York state; only public welfare, relief, and interest increased. 20 M a n y other states and municipalities probably showed similar trends, but data of the United States Bureau of the Census do not permit recent comparisons. A study of state ex" H. M . Groves, Financing Government (1939), pp. 512-13. 17 W . J . Shultz, American Public Finance (2d. ed. rev., 1938), pp. 17-18. " U . S. Bureau of the Census, Financial Statistics oj Slates (¡903-1930). " U. S. Bureau of the Census, Financial Statistics of Cities over 30,000 (1903-1930", no longer issued). , 0 W. W. Soper and A . J. Burke, Trends in Expenditures jar Various Public Purposes in New fork State, Part I I I (Circular No. 7, New York State Teachers Association, 1938), p. 4.

ao

G O V E R N M E N T A L SPENDING

penditures during the decade 1930-1940 showed that only twelve states reduced highway expenditures, but almost all the states studied had substantial increases in expenditures for relief. 11 The Federal Government during the depression not only expanded its public works, welfare, relief, and interest expenditures but also made vast oudays for the social security system, various agricultural programs, soldiers' bonus, numerous governmental agencies (including educational), and national defense. And after 1933-1934 it provided large funds for a number of educational enterprises, some of which have been under its direct control, for example, the Civilian Conservation Corps and the National Youth Administration. After eliminating increases in expenditures for relief, welfare, and interest, allowing for the fall in prices, and taking into account the expansion of Federal and state activities in education, it would be difficult to prove that the public schools did not come out of the recent depression better than did many other functions of government, such as highways. Of course, the schools did suffer severe setbacks between 1933 and 1935, as shown in Chapter I I I , but soon recovered to a substantial degree. When all the facts are known, it probably will be found that what Pitkin discovered about previous depressions is still true. From an examination of the information available for a limited number of states it appeared (1) that those states usually favored the schools rather than the other functions of government during periods of financial stringency; (2) that in states where reductions in governmental expenditures were widely made, those for education seemed to have been cut less and not so soon as those for general governmental purposes; and (3) in some states the amounts granted to the schools increased while cost for other purposes of government were being reduced.22 The growing amount of public expenditures being used to pay interest on indebtedness reflects another tendency—deficit financing and increased borrowing. The Federal Government has not had a balanced budget since 1931. 2 3 The cumulative debt of the Federal Government in 1940 was about forty-three billion dollars, and the estimated total public debt of state and local governments for the u

National Education Association, Research Division, School Costs and Relief Expenditures '93°~'939 (Research Bulletin, Vol. X I X , No. 3). ** R. S. Pitkin, Public School Support in the United States during Periods of Economic Depression ("933). P- «36. " Cost of Government in the United States, '935~t937, p. 71 •

GOVERNMENTAL

SPENDING

21

same year was about twenty billion, making the aggregate public debt of the country about sixty-three billion. 14 O f this amount somewhat over three billion (5 percent) represents public school debt. 1 1 W i t h the large scale outlays for defense or war beginning in 1940, the public debt, especially on the Federal level, will continue to mount, but interest charges may not increase so rapidly due to low interest rates. Expenditure and national income. Public expenditures in the United States, especially between 1930 and 1940, increased faster than estimated income (Table 3). Although considerable part of the increased TABLE

3. T O T A L

PUBLIC

EXPENDITURES,

TOTAL

TAX

COLLECTIONS,

T O T A L ESTIMATED NATIONAL INCOME IN THE UNITED STATES, (In Millions

of

Dollars) TOTAL

TOTAL PUBLIC YEAR

TOTAL TAX

EXPENDITURES * COLLECTIONS

1920 '925 '9a9 >930 '931

PERCENT OF INCOME

ESTIMATED B

AND

1920-1940

INCOME

C

Expenditures

Taxes

9,840

9.2"

73.500

9,166

7,892

'3-4

75.900 87,100

12.1

12.5 10.4

12.6

11.2

77.300 60,300

'4-5

'3-3 '5-4

10,936

9,768

11,192

10,277

11,688

9.305 8,151

1932

12,406

'933 «934 1935

19.4

43.000

28.9

>0.635

7.508 8,778

42.300 49,600

25.1 26.2

'7-7

'4.354

17.9

16,350

54.400 62,600

26.4

1936

9.736 10,528

26.1

16.8

«937

16,606

12 »547

69,500

14,100

64,300

23-9

25.6

13.286

70,983 76,007

25.2

18.7

24.7

18.6

1938

»939

1940

12,984

16,488 17,856

'8.745

14,144

d

The Economic Almanac JOT 1941-1942, p . 3 6 1 . Ibid. p. 361; this varies somewhat from the Tax Institute, Tax Yields 1940 (1941). e Ibid.

19.0 17.7

18.1 21.9

a

b

estimates in

Tax Facts and Figures,

p. 6 and

G. D. Strayer and R. M. Haig, The Financing oj Education in the State 0/ New fork (1934), pp. 1 9 7 ff. 41

44

GOVERNMENTAL

SPENDING

29

within their boundaries, the resources in the poor districts may be strained to the limit to provide a meager educational offering, while the rich districts may be able to finance an elaborate program without perceptible effort. On the other hand, a complete pooling of all the economic recources of the state in support of a state-wide program, might enable the state to spend a much larger aggregate sum for educational purposes in less favored communities and thereby more nearly equalize the burden of support than would be possible under a localized, small-district organization of the educational system where the burden of support even in adjoining districts or counties may be greatly unequal. 4. In the fourth place, if the revenue system of the state be so crudely devised, or so faultily administered, that an increase in taxes results in serious injustices and friction, the tax system itself may be a limiting factor even though economic resources be adequate and the desire for education strong. 5. Another factor which may affect the problem is the confidence which the community has in the skill with which the school system is organized and administered. A conviction, just or unjust, that educational funds are being wasted or mismanaged may serve to prevent a community from sanctioning an educational program which it very much desires and could well afford to support. On the other hand, a school that commands the interest of the community and is a center of inspiration to adults, as well as to children, in building a better and more productive community will be supported more willingly. 6. Finally, the limiting factor may be a weakness in the governmental arrangement for interpreting the desires of the community with respect to the educational program. It is important that the mechanism by which the community registers its decisions as to what it really wants in education should be made as perfect as possible. Experience during the past ten years has revealed three other important factors which should be added to the list: 7. The amount which can be spent for public schools in a state or a community depends in part upon the total current spending and indebtedness of all governmental units raising taxes in the state or the community. 8. The amount which can be spent for public schools is conditioned by the extent to which public school support is organized and able to compete with other organized pressures for governmental spending. 9. The amount which will be spent for public schools depends upon the adaptability of the public school system. Failure to meet needs leads to the creation of new competing agencies or diversion of support to other existing governmental agencies. At this point only the effects of total spending by government upon public school expenditures will be emphasized. However, total expenditures of government do affect certain of the other factors enu-

3o

GOVERNMENTAL

SPENDING

merated as being essential to public school support. Such effects will be included in the discussion. Psychological effects of spending. T h e most serious effect of total governmental spending upon public school finance is psychological. It arises out of a general hostility toward taxation on the part of vocal taxpaying interests. Such hostility becomes most evident when taxes are rising faster than income or w h e n taxes are remaining fixed or rising and income is falling. It is evident whenever there has been a prolonged period of emergency expenditures by government (in war and depression). It is evident whenever there are abrupt, sharp increases in taxation. T h e danger is that hostility toward taxation will become hostility to all governmental services—productive and nonproductive, efficient and nonefficient, essential and nonessential. S u c h hostility affects the willingness of the public to support schools and causes people to overlook the lasting values and economic contributions of public education. Evidence of the psychological effects of public spending is easy to find. Newspaper editorials, cartoons, radio " g a g s , " lines in plays and moving pictures, magazine articles, statements of the m a n on the street, and publications of taxpayers' associations frequently reflect the attitude that all public spending is bad and all governmental expenditures should be cut. T h e following are typical expressions of this attitude: Some heads may have to be cut off, some institutions closed, some people denied the free services they have been getting, some activities dropped. But if things are done in the interest of state welfare, no honest opposition need be feared. 46 Some day we are going to have to mend our ways in this reckless public spending. We might as well begin today. Once we have dealt public extravagance a smashing blow, we'll find we've cleared the air. The huge cost structure of New York education which is impoverishing the people is largely the work of the Teachers Lobby. 47 A f t e r the First World W a r , during the severe depression of 1 9 3 2 1935, and during the recession of 1938 such attitudes were very evident. Fortunately, the attitudes of the most vocal taxpayers generally were not shared by the vast majority of taxpayers, at least as far as public school expenditures are concerned. A poll of public opinion ** California Tax Digest, Dec., 1933, p. 423, quoted in H. Halter, "Taxpayers A&ociation — A Menace to Education?," Clearing House, X I I (Sept., 1937), 3-7. 41 Mew York State Economic Council Letter (No. 15), July 20, 1934, p. 4.

GOVERNMENTAL

SPENDING

3'

c o n d u c t e d by the A m e r i c a n Institute of Public O p i n i o n for the A m e r i c a n Y o u t h Commission in 1940 showed that only 14 percent of the population t h o u g h t too m u c h was being spent for schools. 4 8 Studies by R o p e 4 ' and the M i c h i g a n Education Association substantiate these findings.60 U n f o r t u n a t e l y , the hostile attitude has prevailed at times in individual states and communities, and indiscriminate reductions h a v e been m a d e not only in public school expenditures b u t also in other essential g o v e r n m e n t a l services. Organized pressures to reduce public school expenditures. Increased governmental expenditures for relief, welfare, and interest, the failure of all g o v e r n m e n t a l functions to adjust quickly to changed price levels, and economic paralysis a n d reduced income during the depression b r o u g h t into b e i n g numerous organized efforts to reduce g o v e r n m e n t a l expenditures. H a l t e r found that 60 percent of the school systems included in her study had taxpayers' associations during the depression. 61 S h e f o u n d also that these generally represented the largest business and t a x p a y i n g interests in the communities and w e r e interested in " c u t t i n g expenses rather than reforming e d u c a t i o n a l financing." 6 2 G e n e r a l l y they recommended reduced salaries, curtailments of services and purchases, larger classes, and postponement of m a i n t e n a n c e and repairs. W h e r e they succeeded in forcing reductions, they not only got the reductions but dictated the type of reductions to be m a d e . School authorities generally were not consulted. Before the depression was over, opposition to public spending was organized on a nation-wide basis and in about half the states on a statew i d e basis. T h e T a x Foundation, 30 Rockefeller Plaza, N e w Y o r k city, b e c a m e the national clearinghouse and research a g e n c y for taxp a y e r groups t h r o u g h o u t the nation. Its subsidiary, T h e Citizens' Public E x p e n d i t u r e Survey, b e c a m e the agency for organizing, coordinating, l o b b y i n g , and carrying on p r o p a g a n d a against g o v e r n m e n t a l spending. T h e Survey applied the techniques so successfully developed b y the N e b r a s k a Federation of C o u n t y T a x p a y e r s L e a g u e s to other states and municipalities, especially in Illinois, N e w Y o r k , National Education Association, Research Division, What People Think about Youth and Education (Research Bulletin, Vol. X V I I I , No. 5, 1940). * ' F r e d e r i c k T . Rope, Opinion Conflict and School Support (1941). ' " T h i s association has conducted three such polls. See Educational Trends, M a r c h , 1941, pp. 24-28. " H. Halter, " T a x p a y e r s ' Associations—a Menace to Education?," Clearing House, X I I (Sept., 1937), 3 - 7 . Based upon a doctor's dissertation completed at New York University. 62 Ibid. 48

32

GOVERNMENTAL

SPENDING

Maryland, Michigan, Missouri, and Wisconsin. In some states, like Arizona, California, Colorado, Indiana, Iowa, Kentucky, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Pennsylvania, Tennessee, Utah, and Wyoming, the T a x Foundation and the Citizens' Public Expenditure Survey worked through state taxpayers' associations. Such powerful, centrally financed organizations were able, not only to coordinate existing taxpayer organizations, but also to organize new ones. Lobbying against taxes became more unified. Cooperation of hundreds of daily and weekly newspapers have aided in the w o r k . " Already existing organizations such as the National Association of Manufacturers and the United States Chamber of Commerce were active in the movement to lower public expenses and lower taxes on the local, state, and national levels. Organizations snch as the New York State Economic Council and the Friends of the Public Schools cooperated by deliberately trying to break down confidence in the public schools. The movement for public support for parochial and private schools was renewed and often became merged with taxpayers' groups, in subtle and sometimes open opposition to public school spending. The fact that the taxpayer movement became organized nationally did not change its objectives and its class bias. It remained opposed to all taxes and all public spending and continued to oppose tax reform. The following quotations illustrate the position of such organizations: The dynamic theme of the New Jersey Taxpayers' Association has been "to reduce taxes, cut the cost of government." So called "base-broadeners" have, for example, continually agitated for new taxes, purportedly to shift the burden of taxes from one group of taxpayers to another. But organized taxpayers, recognizing these as clever maneuvers to increase public spending, have promptly rejected the schemes of the "base-broadeners."54 Arbitrary limits and controls on spending. Another effect of rising expenditures for government during hard times has been the enactment of arbitrary controls upon taxation or governmental spending.66 Budgetary and revenue difficulties. The foregoing factors along with the growth of total governmental expenditures itself have created serious budgetary difficulties and tax competition for the public schools in ** Tht Tax Front (Tax Foundation organ), Oct., 1940, p. 4. M Ibid., Nov., 1940, p. 4. " See Chapter VII.

G O V E R N M E N T A L SPENDING

33

most states. All taxes finally must be paid out of income. With the greatly increased spending by the Federal Government, Federal taxes, levied on the same incomes from which state and local taxes are collected, also increased. State and local tax bases were weakened, especially in the poorer states.' 8 Such facts Jed Chisholm to conclude: When it is recalled that the public schools do not receive general financial support from the Federal Government, the problem presented to the schools in the various states as a result of the foregoing condition can be visualized more clearly. How long this situation can prevail without being disastrous to the schools of great sections of the country is problematical.47 This was written before the high taxes to finance the defense program and war effort were enacted. Serious budgetary trouble for the public schools during and after the war certainly can be expected. Particular state and local taxes have been constantly attacked. Groups interested in highway expenditures (they were seriously curtailed during the depression) have made drives in many states to earmark gasoline and motor vehicle tax revenues for highway purposes. In 1938 California, Michigan, and New Hampshire adopted such provisions.®8 In 1940 Idaho, Nevada, and South Dakota adopted similar amendments. 69 Other interest groups also have tried to secure tax advantages. Homeowners have sought and obtained tax exemptions in thirteen states; by 1940 nearly 12 percent of all property in Oklahoma was tax-exempt.' 0 The T a x Policy League (now T a x Institute) in 1938 became alarmed over the trend. In one of its bulletins41 the following strong statements appear: It is distressing to see the attempts that are being made on every side to throtde the taxing power in the interests of particular groups. Tax exemptions, tax prohibitions, tax limitations, tax earmarking are all evidences of discrimination in favor of, or against, some particular group. T a x competition among the states contributes to such inequities. Connecticut and New Jersey attempt to attract New York state residents by not enacting an income tax. States without sales taxes attempt to attract retail trade from states with sales taxes. State taxes on business are often avoided for competitive reasons. Pressure for various types of spending also has brought about See L. L. Chisholm, The Shi/ting of Federal Taxes and Its Implications for tfu Public Schools, («939). PP- 74 ff"Ibid., p. 77. •• Tax Policy, Nov., 1938, pp. 3 ff. 1 1 Public Administration Clearing House News Release, Jan. 3, 1941. u •• Ibid., Jan. 6, 1941. Tax Policy, Nov., 1938, p. 1.

34

GOVERNMENTAL

SPENDING

budgetary crises for the public schools and probably will continue to. An old age pension law enacted in Colorado caused reductions in all other governmental expenditures, created a deficit, led to a diversion of school revenues, and reduced municipal revenues substantially; 62 and the full effects of the law have not been felt yet. Pension groups have seriously threatened the support of government in California, Ohio, Texas, and Washington. 63 In 1939 thirteen state officers reported that old age pension legislation had caused difficulties in getting adequate support for public schools. Others expected difficulties in the future due to legislation already enacted. 64 With the proportion of the population over sixty-five increasing at a rapid rate, and with present industrial trends, this problem will become more serious in the future. Relief expenditures have caused budgetary reductions for public schools, 66 but the pressure for relief should let up with recovery in business and income. Municipalities too have had their fiscal problems, growing out of increased spending and attempts to chisel away the taxing power. One reason for the rapid development of suburban areas during the past twenty years has been the burden of city taxes. The decline in population of central cities shown in the 1940 census, the burden of city debt, the demands for relief and welfare services, declining property values, tax delinquency, and tax limits have brought about one of the most serious problems of public finance which exists today. Competition for the limited revenues by different governmental agencies has become intense. Unsound borrowing for current expenses has taken place. Under such circumstances public schools have suffered. Practically all of the large cities in New York state have been affected by these trends. Chicago, Philadelphia, and other cities in other states have had similar experiences. 66 Their only salvation seems to be through increased state and Federal aid and the reorganization of the structure of government in metropolitan areas. Rural school districts have felt the impact of such developments as 82 D. C. Sowers, " T h e Old Age Threat in Colorado," National Municipal Review, X X I X (Jan-, 1940), 2 1 - 2 5 . " Tax Policy, Nov., 1939. M E. L . Larson, " M u s t States Choose between Schools for Youth and Pensions for the Aged?," National Education Association Proceedings, 1939, pp. 1 2 1 - 2 2 . 15 See L . A. Kirkendall, "Relief Expenditures and Educational Financing," Social Frontier. V (June, 1939), 284-287. " D. Hammond, "Education on the Skids," New Republic, X C I X (July 26, 1939) 326—27; School Review, X L V I I (Sept., 1939), 483-85.

GOVERNMENTAL

SPENDING

35

m u c h as the cities. Small district structure, the inadequacies of the general property tax, and the foregoing trends have tended to weaken rural school support. During the depression thousands of rural school districts were forced to close their schools; they were reopened only through Federal help or state emergency funds, such as were made available in Pennsylvania. In 1933 over 100,000 rural school children lived in districts that were not able to open their schools. 67 School terms in thousands of other districts were shortened, and thousands of schools curtailed their offerings. 6 8 T h e depression forced many school districts to reorganize and to seek new sources of revenues. Public confidence. T h e past ten years have given the faith of the A m e r i c a n people in education a hard test. T a x consciousness, economic hardship, and fear destroyed the confidence of m a n y of the upper classes. T h e middle classes too were affected. Although they often hesitated to attack the schools in their own communities, many of them did not hesitate to join movements attacking school expenditures in other communities and in a state as a whole. M a n y in the poorer classes w h o had looked upon education merely as a means for advancing their children economically were disillusioned by unemployment among the well educated. Such attitudes are not surprising. W h a t is surprising is that such a vast majority of the public came through the depression with their faith in public education not seriously diminished, as witnessed by the public opinion polls already referred to. 6 9 In the next ten years public confidence will be put to another severe test if present trends continue. Public school administrators, if they are to retain support, must make every potential economy possible and give the m a x i m u m educational return for money spent. T h e public will resist changes in the structure and tax support of education, but if financial chaos and curtailed educational opportunities are to be avoided, changes must be made. Responsibility for and control of education are destined to become a paramount issue. 70 R e forms will call for the best possibe statesmanlike leadership. T h e public, confronted with new demands for public spending and demands for general reductions in governmental expenditures, will have to be con" N a t i o n a l E d u c a t i o n A s s o c i a t i o n , R e s e a r c h D i v i s i o n , Current Conditions in the Schools ( R e s e a r c h Bulletin, V o l . X I , N o . 4, 1933), p. 100. "Ibid., p p . 103 ff. •• See p. 3 1 . 70

See Review oj Educational Research, A p r i l , 1938, pp. 108 ff.

Motion's

36

G O V E R N M E N T A L SPENDING

vinced of the values and economic contributions of education. The first requisite is that the schools render the maximum values—both spiritual and economic. The second requisite is public knowledge of these contributions. Financial administration of public education in the future will be no undertaking for amateurs or politicians. Upon public school management will depend to a large extent the future of America. READINGS71 Buehler (16), Chs. I V - V I and V I I I ; Chisholm (24); Clark (27); Groves(84), Chs. X X I I I - X X V I I ; Heer (88), Ch. I I ; Howard (94), Chs. I - I I I ; Lutz ( 1 0 3 ) , Chs. I - V and V I I I ; National Education Association ( 1 3 4 ) , (138), and ( 1 4 5 ) ; Pitkin (158); Shultz (169), Chs. I - I V ; Soper (176); T a x Institute ( 1 9 1 ) ; and U . S. Temporary National Economic Committee (198). 71 See General Bibliography (Appendix II) for full bibliographic data. The number in parenthesis refers to the number of the reference in the bibliography.

CHAPTER

III

PUBLIC SCHOOL EXPENDITURE TRENDS AND THEIR CAUSES DEFINING PUBLIC SCHOOL

EXPENDITURES

Public schools. American education is predominantly a public (governmental) institution supported by taxation. 1 Of the 28,662,591 children enrolled in public and private elementary and secondary schools of continental United States, 25,975,108 are enrolled in the public schools (1938). 2 Public institutions of higher education enroll over half of the students attending institutions of higher education in the United States.' Public schools, colleges, and other institutions of higher education account for the major share of governmental expenditures for education, but they are not the only educational activities carried on by government in the United States. The Federal Government supports a number of Federally administered schools, gives grants-in-aid to states and to public schools, and a number of Federal agencies carry on a variety of educational activities outside of the public schools. These include the Children's Bureau in the Department of Labor, W a r and Navy Departments, Civilian Conservation Corps (until 1942), Work Projects Administration (until 1942), National Youth Administration, United States Office of Education, Office of Indian Affairs, Department of Agriculture, and the Public Health Service. 4 T h e various states support education departments, special schools administered directly by the state, such as schools for the blind and delinquents, and educational activities carried on by such departments as health, mental hygiene, corrections, labor, and social welfare. Public school expenditures. T h e financing of public elementary and secondary schools is the main concern of this book. The expenditure data summarized in this chapter generally will be limited to those Sec B. F. Pittenger, An Introduction to Public School Finance {1915), p. 4. U . S. Office of Education, Statistics of State School Systems, 1937-1938, p. 7. ' U . S. Office of Education, Statistics of Higher Education, 1937-1938, p. 14. * See T a b l e 4 and National Education Association, Educational Policies Commission, Federal Activities in Education.(1939). 1 1

EXPENDITURE

38

TRENDS

expenditures for public elementary and secondary schools, including Federal and state grants to localities, administered by school districts. Reliable data on educational expenditures of other units are T A B L E 4.

S U M M A R Y OF M A J O R F E D E R A L FOR P U B L I C EDUCATION,

EXPENDITURES

1935-1942

EXPENDITURES IN THOUSANDS UNDERTAKING

•935

Land grant colleges, experiment stations, and extension services S 16,622 g Aid for vocational education in public schools 10,387 s 8,500 h War training program a Federal schools, colleges, and U . S . Office of Education b 543 * Civilian Conservation Corps ' 435>5°9 ' Total $57°.' '5

'938

'94°

'94S

S 28,364 i

S 31,063

m

21,776' •6,854 b

21,776 19,200

m

'3.725 h 5.'43 '

15.150

h

8.554

m

90,174'

m

34.529 '

42,123 28,243

k

100,000

k

278,79' $544,900

n

5'.'57 308,599 $570,321

1

b

m

0

$ 3'.°3o '38,835" 44,85o b '5>25°h 8,5001 60,000 20,000 8,000 159,000 247,000 $732,465

* U . S. Naval Academy, U . S. Military Academy, R . O . T . C . , Marine Schools, Civilian Pilot Training, Merchant Marine Training—many new schools for officer training not included. b District of Columbia, Panama Canal Zone, Indian Schools, T . V . A . , Howard University, Columbia Institution for the Deaf, and National Training School for Boys; Federal reservations and other schools not included. • Rehabilitation, oil and mineral royalties, national forest funds, and public land sales; child welfare services not included. d Literacy, vocational, homemaking, parent, adult, nursery, forums, etc. * Rural emergency aid 1935; alien education and other war appropriations for 1942. ' These are quasi-educational enterprises. A large part of the expenditures are for relief and other purposes which have varied from year to year. T h e tendency in recent years is toward increased educational outlays, especially with the advent of defense training. * U. S. Office of Education, Federal Aid jor Education (Circular No. 162, 1936). 11 An approximation based upon various publications and reports. ' U . S. Bureau of the Census, Statistical Abstract oj the United States, 1940, p. 170. ' U. S. Office of Education, Federal Funds jor Education (Leaflet No. 54, 1939). k Appropriation given in National Education Association, Educational Policies Commission, Federal Activities in Education, p. 103. 1 Ibid., p. 87. m U. S. Office of Education, Federal Funds Jor Education (Leaflet No. 6 1 , 1941). " Appropriation given in National Education Association, Educational Policies Commission, The Civilian Conservation Corps, the Xational Youth Administration, and the Public Schools ( 1 9 4 1 ) , p. 23. 0 1942 appropriations with exceptions noted. P Includes Si 16,000,000 emergency aid. 1 Estimated on basis 1940 data.

EXPENDITURE

TRENDS

39

not available except for the Federal Government and possibly for certain states, and even in the case of these, the best d a t a available are but approximations of the total spending for education, as shown in T a b l e 4. N o comprehensive study is available on the expenditures for education m a d e by the various state agencies. T h e United States Bureau of the Census reports $ 2 1 3 , 9 4 5 , 0 0 0 of state expenditures for education in 1939, 5 exclusive of $659,301,000 grants to school districts, but this total does not include educational expenditures of other functions of state government, as those rendered by health departments. Excluding duplication, such as grants and noneducational expenses of agencies like the Civilian Conservation Corps, it is probable that the total public spending for all types of education in the United States for the year 1 9 3 8 amounted to approximately $2,575,000,000, $240,000,000 F e d e r a l , ' $905,000,000 state, 7 and $ 1 , 4 3 0 , " 000,000 local, 8 excluding Federal and state grants to localities. Almost half the expenditures for education, therefore, are m a d e from Federal and state funds. UPWARD TREND IN EXPENDITURES PRIOR TO 1930 Prior to 1930 public school expenditures in the United States were characterized by an almost continuous upward trend. During the early years of the depression there was a sharp reversal of the trend for a few years, but by 1940 expenditures were almost back to the 1930 level. 8 Public school finance problems cannot be understood without background regarding such trends and their underlying causes. Public school administrators must be familiar with the facts and techniques for explaining increases or decreases in public school expenditures. Extent of increases. T h e United States Office of Education began publishing nation-wide statistics on public school expenditures about 1870. 1 0 Although the figures for the earlier years are not as accurate as those 4 U. S. Bureau of the Census, Financial Statistics of States, 1939, I I , 4. • Derived from Table 4 including Si 9,091,000 of student aid given by N . Y . A . and $4,700,000 of strictly educational expenditures by C.C.C. and making a flat allowance for other expenditures not included. ' From Financial Statistics of Stales, 1938, I, 9, with an allowance for expenses not included. 8 Derived from Table 2 and the sources given above. »See Table 12. 10 See Annual Report of the United States Commissioner of Education, 1889-1890, I, 35. For data by years, 1870-1936, see National Education Association, Research Division, Why Schools Cost More (Research Bulletin, Vol. X V I , No. 3, 1938), pp. 132-33.

EXPENDITURE

4°

TRENDS

collected in recent years, they do present a good general idea of the trends in public school spending in the United States. Before 1930 public school expenditures in this country increased at a very rapid rate. A t the end of every decade the amount spent has been nearly double the amount at the beginning of the decade. T h e rate of increase amounted to from 5 to 10 percent a year. As shown in T a b l e 5 the total amount reported as spent for public elementary and secondary schools increased from $63,396,666 in 1870 to $2,316,790,384 in 1 9 3 0 — a n increase of over 3,500 percent. REASONS

FOR INCREASED

SPENDING

Four major sets of factors. T h e approximately 3,500 percent increase in public school expenditures has resulted from four major combinations of factors: (1) those resulting in increased public school attendance; (2) those bringing about changes in the educational program; (3) those causing a change in the status of the teaching profession, including the changed status of women; and (4) those affecting living costs, prices, or the purchasing power of the dollar. TABLE

5.

GROWTH

OF

PUBLIC

SCHOOL

ENROLLMENT

B Y D E C A D E S IN T H E U N I T E D S T A T E S ,

AND

EXPENDITURES

1870-1930»

TOTAL PUBLIC ELEMENTARY

TOTAL EXPENDITURES FOR

AND SECONDARY SCHOOL

PUBLIC ELEMENTARY AND

ENROLLMENT

SECONDARY SCHOOLS

Percent of Increase over YEAR

Amount

1870

6,871,522

1880

9.867.395

Percent oj Increase over Amount

¡870 S

12,722,631

44 85

15.503.'10 «7.813.85a

63,396,666 78,094,687

1890 I9OO igiO 1920

21,578,316

214

1,036,151,209

>930

25,678,015

2

74

2,316,790,384

1870

. •. 23

140,506,715

122

126

214,964,618

«59

426,250,434

239 57a '.534 3.554

" United States Office of Education, Statistics oj State School Systems, 1935-1936 (Biennial Survey of Education in the United States, 1935-1936; 1938), p. 55.

i . Increased attendance. T h e A m e r i c a n democratic tradition, the industrialization and urbanization of the country, and the g r o w t h of population, combined to bring about a phenomenal expansion of the public school enrollment. As democratic rights and privileges were extended, universali education for citizenship became a necessity. T h e

EXPENDITURE TRENDS

4'

requirements of democratic citizenship, the democratic ideals of equal opportunity for all and individual worth, the humanitarian ideal, and the fact that education could not be made universal unless it were made free brought about free schools in the American states. Free public schools caused a rapid rise in school attendance, but parental neglect and economic pressures kept many children from attending school. Education had to be made compulsory. 11 The rapid growth of total population which characterized the United States prior to 1930 contributed greatly to increased school attendance. The total population of the United States was only about 38,600,000 in 1870, but in 1930 it was nearly 122,800,000." In the sixty-year interval it had trebled. The number of children of school age (5-17), however, did not increase quite so rapidly as total population. The number of children of school age in 1930 was only about 2.6 times that of 1870. 13 A nearly threefold increase in public school attendance could have been expected due to the increase in population. Another significant effect of population trends is that the increasing proportion of adults made it both necessary and possible to keep more children in school for longer periods.14 This trend and the factor of industrialization made it possible for school enrollments to increase more rapidly than children of school age. They made possible the nearly 5,400 percent increase in secondary school registration shown in Table 6. The spread of industrialism decreased employment opportunities for children. During each of the many depressions which accompanied industrial expansion, unemployment led to increased school attendance and to further demands for compulsory education laws and extensions in the compulsory school age. Every serious depression has been accompanied by legislation aimed to reduce child labor. 16 Beginning about 1910 a sharp downward trend took place in the employment of boys and girls between the ages of ten and fifteen. In recent years this trend has begun to affect the upper age groups. Even before the depression half the age group sixteen to nineteen was 11

See Chapter V for an elaboration of the principles or ideals underlying public school expenditures. u Statistical Abstract of the United States, 1939, p. 2. u Statistics of State School Systems, 1935-1936, p. 55. 14 See N. Edwards, Equal Educational Opportunity Jor Youth (1939), pp. 18 ff. " See R. S. Pitkin, Public School Support in the United States during Periods of Economic Depression (1933), p. 137.

42

EXPENDITURE

TRENDS

unemployed." Between 1907 and 1936 the number of years of compulsory schooling increased from an average of about seven to about nine. 17 In 1907 the minimum working age in nineteen states was twelve or less; by 1936 forty-six states had set the age at fourteen or over. 1 8 Urbanism, automobile transportation, and improved rural highways which accompanied industrial expansion made it easier for children to attend school. Between 1870 and 1930 the nation changed from a predominantly rural population to a predominantly urban one. In 1870 only about 21 percent of the population lived in places over 8,000 population, but in 1930 the percentage rose to 49. In 1930 over 56 percent of the population lived in places over 2500 population. 19 Nor is modern urbanism confined to the corporate limits of cities. Since 1920 suburbs have been growing more rapidly than cities or farm areas. In 1930 about 45 percent of the population of the nation lived in ninety-six metropolitan areas with populations of over 100,000 inhabitants. 20 Changes in occupational patterns came with the spread of science, industry, and commerce. Thousands of new professions and occupations requiring both broad general educational background and thorough technical preparation were created. Success in many of the older professions and occupations, such as medicine, teaching, and farming, came to require longer periods of formal introduction to the growing body of scientific knowledge and technology. As a result educational opportunities had to be extended upward. Larger numbers of children tended to remain in high schools. T h e emancipation of women and their improved economic condition caused girls to remain in high school and nearly doubled secondary school attendance. M a n y persons took advantage of continuation, summer, night, and part-time school opportunities. At the same time the employment of women and concern over the welfare of younger children brought nursery schools and kindergartens into being. Thus, educational opportunities were extended both upward and downward as a result of industrial trends. The foregoing factors account for the nearly fourfold increase in school enrollment in the United States between 1870 and 1930 shown 17 18 " Edwards, op. cit., p. 8. Ibid., p. 15. Ibid., p. 14. " Statistical Abstract of the United States, 1939, pp. 6 ff. " National Resources Committee, Our Cities (1937), p. vii.

EXPENDITURE TRENDS

43

in T a b l e 5. T h e percentage of the total population in school increased from about 18 percent in 1870 to about 21 percent in 1930 and the percentage of children from 5 to 17 years of age in school increased from 57 to 81 percent." T A B L E 6 . GROWTH IN PUBLIC SCHOOL ATTENDANCE, E L E M E N T A R Y AND SECONDARY,

1870-1930® ATTENDANCE

ENROLLMENT YEAR

Elementary

Secondary

1870 L880 189O I9OO IGIO I92O I93O

6.79'.295 9.757.II8 12,519,668 14,983,859 16,898,791

80,227 110,277 202,963

a

'9.377,927 21,278,593

5'9>25' 915,061 2,200,389 4.399.422

From Statistics of State School Systems, 1937-1938,

PERCENT OF INCREASE OVER 187O

Elementary

Secondary

43-7 84.4 120.6 148.8

37 '53 547 1,041

'85-3 '3-3

2,643 5.385

2

Percent Attending Daily 59-3 62.3 64.1 68.6 72.1 74.8 82.8

Average Number Days 78.4 81.1 86.3 99.0 113.0 121.2 143.0

pp. 72—73.

T h e effect of the growth of public school enrollment upon public school expenditures can be isolated to a considerable extent by reducing the expenditures to a per pupil basis. Whereas total expenditures increased 3,554 percent between 1870 and 1930, the annual expenditure per pupil enrolled increased only 878 percent. 22 Furthermore, part of the increase in per pupil expenditures is due to increased attendance on the part of pupils enrolled. Average daily attendance of pupils enrolled rose from 59 to 83, a rise of 41 percent. T h e average length of term increased only about 31 percent from 132 days to 173 days, but the average number of days of school attendance for each pupil went up from 78 to 143, nearly double that of 1870. 2 3 Not all of the increases in average daily attendance and average days' attendance annually reflected themselves in expanded expenditures per pupil; but about half of the 878 percent rise in per pupil expenditures probably can be attributed to increased attendance by pupils enrolled. Public school expenditures per day for each pupil enrolled increased only about 425 percent between 1870 and 1930. 24 2. New and improved services. T h e second cause of the increased ex51 Statistics oj State School Systems, 1935-1936, p. 56. » See T a b l e 7. " See T a b l e 6. » See T a b l e 7.

44

EXPENDITURE TRENDS

penditures during the period under consideration is the vast difference in the amount of educational service provided in the public schools. However, it is a fallacy to consider this factor the major cause for increased spending. If children aire in school, they must be taught something. If pupils are not enrolled in one curriculum or course, they increase the enrollment in other curricula or courses. As will be shown later, increased offerings significantly increase expenditures only to the extent that they increase enrollment or reduce T A B L E 7.

T R E N D S IN T O T A L P U B L I C S C H O O L E X P E N D I T U R E S P E R P U P I L E N R O L L E D IN T H E U N I T E D S T A T E S , TOTAL EXPENDITURE PER

TOTAL EXPENDITURE

PUPIL ENROLLED PER Y E A R

PER PUPIL PER DAY

Percent Increase Y I M

Amount

1870

1

1880

9-23 7.91

1890

11.04

I9OO

'3-87

I9IO

1870-1930*

23-93

of

Percent

over

1870

Amount S

.12 • IO

—>4

•«3

20

50 '59

I92O

48.02

420

I93O

90.23

878

of

Increase

.14 .21

•39 •63

oner

¡870

—93 2 ). PP- "49 ff«• See pp. 87 ff.

EXPENDITURE TRENDS thirty.*0

47

to about Since only teachers and not all professional employees are included in figuring the ratio, an adjustment must be made, especially in the 1930 ratio. It obviously is too high. If all positions were included, it probably would turn out to be about twenty-eight instead of thirty. In other words, there probably was a drop of approximately 20 percent in the true ratio between 1870 and 1930. Many other increases in services do not directly affect the pupilteacher ratio. These include such items as longer terms, transportation, libraries, books and supplies, and school buildings which combine higher health, safety, and structural standards and which must provide the expanded physical facilities necessary to render the many services of a modern educational program. The effects of such services upon expenditures must be determined by budgetary analysis. In 1870 transportation of pupils and other auxiliary agencies represented but an insignificant percentage of total public school expenditures;31 in 1930 they amounted to 2.79 percent.32 Interest and fixed charges (arising from improved physical facilities) in 1870 probably did not amount to over one percent; in 1930 they represented 6.16 percent. In 1870 textbooks and instructional supplies generally were supplied by the pupils except for the less than one half of one percent spent for libraries; 2.90 percent of the total expenditures for 1929-1930 went for these. After allowing for improvements in maintenance, operation, equipment, and materials, it is probable that from 11 to 15 percent of the 1930 total expenditures per pupil are for goods and services which did not enter into the 1870 expenditures for public schools. New and improved services provided in the public schools, without allowing for the change in the caliber of personnel required to offer these, are an important factor in the growth of expenditures over the sixty-year period. With a 20 percent decrease in pupil-teacher ratios and 11 to 15 percent of the 1930 expenditures devoted to items which were insignificant in 1870, expenditures for public schools would have increased even if salaries, wages, and other costs had remained the same as they were in 1870. At the very least, about a third of the 425 percent increase in expenditures per pupil per day is due to this factor alone, not allowing for increased personnel costs. There re30

Statistics oj State School Systems, IS35~'93^> P- 55-

J1

Estimates based upon distribution of expenditures in New York State, 1869-1870.

31

Why Schools Cost More, p . 141.

EXPENDITURE

48

TRENDS

mains about a 300 percent increase in per pupil expenditures per day to be accounted for. 3. Changed status of the teaching profession. T h e changed status of the teaching profession, the third factor bringing about the rise in public school expenditures, is closely related to the factor of expanded and improved educational offerings and services. T h e growth of knowledge and the advances of science, industrialization, and specialization in all endeavors brought about the development of specialized services in the schools and created a demand for thousands of highly selected, well-educated, technically trained specialists. Continuous inservice preparation, health services, clinics, research, experimentation, and keeping curricula u p to date brought thousands of highly paid professional workers into the public schools. Most of these have had to have professional preparation at least equivalent to that of doctors and lawyers. T A B L E 8 . DISTRIBUTION OF T O T A L P U B L I C S C H O O L E X P E N D I T U R E S IN T H E U N I T E D S T A T E S ,

1914-1930®

'9'4 ITEM OF EXPENDITURE

Salaries and wages Construction of school buildings Interest and fixed charges Operation of plant Maintenance of plant School building equipment Transportation of pupils School building sites Instructional supplies Textbookj Auxiliary agencies other than transportation Total

'93°

Amount in Thousands

Percent of Total

Amount in Thousands

Percent of Total

S373>°69

67.2

$1,492,990

64.4

69.538 »8.743 33.472 •5.854 H.075

12.5

261,098

"•3

«0.993

2.0

7,004

8,364

3-4

142,806

6.0

99.436

2-9

78,810

1-3

48,464

2.0

'•5

65.275

44,505 42.150 25.150

6.2

4-3 3-4 2.8 2.1

«•9 1.8

1.1

3.5'5

0.6

3.450 '555.077

0.6

16,106

•7

100.0

$2,316,790

100.0

a

National Education Association, Research Division, Why Schools Cost More (Research Bulletin, Vol. X V I , No. 3, 1938), pp. 140-41.

Classroom teaching itself between 1870 and 1930 became more a n d more specialized and professionalized. M a n y specialized types of teaching calling for particular abilities and appropriate preparation came into being. Educational and certification requirements for all teaching positions were raised. F r o m mere literacy measured by local lay authorities, requirements were raised to literacy measured by

EXPENDITURE TRENDS

49

local professional authorities, then to literacy and knowledge of teaching methods measured by state authorities, and finally to as much as five years' college and professional preparation beyond high school graduation. Even as late as 1920 teachers could be licensed for life in New York state with no professional or academic requirements whatever except the passing of state examinations in subjects to be taught. In 1920 persons with three years' high school preparation could enter a teacher training class for a year and get a license to teach. T h e highest preparation required for elementary school teaching at the time in any district in New York state was a two-year normal school course beyond high school. However, by 1930 the hiring of young, inexperienced, high school graduates to teach school was on the wane. More mature graduates of institutions offering three to five years' preparation beyond high school were being sought in the elementary T A B L E 9 . T R A I N I N G PREREQUISITES FOR CERTIFICATING T E A C H E R S

WITHOUT

EXPERIENCE, T E M P O R A R Y AND EMERGENCY CERTIFICATES NOT CONSIDERED * NUMBER OF STATES MINIMUM PREREQUISITES

Highschool graduation and three years' advance training Highschool graduation and two years' advance training Highschool graduation and one year's advance training Highschool graduation and some advance training, but less than one year Four years' secondary school (may or may not include professional training) No definite requirement stipulated

¡931 0 0

'93» 2

5

0

11

4

•3

«4 30

12

5

Source: Adapted from U. S. Dept. of the Interior, Office of Education, Motional Survey of the Education oj Teachers, Vol. V ("Special Survey Studies," 1935), Table 6, p. 46. 1

From Why Schools Cost More, p. 161.

schools. Table 9 shows the trends in certification requirements for the country as a whole. With rising professional status there has come about a very fundamental shift in the economic status of teachers in relation to common and skilled labor. Between 1840 and 1920 with the very gradual change of teaching from an occupation requiring only literacy (not measured very accurately) to one requiring considerable educational background and technical preparation, teachers' salaries steadily achieved differentiation from the wages of unskilled laborers and approached the status of skilled labor. However, between the two

5o

EXPENDITURE TRENDS

dates average teachers' salaries remained consistently lower than the wages of artisans." Although the rapid rise in the wages of common labor during the First World War wiped out some of the differential for a time,*4 the economic status of the teaching profession advanced steadily during the decade beginning 1920. By 1930 the average salary of teachers in the United States had reached the all-time high of $1,420 a school year or about $41 a week. For that same year the average hourly wages for common labor was about forty-three cents an hour, or about $23 for a fifty-four hour week as compared with about $26 in 1920. When it is observed that the average salaries for teachers in 1920 was only $871 ($27 a week), it can be seen that the differential between teaching and common labor widened considerably between 1920 and 1930. Skilled artisans received wage increases of about 33 percent between 1920 and 1930, raising their average weekly wages from about $42 to over $55. In other words, teachers in 1930 had attained about the same status that artisans had reached in 1920. Teachers, however, gained relatively on skilled labor between 1920 and 1930, because wages of skilled labor increased only about 33 percent as contrasted with an increase of over 50 percent in teachers' salaries.36 The larger proportion of teachers employed in the secondary schools accounts in part for the higher average salary paid teachers in 1930 as compared with 1870. Requirements for high school teaching traditionally have been higher than those for elementary school; the same is true of salaries. 3 ' As the percentage of teachers receiving salaries on the secondary school level increased, the weighting of secondary school salaries in determining the average became more important. For this reason the average salary tended to show a greater increase than that shown either by elementary or secondary school salaries alone. The statistics by themselves tend to exaggerate the material gains of teachers. The fact is that the average teacher's salary misrepresents the percentage of increase that took place generally. There are two reasons for this phenomenon: (a) the increased proportion of M

See Table 10 for the facts. See National Education Association, Department of Classroom Teachers, The Economic Welfare of Teachers (6th Yearbook, 1931), pp. 25 ff. " S e e Table 10. " National Education Association, Progress and Problems in Equal Pay jor Equal Work (1938), pp. 7 ff.

M

EXPENDITURE TRENDS

5'

secondary school teachers and (b) the increased proportion of urban teachers. Urban trends also have operated to change the status of teachers and to exaggerate both the increases in teachers' salaries and per pupil expenditures. Since 1870 teachers' salaries and public school expenditures per pupil have been much higher in cities and their suburbs than they have been in smaller outlying villages and rural areas. 37 In 1870 the average salary of city men teachers was over three times that of rural men teachers, and city women teachers' salaries averaged about 60 percent more than those of rural women teachers. 38 Naturally, as the proportion of the population living in cities and suburbs increased, average teachers' salaries and per pupil expenditures would have increased, even assuming no increase in the actual salaries paid either in urban or rural areas. Owing to the factor of urbanism the average salary of school teachers increased 519 percent in New York state between 1870 and 1930, but the actual salaries paid in over half of the state increased only about 320 percent, and in no section of the state did the increase exceed 444 percent. 39 Other important changes have been taking place in the status of the teaching profession. One of the most significant of these is the changed status of women. Teaching traditionally has been an occupation for women. Even in 1870 over 61 percent of the teachers in the United States were women. In 1930 about 83 percent were women. 40 With the advance in women's rights, the economic status of women in all occupations has been improved gradually. Women teachers have shared in these economic gains, but not always to the extent necessary to attract a sufficient number of able women to the teaching profession. When women are able to earn more as secretaries, clerks, nurses, and factory workers than they can as teachers, as was true during the First World War and is true at present, it becomes impossible to attract enough capable women into teaching. In 1920 it was impossible in New York state to induce a sufficient number of high school graduates to prepare for teaching. Salaries, especially the salaries of women teachers, had to be increased. On the basis of data " VV. R. Burgess, Trends of School Costs (1920), p. 32; Arvid J . Burke, "Urbanism and Public School Expenditures in the United States," American School Board Journal, C (June, 1940), 21-22 and "Urbanization and Teachers' Salaries in the United States," American School Board Journal, X C V I I I (March, 1939), 23-24. 18 " Burgess, op. cit., p. 32. See footnote 37. 40 Statistics 0/ State School Systems, 1935-1936, pp. 55-56.

52

EXPENDITURE TRENDS

for the years 1841 through 1920 Burgess concluded that, "The salaries of women teachers have been gaining on those of men teachers and those of country teachers on those of city teachers"; and "Women country teachers have had the largest percentage of increase in salary, and city men teachers the smallest." 41 By 1930 the 1920 differentials between the salaries of men and women had been reduced substantially and the trend is still downward. Ten states including the large states of California and New York prohibit teacher salary discriminations based upon sex. One T A B L E 10. W E E K L Y WAGES OF LABORERS, ARTISANS, AND PUBLIC SCHOOL TEACHERS, 1 8 7 0 TO 1 9 3 0 Tear 1870 1880 1890 1900 1910 1920 '930

Laborers

a

$ 9.36 7.86 8.82 8.94 10.62 26.00 c 21.90 '

Artisans "

Public School Teachers

Si 6.94 14.98

S 7.00 7-50 9.40 11.30 15.40 26.90 41.20

>5- 6 4 15.82 '9-79 42.00

d

55-°° '

b

• F r o m W. Randolph Burgess, Trends oj School Costs (1920), p. 71. b Derived from Statistics oj State School Systems, 1935-1936, p. 56. 0 Estimated by Burgess; a study by Hurlin quoted in Paul H. Douglas, Real Wages in the United States, 1890-1916 (1930), p. 175, gives the figure of (26.06 for 1930. d Estimated by Burgess; the data cited in footnote " f " substantiate the estimate. * Male unskilled labor from Statistical Abstract oj the United States, 1940, p. 346. ' Estimate based upon indices for building and printing trades in Statistical Abstract 0] the United States, ¡940, p. 349.

hundred and ninety-eight teachers' salary schedules in cities over 30,000 population out of a sample of 267 show no differentials for men teachers.42 Even if there had not been such far-reaching improvements in the professional preparation and social status of the teaching profession between 1870 and 1930, a fourth factor would have operated to increase teachers' salaries and other wages or salaries paid by public schools—that is, the general rise in living standards. As America emerged from an agricultural and barter economy and entered upon a predominantly urban, industrial, commercial, and money economy, the material standard of living and money income of all classes were increased manyfold. This rise in general living standards had a pro41 41

Burgess, op. cit., p. 45. Progress and Problems in Equal Pay jor Equal Work, pp. 14 ff.

EXPENDITURE TRENDS

53

found effect upon public school expenditures, for as Burgess says about teachers, " I t was no great hardship to own only one silk dress in a life time when other people did the same." 4 ' When factory and office workers can purchase several silk dresses during a year and teachers cannot, then the teaching profession and public education lose out. The standard of living is fully as crucial as living costs in determining the adequacy of teachers' salaries and the compensation of other public school employees. T A B L E I I . DEVELOPMENT OF THE NATIONAL INCOME OF THE UNITED STATES, 1 8 6 9 - 1 9 3 0 " REALIZED NATIONAL INCOME IN 1 9 2 6 DOLLARS

YEAR 1869 1879

Total Amount in Millions 1

B

Amount per Capita

TOTAL

PERCENT OF UN-

UNADJUSTED

ADJUSTED INCOME

INCOME IN

FOR PUBLIC SCHOOL

MILLIONS S

EXPENDITURES

8.995

»237

6,827

0-9

D

>5.'83

309

7,227

I.I

D

10,701

"•3

D

16,158

'•3

1889

23.675

IGOO

36,557

383 480

IGIO

53.043 60,401

575

28,166

»•5

1920

567

68,434

193°

78,099

634

72.398

'•5 3-A

' S o u r c e — T h e National Industrial Conference B o a r d , The Economic Almanac for

E

¡940,

P- 3°4° Correction for changes in the purchasing power of the dollar c o m p u t e d on the basis o the index of the cost of living for low-salaried workers. c Expenditure d a t a from T a b l e 5. d School Expenditures jar the Tears 1869-1870, 1879-1880, and 1889-1890.

The spectacular rise in American standards of living can be shown best in terms of material goods and services—for example, per capita food consumption, toilet facilities, electricity consumption, telephones, automobiles, medical service, radios, and household furnishings, but such evidence is extremely unwieldy to present. Furthermore, in a money economy where the number of living standards is almost infinite, the trend can be shown much more concisely by figures on income accompanied by corrections for changes in the purchasing power of the dollar. Between 1870 and 1930 the total realized income of the United States increased nearly 1,000 percent. Computed income per capita nearly trebled during the same period. Op. cit., p. 48.

54

EXPENDITURE TRENDS

Weekly wages of common labor more than doubled; weekly wages of skilled labor trebled." Such changes meant higher standards of living. In the decade 18691879 nearly 90 percent of the income of wage earners' families was spent for material necessities—food, clothing, housing, fuel, and light." In 1910 about 65 percent of United States consumer expenditures were for necessities; in 1929 this percentage dropped to about 4 6 . " With increased incomes workers were able to spend more on health, education, and semi-Juxury or luxury goods and services. The higher the income the higher the percentage of income which can go for savings, health, education, transportation, and the comforts of life. Table 11 shows that this country has spent a higher percentage of its income for public education as its income has increased. The general rise in the standard of living and income of the country would have brought about a rise in public school salaries even if there had been no changes in the status of the teaching profession. Wages and salaries of school employees could be expected to show the approximately 200 percent increase which took place in average weekly wages of artisans and per capita total realized income between 1870 and 1930. As the prerequisities for teaching advanced from mere literacy to college graduation or even more, it was to be expected that teachers' salaries would increase much more rapidly than wages or income in general. The change in the status of women in general would have caused teachers' salaries to rise more than 200 percent regardless of the change in the professional status of teaching. The shift in the proportion of teachers in urban areas and in secondary schools, where salaries always have been highest, also tended to inflate the rise in teachers' salaries. Salaries and wages represent well over two thirds of total school expenditures; so it probably is safe to assume that a 200 to a 250 percent increase would have taken place in expenditures per pupil per day for public education from the general rise in living standards, the changed status of women, the increased proportion of secondary school teachers, urbanism, higher professional requirements, and the changed professional status of teaching between 1870 and 1930. 44

See Tables 10 and n . National Industrial Conference Board, Tke Economic Almanac JOT 1940, p. 328, data from U. S. Bureau of Labor Statistics. 4 ' Ibid., p. 326. 44

EXPENDITURE

TRENDS

55

4. Decreased purchasing power oj the dollar. T h e remaining increase in per pupil expenditures per day is due to changes in the purchasing power of the dollar—changes in prices and living costs. It is extremely difficult to measure accurately changes in purchasing power for all combinations of goods and services or standards of living, but an approximation of changes can be obtained by measuring changes in the cost of a given standard of living. Between 1870 and 1930 the cost of living at a standard established for low-salaried workers increased about 22.3 percent, 47 which means that the purchasing power of the dollar for this standard was reduced about 22 percent. A recent study seems to show that the purchasing power of the school dollar decreased more than the purchasing power of the workingman's budget dollar between 1914 and 1930.48 Hence, the purchasing power of the school dollar probably decreased by at least 25 percent between 1870 and 1930. This is more than enough to account for the remaining 50 to 100 percent increase in public school expenditures per pupil per day between 1870 and 1930. 5. Summary. T h e foregoing analysis of the reasons for the progressive growth of public school expenditures in the United States from 1870 to 1930 has shown that the increase in total expenditures was about 3,500 percent. (1) Increased attendance accounts for most of the increase; expenditures per pupil per year increased only 878 percent, and expenditures per pupil per day increased only 425 percent; (2) about a third of this 425 percent is due to new expanded and improved services; (3) about half is due to changed status of the teaching profession, especially the increased proportion of secondary teachers, emancipation of women, urbanism, and a general rise in living standards; (4) the remaining increase is due to changes in the purchasing power of money. The influence of various factors in accounting for increases in public school expenditures will vary with the period studied. T h e National Education Association Research Division, in studying the growth of expenditures between 1914 and 1930, found changes in the purchasing power of the dollar to be the most important factor during that period, with increased attendance ranking second. 4 ' Such a finding probably is reasonable, considering the steep rise in prices which accompanied the First World War. * ' Derived from data in The Economic Almanac for rgjo, p. 304. 3'°

3.374 7.87a 5.938 9.357 9.470 6,978 10,706 12,632

2,830 4.590 2,g2o 4.320 3.97o 4.7oo 5,000 5.230

3.647 2.745

'3« «34 148

4-4 2-7 3-7 3-5 3« 3-5

U . S. Average

'3.49°

6,233

2,980

1.885

84

3-4

R a t i o of L o w to High

1:11.2

'=5-7

1:

•9)95° 18,380 «7.59« i5>°7° 15.880 38,060

'

:,

3-9

2,242 2,820 2,083 2,590 2.394 3.068

5-9

104

4» 2.4

'05 106 110 126

1=5-3

•Estimated by National Industrial Conference Board (The Economic Almanac for '94'194a, p. 397) divided by U. S. Office of Education figures on average daily attendance for «937-« 938b Based upon U . S. Bureau of the Census, Asstsied Valuation oj Property Subject to General and Selective Property Taxes by States, 1937 (1939), pp. 4 - 5 and 1937-1938 attendance data as in " a . " 0 Based upon U. S. Dept. of Commerce data summarized in Survey oj Current Business, Aug., 1941, pp. 15 ff., and 1937-1938 attendance as in " a . " d Based upon U. S. Bureau of the Census, Retail Trade—The United States 1939 (1941), pp. 8 ff., and 1937-1938 attendance data as in " a . " • Statistics oj State School Systems, '937-1938, pp. 38-39, based upon current expenses and average daily attendance. S a m e source as " d " and expenditure data from " • " , pp. 132 ff. these figures it s h o u l d b e r e c o g n i z e d t h a t a l o w p e r c e n t a g e o f i n c o m e spent f o r p u b l i c e d u c a t i o n in a l o w i n c o m e state represents a g r e a t e r s a c r i f i c e t h a n a h i g h e r p e r c e n t a g e s p e n t in a h i g h i n c o m e state. Variations within states. T h e r e l a t i o n s h i p o f p u b l i c school e x p e n d i t u r e levels to t a x p a y i n g a b i l i t y w i t h i n states is c o m p l i c a t e d b y a

number

o f v a r i a b l e s — t h e s t r u c t u r e of g o v e r n m e n t , t h e t a x s y s t e m , t h e a m o u n t o f a i d f r o m t h e state, t h e m e t h o d of a p p o r t i o n i n g state a i d , a n d t h e state p o l i c y t o w a r d s u b m a r g i n a l a r e a s ' 4 in a d d i t i o n to those e n u m e r a t e d in t h e last s e c t i o n . M

See F. W. Cyr, A . J . Burke, and P. R . Mort, Payingjor Our Public Schools (1938), Ch. I V

78

V A R I A T I O N S IN E X P E N D I T U R E S

A study of comparative taxpaying ability of school districts relative to expenditure levels should: (i) eliminate small unsatisfactory elementary and secondary school districts with high expenditure levels caused by district structure; (2) eliminate from the expenditure levels support received from overlapping units of government such as the county or the state except in the case of matching aid, the amount of which depends upon the ability of the district to do the matching; (3) use direct estimates of income and wealth such as were used in the previous section; (4) where assessed valuations are used make corrections for variations in assessing practices, especially the ratio of assessed to estimated " t r u e " or "full" valuation; and (5) allow for differences in price levels or purchasing power of the dollar. Morrison maintains that: It simply cannot be done, short of an investigation comparable with that undertaken in the physical valuation of railways and were such an investigation undertaken, it would be worthless unless it were completed within a single fiscal year and repeated every year. We know there are gross inequalities, but nobody ever measured them. Even the best studies ignore what are in reality the prime factors in taxable ability as predicated of school districts. 16

Among the factors he lists are: (1) lack of accurate and comparable data on valuations; (2) lack of data on ratio of valuation to income both from the property and from other sources; (3) differences in the economic effects of property taxes on different classes of property; and (4) difficulty of defining the educational load or need which the property must support." There are no studies available which are refined to such an extent, but there is considerable evidence to support certain generally accepted observations of the effects of extreme differences in local taxpaying ability upon public school expenditures. Since the main support for public schools in most states is derived from the local property tax, 37 assessed property valuation does provide a crude measure of ability to spend money on schools. Its validity, of course, depends upon the uniformity of assessments (which are far from easy to determine and far from uniform), but it is often possible to estimate differences in assessment practices and to allow for them. Certainly differences in the ratio of assessed to full valuation do not " H . C . Morrison, School Revenue (1930), p. 188. •• Ibid. " Statistics of State School Systems, 1937-1938, p. 3 : .

V A R I A T I O N S IN E X P E N D I T U R E S

79

vary over 100 percent, while differences in assessed valuation per child vary by several hundred percent among small school districts. Furthermore, data on the income and the economic status of local governmental subdivisions have been accumulating; these will provide more refined estimates of the taxpaying ability of the smaller units of government. For nearly a century students of public school finance have been accumulating data showing the extremes in taxable property behind each child. These result from decentralized state school systems in an industrial age. In an agricultural economy there were inequalities in taxpaying ability (farms vary in productivity and farmers vary in skill, industry, and thrift), but the extreme differences found in an industrial society were not possible. Industry and business tend to concentrate in advantageous centers. The resources in greatest demand by industry are not generally distributed throughout a state or even the nation. Small school districts which are fortunate enough to include the new forms of industrial wealth such as mines, oil wells, factories, railroads, or power plants can make large expenditures for public schools with very low tax rates. Other districts containing large estates and homes made possible by industry can do the same, but districts containing many children and only farms and small homes have to tax themselves at high rates to make expenditures which are far below average. The states which were first to become industrialized were the first to recognize the effects of industrialism upon local public school support. New York state recognized the problem as early as 1851. The report of the Massachusetts Board of Education for 1872 showed how the growth of manufacturing, migration to cities, the increase in trade and commerce, and the spread of railroads brought about concentrations of taxable property in certain school districts. It showed that it was no longer possible to get districts to maintain schools of uniform standard because of extreme inequalities in school population and taxable property. It showed that the wealthiest district had six times the assessed valuation per child possessed by the poorest district. The public school expenditure per pupil varied from $3.50 a year to $25.83 in 1872, and generally the expenditures were lowest when the tax rates were highest. 38 38

Massachusetts Board of Education, Thirty-fifth Annual Report of the Board of Education (1872), pp. 1 1 7 ff.

8o

V A R I A T I O N S IN E X P E N D I T U R E S

Small districts remained, industrialism advanced, and inequalities in taxpaying ability and public school expenditures increased with each generation. In 1872 the highest district valuation per child in Massachusetts was only six times the lowest district valuation and the highest expenditure level was only about seven times the lowest." In 1940 the highest district valuation per weighted pupil was nearly fifty times the lowest and the highest expenditure level about seventeen times the lowest.40 In 1900 property valuation per person in New Jersey ranged from $334 in one county to $594 in another. In 1928 the range was from $702 to $4,349. In twenty-eight years inequalities in taxpaying ability among New Jersey counties increased nearly 250 percent. 41 The smellier the district structure, the greater the extremes in taxpaying ability and expenditure levels. In the counties of Illinois (1925) property valuation per child ranged from $880 to $4,373, or the richest was about five times as able as the poorest. In the school districts, the richest district was over one hundred times as able as the poorest.42 Among the county school districts of Kentucky the assessed valuation per child (1937-1938) varied from $329 to $9,856 or in the ratio of about one to thirty. 41 In the independent school districts for the same year the low was $ 1 1 4 a child and the high $ 1 1 , 8 3 0 ; the high was one hundred times as able as the low district.44 Studies in most states, old or recent, reveal similar findings. In New York state (1935) some school districts were found to have around 300 times the valuation behind each child found in other districts.46 In the past decade indexes of the type used for approximating the general taxpaying capacity of states have been developed for local units of government, especially counties. Cornell developed an index of local taxpaying ability, using population, retail sales, motor vehicle registrations, production, number of individual income tax returns, " Ibid. Based upon Edgar Fuller and S. V. Wilking, "Financial Equalization in Massachusetts System of State Aid for Education," The Harvard Educational Review, X I I (Jan., 1942), 22-32. 41 H. D. Updegraff, Report of the Commission to Survey Public Education (1928), p. 176. 41 Illinois State Department of Public Instruction, Inequalities oj Educational Opportunities in Illinois (Circular No. 172, 1925), pp. 21 ff. 41 L. E. Meece and M. F. Seay, Financing Public Elementary and Secondary Education in Kentucky (Bulletin of the Bureau of School Service, Vol. X I I , No. 1, 1939), pp. 40. 44 Ibid., pp. 135 ff. 48 A. B. Caldwell and A. J . Burke, A Study of Financial Support and Educational Opportunity in the One Teacher School Districts of New York State (1936), pp. 23 ff. 40

VARIATIONS IN EXPENDITURES

81

and postal receipts. 4 ' Using the State Tax Commission's equalization ratios as a criterion, he found that in New York state (1930), his formula was more reliable in predicting relative taxpaying ability than was assessed property valuation. 47 The state of Alabama has developed a similar index for purposes of distributing state aid. Other data which go beyond property valuations in estimating local taxpaying ability substantiate to a large extent what assessed property valuations indicate to be true. Edwards found that the counties with lowest economic resources and planes of living have the highest reproduction rates and highest ratio of children of school age per 1,000 of population. 48 His study shows clearly the discrepancy between educational load and economic resources in the various states. He also showed that differences in economic levels within states frequently are greater than those among states. 4 ' To a large extent rural-urban discrepancies in expenditure levels are due to differences in educational load relative to estimated income.40 Edwards concluded: " T h e inequalities of educational opportunity which characterize the American educational system today result primarily from the unequal distribution of the educational load, from regional and community differences in economic well-being, and from the long established tradition that the schools should be supported in the main from local and state revenues."" The present author in studying urbanism and school expenditures found a closer relationship between average family income (based upon sampling studies) and average annual expenditures for public education than that existing between average assessed property valuation per pupil and average expenditures per pupil." EXPENDITURE

LEVELS AND PRICE

DIFFERENTIALS

Limitations of data. It is generally recognized that there are differences in price levels or living costs among states and communities, for example, it is common knowledge that it costs less to live in the southern states than it does in the northern industrial states and that it costs more to live in some cities than in others. Nevertheless, it is not easy to measure general price variations among places because a 41

F. G. Cornell, A Measure oj Taxpaying Ability of Local School Administrative Units (1936). 4 Ibid., p. 51. » Edwards, op. cit., pp. 58 ff. 49 Ibid., pp. 79 ff. " Ibid., pp. 88 and 106. " Ibid., p. 149. ** Arvid J . Burke, "Urbanism and Public School Expenditures in the United States", Amtrican School Board Journal, C (June, 1940), 21-22. 47

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EXPENDITURES

price structure is made up of thousands of prices and because prices must be selected and weighted for specific purposes. T h e price patterns entering into expenditures for public education and the relative weight of different prices in determining expenditure levels for schools will not be the same as those influencing expenditure levels for highways or health service. T h e data available merely show that there are price variations among states and communities and that the same quantity or quality of education or of any other service affected by local price variations will require a higher expenditure in some states or communities than in others. T h e precise differences in outlays required to purchase the same service are not known and they probably will vary somewhat from time to time. State price differences. H i g h ability to support schools, high expenditure levels for schools, and high price levels generally tend to go together, but differences in ability and expenditure levels among states are greater than differences in prices. States with the least economic resources and lowest expenditure levels for schools, nevertheless, tend to be the states with the lowest price levels. According to the d a t a presented in the previous section, the most able state in terms of economic resources had nearly six times more ability to support schools than the least able state. According to the data contained in T a b l e i8 no price factor shows such a wide variation. W a g e rates, an important determiner of prices, vary only about 68 percent in the case of average hourly wage rates on school building construction, 88 percent in union wage rates for journeymen in the building trades, and about 135 percent in average weekly earnings for all workers. F a r m labor, w h i c h influences the price structure in many states more than industrial wages, varied over 200 percent among the states. M e d i a n rentals, a factor which has a close relationship to living costs, varied over 400 percent. T h e median cost of college room and board varies from $175 a year to $400 a year, about 129 percent, while median college tuition charges in private colleges range from $75 to $400. T h e cost of building a standard house ranged from $4,886 to $7,134 or a difference of only 46 percent. T h e cost of living at a uniform standard showed variations of only about 23 percent, but the actual difference in living costs probably is much greater than that as indicated by median rentals and college room and board. T h e fact is that certain items, such as heating, are negligible expenditures in many states with low price levels. Moreover, in typically agricultural

V A R I A T I O N S IN E X P E N D I T U R E S

83

states, many items do not enter into the monetary cost of living at all, for example, food grown on the farm. It is a fallacy to assume that all sections can or should live at a uniform standard. Defensible differences in living standards probably are more influential than differences in living costs at a uniform standard in affecting price levels, as indicated by variations in rentals. The relationships existing between median rentals apparently did not change much between 1930 and 1940. Preliminary data from the 1940 United States Census gives the median for the nation as about $27, about the same as it was in 1930. The rank of the states with the lowest median monthly rentals in 1940 is as follows: Arkansas ($12), Mississippi ($13), Alabama ($13), South Carolina ($15), New Mexico ($15), Georgia ($16), Oklahoma (Si6), North Carolina ($17), Louisiana ($17), and South Dakota ($17). All of these states had substantial increases over 1930 as may be seen by comparing these figures with those in Table 18. New York in 1940 still ranked at the top ($40), followed by New Jersey ($37), Connecticut ($37), Delaware ($34), California ($31), Illinois ($31), Maryland ($30), Michigan ($29), Wisconsin ($28), Ohio ($28), and Pennsylvania ($28). Trends in these states have varied as may be seen from Table 18. Although it is impossible at the present time to measure the effects of price differences upon school expenditure levels, a glance at Table 18 will show that it is a factor which is operating in combination with other factors. It does not offer an explanation of the expenditure level of Wyoming, but it has been operating to bring about the levels in California, Nevada, and New York. At the other extreme, it generally offers a partial explanation at least of the low expenditure levels of Georgia, Arkansas, Mississippi, Alabama, and South Carolina. Community differences. High community ability to support schools, high expenditure levels for schools, and high price levels tend to go together and vice versa. Large cities tend to have higher average industrial wage rates than small cities.53 Average family income in large cities is more than double that of farm families and 64 percent higher than that of families in small cities." Average salaries of municipal employees and teachers vary according to size of city. 55 Average " See National Industrial Conference Board, Differentials in Industrial Wages and Hours in the United States (1938), pp. 19 ff. M See National Resources Committee, Consumer Incomes in the United States (1938), p. 23. " See National Education Association, Research Division, Salaries of City School Employees, 1940-1941, (Research Bulletin Vol. X I X , No. 2, 1941) pp. 86 ff., and Municipal Yearbook, 1941, pp. 408 ff. and 451 ff.

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monthly rentals for homes are much higher in large cities than in small cities." T h e average cost of living at a uniform standard tends to be lowest in the smaller cities. 67 Cost of living studies for teachers indicate that large cities and small cities within metropolitan areas tend to have the highest price levels. 5 8 In N e w York state a difference of 39 percent in the cost of living of teachers among communities was discovered. 5 ' EXPENDITURE LEVELS, POPULATION DENSITY, URBANISM, AND DISTRICT ORGANIZATION The factors involved. Economic resources largely determine how much a state or a community can spend for public schools. E f f o r t or sacrifice determines to a considerable degree what is spent. Underlying price differentials affect the quantity and quality of the service obtained for money spent. However, these three factors do not offer a complete explanation of public school expenditure variations. Other factors also are operating. Population density, urbanism, and district organization also condition the returns received for money spent. Sparsity of population plus extremely small district structure mean high costs relative to the services purchased. Density of population and small districts will produce the same result. Urbanism generally inflates the cost because urbanism and higher price levels tend to go together. Density of population and urbanism. Sparsity of population, no matter what the type of district structure, increases expenditure levels for public schools. Transportation, small classes, small pupil-teacher ratios, and other concomitants of sparsity inflate the cost of any public school service. As may be seen in T a b l e 19, this factor is operating in states like Arizona, M o n t a n a , Wyoming, and N e v a d a . On the other hand, population concentration in cities and population spread in metropolitan areas is accompanied by higher price levels as shown in the previous section. This factor is very influential in determining the expenditure levess of N e w York, California, N e w Jersey, Massachusetts, Delaware, Connecticut, and Illinois. " N a t i o n a l Bureau of Economic Research, Differentials in Housing Costs (Bulletin 75. >939). P- 8. Intercity Differences in Costs oj Living, p. 8. " See D. P. H a r r y , Cost oj Living oj Teachers in the State oj New York (1928); W . C Eels, Teachers' Salaries and Cost oj Living (1933); C o m m o n w e a l t h of Pennsylvania, Report oj the Commission to Study the Distribution oj State Subsidies to School Districts, (1927), p p . 119—146. *• H a r r y , op. cit., pp. 106 ff. ,T

VARIATIONS IN EXPENDITURES

87

T h e relationship between urbanism and public school expenditure levels is not confined to the United States nor is it a modern phenomenon. T h e author has found that the same relationships exist in Germany and England. Indeed the relationships existing between public school expenditures levels in the London metropolitan area and the smaller centers in England are very similar to those which exist in the United States. T h e average per pupil expenditure for public elementary education in Greater London was seventeen pounds, fourteen shillings (1934-1935). The average expenditure for places 100,000 to 999,999 outside the metropolitan areas was 27 percent less; the average for places 30,000 to 99,999, 30 percent less; and the average for places 10,000 to 29,999, 35 percent less.60 The average per pupil expenditure for public schools in the New York city metropolitan area was $140 in 1929-1930; that of places 100,000 to 999,999 outside the metropolitan areas, 23 percent less; the average for places 30,000 to 99,999, 32 percent less; and the average for places 10,000 to 29,999, 4 1 percent less.61 The relationship between public school expenditures and size of community is not of recent origin. In another study the author found that public school expenditures in the New York city metropolitan area have been higher than those of smaller cities in New York and New Jersey at least since 1870. As the New York city metropolitan area spread into New York and New Jersey, the expenditures of the communities affected gradually approached, equalled or exceeded those of New York city itself. Although the percentage relationships have changed somewhat since 1870, the large places always have remained on top in public school spending and the smaller ones at the bottom.* 2 District structure. Small district organization and the resulting inefficient use of personnel and physical facilities as indicated by pupilteacher ratio is one factor causing the high expenditure levels of New York, Nevada, Wyoming, Montana, and Illinois. (Low ratios in some of these states are an indication of both unsatisfactory school districts and a broad program or enriched educational opportunities.) 60

Derived from List 43, Board of Education, London, England. Derived from Statistics oj State School Systems, igsg-igy). 1929-1930 d a t a were used for the United States because no figures are available for 1934-1935 and because 1929-1930 is more comparable with economic conditions in England 1934—'935 than 1935-1936 would be. B See Table 20.

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Laws 7 recommended the following state controls over local budgets: To examine «ill local budgets with special reference to their provisions for debt service, deficiencies, and delinquencies, with power to issue orders binding upon local authorities. . . . To approve budgets of all school districts obtaining more than half of their revenues from state funds. . . . The Regents' Inquiry six years later recommended: Where state aid equals or exceeds 50 percent of the current school budget, or amounts to more than $160 per child per year, require approval of the local budget by the State Education Department.8 Another author of a research study says: Correlative with the foregoing is the proposal that over one area there should be but one level of local government.' These are but a few illustrations of hundreds of similar recommendations made in New York state and other states during recent decades. TYPES OF CONTROLS

There are two classes of controls with which public schools are concerned: (1) controls on total public spending which affect education either directly or indirectly, and (2) controls which specifically apply to public school expenditures. In both these classes are included restrictions on state and local taxing power, budgetary review, mandatory legislation, state approval of expenditures, municipal approval of school expenditures, debt limits, and pre-audits. In either class there may be restraints which shift control over educational policies from school authorities to some other governmental authority, Federal, state, or local, or from local school authorities to state school authorities or from one or both to Federal educational agencies. LOCAL CONTROL AND FISCAL

INDEPENDENCE

One of the oldest conflicts over control is that which exists between jjhool districts and municipal governments. Municipal officials and .students of public administration generally have held that school authorities should be fiscally dependent, that is, the public school budget should be an integral part of the total municipal budget under ' Report for 1932, Legislative Document (193a) No. 77, pp. 1 2 - 1 3 . ' Education for American Life, p. 55. ' Paul E. Malone, The Fiscal Aspects of State and Local Relationships in New York (Special Report of the State T a x Commission No. 13, 1937), p. 388.

CONTROL OF OUTLAYS

175

the control of a single budgetary authority. Public school officials and students of public school administration generally have favored fiscal independence for school boards, that is, the boards should determine their own budgets and tax levy and not have their budgets or their tax levy subject to revision by municipal authorities. Because the conflict is based upon fundamental principles and because neither side has provided conclusive evidence to support its position, the issue never has been settled. Fiscal independence. T h e case for fiscal independence of school boards is based upon the principle that education is a state function, that school boards are state agents of local jurisdiction, and that school boards in exercising a state function should be independent of local political controversies. T h e argument may be summarized as follows: I. Education is a function in which the citizens of the whole state are concerned. From the beginning states offered aid in order to encourage local school districts to establish citizenship schools. Once such schools were established, the states provided teacher education institutions, gave aid for specific improvements, and established minimum standards for teacher preparation, buildings, length of term, and other aspects of the school program in order that all children in the states should have equal educational opportunities and in order that all citizens might enjoy the advantages which come from universal citizenship education. Constitutions and laws all have recognized education as a state function. T h e courts in a long series of judicial decisions have declared that education is a function of the state, that the common school system is a state school system, and that school boards are agents of the state under the jurisdiction of the state education departments. In the famous Gunnison case (176 N. Y . 11), the court held: 10 It is apparent from the general drift of the argument that the learned counsel for the defendant is of the opinion that the employment of the teachers in the public schools and the general conduct and management of the schools is a city function, in the same sense as it is in the case of the care of the streets or the employment of police and in payment of their salaries and compensation; but that view of the relations of the city to public education, if entertained, is an obvious mistake. T h e city cannot rent, build, or buy a schoolhouse; it cannot employ or discharge a teacher; and has no power to contract with teachers with respect to their compensation. There is no contract or official relation expressed or implied between the teachers and 10

See also N. Edwards, The Courts caul the Public Schools (1933), Ch. III.

176

CONTROL OF OUTLAYS

the city. All this results from the settled policy of the state from an early date to divorce the business of public education from all other municipal interests or business and to take charge of it as a peculiar and separate function through agents of its own selection and immediately subject and responsive to its own control. There is no inherent right of home rule. Municipalities and school districts both are creations of the state with powers which may be increased or diminished. T h e units themselves may be abolished or reorganized by the state. In the case of school districts the state has not relinquished its responsibility for education but has created agencies to carry it out. According to Mort and Reusser state regulations in school matters remain supreme over city home rule charters; all local school officers are state school officers; local school officers are responsible to all the people of the state; and local school agencies have the prudential responsibility of protecting the interests of all the people in individual school districts. 11 II. T h a t citizens and school boards must be independent of political controls in providing public education has become a cardinal principle of public education in American democracy. In general, the American people have been less willing to tolerate the evils of politics in the public school system than they have in government in general. T h e chief reasons for making the schools independent of political controls are these: ( i ) Education is more complex than all other governmental functions put together. Policy formulation in education requires the undivided attention of a board appointed specifically for that purpose. (2) Education is a function which requires continuity of policy. Separate boards only part of which come up for election or appointment in any year tend to provide the needed continuity. (3) T h e education of a future generation is such a fundamental and complex life activity that educational issues should not be mixed with other more or less temporal local issues in an election. T o mix educational issues with other political issues often means that decisions on education are influenced by decisions on wholly extraneous matters. (4) T h e most important means democracy has for correcting political and social evils is through education. If education is controlled by boards of education separate from other political units and appointed or elected for long terms, it usually is easier to prevent a u

P. R. Mort and W. C. Reusser, Public School Finance (1941), pp. 54 ff.

CONTROL OF

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177

corrupt political machine from using education to perpetuate itself after it has ceased to serve the best interests of the citizens. 1 1 O t h e r reasons advanced for political independence are: (1) "scientific instruction is independent of politics;" (2) " t h e humanities have their independent imperatives;" (3) " t h e teaching of controversial issues calls for judicial prerogatives;" (4) "preparation for citizenship transcends all partisan limits;" and (5) " t o education is entrusted enduring interests and v a l u e s . " 1 ' I I I . In those cities where the m a y o r and the council have been given control over school budgets, there is no evidence to show greater efficiency and economy than exists in other cities. In general there is no difference between the expenditures per pupil of dependent school systems and those of independent school systems if all factors are taken into consideration. Size of city and whether or not a city is located in a large metropolitan area are the factors showing the closest relationship to costs. Metropolitan cities and large cities generally tend to have higher costs than cities outside of metropolitan areas and smaller cities, probably because of differences in taxable wealth and differences in living costs. T h e expenditure for teachers' salaries, in fact, tends to be higher per pupil in the dependent cities than in the independent cities. 14 I V . Another important factor in favor of independent administration for public schools is that school administration not only as it relates to education but also as it relates to business affairs has advanced far beyond other phases of public administration. W h e r e modern standards and techniques of business and administration are applied in the administration of public education, not even private business enterprise can show any more efficiency and economy. Even some writers on public administration have recognized this fact and are not in favor of fiscal dependence for public schools under the present political administration of cities. For example, M u n r o in his Municipal Administration (1934) says: " I t is probably a fact, moreover, that the taxpayer comes nearer to getting one hundred cents on the dollar for his expenditures on public education than he manages to secure from any other branch of municipal administration." 1 5 Walker See Educational Policies Commission, The Unique Function of Education in American Democracy (1937), pp. IOI FF. "Ibid., pp. 113 ff. u J. R. McGaughy, The Fiscal Administration oj City School Systems (Educational Finance Inquiry, Vol. V , 1924). 16 W . B. Munro, Municipal Administration (1934), p. 459. 11

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C O N T R O L OF O U T L A Y S

in his book, Public Administration in the United States (1937) says: " T h e school district has been organized with relatively high efficiency compared with cities and counties." 16 Pfiffner in his Public Administration (1935) cites school administration as an example to be imitated by public administration. 17 V. Fiscally dependent school boards and school districts only intensify the conflict between schools and municipalities. Municipal officials tend to regard education as a municipal function, to believe that city charter provisions are superior to state laws, to increase control over details of school policy, and to oppose the development of public education. 18 Frasier's study tended to support this last conclusion. He found that: "There is a distinct tendency for fiscally independent school systems to have higher index numbers than fiscally dependent systems."" However, his criteria are hardly valid enough to demonstrate conclusively the superiority of schools in fiscally independent school systems. V I . Fiscal independence leads to a continuous educational policy and development. Services are more permanent because revenues are more stable. V I I . Fiscal independence does not endanger other municipal functions or sources of revenue. School boards are responsible to the same citizens as other municipal legislative bodies. Citizens can prevent school boards from hampering other services which they want. Frequently the taxing power of school boards is limited by legislative acts or charter provisions.20 V I I I . There are barriers to making all schools fiscally dependent —for example, school districts not conterminous with the municipality or city schools included in county school units. I X . Increased state aid for schools tends to diminish friction between school authorities and municipal authorities, by releasing local tax revenues for other city purposes. Fiscal dependence. The case for fiscal dependence is based upon the principle of home rule and the necessity of unified local government over a given area (for example, a county, a city, a town, or a village). u

Op. dt., p. 87. Op. cit., pp. 503 ff. 18 Educational Policies Commission, The Structure and Administration oj Education in American Democracy (1938), pp. 45-46. " G. W. Frasier, The Control oj City Finance (192a), p. 82. 14 For points V I and V I I see Frasier, op. cit., pp. 65 ff. 1T

C O N T R O L OF OUTLAYS

179

T h e New York State Conference of Mayors stated the issue in this way: That either the school system should be left with the municipalities as a matter of home rule, or if the State is to insist on violating the principle of home rule as regards education and wishes to adopt the theory of those who insist that education is entirely a state function . . . , then the state should assume independent control of the educational burden with all the responsibilities that go with it financially and otherwise. . . . 2l I n the same study it was found that: There still exists an unsatisfactory condition in those municipalities where the educational authorities have complete or practically complete control of the budget and the city authorities are held responsible for the tax rate.22 One of the weaknesses resulting from the more or less independent relationship existing between the boards of education and city authorities appears to be the lack of familiarity of the board of education with the fiscal requirements and plans of the city.2* From these statements it can be seen that state school mandates which affect local tax rates, municipal responsibility for local tax rates not wholly determined by municipal authorities, conflicts of interests in determining budgets, and divided control are the main reasons why municipal officials seek to make public schools fiscally dependent. No doubt, such factors as political machines wishing to extend their influence also are operative. A review of the literature on public administration shows the following to be among the major arguments advanced in favor of fiscal dependence for public schools: 1. The citizens of a locality should have the right to determine how much of their income they shall spend for local governmental purposes and the right to determine how much shall be spent for each governmental purpose. T o accomplish this end it is necessary to have a single budget adopted by the legal representatives of all citizens— a single legislative body. When schools or other governmental agencies spending local tax funds are fiscally independent, careful over-all planning for balanced development of all municipal services becomes virtually impossible. 24 2. The state interest in locally administered functions should be limited to the extent that it provides financial support for that par" In Special Joint Committee on Taxation and Retrenchment, Fiscal Problems of City School Administration (Legislative Document No. 66, 1928), p. 124. M " Ibid., p. 1 1 . " Ibid., p. 13 See Malone, op. cit., p. 206.

i8o

C O N T R O L OF

OUTLAYS

ticular function. State mandates relating to education should be financed by the state and controlled by the state. Complete state support for education should accompany the theory that education is a state function." 3. Divided control and responsibility lead to overlapping functions and duplication of effort. In the case of schools they lead to the maintenance of a number of officials and services duplicating those of municipal government—for example, legal services, personnel service, tax collection, purchasing, accounting, custodial service, maintenance, health, library, recreation, plant, and capital outlays. Moreover, public funds are scattered, operating balances are larger than necessary, the demand for and costs of short-term loans are increased, and many more officials have to be bonded than under a single treasury system. 28 4. Intergovernmental relations are made more complex when various independent governmental agencies arc serving the same area. Record keeping, reporting, taxpaying, state and local relationships, and other routine matters become involved. 5. Legislative bodies determining policies, adopting budgets, and fixing tax rates should have to assume responsibility for the tax rates. School districts should either collect their own taxes or have them collected for them by another unit of government in such a way that the public differentiates between school taxes and taxes for other purposes. In many municipalities where school boards are fiscally independent, city officials who have no control over school tax levies are forced to assume responsibility for the levy. 2 7 6. Members of fiscally independent school boards and their school superintendents frequently are unfamiliar with the needs and fiscal problems of the city as a whole. As a result school services often are expanded at the expense of other city services and school boards are not as economical as they would be if their budgets were adopted after a careful consideration of other financial needs and problems. 7. T h e tendency has been to abolish special districts and independent boards, for example, health, library, recreation, fire, police, highways, and the like. M a n y of the functions performed by such boards are matters of administrative detail which should be left to administrative officials. " Ibid. " Ibid., pp. 206 ff. Sec B. F. Pittenger, An Introduction to Public School Finance (1925), pp. 183-84.

17

C O N T R O L OF OUTLAYS

181

8. Overlapping units of government make it practically impossible to control indebtedness and taxation. Individual properties become burdened with debt and taxes far beyond the economic ability of the owners to pay. 9. Fiscally independent school boards can claim no more freedom from politics than fiscally dependent boards, especially in large cities.*' 10. There are court decisions which have held that education is a municipal function under certain conditions.19 Extent of fiscal dependence. T h e degree of fiscal independence or de-

pendence of school boards varies among states and among communities within certain states. In Pennsylvania all school districts are fiscally independent of other units of local government. In New Mexico all school districts are dependent upon a county school budget commission. Owing to property tax limits (see section following) school districts in Michigan, Indiana, Ohio, and Oklahoma are dependent upon county boards. 10 The budgets in certain city school systems in Florida and Georgia are subject to review by county agencies." In Minnesota there is a considerable degree of fiscal dependence. In New Jersey city school budgets are subject to review by a joint board representing the city and the school board. In 151 cities of over 50,000 population out of 191 studied by Henry and Kerwin, the school boards are required to submit budgets to some other governmental agency (state review will not be considered here as it will be taken up in the next section). In 66 of the 191 cities (about one third) the city authorities had power to revise the school budgets. M In 44 city manager cities about 26 were found to be fiscally independent." In the smaller cities and school districts in most states, school systems generally are fiscally independent,' 4 but the number is decreasing largely owing to the extension of the tax limits. Of course, in many such districts the budget is subject to the approval of the people, but this is hardly comparable with the dependence of one legislative body upon another. The degree of control exercised over school budgets by city or " See Nelson B. Henry and J . C. Kerwin, Schools and City Government (1938), pp. 92-93. "Ibid., Ch. II. to vVylie Kilpatrick, State Supervision 0/ Local Finance (Publication No. 79, Public Administration Service, 1941), p. 61. " Henry and Kerwin, op. cit., pp. 13-14. ** Hid., p. 15. " National Education Association, Research Service, Relationship of Local School Systems to Council-Manager Plan of Municipal Government (Circular No. 5, 1939), pp. 9 ff. ** McGaughy, op. cit., p. 5.

CONTROL O F OUTLAYS county agencies also is a variable. Among the possibilities are revisions of total budget only, changes in specific items in budget, tax rate established and levied by another agency (in whole or in part), approval required before taxes can be levied, certain items exempt from budgetary control, and control over certain expenditures only. 45 Fiscal dependence and governmental structure. Where school boards are fiscally dependent upon some other agency of local government having power to reduce or alter the school budget, the school board becomes a redundant appendage of local government. Its function as a policymaking body is transferred to another agency and it becomes largely an advisory body or administrative board. Since its administrative functions should be delegated to professionally trained administrators, it is difficult under such conditions to defend its continued existence. T h e agency having fiscal authority finally determines educational policies; but since this is done indirectly, it can escape being held responsible. It would be far better to give the body having authority to control the funds of the schools the responsibility fordetermining the policies of the schools. This is the ultimate outcome of fiscal dependence. STATE

CONTROLS

During the past decade public schools have been threatened with state controls to a greater extent than ever before. T h e new threats arise from two trends—the breakdown of the local property tax a n d the extension of state support for public schools. T h e first brought demands for property tax limits and debt limits and state control over local spending. T h e second brought demands for mandatory laws, approval or review of local expenditures, pre-audits, and other state controls. Tax limitation.,6 Limitations on various taxes have been incorporated into constitutions and legislation in response to various organized pressures. The most common restrictions are those applying to property taxation. T a x limits generally establish a m a x i m u m tax rate that can be levied on property by a unit of government. Over-all limits establish a maximum rate that can be levied by all overlapping units of government on a particular parcel of real property. These may be statutory or constitutional.* 7 " Henry and Kerwin, op. cit., pp. 15 ff. " See H. M. Groves, Financing Government (1939), Ch. X X for a good discussion of tax limitation. " See G. Leet and R. M. Paige (eds.), Property Tax Limitation Laws (Pub. No. 36 rev., Public Administration Service, 1936).

C O N T R O L OF OUTLAYS During the depression of the thirties there was a concerted effort led by the National Association of Real Estate Boards to adopt state constitutional over-all property tax limits and to lower existing limits. The association recommended the following constitutional provision. " T h e total of all taxes which shall be levied against real estate in any year by all taxing authorities of this state shall not exceed i % of the true value." 1 8 Michigan, Nevada, New Mexico, Ohio, Oklahoma, and West Virginia enacted new constitutional over-sill property tax limits during the depression. Indiana and Washington during the same period adopted statutory over-all limits." The movement lost ground after the disastrous experience of states like Ohio, Michigan, and West Virginia became known. Not a single state has adopted a drastic property tax limit since 1933. Yet the movement has not died. The National Conference of Real Estate Taxpayers was organized in 1940 to keep the agitation alive and to seek property tax adjustments. The Conference, purporting to be sponsored by the National Association of Real Estate Boards, National Association of Building Owners and Managers, Mortgage Bankers Association, National Apartment Owners Association, National Grange, and American Farm Bureau Federation, gives as its first objective the adoption of over-all tax limits. The states mentioned specifically are Arkansas, New Jersey, Minnesota, North Carolina, and Utah. 4 0 T a x limits, even constitutional over-all tax limits, are nothing new; they are recurring depression phenomena. Rhode Island and Nevada have had statutory over-all limits since 1878 and 1895 respectively. Oklahoma has had constitutional over-all limits since 1907 and Ohio since 1 9 1 1 . 4 1 In these states the depression laws merely made the limits more drastic. This is how they came into being. During times of prosperity real estate interests are among the most strident advocates of governmental spending and improvements in order to increase realty values. Then comes deflation. Building ceases; families double up; others move to cheaper quarters; market sales of property cease; vacancies increase; rents go down; and forced sales, foreclosures, and bankruptcies follow. Yet governmental services must go on and the cost of improvements must be paid. The cost of certain governmental services can be de" National Association of Real Estate Boards, Real Estate Tax Limitation (1935), p. 16. " Leet and Paige, op. cil., pp. 42 ff. 40 New York Times (Real Estate Section), Dec. 22, 1940. 11 A. M. Hillhouse and R . B. Welch, Tax Limits Appraised (Pub. No. 55, Public Administration Service, 1937).

CONTROL OF OUTLAYS creased, but the cost of relief and debt service keeps the total taxes up. Real estate operators and investors then demand constitutional overall tax limits to protect property values and to provide quick tax relief. When prosperity again returns, they soon demand new public improvements and services, but tax limitations stand in the way. If the tax limitation is of the 1884 New York state type, applying only to individual municipalities, special improvement districts are formed by the hundred. If the tax limitation is of the 1901 Illinois type providing a statutory over-all limit on each parcel of property, numerous amendments to liberalize the law are passed. (The 1901 J u u l Law in Illinois is called the most frequently amended law in the United States.) 42 How the realty interests will evade modern "constitutional over-all tax limitations" remains for the future to answer. Economists and students of government and taxation are almost all opposed to tax limits, especially constitutional over-all limits. A constitution should include only broad general principles, such as giving legislative bodies power to provide for essential governmental services and to levy taxes to pay for such services. Governmental needs and sources of tax revenue cannot be determined twenty years in advance. The limiting of tax sources and tax rates is a legislative matter. T a x limits are too rigid to provide for the varying future needs of different communities. Governmental needs not only vary among communities according to their geographic location, density of population, and other factors, but they also vary from year to year within the same community. T a x limitation is like trying to make all persons wear the same size shoes from babyhood to old age. As discovered by the New York State Commission for the Revision of the Tax Laws, Every variation of the plan that has been proposed or tried was included in the Commission's study. If the limitation be applied one way, the larger units of government which we are anxious to strengthen would be hit hardest; if the limitation be applied on another basis, the small units of government, which means the school districts and the special districts, would be practically wiped out.'1' The arbitrary maximum rate of taxation has no basis in fact. In the seven states which have adopted constitutional over-all limits the maximum rates vary from one percent to 5 percent.44 Which is the most 41

Leet a n d Paige, op. cit., p. 48. New York State Commission for the Revision of the T a x Laws, The Effect of a Two Percent Tax Limitation Law upon Local Government in New York State (Seventh Report, 1936), PP- 352-5344 Hillhouse and Welch, op. cit., p. 2. 41

CONTROL OF OUTLAYS

185

reasonable? In New York state cities the tax rates for 1935 varied from 2.2 percent to 6.7 percent. W h y should the limit be set at 1.5 percent or 1.75 percent? Should the same limit be applied to a sparsely settled town as is applied in a densely populated city like New York? Such guesswork should not be imposed upon future generations. T h e vast majority of taxpayers do not benefit from arbitrary tax limits. Because a certain minimum of government revenue is absolutely necessary, replacement taxes, usually a general sales tax, have followed tax limitation. Because this tax falls heaviest upon the low income group and small homeowners, most citizens and homeowners have had their taxes increased under tax limitation. (The seven states with the most arbitrary tax limits have been forced to enact a general sales tax.) It is estimated that under the Ohio one percent tax limit the average small homeowner saved from twelve to fifteen dollars in real property taxes annually; yet under the 3 percent general sales tax which followed tax limitation the average homeowner had to pay an additional twenty to forty dollars annually. Actually he paid more taxes than he did before." In addition to the general sales tax the vast majority of citizens pay for tax limitation in other ways. M a n y services which formerly were paid for out of general taxation are placed upon a fee or assessment basis. For example, street lighting has been charged on frontage basis, and garbage collection, cleaning, and even snow removal have been placed upon an assessment basis. 4 ' T a x limits also tend to foster overassessment or rigidity in assessments to protect the taxing and borrowing power of a unit of government. T h e most serious long-time effects of arbitrary state-wide tax limits upon public schools are to be found in their implications for the control and structure of public school systems. T a x limits nullify local control and the fiscal independence of school boards. Control is taken away from the present generation, and the arbitrary decisions of pressure groups in the past prevail. Y e t the immediate effects of over-all tax limits upon educational opportunities are serious enough. The closing of schools in Dayton, Conneaut, and Springfield, Ohio, was given national publicity, and the public schools were more successful than other municipal services in getting special levies voted beyond the limit. 47 Soon after the enactment of the limit in West Virginia the state superintendent of public instruction reported: " T h e tax limitation amendment caused a great deal of misery and 46 47

HUlhouse and Welch, op. cit., pp. 20 Leet and Paige, op. cit., p. 73.

ff.

44

Ibid., pp. 22 ff.

CONTROL OF OUTLAYS distress among teachers and other governmental employees who worked for months without pay. . . ." 4 * In Michigan the most serious impact of the tax limitation amendment was upon the public schools. Teachers' salaries had to be reduced in some instances to as little as thirty dollars a month. 49 Property taxes for schools were cut 50 percent.' 0 Drastic cuts in school outlays followed the enactment of the Kansas tax limit in 1933." T h e Washington law enacted in 1933 cut school revenue about in half. 51 Budgetary review. State budgetary review has the same objective as property tax limitation; its implications for public schools are about the same; but it is less drastic than tax limits. Frequently such measures are adopted as an emergency expedient with little regard for their effects upon the structure and functioning of government. For example, during the depression New York state adopted a measure giving the commissioner of education power to withhold up to 25 percent of the state aid of a school district where he considered it necessary. This measure gave the state education department power to review almost all local school budgets and reduce them. Yet it passed the legislature with the approbation of some school officials. State budgetary review exists in many forms. First, there are provisions giving state education departments power to review local school budgets under certain conditions, for example, when local administration or financing breaks down. Second, there is review of all local budgets by state school authorities. Third, there is review by some state authority other than the education department under certain specified conditions. Fourth, there is state review by a noneducational agency of all local budgets. Fifth, there are constitutional or statutory controls over the amount of increase in the annual budget, for example, requiring state approval of an annual tax increase in excess of a stated percentage. Sixth, there is state review limited to certain budget items such as debt service. There are a number of state provisions aimed specifically at reviewing local school budgets." North Carolina during the depression 4'Statement

m a d e at a hearing on a Federal aid bill. Leet and Paige, op. cit., p. 68. 40 National Education Association, Research Division, Tax Education and School Financé (Release N o . a, Feb. 10, 1941), p. 4. " Ibid., p. 3. »Ibid., p. 5. " See T . Covert, Financing Schools as a Function 0/ State Departments 0/ Education (Bulletin 1940, N o . 6, M o n o g r a p h No. 3, U . S. Office of Education, 1941 )•

41

CONTROL OF OUTLAYS

187

(1933) gave complete control over county and city school budgets to a state school commission. T h e levying of local taxes to supplement state support was made difficult.' 4 Fifteen other states review local budgets through some state agency which has the power to change either the levies or the appropriations; eight require state approval of the amount and purpose of bonds and loans." In West Virginia city school districts must submit their budgets to the state tax commissioner." In Pennsylvania second, third, and fourth class districts must submit their budgets to the state education department.' 7 In New Mexico the state school budget auditor has power to review all school levies and budgets." In other states the state review of local budgets required for all local units includes school districts. In Indiana and Iowa state review is required upon the petition of a small number of taxpayers." Budget review for local units having fiscal difficulties is provided in Alabama, Indiana, Maine, New Hampshire, New Jersey, and North Carolina. In California, Colorado, and New Mexico increases of over 5 percent in expenditures or the tax levy in any one year are not permitted without state approval. 60 Other state controls. There are numerous other state controls over the local financing of public education found in state constitutions and statutes. 41 Holmstedt 42 summarizes these in Table 21. Along with increased state support have come additional controls over education in localities. Most states have provided aid for particular educational services and thereby exercised control over the local educational offerings. In Texas state aid in certain types of districts is apportioned upon approved budgets. In New York the commissioner of education has been given the power to review local budgets and apportion from 75 to 100 percent state aid. T h e Regents' Inquiry recommended budgetary review to accompany state aid under certain conditions. 4 * It also proposed the concept of an " a p 14 G. D. Strayer, Jr., Centralizing Tendencies in the Administration oj Public Education (1934), pp. 25 ff. " R . W . Holmstedt, State Control oj Public School Finance (Bulletin of the School of Education, Indiana University, Vol. X V I , No. a, 1940), p. 25. " H e n r y and Kerwin, op. cit., p. 13. "Ibid. " Kilpatriclc, op. cit., p. 61. « Ibid. W. J. Shultz, American Public Finance (2d ed., 1938), pp. 135-36. " See Ralph Yakel, The Legal Control oj the Administration oj Public School Expenditures (1929); Wayne W. Soper, Legal Limitations on the Rights and Powers oj School Boards with Respect to Taxation (1929). " Op. cit., pp. 22-23. *' See p. 174.

188

CONTROL OF

OUTLAYS

proved educational opportunity" which probably presumes a certain amount of state discretion in apportioning state aid to local districts. 44 Similar state controls have been proposed from time to time in other states. T h e demand for state control is summarized in the following quotation from a recent report on relations among governmental units: T h e state should not redistribute revenues to localities without squarely facing the question of expenditure control. A practical answer is that the state cannot turn over increasing revenues to localities without setting standards for the control of administrative performance in the local use of state money. Conversely, the state should wisely refrain from a detailed control of the expenditure of funds locally r a i s e d . " In most, if not all, states, mandatory laws have been passed relative to educational provisions, salaries, and other aspects of the program TABLE 21.

CONTROLS o r PUBLIC SCHOOL FINANCE INCORPORATED CONSTITUTIONS AND

IN

STATE

STATUTES

Number of Type of Control

States

CONSTITUTIONS

1. 2. 3. 4.

Limits bonded indebtedness Limits local tax levies Provides that chief state school official supervise schools Provides that state board supervise schools

. . . .

27 15 13 10

STATUTES

5. School tax rates limited 6. School budgets regulated— a. School officials required to prepare budgets b. Uniform budget form required c. Itemized budget required d. Budget required to be filed with other officials e. Provisions made for review and revision of budget by other agencies f. Budget required to be published g. Expenditures and revenues required to balance 7. Bond issues regulated— a. Purposes restricted b. Total debt limited c. Final check on authorization by state authority required . . . d. Selling below par prohibited e. Maximum interest rates set M

A . G. Grace and G. A . Moe, State Aid and School Costs, pp. 2 5 2 - 5 3 . " T a x Policy League, Tax Relations among Governmental Units (1938), p. 137.

40 46 32 27 31 15 19 15 46 45 42 45 41

CONTROL TABLE 21.

OF OUTLAYS

189

CONTROLS OF PUBLIC SCHOOL FINANCE INCORPORATED IN S T A T E CONSTITUTIONS AND STATUTES ( C o n t i n u i t i ) Number of Typ* oj Control

States

STATUTES

8.

9. 10. 11. 12. 13. 14. 15. 16. 17.

f. Tax levies for debt service required g. Tax levy for debt service limited h. Serial bonds required i. Time limit on maturity set j. Denomination limited k. Public vote to authorize required Short-term loans regulated— a. Purpose of loans limited b. Amount of loans limited c. Provision made for payment d. Maximum interest rate set e. Sale price of warrant, limited f. Penalty set for nonpayment Uniform accounting system required Provision made for independent audit Annual audit required Custodian of local school funds required to be bonded County superintendents required to be bonded Depositories for school funds required to furnish security . . . . Pecuniary interest of local school officials in contracts prohibited . Bids required to be secured on purchases over a certain amount Minimum teacher salaries prescribed

38 20 27 47 16 31 27 30 26 25 8 5 15 26 16 35 29 25 35 22 18

involving financial outlays without regard to their financial implications. Pre-audits which give state officers the final decision upon local expenditures are in the same class as budgetary review. Implications

of state controls.

It is admitted that there is no inherent

right to home rule and that education is a state function—a responsibility of all the people of a state. It is granted that the power to tax is a sovereign power of the state." It is admitted that complete absence of state control in a matter like public education which affects the interests of all the people is unthinkable. 47 It is clear that state controls reduce the responsibility of local school authorities to carry out state mandates or decisions. 68 However, states in the past •• Holmstedt, op. cit., pp. 15 ff. • 7 S e e K i l p a t r i c k , Stale Supervision oj Local Budgeting, p . 12.

"

Ibid.

i go

CONTROL OF OUTLAYS

apparently have believed that the interests of all the people in public education were best promoted by delegating responsibility to school districts to act as agents of the state. They apparently believed that granting freedom and initiative to small groups of citizens would best promote educational progress, adjustment, or adaptability to new or changed conditions. Every extension of state controls decreases the necessity for the complicated machinery of local control in education. State-wide tax limits, state control over local budgets, or complete state control of the educational program through mandatory legislation or state education department regulations and examinations make school districts useless appendages. All the inefficiency, waste, and expense that go with local districts are retained without the advantages which come from local freedom and initiative." Centralization under such conditions has both the disadvantages of centralization and those of decentralization. 7 0 T h e extent to which state controls can be extended without sacrificing the values of local responsibility and initiative will be taken up later in this chapter. It will be shown how the state cannot even control certain elements in a state-supported foundation program of education without controlling the entire educational program in a school district. FEDERAL

CONTROLS

Nationalism. T h e observation already has been made that Federal spending policies are determined to a considerable extent by international developments. National survival at times necessitates drastic changes in established policies. With the First World W a r and the depression which followed it, came the Federal income tax, Federally aided vocational education, Federal controls of business, Federal youth-serving agencies, and the extension of Federal welfare activities. T h e Second World W a r is bringing further centralized controls over the business and life of the people. It will bring increased Federal interest in the education of all its citizens. T h e interests of all the people of the nation will take precedence over sectional, state, and local interests in times of national crisis. As long as the nation is threatened by other powerful nations, intense Federal interest and even a certain extent of Federal control in education is to be expected. With increased Federal participation in education have come new issues regarding the control of education. Federal aid for specific " See Mort and Reusser, op. at., pp. 109. ff.

70

See pp. ig5 ff.

C O N T R O L O F OUTLAYS educational enterprises like vocational education is in itself a control. T h e curriculum in states and school districts is altered to meet national needs through Federal financial aid. Federal agencies also have at times exercised considerable control over the educational enterprises aided by the Federal Government. More recently the Federal Government has established independent governmental agencies under its direct control which have been providing educational services in the several states and their subdivisions. As a result the education provided within a given jurisdiction has been controlled partly by Federal agencies, partly by the state, and partly by the school districts. In this situation conflicts of jurisdiction and interest are inevitable. T h e Federal Government also has given indirect aid to nonpublic schools and has thereby evaded the constitutional prohibitions of many states. Private school interests have sought to couple all Federal aid with aid to nonpublic schools and have reopened one of the bitterest struggles for control over education. T h e Federal Government exercises powerful indirect control over public education through its taxing power. All taxes eventually must come out of the income of the people. Increased Federal taxation, especially when levied on the same tax sources as those used by states, decreases the ability of state and local units of government to finance the educational policies and programs which they have decided to be in the interests of the people. As Chisholm has shown, either Federal spending and taxation must be decreased or increased Federal aid for public education must be provided. Otherwise states and their subdivisions cannot continue to provide the kind of education required for citizenship, survival, and the fullest development of the individual according to our democratic traditions. 71 Control through special aids. During the Civil War the Federal Government began to interest itself in higher education. At that time it inaugurated the policy of subsidizing certain aspects of the educational program which were considered to be of national interest. This policy gradually was extended during the years which followed and by 1917 was broadened to include the public schools. The Smith-Hughes Act passed in that year not only granted aid for particular educational services but it required Federal approval of state plans. Minimum standards for the services aided were set up. 71

L . L . Chisholm, The Shifting of Federal Taxes and Its Implications for Public Schools (1939), PP- 76-77-

192

CONTROL OF

OUTLAYS

During the decade following the First World W a r the conflict over control between Federal and state agencies administering public education began to receive nation-wide attention. In 1929 the President appointed the National Advisory Committee on Education to investigate the "difference of opinion as to the policies which should be pursued by the Federal Government with respect to education." In 1931 the committee made its report. A m o n g its recommendations were these: Amend those existing laws which give or tend to give the Federal Government and its agencies powers to interfere with the autonomy of the states in matters of education. Enact no additional laws that grant federal financial aid to the states in support of special types of education or that increase existing federal grants for such special purposes. . . . Make all future grants to states as grants in aid of education in general, expendable by each state for any or all educational purposes as the state itself may direct.72 T h e committee report did not settle over education. In 1936 the President committee on education. T h e report of lished in 1938 did not condemn special

the issue of Federal control appointed another advisory this second committee pubaids but recommended that:

Federal grants for special educational purposes may properly be used to bring attention to educational matters of special national concern and thus to improve the educational programs conducted under state and local auspices, but such grants should be considered with very great care to see that improvement does in fact result.73 The major portion of all federal aid for education should be granted as a general fund for the current support of elementary and secondary education. In order that states and local school jurisdictions may have the necessary flexibility in the development of programs suited to local conditions, the specification of particular phases of elementary and secondary education to be supported from such a fund should be avoided. 74 Control and general aid. Since the Federal Government is not yet providing m u c h financial aid for general education, the controls which should accompany such aid are a matter of academic debate. T h e Advisory Committee of 1929-1931 concluded that the Federal Government or its agencies should have no discretionary or statutory control over educational policies. It believed that the Federal Governn

National Advisory Committee on Education, Federal Relations to Education (i 9 3 1 ) ,

I. 37-38. " T h e Advisory Committee on Education, Report 0/ the Committee (1938), p. 42. Ibid., pp. 42-43.

74

C O N T R O L OF

OUTLAYS

193

ment should confine itself to research, leadership, and audits to see that funds were spent on general education or special education as required by law. T h e Advisory Committee of 1936-1938 set up as its objective the preservation of local control, but many of its recommendations implied greater Federal control. T h e committee proposed that the apportionment of aid be based upon plans jointly agreed upon by state and Federal authorities. Several items to be included in such plans are specified. Another of its proposals would make Federal aid contingent upon the adequacy of the state administrative agency and its cooperation with the Federal agency, both to be judged by the Federal agency itself. Reports and audits, according to the recommendations, also would be used to safeguard the expenditures of the Federal funds. Certain types of Federal aids—for example, aid for reading materials, transportation, and scholarships—would be provided for nonpublic schools under the proposals, although such aids are prohibited in many states. T h e foregoing report has been the center of m u c h controversy since its distribution. T h e controls proposed have been opposed bitterly by both educational and noneducational groups. 7 5 Others would provide additional controls. Groups interested in special aids would like to see this policy extended. Others believe that additional standards, regulations, and conditions should accompany Federal grants. Still others believe that the aid will pauperize certain states and m u c h of it will be wasted. 7 6 Independent Federal agencies. Even before the depression of the thirties the Federal Government had created a number of agencies carrying on activities closely related to education. 7 7 During the depression two temporary youth-serving agencies (the National Y o u t h Administration and the Civilian Conservation Corps), which were directly controlled by the Federal Government were created. O n e of these, the National Y o u t h Administration, provided indirect support for nonpublic schools through student aid funds. As the depression subsided and the need for emergency relief decreased, these agencies sought to justify their continued existence by expanding their educational services. This brought them into direct conflict 75 See publications of the Educational Policies Commission and the writings of George D . Strayer, J . B. Edmonson, A . B. Moehlman, Paul R . M o r t , and John K . Norton. '« See W . G . Reeder, " W h a t Controls, If A n y , Should Follow Federal Subsidies to Public Education?" in American Educational Research Association, Research on the Foundations of

Education (1939), pp. 27 ff. 7 7 See Educational Policies Commission, Federal Activities in Education (1939).

194

CONTROL OF OUTLAYS

with the existing public school systems in the states and school districts. If either of these agencies is to become permanent, it becomes clear that there will be a dual school system—one controlled by Federal agencies, the other controlled by states and state agencies of local jurisdiction. Control over educational policies and services would be divided between the Federal Government and the states. This new conflict over control has become a national issue, which up to this time, has not been settled. T h e Educational Policies Commission after studying the question recommended that: As soon as they have completed their present emergency assignment of training workers for the national defense production program, the National Youth Administration and the Civilian Conservation Corps should be discontinued as separate youth agencies, that their functions as agencies of vocational training, general education, and guidance should be continued but should be transferred to state and local agencies. 78 Other national 7 9 and state organizations and committees have reached similar conclusions. For example, the position of the Youth Needs Committee of the New York State Teachers Association may be summarized as follows: Control over public educational policies in any branch of government should be unified in order that there may be a continuous, integrated, economical, and efficient educational program. Duplication of effort, competition, conflict of jurisdiction a n d / o r authority, and lack of balance in educational activities do not promote individual and group welfare. Responsibilities for all educational policies and their execution should be delegated to existing school authorities at the level of government involved. If existing agencies are not adequate to meet the new responsibilities, the states should either reorganize such agencies or provide the services through direct state action. The National Youth Administration and Civilian Conservation Corps educational services for youth should be placed under state and local public school agencies. 80 A somewhat different view is held by the American Youth Commission. It recommends: The consolidation of the National Youth Administration and the Civilian Conservation Corps into a single major subdivision of the Federal Security " The Civilian Conservation Corps, the National

Youth Administration,

and the Public Schools

(194O, PP- 5-6See especially "Relationship of the Federal Government to the Education of Youth of Secondary School A g e , " Bulletin of the National Association oj Secondary School Principals, X X V (April, 1 9 4 1 ) , 3-24. 80 Community Programs of Action for Youth ( 1 9 4 1 ) , p. 22.

CONTROL OF

OUTLAYS

195

Agency, charged with the administration of federal activities in behalf of youth who need public facilities for wage employment and for training on the job such as are not available in public schools.81 T h i s conclusion is based u p o n the following reasoning: The public function of providing gainful employment for the unemployed whether young or old, is not an educational function. Where supplementary educational programs are to be provided for youth and other persons employed on public works programs, such programs should be provided in so far as possible by established educational authorities. Federal grants to states for such supplementary educational programs are desirable and should be supplied. 85 But the federal government is not prohibited by law or usage from providing additional educational services which youth and adults may utilize on a voluntary basis under certain circumstances, and the federal government has compulsory powers of education and training for national defense.84 In 1942 the Civilian Conservation Corps was abolished, but the National Y o u t h Administration still continued to function in spite of intense opposition. H o w e v e r , it is not clear at this time whether the issue has been settled, or whether the change merely represents a temporary wartime adjustment. It is very probable that the conflict will be renewed after the war is over. EXTREME

CENTRALIZATION

DECENTRALISATION

VERSUS OF

EXTREME

CONTROL

Existing patterns of control. T h e existing patterns of control over education in most states are complicated, outmoded, and full of contradictions. W i t h few exceptions states have established hundreds or thousands of local units of school administration which seldom adhere to established criteria of adequate local units of administration and which frequently overlap each other. Changes in population and wealth have made most of them impotent in exercising local control and initiative. Such extreme decentralization has resulted in extreme inequalities in education, shortsighted policies, neglect of broader problems, inertia, control by petty local interests, inefficiency, and waste. Within such local units control often is divided or is transferred to some other local unit of government through budgetary review or tax limits. Instead of reorganizing these unsatisfactory units of government, states generally have passed emergency and corrective legislation w h i c h has created contradictory patterns of control. For " Youth and the Future (1942), p. 236.

a

Ibid., p. 59.

9a

Ibid., p. 60.

M

Ibid.

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196

example, New York state, through Regents' examinations, courses of study, regulations, mandatory legislation, budgetary review, tax limits, and other means of control, really has assumed control of much of the basic educational program. Yet, the complicated district structure remains. It is even being reorganized at considerable cost without any shift of control from the state to the localities. The result is that a complicated, expensive, overlapping, inefficient, and uneconomical district structure is being retained to exercise control over certain minor details of the educational program. Other states have done the same. Such systems have neither the advantages of extreme centralization nor those of an adequately organized system of local government. There is centralization with both the disadvantages of centralization and the disadvantages of decentralization. Complete state support and control. T h e present structure of local government in most states was established when states had over 90 percent rural population. Population was scattered and communications were poor. Now twenty-one states have a predominantly urban population and over 56 percent of the nation lives in urban centers. 85 Moreover, many of the areas classified as rural are not rural but are parts of large metropolitan or urban regions made possible by the automobile and other rapid means of transportation. For example, the largest population unit in the United States is the New York city metropolitan area with a population of nearly 12,000,000 living in three states. 86 Nearly 11,000,000 of the 13,479,142 residents of New York state live in seven large metropolitan areas. 8 7 M a n y others live in the smaller urban regions. T h e greatest population growth is taking place in these suburban regions. M u c h of the controversy over local control is unrealistic. States and local districts are treated in the abstract, and conditions which existed a century ago are idealized. Direct state control or complete state support are condemned. Yet New York city, a local unit of administration and support, has a greater population than any one of forty-six states; Chicago is larger than thirty-six states; Philadelphia has a population exceeding that of twenty-five states; and Detroit and Los Angeles each exceed eighteen states in population. Unified control and support is seldom questioned in such overgrown local units. On the other hand, unified control and support is opposed in Nevada, population 110,247, l e s s than that of eighty cities. " S e e p . 42.

84

U. S. Census data, 1940.

87

Ibid.

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197

Wyoming has a smaller population than thirty-seven city school districts. The population of Vermont is less than that of twenty-two cities. It may- be argued that some of these states have large areas. Rhode Island is not much bigger than Los Angeles or New York city in area, but its population is exceeded by nine cities, being only about half that of Los Angeles. Delaware is another small state with a small area and it has a smaller population than thirty-five cities. Large city units of school control and support have provided educational opportunities and operational efficiency and economies which have not been equaled by the combined efforts of states and localities in most of the smaller local school units. Certainly complete state support and control in the smaller states, especially those small in both area and population, may be worth trying. No doubt a limited number of wealthy local units have contributed to educational progress and adaptability through local freedom, but it is entirely possible that their contribution hardly offsets the denial of educational opportunities and the waste of public funds which has accompanied extreme decentralization in most states. The money wasted annually in inefficient units of administration if properly spent by the states themselves might contribute much more to progress and adaptability than is contributed by the few small units which do show initiative. Delaware has taken the initiative and has proved that the step can achieve both economy and a leveling up of educational opportunity. 88 Some students of public school finance advocate complete state support and control for all states, even large ones with diversified conditions.89 North Carolina is the only large state which approaches this condition now. It provides an excellent laboratory for testing the implications of such a policy in a large state, that is, large in area; it is no bigger than Chicago in population. Other authorities are of the opinion that complete state support and control of education will come in other states, especially as centralization continues in economic life and taxation. Speaking of Morrison's work, Mort and Reusser 90 say: "One cannot consider this proposal without the hint that perhaps he is foreshadowing a condition which will exist some time in the nottoo-distant future . . . " Swift has reached a similar conclusion. He writes: " I t is our belief that eventually some such plan as that of Delaware or of the Australian states will be adopted by many com88

See P. R . Mort and F. G. Cornell, Adaptability oj Public School Systems (1938), p. 46. ,0 " H. C. Morrison, School Revenue (1930), Ch. X . Op. cit., p. 392.

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C O N T R O L OF O U T L A Y S

monwealths in the United States, perhaps by all, and that if Utah could see her way clear to adopt such a plan it would be the wisest, simplest, and most equitable manner of supporting schools." 91 Extreme centralization has weaknesses which counterbalance the weaknesses of extreme decentralization,92 but in so far as schools are concerned there are no grounds now for determining at what point the balance changes. Theoretically, in a highly centralized school system it is possible to give consideration to the broader issues in education, attain more nearly equal educational opportunities, secure unusual talents, foster specialization, provide research and experimentation, simplify administration, and secure greater efficiency and economy. At the same time it becomes easier for minority pressure groups to affect educational policies. Good or bad administrative control may affect more persons; local interest may be weakened; local needs and adjustments may be neglected; and initiative may be stifled by bureaucratic control and regulation. When and under what conditions do large cities begin to show these disadvantages? Are they developing in North Carolina? in Delaware? Only research which will answer such questions will provide the guidance needed.9* It is often argued that centralization is less democratic than decentralization, but there is a limit to the validity of such an argument. It cannot be argued that the Federal Government is less democratic than the states. The citizens exercise control in either case through voting and representation. It is possible to have centralization with or without democracy. It is possible to have decentralization with or without democracy. The only difference is that the larger the unit of government the more difficult it is to secure active participation in democracy. Moreover, democracy in a larger unit may work better because citizen action more easily can be confined to broad policies, leaving details to specialists or professionally trained administrators. Local interference with the petty details of school operation frequently has been confused with democracy in educational control. The smaller the unit, the more likely it is that democracy will take the form of interference with details on the part of the uninformed and overconfident citizens. Under such conditions democracy fails to use its ,l F. H. Swift, Federal and State Policies in Public School Finance in the United States (1931), p. 407. " See Paul Studenski and Paul R. Mort, Centralized Versus Decentralized Government in Relation to Democracy (1941). M For example of such a study see F. S. Cille, Centralization or Decentralization (1940).

C O N T R O L OF OUTLAYS

'99

talents to best advantage, and the educational welfare of future generations is jeopardized to the disadvantage of all citizens. Extension of central controls. T h e history of education in the United States demonstrates that it is easier to extend state controls than it is to bring about a thoroughgoing reorganization of state and local government. Probably no state ever has abolished all unsatisfactory school districts, created new ones which will function properly in control and support, transferred many existing controls from the state back to these new units of administration, and reorganized other units of local government and their relationships to school government. No state in reorganizing local school units has recognized the new social phenomenon of the metropolitan area or urban region—a central city and the surrounding area in which city workers live or in which the residents use m a n y of the city services. Most attempts at reorganization are from twenty-five to one hundred years behind the times. It is true that a few states like Maryland, Utah, and West Virginia have abolished all small districts and have created large units of local school government, but they have not taken all of the other steps. Centralizing tendencies go on just as they did in Delaware. Worst of all, the central controls which are being extended stifle local initiative by controlling the what and how of teaching and limiting the power of local districts to exercise local initiative through tax leeway and tax freedom. Every m a n d a t e which increases local taxes makes it just that much more difficult for local initiative to function. A heavily taxed local unit may want to pioneer but can not. If central controls are to be extended and if school district reorganization is to continue to be nothing but the gradual elimination of the most outworn machinery of local control, the important problem becomes that of putting the extension of central controls u p o n a rational basis. As long as the expensive machinery of local control and support remains, the wise policy is to secure the maximum advantage from it, that is, permit it to make local adaptations a n d to exercise its initiative in solving educational problems. T h e m a x i m u m local initiative should be preserved through tax leeway and fiscal independence in districts capable of exercising initiative. In the literature of public administration and school administration, certain controls are universally accepted as not being inconsistent with local home rule. These include: ( i ) debt limits, particularly those not based upon arbitrary percentages of assessed valua-

200

C O N T R O L OF O U T L A Y S

tion;*4 (2) provisions for supervising the fiscal affairs of districts in default on their obligations; (3) temporary state control in districts where local administration has broken down; (4) the formulation of standards of service and cost for guidance of all local units; (5) the standardization of budgetary procedures and accounting systems; (6) the requirement of periodic reports and publicity; (7) provision for state audits; (8) provision for the filing of budget documents and their pre-audits by a state agency if confined to the legality of the items (school authorities would limit pre-audits to those made by education departments); and (8) state research and supervisory leadership." Recent research, surveys, and writings on school finance have recognized that direct state control and support of certain services are not in conflict with local initiative. Strayer refers to these services as "externa," that is, services which do not affect "what is taught and how it is taught—the life and spirit of the school." 96 Transportation is a good example of a service which can be administered and paid for directly by the state. It does not affect teaching, it is expensive under the best of conditions, its local administration generally increases the cost, and the more that is spent upon transportation the less there is available for instruction and the exercise of local initiative. Indeed unless the state assumes the complete support of transportation, equalization is impossible because an added burden is placed upon school districts which must transport children in order to give them the state foundation program of education. Capital outlays and debt service are other excellent examples. Local districts cannot provide architectural and engineering services as cheaply as states, and states can develop standards and techniques for construction which will reduce costs. Local districts cannot get credit as cheaply as states. The added burden of debt service resulting from local control decreases both educational opportunities and tax leeway for the exercise of local initiative. States should provide school building services and funds for capital outlays and eliminate debt service as a local expense. Where complete state support is not provided for such capital outlays, the state could extend credit to the school districts to be repaid gradually to the state. Insurance is still another major item of service which can be provided more economically by the state ** For example, see Kilpatrick, State Supervision oj Local Finance, Ch. V I . M See P. R. Mort, A. W. Schmidt, and Arvid J . Burke, An Improved System of State School Finance jor New York State (1940), Ch. V I I . •• George D. Strayer, Jr., op. cit., pp. 11 ff.

C O N T R O L OF O U T L A Y S

201

through a system of self-insurance than it can by local school districts. If savings could be made in building operation and maintenance and purchasing of supplies and equipment through state action, state action in such matters would increase local initiative by providing extra tax leeway for the exercise of initiative.* 7 Certain minimum standards can be enforced which do not hamper proper local initiative, providing they can be financed under state aid and do not increase local taxes except in wealthy districts with considerable taxing margin for the exercise of local initiative. Standards for minimum length of school term, minimum standards of teacher preparation, and minimum salaries for teachers under certain conditions may be put in this category. Another example would be the requirement that all appointments be made upon the basis of merit which would rule out such arbitrary restraints as "local teacher preference" rules, which often make it impossible to attain reasonable minimum educational opportunities, no matter how much state aid is apportioned to a district. Requirements that all purchasing be done by bidding is another example. Minimum standards within the state-financed foundation program of education limit local initiative, but they do not destroy it. If there are many of them, they seriously restrict local initiative, because an educational program, a school budget, or the education of a particular child must each be considered as a whole. Where parts are mandated the whole program is affected. Mandating the offering of certain services which are considered to be in the general public interest, such as kindergartens, medical inspection, nurse service, library service, vocational courses, physical education, and homemaking courses, are in this category. Education department regulations, however, are to be preferred to legislative mandates relating to the curriculum, but two conditions should prevail: (1) state aid should be sufficient to provide the mandates without destroying local tax leeway; (2) local districts should be free to exceed the standards; no maximum standards should accompany state aid if local initiative is to be preserved. 98 Direct state action is possible in other directions without destroying local control and initiative. Most states already have taken over the complete control and support of public teacher education institu47 The state of Alabama has made considerable progress in this direction. " See Holmstedt, op. cit., pp. 58 ff. and Mort and Reusser, op. cit., pp. 467 if.

202

CONTROL OF OUTLAYS

tions. Massachusetts, Connecticut, and New York have established state vocational schools or technical institutes. Maine operates and supports schools in certain sparsely settled a r e a s . " No doubt other areas, especially submarginal lands, will come under complete state support and control in the future. Such direct state action secures the advantages of centralization without retaining both the disadvantages of centralization and the disadvantages oj decentralization. Research must be undertaken to determine what educational services or functions can be centralized to best advantage. Cille's study has made an excellent beginning in such an approach. 1 0 0 Federal control. Complete Federal control and support of education would be accompanied by all the disadvantages of extreme centralization in a country as large and as varied as the United States. Yet, it is entirely conceivable that international and national developments will increase the interest of all the people in the education of future citizens within a particular state. As shown in a previous section the trend has been toward increased Federal interest and participation. T h e extension of Federal participation in public education and its support should be accompanied by a minimum of centralization. Control of the education of the whole child, control of the whole educational program, and control of the whole budget should be retained by the states and their subdivisions. If any controls are to accompany Federal finance, they should be limited to those which do not limit local initiative. Minimum qualifications of personnel, especially in education departments, merit appointment or selection, professional tenure, and continuity in control on the state level are all matters for which standards might be established before Federal aid will be apportioned to states. T h e Federal Government might even strengthen state school administration through subsidizing reorganization of archaic governmental structures and the provision of essential research and supervisory services in education departments. Governmental reorganization. The only alternative to further centralization in many states is a complete reorganization of the structure of local government. Large units of administration must be created which will contain enough economic resources to reduce inequalities in educational opportunities, which will have the population characteristics essential for the proper functioning of local initiative, and • • See Mort, Schmidt, and Burke, op. cil., p. 44 and Mort and Reusser, op. at., p. 399. Op. cit.

100

CONTROL OF

OUTLAYS

203

which will have the budgetary freedom and tax leeway essential for the exercise of local initiative. 101 Moreover, certain controls assumed by states as a result of the former unsatisfactory structure will have to be transferred back to the local units. T h e new social phenomenon of the metropolitan area or urban region will have to be taken care of in the reorganization. Schools in submarginal, decadent, or declining areas within states may have to be administered and supported directly by the states. COORDINATION

AND COOPERATION AMONG LOCAL UNITS OF

GOVERNMENT

The property tax. As long as school districts which serve the same area as other units of general government exist, and as long as both have to rely upon the property tax base, conflict is inevitable. T h e property tax base no longer can support all the functions of local government, including schools. For educators to insist upon fiscal independence under such conditions is unrealistic. If fiscal dependence is not achieved directly, it will be achieved indirectly -through tax limits, budgetary review, and other state controls on local spending. T h e doctrine of local initiative in education is posited upon fiscal independence and tax leeway. Property tax leeway for schools depends upon the tax burden for all local purposes. T a x leeway for schools can be created only by finding a new local tax for schools or by taking measures to relieve the burden placed upon the property tax by states, counties, cities, villages, towns, school districts, and other special districts. Since it is practically impossible to find another tax which can be administered locally, property tax relief is the only way out. Fiscal independence and tax leeway for schools can be retained only if the following steps are taken: r. Repeal all state taxes upon real estate, leaving real estate as a local tax to finance home rule and local initiative. 2. Simplify the entire structure of local government, eliminating waste and duplication through coordination and cooperation. 3. Transfer the major burden of support for functions like schools, highways, relief, police outside of cities, health services, and correction to state and Federal units of government. See P. R . M o r t and F. G . Cornell, American Schools in Transition (1941); Adaptability of Public School Systems. 101

204

C O N T R O L OF

OUTLAYS

4. G u a r a n t e e a n arbitrary degree of property tax leeway based upon past experience to school boards, for example, a certain tax rate or a fixed percentage of the total property tax levy. 5. Create new leeway by shifting more of the burden of support to state and Federal units of government w h e n the majority of school districts have used u p this taxing margin. Abolishing separate school districts. O n the state level the policy of having only one budget adopted by the legislature generally has not been challenged. State educational policies and school budgets require legislative authority or sanction. State boards of education are advisory agents or agents using discretion within limits established by the constitution or legislative acts. Since many states are smaller units than m a n y cities, the extension of the same policy to large cities has some precedent. Unless the steps outlined in the previous section can be taken, abolishing school districts may do more to preserve local initiative than allowing present trends to continue. T a x limits, budgetary review, state control of local finance, pre-audits by state agencies, mandatory legislation, state regulations, and the extension of other central controls make fiscal independence meaningless. T h e reasons for its continuance are destroyed. O n the other hand, if unified budgetmaking c a n be achieved over an area and if the economies possible by eliminating competing and duplicating units can be achieved, then a limited degree of local initiative might be preserved, especially if public administration becomes professionalized and public administrators come to be selected upon the basis of merit and fitness. Indeed many of the objections to fiscal dependence for schools do not apply in city-manager cities. 102 N o matter w h a t the unit of government, the only force w h i c h will assure good schools and adaptations to changed conditions is public opinion. O r g a n i z e d supporters of good schools within a unit of government are more important than mere governmental structure. Fiscal independence will not assure good schools in a city where democracy has ceased to exist. M a n y fiscally dependent cities have been leaders in educational advance because of their alert and organized school support. Cooperation and coordination. It is not likely that any drastic changes will take place in current practices. Cooperation and c o o r d i n a t i o n — 104

See H e n r y and K e r w i n , op. cit., p. 97.

C O N T R O L O F OUTLAYS

205

voluntary or mandatory—will have to be relied upon. School officials should attend budget hearings on municipal budgets; municipal officials should be informed on school budgets. Both should know the net effects of all spending, past and present, upon local taxes in any one year and govern their budgets accordingly. There should be avenues for exchanging budgetary data among all units of local government serving a given area. Much duplication and overlapping should be eliminated. Tax administration and collection should be unified in one agency. There should be one central treasury serving a given area. Purchasing should be centralized, providing that purchasing is done by specifications and bidding, and schools can establish their own specifications. Architectural, engineering, and specialized maintenance services should be centralized, except that school authorities should be free to establish specifications for buildings in so far as the instructional program is affected. Legal services, accounting services, many aspects of personnel service, and many other overhead expenses should be pooled. Cooperative arrangements should be worked out for such overlapping services as libraries, welfare, health, recreation, juvenile delinquency control, safety, and services for out-of-school youth and adults. 10 ' CONTROL AND THE FINANCING OF SEPARATE OR PRIVATE SCHOOLS

Demands for aid. Federal and state financial aid for private schools in the American states will come within ten years—so reads one prediction. Whether or not that prognosis is accurate is not important. What is important is that there is a renewed agitation for publicly financed nonpublic schools and that the present generation is not generally aware of the historical background of present policies. Most citizens of the American states have inherited the policies of nonsectarian, democratically controlled, common schools. They do not realize the relationship between these policies and public financial aid to nonpublic schools. Hence, if they are subjected to propaganda decrying the injustice of "double taxation" and pointing out the "potential saving to the taxpayers," many of t^pm.^plight .vote to grant aid to such schools without considering the implications of this act. The citizens of the American states must know exactly what groups are asking for when they seek public financial support for their 103

See Educational Policies Commission, Social Services and the Schools (1939).

2O6

CONTROL OF

OUTLAYS

schools; and they must know the implications of changing present educational policies. F e w have analyzed the issues of control involved. Implications of the demands. O n l y the implications for control will be discussed here in this chapter; discussion of the c o m m o n school concept and the separation of church and state will be eliminated. 1 0 4 W h e n a g r o u p asks public financial support for its schools, it asks for the following: 1. T h e abandonment of the policy of direct democratic control over education by the citizens, the citizens' taxing themselves for schools under the control of individuals, corporations, churches, or societies independent of the whole body politic. 2. A b a n d o n m e n t of the policy of publicly financing only one school system in a community and only one school in a neighborhood; the citizens' taxing themselves to support as many school systems as there are religious denominations or other groups w h i c h want separate schools. Direct democratic control. Because most of our thinking on the state is imported, m u c h of the discussion of institutional relationships in the United States is based upon false assumptions. State, to us, means the collective will of all the citizens, not in the state unit alone, but in each subdivision of the state. T h e will of the citizens in any governmental unit m a y be that of the majority, but in most instances it is a compromise between a majority and one or more minorities. Militant minorities prevent a majority from becoming oppressive. Because citizens of the states as wholes have conceded a m a x i m u m of control to citizens in the various local governmental units, decentralized direct democratic control over education has characterized the United States. Y e t m u c h of the discussion of state relationships presumes a centralized superimposed state which imposes its authority upon the citizens. Direct decentralized democratic control over publicly financed education enables citizens to change any type of education w h i c h fails to meet their needs. U n d e r democratic control, a government w h i c h fails to meet the needs of its citizens cannot use education to perpetuate itself after it has outlived its usefulness. A centralized or absolutist government or church, on the other hand, by controlling education can perpetuate itself long after it has ceased to serve the best interests of its citizens or members. 1M

See an article by the author appearing in Nation's Schools, April, 1938.

CONTROL OF O U T L A Y S

207

American citizens by pursuing this policy of public control of schools do not deny minority rights. Minorities can participate in democratic control of public schools. At times and on specific policies, the minority views even may prevail or modify the majority opinion. If the democratic state publicly finances schools under private and denominational control, decentralized democratic control over education, as we now know it, will disappear. Under the present policy, all citizens in a state or a school district, no matter to what church or group they belong, can vote on public school matters or sit upon public school boards. Private schools, on the contrary, generally are controlled by individuals, corporations, or societies. This control may reside in or be exercised by individuals within or without the democratic state or unit of government. The citizens of the state might by legislation impose external controls on such schools, but neither the majority nor the minorities in the democratic state or its subdivisions can participate direcdy in the control of such schools. Furthermore, if any church or group is given public support for its schools, other churches or groups are placed at a disadvantage which they can overcome only by opening publicly financed private schools of their own. A church or group which opens publicly financed schools of its own gains the following advantages over other churches or groups: (a) freedom from direct democratic civil control over its schools; (b) the right to impose religious tests upon teachers; (c) the right to use censorship and propaganda to promote its doctrines; (d) property rights to its schools; and (e) retention of the right of members of the church or group to vote on public school matters, sit on public school boards, and teach in the public schools free from religious tests. Members of a church or group, which does not open publicly financed schools of its own, cannot (a) escape direct democratic control over education; (b) impose religious tests upon teachers; (c) use public education to indoctrinate their beliefs; (d) acquire any property rights in public schools; or (e) vote on publicly financed denominational or private school matters, sit on the boards of control of such schools, or teach in such schools, free from religious tests. This factor and competition for pupils to increase state aid would hasten the disintegration of democratically controlled public schools. T o grant state aid to institutions organized on state, national, and international bases would give these institutions more centralized control over education than the citizens in any American state have

2O8

CONTROL OF OUTLAYS

yet assumed. Institutions involved in international politics and even controlled by citizens of a foreign nation could use their schools for propaganda purposes. Nations might even struggle for the control of international organizations in order to gain control over education in the democratic state. By controlling education, institutions and groups organized for ends contrary to democratic principles would be better able to indoctrinate behavior inimical to citizenship in the democratic state. Such indoctrination need not be overt; organizational and environmental factors might even be more effective. The unified school system. American school finance has been struggling to decrease inefficiency and waste. Administrative overhead, plant utilization, class size, and unit costs are under constant scrutiny by school administrators and school boards. The public financing of private or separate schools eventually will result in increased school costs. Instead of financing only one school system in a community and only one school in a neighborhood, the public will be paying for as many school systems and separate schools as there are denominations and other organized groups wanting separate schools. The shift from common schools to publicly financed private or separate schools means a gradual abandonment of a large part of the present public school plant, an increasing duplication of plant as denominational and group rivalry increases, and a decrease in the pupil-teacher ratio, especially in sparsely settled areas where education is costly and inefficient even under present conditions. Even in cities separate publicly financed schools tend to increase costs, owing to competing schools in the same neighborhood, small schools in some areas, small class size in other areas, and duplicating services and overhead. Control of public expenditures, moreover, will be difficult when the spending agent is not a civil or political division of the state. States long ago put an end to public financing of bridges, roads, and other enterprises under private control. If in spite of these implications, the citizens of the democratic state should decide to grant financial support to private or denominational schools, they should protect the interests of citizens who prefer to have their children attend public common schools. If any group is given public financial aid for its schools, it should be required to relinquish its rights to participate in the control of public common schools and to teach in the public common schools. Perhaps the only practicable method of protecting citizens who prefer common schools under such

CONTROL OF OUTLAYS

209

circumstances would be to constitute them as a body corporate with powers to elect directors and employ teachers of their own choosing. READINGS Campbell (20); Cillt (25); Cubberley (41), Chs. V and X X V I I ; Cyr (43); Educational Policies Commission (55) and (57), Ch. V I I ; Edwards (60), Chs. I-III; Frasier (75); Garber (78); Groves (84), Chs. X X and X X I I ; Henry and Kerwin (89); Hillhouse and Welch (91); Holmstedt (93); Kilpatrick (96) and (97); Leet and Paige (99); Lutz (103), Chs. V I - V I I ; Moehlman (113), Chs. I, V I I , V I I I , X X V I , X X X I V , and X X X V I I ; Morrison (117), Chs. I V and X ; Mort (Dir.) (120), Chs. V I I - V I I I ; Mort and Cornell (121) and (122); Mort and Reusser (123), Chs. I l l , V , V I , X V I I , and X X I V ; National Survey of School Finance Staff (147), Chs. V I I I , X I I , and pp. 116 ff.; Pfiffner (156), Chs. V - V I I I ; Pittenger (159), Ch. V I I ; Rainey (164), Ch. II; Shultz (169), Chs. V , V I , X X I X , and X X X ; Soper (177); Strayer (181); Strayer and Haig (183), Ch. X I I I ; Studenski and Mort (184); Swift (186), Chs. V - V I ; T a x Institute (190); and Yakel (204).

CHAPTER

Vili

CONTROL OF PUBLIC SCHOOL SPENDING THROUGH IMPROVED MANAGEMENT MEANING AND SIGNIFICANCE OF

MANAGEMENT

Management defined. Management is the bringing about of coordinated human action to achieve agreed-upon ends. It is the judicious use of means (the securing of the best possible combination of personnel and materials) to attain the objectives. 1 It is the skillful control of all factors to secure the " m a x i m u m beneficial results" with the "minimum expenditure of social resources." 1 Management is human, personal, and organic, not mechanical, impersonal, and routine. It accumulates the contributions of all personnel, directly or indirectly involved in the process; organizes their ideas, conclusions, reactions, criticisms, or suggestions; and provides convincing evidence for or against proposed policies. Once policies have been adopted, management plans, organizes, coordinates, and promotes the cooperative execution of the policies. Through management the responsibility and authority necessary to attain results are delegated. At all times management is aware of the personal values, factors, and problems involved and is able to lead, stimulate, and secure collaboration, cooperation, and coordination and to minimize friction, inefficiency, and wasted effort and material. Character, personality, energy, proper attitudes and behavior, and self-control are requisites in management. Management is always dealing with personalities and their coordination.' Management involves "the higher derivatives of consciousness," 4 requiring a high degree of native ability, intelligence, preparation, background, experience, technical skill, and devotion to calling. Its effectiveness depends to considerable degree upon the good judgment and breadth of outlook reflected in choices, decisions, and recommendations and the resourcefulness displayed in facing new or un1

See Harvey Walker, Public Administration in the United States (1937), p. 17. Ibid., p. 8. ' See E. H. Schei], Administrative Proficiency in Business (1936). * Ibid., p. 167.

1

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 211 known conditions, factors, or problems. Management is constantly required to define problems; secure and evaluate d a t a ; propose answers or solutions; test and verify these; experiment; establish criteria or standards for appraising performance, processes, procedures, or results; see relationships; anticipate consequences; and make readjustments in ends and means, proceeding tentatively and slowly. M a n a g e m e n t , moreover, contributes background, experience, knowledge, wisdom, overview, vision, and breadth to policy formulation through its recommendations. Getting legislative and policymaking bodies to weigh these recommendations in making decisions demands the highest qualities of leadership. Public management. Competence, coordination, and control resulting in economy and efficiency of operation are the signs of good public management.® H o w e v e r , democratic control of public management by citizens should not be confused w i t h political control. T h e ends or fundamental policies should be determined by the citizens or their representatives. Devising means to attain the ends or carry out the policies is the function of m a n a g e m e n t . T o fulfill its function management should be unified under one professional executive responsible to the legislative or policy-making body. Executives should be selected upon the basis of their competence, should have tenure during competency, and should not be elected by popular vote. Executives should not be surrounded with restraints and controls which destroy initiative. T h e y should be held responsible for results through audits, reports, and surveys by outside experts. 6 Executives should be prepared at all times to justify their decisions and actions and should keep the public and legislative bodies informed u p o n their plans and activities. School management. L e g a l responsibility for the management of public schools traditionally has been delegated to lay boards. As public education evolved, intelligent boards of education recognized that laymen were not competent to direct the operation of schools and they delegated responsibility to full-time executives. Unfortunately m a n y school boards, especially in small school districts, did not delegate sufficient responsibility to assure efficient management. Frequently school boards have retained administrative control over the most important functions of management, such as the selection and employment of personnel—teaching or nonteaching. Financial or business 1

S e c W a l k e r , op. cit., pp. 8 ff. a n d J . M . P f i f f n e r , Public Administration (1935), pp. 9 ff.

« See Walker, op. cit., pp. 13 ff.

212 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T management often has been conceived as a function independent of educational management, and responsibility for business affairs has been retained by school boards, committees of school boards, individual board members, attorneys, business managers, clerks, and others independent of the superintendent of schools. Moreover, school executives sometimes are elected or appointed for reasons which do not guarantee professional or executive competence; and many school executives are not masters of the professional knowledge and administrative techniques which have been developed in the past twenty-five years. Where such conditions prevail, it is almost impossible to get the kind of management required to obtain the maximum educational returns with the minimum of waste. Delegation of full responsibility for management to a professionally and personally competent executive alone does not insure the best management of schools. Just as lay school boards cannot claim competence in the administration of schools, the superintendent cannot claim competence in the performance of all the technical educational and business responsibilities which should be delegated to him by school boards. As shown by Moehlman 7 the specific responsibilities of school management may be classified into eleven categories: formulating a comprehensive educational policy, developing a school plant, selecting and organizing personnel, developing a curriculum, promoting attendance, operating the plant, developing records, appraising the efficiency of operations, supervising program and personnel, interpreting the community and the schools, and securing and expending school moneys. No one person can perform all of these classes of service competently. As the following analysis of business management will show, no one person can perform efficiently all of the responsibilities involved in such management alone. Yet, in small school systems especially, school executives are trying to assume responsibility for performing functions ranging from supervising Latin and planning school buildings to selecting music teachers and purchasing soap. Too many school administrators fail to recognize the limits of their professional competence. The responsibilities of the superintendent of schools preclude his assuming direct responsibilities for performance of many operational details. T o guarantee good management the superintendent of schools must see the program as a whole and be able to secure the coordina' A. B. Moehlman, School Administration (1940), p. 260.

CONTROL THROUGH IMPROVED MANAGEMENT

213

tion and balance of personnel and material to achieve the results desired, but he must have the technical assistance necessary to perform all operations efficiently. According to Moehlman 8 the chief operational responsibilities of the school executive are: to plan a system which will carry out the policies adopted by the school board; to select, assign, and coordinate personnel in carrying out the plan; to keep operations going smoothly and efficiently; to provide means and incentives for the continuous improvement of personnel and operations; and to furnish leadership. Financial management. T h e wise expenditure of public school funds, getting the maximum return with the minimum outlay, depends upon the wisdom and caliber of management more than it depends upon the allocation of control. Practically all decisions regarding educational policies or their execution have financial implications. Education more than any other undertaking, public or private, requires competent management. T h e Research Staff of the National Survey of School Finance emphasizes this fact. They maintain that: Education is concerned with the human mind and body, the most baffling things in the world. . . . Because of the technical and complex nature of education, every educational process or procedure presents ¡numerable opportunities for waste; every expenditure for materials or services presents opportunities for waste. If the best teachers are not employed . . . there is waste; if the pupilteacher ratio is too small, there is waste; if the educational aims are not sound, there is waste; if the curriculum is not adapted to the needs, interests, and abilities of pupils, there is waste; if the best supplies . . . are not purchased and if supplies are not used efficiently, there is waste; if buildings are not properly planned, constructed, paid for and used, there is waste. In brief there is opportunity for waste in every school expenditure large or small.9 School management in common with other types of management has developed tools for financial management—the budget, procedures for handling funds, payroll procedures, purchasing procedures, records, accounts, reports, audits and other safeguards. These administrative procedures and techniques, however, can become unduly elaborated and magnified beyond their importance. Detail and routine easily can be substituted for management or leave little time for management. Where procedures and techniques become ends in themselves and management becomes enslaved to them, the 8

Ibid., p. 261.

• Research Problems in School Finance (1933), pp. 67-68.

214 C O N T R O L T H R O U G H I M P R O V E D MANAGEMENT making of wise expenditures is replaced by detailed accounting for unwise expenditures. All aids to expenditure management are relative to the size of the school system and should be subordinated to prudent management. They should be functional and simple and be performed by persons with appropriate ability, preparation, and understanding. The executive should understand and use these details but he should not become involved in them except when something goes wrong. The executive and his chief assistants should reserve their energies for the important function of making wise decisions on matters affecting the values received for money spent. The prudent management of expenditures cannot be achieved by legal restraints, safeguards, standardized budgetary and accounting forms and procedures, and the use of other available procedures and techniques. These are no substitutes for competent, professionally prepared, skillful, experienced leadership. Safeguards assure wise expenditures or maximum returns with maximum economy and efficiency only where they are used wisely by management. Rigorous selection of persons to be prepared for administrative positions, high professional education and certification requirements for administrators, creation of units of government capable of employing competent administrators, creation of conditions which will assure the employment of the most competent management and assure tenure during competency, and promotion of research contributing to the improvement of management—these are the important considerations. The wise spending of money is a matter of good judgment in selecting objectives, making plans, and carrying out policies. MANAGEMENT

OF PUBLIC SCHOOL FINANCE

ANALYZED

Need for analysis. An analysis of what is involved in the financial management of public schools will reveal the elements whose betterment will yield the greatest improvements in public school spending. Public confidence, upon which public school support depends, often is not very much affected by the greatest potential wastes in public school spending, because the public generally either is not well enough informed on educational structures, processes, or sanctions and defends many of the most wasteful practices, such as small attendance areas or very small high school classes. Yet, when such wastes are discovered, important segments of the public lose confidence in management. Furthermore, public confidence at all times depends

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 215 u p o n protecting school funds from loss, theft, or graft and upon m a k i n g certain obvious economies in operation. A balanced program of expenditure m a n a g e m e n t , therefore, must embrace all possible safeguards and prudential measures with emphasis upon the important elements w h i c h will result in the greatest returns for money spent. Scope of financial management. Financial management cannot be divorced from other functions of school administration. Educational decisions, such as m a k i n g a schedule of recitations, m a y involve m a n y times more financial waste than is involved in purchasing. T h e recruiting, selection, assignment, and m a n a g e m e n t of teaching personnel involve the decisions w h i c h h a v e the most effect u p o n returns received for money spent. A l t h o u g h such responsibilities of management are not usually considered within the scope of business management, all educational decisions w h i c h affect expenditures are involved in the improvement of public school spending. T h e c o m m o n classification of responsibilities for business management usually includes only the following: central office m a n a g e m e n t and practice, accounting, property management, borrowing, indebtedness and bond issues, reporting and publicity, budget preparation and administration, payrolls, purchasing, stores, research and cost accounting, auditing, m a n a g e m e n t of nonteaching personnel, planning and constructing buildings, transportation, and administration of income and endowments. Major elements. T h e m a j o r responsibilities of m a n a g e m e n t w h i c h affect the returns for money spent should be isolated in a program of improvement. T h e s e include: (1) delegation of administrative responsibility to persons possessing the necessary professional or technical competence, (2) the budget, (3) personnel, and (4) the use m a d e of personnel and materials. Certain improvements possible in these four elements will be emphasized in this and the following three chapters, with a survey of the literature bearing upon other important elements. I m p r o v i n g the technical competence of m a n a g e m e n t involves provisions for professional or technical preparation for managerial responsibilities, legal provisions w h i c h will assure m a n a g e m e n t its proper status, internal organization w h i c h will give responsibility to persons with the necessary technical or professional preparation, and arrangements w h i c h will m a k e available certain important technical services for all school systems, particularly the small systems.

ai6 CONTROL T H R O U G H IMPROVED MANAGEMENT T h e m a j o r decisions involved in public school spending are p a r t of the b u d g e t a r y process. Ends, plans, program services, activities, schedules, assignments, standards for performance, a n d all the other m a j o r determiners of public school expenses are reflected in the b u d get. T h e budget is the integrating element for all aspects of m a n a g e m e n t . It is the best single administrative device for controlling expenditures in order to get the m a x i m u m results. M a n a g e m e n t in making the budget and in its day-by-day operation of the schools must be a w a r e of certain decisions which have the greatest potentialities for waste or economy. Personnel decisions generally have the greatest influence upon expenditures, b u t other decisions, such as those relating to scheduling, the selection, purchase, storage, distribution, use, a n d care of goods a n d services; the operation, m a i n t e n a n c e , a n d protection of plant; the creation of indebtedness; a n d the conducting of related enterprises, such as transportation, cafeterias, offices, a n d laundry service, cannot be neglected. Safeguards a n d other aids to p r u d e n t m a n a g e m e n t of income a n d expenditures should be used to the fullest extent, b u t they should not h a n d i c a p the m a k i n g of wise decisions relative to w h a t is to be financed with public school funds. Adjustments to cyclical or long-term changes in prices a n d income also create some of the most baffling a n d pressing problems which m a n a g e m e n t must face. Variations or differences in expenditure levels or unit expenditures always offer a challenge to m a n a g e m e n t . T h e i r m e a n i n g a n d significance must be understood. PROFESSIONAL

PREPARATION

FOR FINANCIAL

MANAGEMENT

Importance of preparation. T h e recruiting and selection of persons with the necessary intelligence a n d other personality requisites for public school administration is important, b u t unless such persons have the background, wisdom, and technical competence required to execute their responsibilities, good m a n a g e m e n t does not follow. U n d e r such conditions administration becomes a trial-and-error process which itself is wasteful. T o achieve good m a n a g e m e n t there must be a pooling a n d evaluating of past experience, research, technique, invention, a n d reflective thinking which is passed on f r o m one generation of administrators to the next. O n l y through professional education can this body of professional background and technique be a c c u m u l a t e d a n d passed on to others. Professional p r e p a r a t i o n for school administration developed earlier

FIGURE I . A N O U T L I N E OF EXPENDITURE MANAGEMENT IN PUBLIC SCHOOLS

218 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T t h a n preparation for other types of public management. T h e public, however, has been slow to recognize that the greatest economies achieved in educational administration have resulted from this preparation. Moreover, the greatest potential economies in the future will come through further improvements in the professional education of administrators. T h e growing recognition of the importance of providing improved professional preparation for school administrative personnel is indicated by the work of five national agencies. T h e American Association of School Administrators has had a committee considering the problem. T h e National Association of Public School Business Officials has had a similar committee. T h e National Association of Colleges and Departments of Education has a committee on a new program for the preparation of administrators. T h e Commission on Teacher Education of the American Council on Education has included the education of administrators within the scope of its work. T h e United States Office of Education recently completed a study of the problem. The superintendent of schools. In the preparation of school superintendents there is much confusion and conflict within and among institutions of higher education as to what constitutes an ideal prog r a m for the preparation of school administrators. 1 0 Little progress can be made in recruiting and selecting capable persons for training." Backgrounds in economics, political science, and sociology are provided but are not required in most institutions. Most institutions stress the preparation required for increasing the educational efficiency of the public schools: a knowledge of h u m a n nature and the technique of education. Opportunities for practicing basic administrative skills involved in the community relationships and in working with others and for gaining experience in planning, carrying out, and evaluating programs are very limited. 12 Most preparation consists of the completion of subject matter courses leading to state administrative certificates." Among the courses generally recommended by institutions preparing school administrators are elementary and secondary school administration; curriculum and methods and principles; city, state, W . D. Cocking and K. R . Williams, The Education of Administrators (1940), p. 79; J o h n Lund, Education of School Administrators (Bulletin 1941, No. 6, U. S. Office of Education, 10

«942). PP- 76 ff.

>' Lund, op. cit., p. 79. " Ibid. u American Association of School Administrators, Standards for Superintendents of Schools

('939). P- 35-

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 219 and county school administration; school finance and business administration; educational psychology and mental hygiene; school law; tests and measurements; research, survey, and statistical techniques; guidance; and the history, philosophy, or sociology of education. 14 It is noteworthy that economics, taxation, and public finance are omitted, although such subjects often are included in a long list of desirable electives. Most state certification requirements for public school administrators are very elementary and general. At least twenty-five states require administrative certificates for city superintendents of schools, but only about fourteen states define the professional requirements in detail and most of the requirements are still too low or too general considering the responsibilities. A t least twenty states have set up certification requirements for county superintendents. Connecticut, Delaware, Indiana, Iowa, Kentucky, Nebraska, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, and Vermont require some specific preparation in administration for both city and rural superintendents. Eight states require at least one year of work beyond college graduation. California requires two years of graduate work for a superintendent's certificate. Most state requirements for administrative credentials have been adopted in the past five years. 15 T h e American Association of School Administrators Committee recommended the following minimum requirement for the certification of superintendents of schools: Four years of education in a standard and accredited college plus one year of graduate study terminating in the master's degree. T h e period of preparation to include both cultural and professional studies in such areas as political science and government, economics, sociology, public finance, child psychology and hygiene, teacher personnel, school administration, public relations, vocational education, and curriculum development. 16

It should be remembered that this is a minimum proposal which is realistic in terms of the present low requirements. An analysis of the background implied in the recommendation will show that a minimum of two or three years of graduate work would be desirable as the committee itself recognized. Since the wise expenditure of school revenues primarily means the exercise of good consumer judgment in education, the improvement 14

Ibid., p. 37.

" Ibid., p p . 14

ff.

Ibid., p. 4.

sao C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T of financial management depends upon the educational and administrative background of the superintendent as well as upon his economic and financial background. In his educational and administrative preparation, the relationship of certain potentially wasteful educational policies and practices to financial management should be stressed. T h e superintendent should possess the skills which make it possible for him to make economical use of personnel and materials in plans, programs, and schedules. Although the superintendent himself should delegate many technical responsibilities of personnel management to specialists, he himself should have a good background in personnel administration and leadership if he is to secure the coordination, cooperation, and maximum effort required for maximum results. It is desirable for the superintendent to delegate most of the technical and detailed features of business management to others possessing the required background and skills, but he himself must assume a considerable degree of responsibility for the budget, the basis of all sound financial management. His budget-making responsibilities presume background in economics, taxation, public finance, government, and public administration as well as in education, especially its historical, social, biological, and psychological foundations. The advance in professional preparation is not dependent upon institutions of higher education alone; state education departments can provide a great many opportunities for in-service preparation and improvement. Publication of handbooks, promotion of workshops, conferences, committee assignments, cooperative research studies, surveys, field or consultant services, study groups, and summer schools are among the devices most frequently used by state education departments. 1 7 Field service by education departments, rendered by specialists in education and school finance, is one of the best means for increasing the returns received from public school spending. Other business personnel. T h e importance of delegating many responsibilities for school business and personnel management to technically competent persons has not been generally understood. As a result management has not been so effective as it could be, and professional training opportunities for many persons responsible for spending public funds or conserving public assets have been slow to develop. T h e Committee on Professionalization of the National Association of Public School Business Officials found that there are no recognized 17

Lund, op. cit., pp. i oa ff.

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 221 standards of qualifications for such personnel.' 8 It also found that n o university provides an organized curriculum for school business officials and e m p l o y e e s . " T h e committee concluded that a good background in professional education, public finance, sociology, economics, and political science is needed by public school business officials. 20 In California it was proposed that certification of such employees be based upon at least eighteen semester hours of work in cost accounting, business management, public finance, public administration, school finance, state, county, and city school administration, statistics, and legal aspects of education. T h i s certificate would be required of persons responsible for school accounting; purchasing and stores m a n a g e m e n t ; supervision of janitorial staff; and oversight of maintenance, repairs, and use of buildings.* 1 T h e University of California has taken the lead in developing the courses recommended. Universities and state education departments in recent years have developed in-service educational opportunities for school janitors and bus drivers.* 2 Mississippi has provided for both of these groups. It is the position of this author that great improvement in financial management can be accomplished through the delegation of many technical aspects of administration to persons possessing specific technical preparation for those responsibilities, particularly in personnel management, purchasing, property management, accounting, transportation, office management, public relations, management of stores, and the planning and supervising of capital improvements. Certification requirements should be established for persons performing such services, and opportunities for pre-service and in-service professional training should be m a d e available. N o superintendent of schools or any other person is likely to possess the skills necessary to perform all these tasks. M o r e o v e r , if the superintendent of schools spends m u c h time on such details he will not have sufficient time to do the planning, evaluating, and leading necessary to provide the best possible education for the least cost. State officers. State control or other state action to promote prudence and economy is n o panacea. Unless state m a n a g e m e n t is competent and nonpolitical; is selected on the basis o f merit; and has tenure during competency, substituting state action for local action m a y increase waste. In m a n y states no qualifications or civil service status 19 Ibid., p. 59. " Proceedings oj the Thirtieth Annual Meeting (1941), p. 58. a Sec Lund, op. cit., pp. 102 ff. " Ibid., p. 60. " Ibid., pp. 63-64.

222 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T have been established for state educational officials; appointments or elections are political; and officers change with political changes. In other states requirements for state officers are not so high as those for local officers in m a n y local units of administration." H i g h qualifications for state positions, merit appointments, and civil service standing must precede state action. T h e attainment of economy or prudent spending depends upon professionally prepared, outstanding, competent management in any unit of government. MERIT

APPOINTMENTS

Appointment of a superintendent. Assuming that the executive is given the responsibilities and powers essential to good management, either by board of education action or state law, the best way to promote efficiency in the educational and financial management of public schools is to select and employ a superintendent of schools possessing the qualities and competences enumerated or implied in preceding sections. A good or b a d selection of an executive affects the efficiency of the schools for years, especially if the executive during his term has had an opportunity to select and employ assistants, teachers, and other employees w h o are given tenure through civil service or tenure laws. T h e selection of an executive, therefore, is the most important function of a board of education. Y e t , it is a function concerning which few legal safeguards have been established and concerning which very little material for guiding boards of education is available. Methods of selection. Popular election; partisan political control and appointments; the limiting of appointments to local candidates or persons already employed in a particular school system; the making of a selection from only those who apply; or the basing of the selection upon the subjective judgments of individual board members, involving community, religious, fraternal, college, social, or personal loyalties, will not assure managerial competence. If an able executive occasionally is selected under such conditions, it is the result of chance. It is not possible, of course, to avoid making mistakes in the selection of personnel, but the following safeguards reduce the chances of error: 1. A board of education should define the executive activities or functions. 24 2. A board of education should list the specifications or qualificaSee K . A . Frederic and W . D. Cocking, State Personnel Administration (Staff Study No. 3 of the Advisory Committee on Education, 1939), pp. 37 ff. and 97 ff. M See Moehlman, School Administration, pp. 260 ff.

11

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 223 tions required to carry out these functions, giving weight to both professional and lay judgment and local factors. 16 These should be submitted to a selected group of laymen and school administrators for criticism before being adopted by the board. 3. Schools of education, education department officials, and outstanding superintendents should be asked to recommend candidates who they think possess all or many of the specifications listed. 4. A n outstanding school personnel expert or a small committee, including both laymen, particularly those with experience in selecting personnel, and successful superintendents, should be asked to review all applications and recommendations and through correspondence, a study of records, interviews, and visitation select the candidates who in their judgment most nearly meet the specifications. 5. T h e board of education should interview the candidates so selected and make a tentative choice. Before employment, however, the board should visit, or employ a competent administrator to visit the school system of the candidate to observe his achievements and interview staff members and laymen. 6. A board of education should make the financial arrangements, provide the working conditions, and make whatever other arrangements are necessary to obtain the most qualified candidate. If the school district simply cannot afford to pay the salary asked, it should take the next best candidate with w h o m mutually satisfactory arrangements can be made. T h e sole basis for selecting a superintendent of schools should be merit, the possession of the qualities, background, or skill required to assume the administrative responsibilities under given local conditions. If a popular local candidate, a member of the same political party as the board, or a member of a preferred church happens to be the best qualified personally and professionally there probably is no valid objection to his employment. Other appointments. Administrative assistants also should be selected according to merit, but their selection is an administrative responsibility to be handled by the superintendent. In municipalities operating under civil service a conflict of administrative jurisdiction is likely to occur between school management and the civil service administration. Educators generally are opposed to " See E. R . V a n Kleeck, "Specifications For a School Superintendent," American School Board Journal, X C I I (May, 1936), 16 ff.; H. B. Mulford, " T h e School Board Changes Executives," American School Board Journal, C V (July, 1943), 17-18.

224 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T the selection of professional employees by a civil service body not under the jurisdiction of the board of education." This does not mean that school authorities are opposed to the use of civil service personnel and techniques in the selective process. It simply means that school management, which is presumed to be familiar with the complexities of education, wants to write the specifications for its professional employees, to select the candidates who best meet these specifications, to have an opportunity before making permanent appointments to observe candidates for a longer probationary period than is required for most civil service appointments, and to be unhampered by civil service lists for appointments when better qualified candidates, who are not on the lists, are available. T h e use of a civil service agency not under the jurisdiction of the school board for the selection of nonprofessional employees also is becoming a source of friction. As actually applied in certain municipalities, the civil service machinery is not professionalized and is part of the political machinery. Candidates obtained through this machinery frequently do not possess the character or personal traits required of persons who come in contact with children every day. Unless civil service is to be handled by professionals, using specifications prepared by school officials, and all appointments are to be made solely upon merit, it is far better to allow school management to do its own selecting of nonprofessional personnel. LEGAL STATUS

OF

MANAGEMENT

Existing legal provisions. State education laws have lagged behind practice in defining the legal status of the superintendent of schools, a condition which probably can be attributed to the fact that the superintendency originated by local initiative. Instead of defining the relationships which should exist between a board of education and its executive officer, most laws deal with specific duties, (i) There are a number of routine duties which the superintendent must perform as a state official, for example, submitting specified reports. (2) There is a trend toward specifying actions which a board of education can take only if the superintendent has recommended the action, for example, the employment of teachers and other employees; the promotion, suspension, and dismissal of teachers; and the purchase of books and " See Educational Policies Commission, The Structure and Administration oj Education in American Democracy (1938), p. 54.

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 225 supplies. 17 (3) In some states, like New York, there are no uniform provisions applying alike to city, village, and rural superintendents. Most of the duties of superintendents of schools are not covered by statute. Legal safeguards. It is questionable whether the specific duties of superintendents of schools should be defined in detail by statute. Nevertheless, it does seem reasonable that the state, which creates a local structure to administer a state function like education, should establish the safeguards essential to getting efficient local management. M a n y states have made a beginning in establishing minimum standards for the licensing of superintendents. 28 Much progress can be made in this direction. Few, if any, states have established safeguards to assure the merit appointment of superintendents and all other school personnel. With outmoded school district structures, political domination in others, and frequent turnover among local school officials, a good case can be made for minimum state requirements regarding merit appointments. T h e proper relationship between the school board and the superintendent can be defined by statute without defining in detail the respective duties of the board and superintendent. Existing statutes can be amended to conform to these relationships. ORGANIZATION

AND PROFESSIONAL

RELATIONSHIPS

Definition. Organization is a systematic division of responsibilities and effort, a coordination of thinking and action, to achieve a purpose. Organization presumes a group of persons working toward common objectives. Through organization group activities approximate the organic unity of individual activity. There is no one type of organization suitable for all purposes. T h e achievement of military objectives, production of automobile tires, collection of Community Chest funds, or the education of children do not necessarily call for the same type of organization. T h e varying purposes may make different demands upon individuals concerned. T h e manufacturing of a product by machine methods calls for very different relationships among participants than the rendering of a service like police protection. T h e purposes of education are themselves variable. A school system operating to achieve the narrow objective of master)' of a few tools of " See Encyclopedia of Educational Research, p. 12.

" See p. 219.

226 C O N T R O L T H R O U G H I M P R O V E D

MANAGEMENT

learning involves very different relationships a m o n g employees and children than a school system trying to achieve many other desirable objectives, with special emphasis on preparation for democratic citizenship. In the latter school system, democracy in organization becomes necessary. Since school organization and financial m a n a g e m e n t are both means to the same end, the well-rounded education of individual persons for life in a democracy, the two should not be divorced. A c c o r d i n g to M o e h l m a n , school organization should secure efficient g r o u p action through: (1) The establishment of routine, formalized procedures, or means, standardized in terms of the basic policy and on the basis of proved knowledge; (2) The centralization of control and responsibility to make coordination of effort and decision possible; (3) The objective appraisal of the effect of adopted policies and procedures; (4) The scientific variation from adopted policies and procedures for purposes of improvement and the appraisal of such experimentation on a fact basis; (5) The provision for modification of policies and procedures on the basis of objective evidence; and (6) The progressive development of machinery for co-operative effort and growth by all agents involved in carrying out these activities. 2 ' Traditional school organization. During the past quarter of a century the organization recommended for public education has had the following characteristics: (1) a small board of education elected by the people and responsible to them for the conduct of the schools; (2) the legislative function to be vested in this board functioning as a whole; (3) the chief executive to be selected by the board and responsible to it for executive functions; (4) the executive to have centralized responsibility and authority; and (5) the executive to delegate responsibility and authority to subordinates. This pattern of school organization is the outgrowth of weaknesses in the type of organization which preceded it. It has been adopted to correct the inefficiency, waste, and corruption inherent in that type of organization in w h i c h matters requiring professional expertness had been left to a n u m b e r of standing committees of the board of education w h o often acted independently of each other and of the board as a whole. It has aimed to achieve the coordination and efficiency in" Moehlman, op. cil., p. a6o.

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 227 herent in the business or industrial organization. Moreover, it was suited to the concept of education which prevailed for decades, and still prevails in certain school systems involving: (1) a psychology which tends to be mechanistic; (2) a measurement movement based upon the assumption that whatever exists, exists in quantity; (3) a curriculum conceived as a grouping of subjects; (4) standards based upon achievement in subject matter; (5) teachers having little training, primarily in subject matter; (6) teaching conceived as the process of providing subject matter for children to study and be examined upon. Under such a concept the subject matter might be considered as the machine, the teacher as the tender of the machine, and the learner as the raw material. T h e standards and tests determined whether the finished product was fit for the market, fit for the junk pile, or in need of further processing before being sent out as a "second" or a slightly imperfect product. Such a process, like most industrial and business processes, placed a premium on doing. What little thinking had to be done could be done in the laboratory, in the executive offices, or in the board or the directors' meetings. T h e emphasis was on action, the turning out of a standard product, and the doing of specific jobs in the process of turning out that product and specific training in technique were essential. Hence, an organization with a small deliberative body, a master mind at the top to advise this body, and a staff of subordinate thinkers to supervise or assist the workers was almost as applicable to schools as it was to an industrial plant. Democratic organization. Because future school organization will evolve out of the weaknesses of this present type of organization, it is necessary to examine the weaknesses. T o discover these, reccnt trends in education must be compared with trends dominant at the time that the business type of organization was so enthusiastically advocated by educational leaders. (1) Psychology is again coming to be conceived as organismic and human. T h e learner is being seen as a complex whole. (2) Renewed emphasis is being given to values, attitudes, interests, ideals, thinking, and "acting-on-thinking," all of which are much more difficult to measure than the mastery of subject matter or of skills. (3) T h e school curriculum is coming to mean all the experiences of children either in school or out of school in so far as the school has assumed responsibility for them. (4) The rapidity of change in society has become so accelerated that children cannot expect to live

228 C O N T R O L T H R O U G H I M P R O V E D

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as adults in the same kind of society that now exists. Therefore, it becomes very difficult to prevent the gap between life needs and the school curriculum from widening. (5) T h e growing complexity of society makes children and adults more and more dependent upon education and the schools. Technological advance and the lengthening of the life span of adults require children to remain in school for a longer period than before. Hence, the school must meet individual differences in abilities, interests, and purposes, rather than accept elimination and retardation as necessary. (6) T h e professional requirements for the preparation of teachers are gradually being raised. Emphasis is being placed on the techniques of guiding and enriching the lives of children. (7) T h e implications of democracy for education are coming to be seen more clearly. Actual experience in democratic living is replacing textbook learning about theoretical democracy. T h i s concept of the educational process is very different from the industrial process where the emphasis is upon the mechanical doing of specific jobs. (1) It is a living together in which the richness of the living of the teacher contributes to the richness of the living of children. (2) If children are to become independent thinkers, the atmosphere becomes one of democracy in which children have responsibilities. A s educational thinking matures, the inconsistency of teaching verbal democracy in an autocratic situation is being recognized. (3) It requires teachers w h o are independent thinkers with broad and thorough professional preparation. Hence, as differences in ability and preparation are decreased, democracy in the profession or the professional staff must increase by necessity. C a p a b l e persons prefer to do their o w n thinking; they rebel under an organization w h i c h presumes that all thought must come from the top. (4) U n d e r this concept of education, policy formulation becomes an extremely difficult task, a task which cannot be assumed by any one person intelligent enough to realize its implications. It is a task requiring the cooperative thinking of all the intelligence available in the school system and the community (democracy again). T h e depression demonstrated the inadequacies of some of the expedients w h i c h had been inaugurated to meet the foregoing trends. It became evident that m a n y teachers and public leaders did not appreciate the efforts of curriculum experts, supervisors, and others hired to do the thinking for teachers. There followed a frantic effort

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 229 to "educate" the teachers and the public. Such efforts might have been unnecessary if there had been wider participation in determining policies and plans. If the heed for greater democracy in future school organization is admitted, the question is: Can a school system be so organized without sacrificing efficiency? Before answering this question, the working of democracy must be discussed. A proposed organization. Democracy in organization is highly desirable and effective for thinking. It offers the clash of opinion out of which comes creation, inventiveness, and other types of progressive thinking, except that without synthesis it may result only in confusion and conflict. It is hardly ever effective, however, as a way of getting things done. Social experience has demonstrated the fact that when action is needed there must be responsibility fixed in some one individual. These observations must be taken into account in school organization. It must also be remembered that good thinking probably results from both individual and collective effort. Perhaps it may even be true that individuals have more often been right than the group. Yet, the thinking shared by the group, that thinking arrived at democratically, is more apt to become really effective from the long-time view, a fact overlooked by those who would like to do all the thinking for an organization. Such thinking becomes effective because it receives public and professional support. Therefore in thinking of school organization it must be remembered that it is not always the best thought which is sought but that which will be given wide support. Furthermore it must be recognized that democracy must concern itself only with the broadest policies confronting the group. O n matters of detail or in an emergency, discretion must be left to individuals or small groups. For example, the scope of the educational program is a broad matter of policy. The handling of a boy injured in an accident is an example of a matter to be left to the judgment of the teacher. Of course, even here certain policies resulting from previous experience with accidents should be applied by the teacher. T h e point is that she should not be required to consult a number of her colleagues before taking the decisive action needed in the particular emergency. It also must be realized that even though decisions on broad plans and policies are formulated by the group, their carrying out should be left to experts and specialists in so far as such procedures are consistent with sound educational results. It may be that specialization in certain

230 C O N T R O L T H R O U G H I M P R O V E D MANAGEMENT aspects of the educational process is not having the best effects upon pupils. If this is true, it may not be an indictment against all specialization but against certain types of specialization. With the foregoing generalizations in mind, the problem of organizing a school system more democratically is approached. If present trends continue, schools will require a different type of organization than is required in business or industry. It has been shown that in business and industry the emphasis is on doing or on production. The process is mechanized, clear-cut, definite, and quantitative. In education the emphasis is about as much on thinking as it is on doing. In dealing with persons in a changing environment many variables are encountered. Concepts of value are probably more important than concepts of quantity. The process is dynamic, complex, and continuous. It is a matter of human relationships, influenced greatly by emotions which are transitory; yet, which may have profound effects upon the results produced. Hence, educational organization can be conceived as being concerned with two interrelated functions—(i) thinking or planning and (2) doing or executing. These two functions must be so organized that each will contribute to the other. Personnel engaged in "doing" should have an opportunity to think, evaluate, and criticize through channels which will result in an improvement of the process. Those engaged primarily in "thinking or planning" should have an opportunity to share the experience of those who know the realities of trying to put plans, policies, or ideas into effect. They should also have an opportunity to have sound ideas tested in practice. As shown in Figure II, the organization should be so conceived that thinking and doing are part of a continuous process (the dotted line in the diagram shows this relationship). As has been indicated, democratic organization is best suited for the thinking or planning portion of the diagram. This function can well be performed through the committee type of organization with a small coordinating committee for synthesis and as many other committees and subcommittees as are necessary, depending upon the size of the system and the magnitude of the problems under consideration. All engaged in "doing" might have a chance to participate on such committees. Membership on committees might be rotated and selection for membership might be made through a democratic procedure.

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 231 T h e line and staff" type of organization, on the other hand, is well adapted to the executing or doing portion of the diagram. When action is needed, responsibility must be definitely placed and a limit placed on discussion. Those holding subordinate positions of responsibility may have an opportunity to criticize through the committee organizations. It might be even possible within the limits set by specialization

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F I G U R E I I . A N O R G A N I Z A T I O N C H A R T FOR P U B L I C EDUCATION.

to alternate positions of responsibility. As differences in ability and preparation are lessened, it might even be possible to select those in responsible positions through the democratic process. The carrying out or executing of educational plans and policies, of course, will require varying degrees of expertness. Their planning, however, can benefit from the widest sort of participation. If possible all committees should represent the interests of parents, learners, and other lay groups as well as the professional staff. At any point in the process it ought to be possible to call in experts in various life activities for consultation and assistance. The foregoing type of school organization requires a different attitude toward personnel than has been held under the business theory. In this concept personnel becomes the very core of the school system instead of a phase of executive responsibility. Organization is conceived as a way of getting coordinated and cooperative action and

232 C O N T R O L T H R O U G H I M P R O V E D

MANAGEMENT

thought on educational problems. It is the medium through which functions are performed. Organization must contribute to the effectiveness of personnel; it must be secondary to human values. It must serve to aid group action and thinking, not retard it. Beginnings toward attaining such a type of school organization have been made, especially for purposes of curriculum making. It is possible that out of the experience gained in such attempts will come a more democratic school organization which will not sacrifice efficiency. Logical plans of organization mean very little unless certain principles are applied in professional or personal relationships among personnel. A study of nineteen codes of ethics for the teaching profession reveals some of the most essential principles involved: 1 0 1. Between teachers and executives there should always be found the confidence which arises out of a complete understanding and the mutual attitude of being co-workers in a great cause. Each should maintain a justifiable pride in the work of the other. Each should feel that his success is impossible, in the fullest sense, without the corresponding success of the other. 2. The superintendent should be recognized as the professional leader of the school system, but a teacher's right to self-expression should be respected. Each member of a system should be given opportunity to collaborate in the solution of professional problems; but when a policy is finally determined, it should be loyally supported by all. 3. Both teachers and administrators should observe professional courtesy by transacting official business with the properly designated persons next in rank. 4. Each teacher is entitled from time to time to statements of his professional record, whether favorable or unfavorable, and may properly make requests for such statements. No adverse comments regarding a teacher's work should be made by a superior officer in the presence of other teachers or pupils. 5. It is the obligation of an administrator to endeavor conscientiously to prevent the failure of any teacher who might succeed if wisely and sympathetically advised. 6. Those who are responsible to the public for the conduct of the school should attempt to acquaint the teacher with the larger purposes of the organization and to furnish him with such assistance and guidance as will enable him to cooperate intelligently. 7. It is the duty of the superintendents, or principals, to prevent, as far as possible, their teachers from being overloaded with work. This is a duty to the school as well as to the teacher. It may be impossible for the superinten10

American Association of School Administrators, Standards JOT Superintendents 0/ Schools, pp. 45-46.

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 233 dent to prevent this overloading, but he should strive to convince his board that such a policy is both unwise and unjust. Organization and finance. A school organization w h i c h stimulates individual growth, thinking, creation, and invention and pools the results of collective thinking and experience to devise better ways of achieving school purposes and which, through a division of responsibility and effort, clear-cut lines of responsibility and authority, and careful attention to h u m a n relationships, makes possible smooth and efficient operations with a m i n i m u m of friction and waste of time and materials, contributes to a m a j o r purpose of financial management, the attainment of m a x i m u m returns for money spent. It contributes m u c h more than could be achieved b y a very competent, highly trained, and well-organized financial or business staff. T h e size and organization of the staff handling the financial and business affairs of a school will v a r y with the size and complexity of the educational system. H o w e v e r , certain general principles have evolved w h i c h apply to all systems. (1) T h e board or legislative body having responsibility for educational policies should have control over the financing of those policies, subject only to the will of the people in the unit of government concerned.* 1 Otherwise, the body having control of finance has in fact assumed responsibility for determining educational policy. H o w e v e r , the problems arising f r o m the application of this principle must be solved as shown in the preceding chapter. (2) T h e board of education should have control over the services involved in financing schools except where the cooperative arrangements discussed in the preceding chapter are feasible. (3) T h e financial management of schools is a responsibility of the executive. Persons responsible for business affairs should be directly responsible to him and not directly responsible to the board. 1 2 D u a l responsibility presumes that financial m a n a g e m e n t is an end in itself and not a means for securing the m a x i m u m educational results with the minim u m outlay. T h e purpose of the schools is to educate, and those responsible for administering finance should not be in a position to control education, as often is possible under dual organization. In small school systems this principle usually is violated, the budget and accounting being handled by the secretary or clerk of the board " Sec Educational Policies Commission, The Structure and Administration of Education in American Democracy, pp. 47 ff. "Ibid., pp. 55 ff.

234 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T of education. In many larger school districts and certain states, like New Jersey, a dual organization exists where the superintendent of schools and the business manager or finance officer are coordinate executives responsible to the board. In a large school system employing one or more specialists in finance, the budget, insurance, management of assets, purchase and service of equipment and supplies, accounting, and financial research services should be centered in one office directly responsible to the superintendent or an assistant superintendent. This office should not be part of the line organization for the entire school system, but should have a staff (advisory and service) relationship to other offices, principals, and teachers. In smaller systems where such specialization is impractical, services closely related to finance, such as management of nonprofessional employees, operation and maintenance of plant, and transportation, may be centered in one office under the direction of the superintendent. No matter how the finance function is organized in a particular school system, the executive or one of his educational assistants should make any financial decisions which affect the educational policies or practices of the schools. Those responsible for finance and allied managerial functions should not be divorced from educational administration. Indeed, all such employees should have thorough preparation in education and school administration, should work in close cooperation with those primarily responsible for educational functions, and should be directly responsible to the executive. The foundation of the budget, for example, is the educational needs of a school district as formulated in plans and policies. Furthermore, accounting must yield the information needed both in educational and financial management; purchasing must be based upon the specifications required in materials to achieve educational purposes; and operation and maintenance must conform to standards which will promote the results which the schools are trying to attain. TECHNICAL SERVICES

Efficient public school management requires that all operations be coordinated by one executive who is highly qualified both in educational administration and business management. However, the employment of a superintendent, no matter how well qualified he is, does not guarantee the most efficient management. A good superintendent

C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T 235 cannot be a school building architect and an engineer, an insurance adviser, an expert on bonds, an auditor, a specialist on property operation and maintenance, a skilled personnel officer, a competent purchasing agent, a good office manager, a transportation specialist, a public relations counselor, an expert on investments and handling endowments, a cafeteria manager, a research director, and an acacountant and at the same time be a specialist in curriculum making and instructional supervision, an organizer, a guidance counselor, and a master teacher. Yet, in most school systems, particularly small systems, the superintendent is trying to perform all of these services. It is admitted that a superintendent who has had some basic preparation in these administrative responsibilities can do a better job than a lay board of education. T h e contention is that no one person can attain the highest competence in all of them. Some way has to be found to create units of administration large enough to employ the necessary specialization at a cost which bears a reasonable relationship to other costs, or, where sparsity of population makes large units of administration impossible, to supply these specialists on a state-wide or regional basis. A number of studies have been made regarding the minimum size of a satisfactory unit for school administration." Dawson found that a unit should have a minimum of about 10,000 pupils' 4 to be able to employ a competent superintendent, a business manager, a supervisor of buildings and grounds, a director of research, a bookkeeper, and clerical assistance, in addition to an adequate staff of instructional supervisors and special teachers at a cost which bears a reasonable relationship to other expenditures. Even a minimum unit as large as this one, which probably will not be attained in most states for a long time to come, does not provide for specialization in such important areas as transportation, architectural-engineering services, personnel management, accounting, and purchasing. In most states the only practical way to provide local school management with the best technical assistance available is to increase the field staff of the state education department, even going so far as to establish regional offices in large states. A superintendent in a small system hardly ever gets an opportunity to erect school buildings more than once in his school career. A state specialist in school building construc" Encyclopedia of Educational Research, pp. 366-67. H . A . Dawson, Satisfactory Local School Units (1934), P. 81.

M

236 C O N T R O L T H R O U G H I M P R O V E D M A N A G E M E N T tion should be available to assist local superintendents when the need arises. This arrangement does not preclude the employment of competent private architects. Unfortunately, the percentage fee system used by private architects places a premium on expensive buildings. The responsibility of management is to obtain the lowest original cost and lowest operation-and-maintenance cost consistent with the purposes and standards which the school system is trying to attain. The field services of the education department also should include specialists in accounting, auditing, transportation, personnel management, purchasing, research and surveys, insurance, bonding, property operation and maintenance, and other aspects of business management. Expansion of education departments in these directions, however, should not be accomplished at the expense of field assistance in curriculum making, instruction, measurement and evaluation, and other aspects of educational administration. An education department, like a local unit of administration, must retain a balance between educational management and fiscal management. Where large units of administration cannot be created and expansion of education department services is impractical, there is another possibility. A number of units of administration can cooperatively purchase the services of specialists on a part-time basis in each system. READINGS

Cubberley (49), Chs. IV, V, and X I I - X V ; Dawson (46); Educational Policies Commission (55), Chs. II-III; Engelhardt (64), Chs. I-VII; Engelhardt and Engelhardt (65), Chs. I-V; Frederick and Cocking (76); Linn (101), Chs. II and VII; Moehlman (112), Chs. III-IV and (113), Chs. V, VII, IX-XII, and X X ; Mort and Reusser (123), Chs. II and VI; National Survey of School Finance Staff (147), Ch. X I ; Pittenger (159), Ch. II; Reeder (165), Chs. I-II; Smith (174), Chs. II-IV; and Strayer and Engelhardt (182), Chs. X I I I and X V I I .

CHAPTER

IX

CONTROL OF PUBLIC SCHOOL SPENDING THROUGH IMPROVED BUDGETS FUNCTIONS

OF THE

BUDGET

Budget defined. A public budget is a well-conceived program of governmental action for a given period of time, with reasonably accurate plans for making the financial outlays involved and raising the necessary revenues. Buck, in his book on public budgets, puts stress upon the fact that a budget is "a plan of action for the future." 1 He emphasizes that policies, decisions, programs, services, commodities, obligations, operation, and performance, not the routine estimating of receipts and expenditures, are the essence of "public budgeting." 2 Nor is the preparing, filling in, and publishing of a budget document (usually referred to as a budget) indicative of "budgeting." Unless there is a well-conceived plan of action, an intelligent consideration or weighing of all governmental needs or requirements, and a careful selection of activities to be financed during a given period with monies supplied through operational economies and revenue sources, "budgeting" is not taking place. The preparation of a budget in government is not a periodic or even an annual activity. It is a continuous process. It involves longterm study, thought, and planning. It is part of the process through which governmental institutions achieve rejuvenescence, adaptability, or maximum effectiveness day by day and year by year. Existing legal and financial institutions and practices require periodic budgets, usually for a year. Budgets for a fixed period of time, however, are merely reflections of the continuous application of intelligence to governmental activities, their financial requirements and limits. Budget making presumes ideal plans of action, spending, and securing needed revenues to attain ideal results. Taking all factors into consideration, what can be done in any one year will be the best approximation of such plans which can be achieved. Annual budgets are 1

A. E. Buck, Public Budgeting (1929), p. 4.

' Ibid., p. 460.

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BUDGETS

effective to the extent to which they reflect carefully worked out continuous, long-term plans. Public school budgets are an integral part of public "budgeting." They are affected by, and they in turn affect, all other public budgets. Educational programs, plans of action for education, can be conceived in the ideal, but public school spending and revenue plans and practical plans of schooling for any given year bring the public schools into direct contact with other governmental units. All depend upon the same economic resources, economic trends, and financial institutions. What one unit does affects the plans of all other units, directly or indirectly. In the aggregate, public budgets determine the proportion of the national income to be spent collectively, that is, they establish the ratio between private enterprise and collective endeavor. T h e total budgets of all governmental units may handicap the economic life of the nation and thereby affect individual governmental budgets adversely, or the aggregate budgets may so contribute to the economic life of the nation that all units benefit. What is important is obtaining the maximum economic contributions or social benefits through wise decisions in all spending and revenue raising. What one unit does is important, but how it fits into the total pattern of governmental activity is most important. T h e contributions of all units must be maximized through proper balance. T h e public school budget, therefore, consists of a program or plan of action for a given period of time, accompanied by carefully formulated spending plans and plans for raising the necessary revenues, all three plans formulated in relationship to other public budgets and to economic conditions and trends. T h e ideal school budget "integrates the educational program, its financial support, and the management of expenditures into one unified whole."* Importance of the budget. T h e budget determines the effectiveness of public finance. It determines the economic contributions, the productivity of public spending. It decides the returns received for money spent. All values received from public spending, economic or others, are conditioned by the budget. Federal or state aids, shared taxes, larger units for local property taxation and administration, complete state support, and complete Federal support, are but means to an end. Unless the budget is functioning properly in the units actually ' See "Planning Through Budgeting" in American Association of School Administrators, Schools in Small Communities (17th Yearbook, 1939), p. 354.

CONTROL THROUGH

IMPROVED BUDGETS

239

purchasing goods or services and performing public services, such plans for increasing revenues or economies fail to achieve m a x i m u m results with the m i n i m u m expense. Functions of the budget. T h e traditional function of the public budget has been to plan and control financial outlays and taxation, but the budget has m a n y other functions. In a democracy one of its most important functions is to provide a basis for democratic or legislative action. 4 T h r o u g h the budget the people or their representatives c a n see the requirements of government and the evidence to support governmental requests. T h r o u g h the budget they can concentrate on the broad policies, leaving the details and technical problems to specialists. T h e budget enables them to see the whole plan and its major subdivisions. T h e y c a n study, evaluate, and decide. T h r o u g h budget hearings and budget approval they can exercise control over the activities, outlays, and income of their government. Another important function of the public budget is to improve the administration or m a n a g e m e n t of governmental affairs. W h e r e good budget making is demanded, professionally prepared, informed, able, and skillful public administrators are in demand. T h e mere political official is not wanted. T h e budget requires the administrator to formulate long-term plans for governmental undertakings, to see the needs of other units or departments, to coordinate activities within his o w n department, to have work plans for each undertaking in the budget, to foresee expenditure requirements, to estimate receipts and balances, to control expenditures, to economize, and to evaluate what is being done under his direction. A good budget makes the executive responsible for efficiency, economy, and good management. It is not the function of a budget to stifle initiative, flexibility, adaptability, or j u d g m e n t for the budgetary period. There should be a reasonable degree of freedom left to administrative officers to make necessary adjustments during the year. However, the budget should not permit initiative to run wild. If an adaptation conceived during the year is good, a year of criticism, planning, and mental revision, accompanied by a certain amount of experimentation within the limits of the budget, will enhance it rather than destroy it. O n the other hand, there has been a decided tendency in recent years a m o n g taxpayer groups to make the budget a rigid financial cast. S u c h a concept certainly violates the adaptability principle. 6 See A. E. Buck, The Budget in Governments of Today (1934), pp. 3 ff. • See P. R . Mort and W. C. Reusser, Public School Finance (1941), pp. 154 ff.

4

240

CONTROL THROUGH

IMPROVED

BUDGETS

D e Y o u n g lists twelve functions of the public school b u d g e t : 4 1. The budget is a servant of education. (It is a "facilitating device for educating the child.") 2. It gives an overview. 3. It aids in analysis. 4. It develops cooperation within the school. (Educational and business functions are brought together in the budget.) 5. It stimulates confidence among the taxpayers. 6. It estimates the receipts. 7. It determines the tax levy. 8. It authorizes expenditures. 9. It aids in administering the school economically. 10. It improves accounting procedures. 11. It aids in extra-curricular activities. (Plans and controls can be substituted for anarchy and chaos.) 12. It projects the school into the future. CONSEQUENCES

OF POOR

BUDGETS

Status of budgets in government. T h e public b u d g e t is relatively new in A m e r i c a n public finance. A l t h o u g h progress is taking place, only a beginning has been m a d e . 7 T h e m o v e m e n t for state a n d local governmental budgets b e g a n a b o u t 1912, a n d the F e d e r a l b u d g e t system was not i n a u g u r a t e d until 1 9 2 1 . 8 Since then a certain a m o u n t of financial planning has replaced blanket authority to m a k e expenditures, piecemeal spending a n d appropriations, a n d spending practices w h i c h m a d e it impossible to tell in a d v a n c e h o w m u c h will be spent in a y e a r and h o w revenues will c o m p a r e w i t h expenditures. H o w ever, m u c h public " b u d g e t i n g " is in the routine or d o c u m e n t a r y stage. Expenditures and receipts generally are estimated o n paper, but the continuous planning, evaluation, a n d careful selection of a p r o g r a m of action (the a t t e m p t to get the m a x i m u m return for m o n e y spent) is exceptional. Blind adherence to policies a d o p t e d in the past, response to pressures, political considerations, lack of b a l a n c e , and coordination, hasty decisions, and a b u d g e t p r e p a r e d a short time before its adoption are too c o m m o n . T o o frequently the routine p r e p a r a t i o n of a b u d g e t d o c u m e n t is confused w i t h the preparation of a b u d g e t . Buck attributes the slow d e v e l o p m e n t of p u b l i c budgets in the U n i t e d States to the following causes: ( 1 ) the Federal system w h i c h • C. A. De Young, Budgeting In Public Schools, pp. 9 ff. (Copyright 1936 by the Odyssey Press, Inc. Used by permission.) ' Buck, The Budget in Governments oj Today, p. 397. * Buck, Public Budgeting, pp. 14 ff.

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sets apart national and state finances (and decentralization within states with its conflicts among local units of government and between local government and state government);' (2) the separation of powers between the legislative and executive branches of government; (3) bicameral legislative bodies, making it easy to shift responsibility; and (4) frequent lack of control by one party over both the executive and the legislative branches of government or over both branches of bicameral legislative bodies. 10 Other reasons include the political tradition in public administration, the lack of professional requirements or qualifications for public administration, and the small number of public administrators reached by institutions offering professional preparation for the public service. Indeed, research, scholarship, and professionalization in public administration are relatively new in this country. Public school budget practices generally are slightly ahead of practices in other local governmental units, owing to the fact that the professionalization of public school administration has paralleled the public budget movement. The first comprehensive study of public school budgetary practices was published in 1922. Although budgetary reforms already had affected public schools to a considerable degree, budgetary practices were still rudimentary and far from standardized. 11 Yet, ten years later, another nation-wide study revealed that public school budgeting, in spite of improvements that had taken place since 1922, was still in the elementary stages.12 More recent studies in various states indicate a trend toward sound school budget practices, but a great deal remains to be done.1* In school districts, as in other units of government, the routine filling in of a budgetary document (often required by states) is too often confused with "budgeting." Moreover, the budget often is made by the clerk of the board of education, the business manager, or the president of the board of education. Educational planning, the major part of the budget, is absent or a secondary consideration. Education and finance, or business management, cannot be divorced when sound budgetary practices exist. The results. The absence of sound budgetary practices has serious 10 * Parenthesis mine. Buck, Budgets in Governments oj Today, p. 298. J . W. Twente, Budgetary Procedure for a Local School System (192a). " C. A. De Young, Budgetary Practices in Public School Administration (1932). " See American Educational Research Association, Review of Educational Research (Vol. X I , No. 2, 1941), pp. 172 ff.

11

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consequences. (1) It destroys public confidence, the basis of continued support. T h e public is aware only of expenditures and taxes. It is not familiar with the policies, programs, decisions, ideals, and the evidence supporting the program and its financing. Under such conditions it is easy to destroy the people's faith and confidence in public education. (2) It leads to educational stagnation and lack of adaptability. Old policies, practices, and program elements are retained without questioning. New enterprises and undertakings are pyramided on top of the old. (3) It means high costs and failure to give the most for the money spent. (4) It results in waste, inefficiency, expenditures exceeding revenues or the accumulation of large balances, and other evils which are inevitable under such conditions. (5) It brings state and Federal aid into bad repute. Apportioning state or Federal aid to school units, where the budget is not functioning, only aggravates the evils unless accompanied by central controls. Unless the budget process is functioning as it should, state and Federal aid cannot achieve their objectives. Adequate support, by itself, merely makes good schools possible. Nor does assumption of direct control and support, by a state or a large local unit, assure the best possible education for the least expenditure, unless provision is made for sound budgets. Unless control is assigned to a unit, which can and does make the best possible educational plans, financial plans, and revenue plans, re-allocation of control has litde value. ESSENTIALS

OF SOUND BUDGET

MAKING

Basic elements. In the foregoing discussion, the elements of sound budget milking in public schools have been implied. These will be summarized here and discussed in detail in the sections which follow. 1. A sound school budget begins with the objectives of the schools, continually determining the relative emphasis to be placed upon each objective; continuously reviewing and evaluating all past policies, programs, activities, practices, or accomplishments and the evidence supporting each; continuously weighing these against other possibilities and educational provisions not being made; recommending a balanced and coordinated plan of action, or work program, for a given year, with supporting evidence; summarizing needs not being met, or provisions not being made, and the reasons they are omitted;

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and recommending possible plans for taking care of these in the future. 2. A sound school budget recommends plans of action, or programs of work, for public schools w h i c h do not duplicate the work of other governmental agencies, w h i c h make m a x i m u m use of services provided by other governmental agencies, w h i c h foster a balanced and coordinated program of action for government as a whole, and which take into consideration the present and future needs for all governmental services. 3. A sound school b u d g e t contains: (a) careful estimates of both expenditures and revenues required to carry out present and future plans, taking into account economic conditions, trends in income, prices, and consumer expenditures, the tax structure, and the expenditures of other units of government; (b) plans for making expenditures accompanied by data to explain proposed increases or decreases in expenditures; and (c) plans for obtaining the necessary revenues through economies, taxation, aid from other units, other revenue sources, and proposed reforms in the tax structure. 4. A sound school budget is balanced not only at the beginning of the year but at the end of the year, but the budget is flexible enough to adjust to changes in conditions or trends w h i c h take place during the year. Since perfect balance is impossible, income at the end of the year should very nearly equal or exceed outgo. Other criteria. T h e r e are a n u m b e r of specific criteria to which a good budget should conform, but these will not be discussed in detail in this chapter. T h o s e responsible for public school budgeting should be familiar with such standard works as those of Buck and D e Y o u n g . A m o n g these specific criteria should be included the following: 1. A good budget is inclusive of all aspects of the public school program involving financial transactions, including the curricular or extracurricular. T h e r e schould be n o separate budgets unless these are attached to the main budget as subsidiary budgets. 2. A good budget is prepared and executed by a professionally trained educational administrator, with the assistance of all persons responsible for various phases of the program, persons familiar with the educational needs of the community, and persons familiar with economic and public finance factors. 3. A good budget is adopted by the legislative body only after

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critical study or examination of all major policies, programs, activities, expenditures, and supporting data; adoption and approval is based upon understanding of the broad policies involved. The authority to make outlays under the budget should be included in the appropriation resolution. 4. A good budget depends upon good management and administration; it requires good judgment at all times; it is not a substitute for initiative; it depends upon an efficient organization, careful employment of personnel, a good purchasing program, an adequate maintenance program, care in the use of goods and services, research, a good record and accounting system, standards, and economy and efficiency in all operations. 14 Good budgets require good personnel. State supervision, standardized budget forms, and state laws or regulations do not insure good budgets. Unless budgets are made by persons possessing intelligence, vision, managerial ability, knowledge of all factors involved, and technical preparation and skill, good " b u d g e t i n g " will not result. 5. A good budget presumes detailed work programs for each undertaking, showing exactly what is to be done and what services and commodities are to be consumed within each appropriation during the year, showing periodic financial requirements, and reconciling any discrepancies between appropriations, requirements, and income. T h e budget itself should not be so detailed as to prevent flexibility and initiative in making work programs.' 6 6. A good budget involves continuous publicity to call attention to objectives, services rendered, policies in force, needs not being met, costs, results, and other data essential for continued public support and confidence. T h e budget document itself should contain all essential information and should be simple, interesting, and widely distributed. Public hearings should be encouraged, rather than discouraged. T h e public should know for what it is spending its money. 7. A good budget implies that the legislative body will hold the executive responsible for performance under the budget, through reports, audits, and other means. Reforms needed. Ideal school budget making cannot be achieved by local school authorities alone. State action will be necessary to elimi14

See N. L . Engelhardt and Fred Engelhardt, Public School Business Administration (1927), pp. 550 ff. " See Buck, Public Budgeting, pp. 456 ff.

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nate unsatisfactory local school units, to raise professional requirements for school administrators, to give school administrators legal status and define the proper spheres of action for school boards and other policy-making bodies, to promote the in-service improvement of school administrators with respect to budget responsibilities, to establish standards and means of appraisal for guidance of school officials, to eliminate duplicating and overlapping expenses, to improve tax structures and systems of financial aid, to allocate control, to achieve certain economies, to standardize budgetary, accounting, and reporting forms and procedures, and to provide audits and supervision. T h e state can set u p uniform rules requiring local budgets and rules regulating procedures, borrowing, transfers, contingency funds, emergencies, budgetary balance, format for budget documents, time of adoption, publication, hearings, filing, levying taxes, authorizing expenditures, and audits. S u c h regulations, however, should facilitate and not hamper the primary purpose of the budget, the m a x i m u m educational return for money spent. It should be remembered, though, that state requirements are no substitute for competent, professional administration. W h e r e good management is lacking, state requirements accomplish very little. 16 Since state and local budgets are dependent u p o n a nation-wide economy, the Federal Government also c a n do a great deal to improve " b u d g e t i n g " through research, information service, leadership, consulting and survey service, standardization, and financial aids. THE EDUCATIONAL

PLAN

OF

ACTION

Meaning and importance. T h e educational plan of action is part of a continuous process, first evaluating w h a t is being done, conceiving adjustments or changes, trying out certain of these, evaluating the results, and going through the cycle again and again. T h e plan of action is always an outgrowth of w h a t has been done, w h a t should be done, w h a t is being done, and w h a t can be done during a given future time, taking all factors into consideration. T h e plan of action for any one year is but a phase of the continuous long-term process of adjustment and adaptation. Research, experimentation, criticism, study, discussion, measurement, and evaluation must be present if the best plans of action are to be conceived. T h e r e must be an overview, a 16

See Mort and Reusscr, op. cit., pp. 134 ff.

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seeing of the p r o g r a m as a whole, if educational plans of action are to be balanced and coordinated. Since there is always more to be done than c a n be done in a n y one year, the plan of action presumes intelligent selection, emphasis, or priorities based upon sound criteria. T h e educational plan of action is the essence of public school " b u d g e t i n g . " Indeed, some writers have conceived a school budget as a triangle, with the educational plan as the base and the spending and revenue plans as the other two sides. 17 D e Y o u n g maintains that a budget is " b u i l t " to educate and it must be balanced " e d u c a t i o n a l l y " as well as " t e c h n i c a l l y . " A balanced school budget must possess "intrinsic s y m m e t r y " ; its parts must fit together to provide the m a x i m u m educational returns within the limits set b y the expenditure and revenue plans. Just as the educational plan is the starting point in building a schoolhouse, so it is in building a budget. 1 8 Since the important part of the budget is the educational plan, it is impossible to divorce finance or financial control from education or educational control. In actual practice the three plans—educational, expenditure, and revenue must be conceived together. 1 9 D e Y o u n g summarizes four important functions of the educational plan in the budget: (1) " T h e educational program makes the budget a professional d o c u m e n t . " (q) It makes the budget " a constructive instrument." (3) " I t makes for better b a l a n c e " within a budget. (4) " I t serves as the base of the budget." 2 0 Group responsibility. Executing a budget requires a direct line of responsibility, from the chief executive to the person actually carrying on the operations. Building the educational plan, however, requires a democratic division of responsibility, a sharing of responsibility. Persons having an intimate aquaintanceship with the individual children and adults served; with community problems; with group, state, and national interests; and with the broader implications of education, must be heard in making budgetary decisions. T h e background, experience, skill, intelligence, inventiveness, criticisms, and suggestions of all individuals and groups concerned, including the children or adults served, must be pooled. T h e r e must be channels for See D e Y o u n g , Budgeting in Public Schools, pp. 7 ff. "Ibid., pp. 14 ff. See also Engelhardt and Engelhardt, op. cit., p. 5 1 5 ; and H . P. Smith, Business Administration 0} Public Schools (1929). p. 8. See M o e h l m a n , Public School Finance, C h . I V . 1 0 D e Y o u n g , Budgeting in Public Schools, pp. 28 ff. (Copyright 1936 by the Odyssey Press, Inc. Used by permission.) 17

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the exchange of information and ideas which affect the budget. Participation, interest, and assistance must be welcomed, not discouraged. 1 1 Educational planning implies that the school board will devote its meetings to the review and examination of previously adopted policies, the study of proposed changes in policies, the relationships of one policy to another, and the overview of all policies taken together. Boards of education must d e m a n d data on how policies are being carried out, the results of following certain policies, and possible improvements, rather than devote their time and energies to administrative details w h i c h should be delegated to professional employees. W h e r e good plans of education are being developed, school boards are too busy to be anything but policy-making bodies. Major considerations. It is easy in educational planning to get involved in details and neglect basic or fundamental elements. In making the budget attention should be centered upon the objectives, ideals, emphasis, and standards to be achieved, and the m a j o r policies adopted to carry out purposes, especially those relating to curricula, services, organization, personnel, materials, and housing. T h e objectives, ideals, emphasis, or standards, w h i c h a school system is attempting to attain, should be the center of attention in budget milking, budget discussions, and budget publicity. These should be reexamined and modified from time to time as necessity requires. A l l persons concerned should be familiar with them and should have an opportunity to participate in their formulation and modification. Written or stated aims have little value except as they become the ends of all operations and activities. W h a t should be watched are the objectives and emphases actually implied in what is being done d a y by d a y and in the measures or other means used to evaluate w h a t is being done. It is especially important in the consideration of ideals and objectives to distinguish between economic values and other values in making a budget. Objectives, the accomplishment of w h i c h will preserve or increase the productivity of the nation, either directly or indirectly, have a priority, since they m a k e it possible to increase financial support for other objectives in the future. V a l u a b l e as certain ideals may be from noneconomic consideration, very often their " See Arvid J. Burke, "Is it Possible to Organize a School System More Democratically Without Sacrificing Efficiency?," American School Board Journal, X C (May, 1935), 15-16.

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inclusion in the budget has to wait upon economic ability to provide for their attainment. It may even be wise to curtail temporarily certain luxury values in education in order to take steps which will increase capacity to pay for them in the future." What is important, in this connection, is the objectives being achieved by a practice and not the curricula, services, or activities in themselves. Results, not rationalizations or arguments, provide the criteria. Having agreed upon objectives, emphases, and standards to be attained through the educational undertaking, the means must be considered. These include courses, curricular services, personnel, techniques, procedures, and activities, whose planning cannot be divorced from organization, limitations, and other policies relating to them. In Chapter IV, there is a detailed list of considerations involved in this type of educational planning which have a bearing upon expenditures. The most basic decisions involved include these: 1. What persons are to be entitled to free public education and various free services of the public schools? A t what age will they be admitted to school? During what ages will they be compelled to attend school? U p to what age may they remain in school? (Numbers alone will increase expenditures.) 2. What means will be employed to plan, evaluate, and improve the educational program? What degree of professionalization? What degree of specialization? (Highly professionalized and specialized administrative, supervisory, and research services may increase total expenditures, but the increased expenditures may be more than offset by the increased returns for money spent.) 3. T o what extent is education to be adapted to individual differences? T o what extent shall it be selective for persons with certain interests, abilities, talents, habits, and other characteristics? (The more individual attention the higher the expenditures.) 4. How shall pupils be classified, grouped, divided, or organized for educational purposes? How large will be the attendance areas? How large will groups or classes be? How many special groups or classes will there be? (The smaller the attendance areas, the larger the number of special groupings or divisions, the smaller the pupilteacher ratio, and the higher the expenditures.) 5. O n what bases shall progress, promotion, and graduation be determined? (The slower the progress, the higher the costs; the higher n

See Chapter V I for a discussion of economic values in education.

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the percentage of pupils in the upper grades, the higher the costs under present conditions.) 6. What curricula, courses, activities, and services 2 ' shall be provided for the various groups or divisions? What quantity? What quality? In school? Out of school? For how many days per year? (The greater the quantity and the higher the quality of services provided, the higher the expenditure, all other factors being equal. Undue expansion of services at the expense of quality may be wasteful. The wider the environment in which the schools try to operate, the higher the costs. The longer the school day and the school year, the higher the expense involved.) The modern secondary school program is most in need of reexamination and adjustment. A program established for a highly selective concept of secondary education has been trying to fulfill a common school concept of secondary education by adding new courses and services to the old. Small classes and unbalanced work loads have inflated expenditures; yet the educational results of such piecemeal adjustments are open to serious question. Educators have been aware of this condition and there have been a number of strong movements to reorganize secondary education. These raise a number of questions: 1. T o what extent should certain traditional offerings like Latin be eliminated? 2. T o what extent should certain college entrance subjects (languages, mathematics, sciences, and the like) be concentrated in regional schools to eliminate small, expensive classes and permit needed adjustments for the majority of pupils not going to college? 3. T o what extent should general education be substituted for the present multitude of electives and the small classes, high costs, and questionable results which have accompanied them? 4. T o what extent should specialized courses such as vocational courses, advanced commercial courses, and technical art and music courses be centered in regional institutes or technical schools to eliminate the high costs of small classes and to enable adjustments in general education for all? 7. What personnel policies shall be adopted? What qualifications for each type of service? What recruiting and selection procedures? What tenure policies? What provisions for improvement in service? What teacher welfare measures? What salary policies? What retirement protection? What policies regarding work load? (Personnel is " See pp. 45-46 for a list of such services.

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the major item of expenditure in any plan no matter w h a t the standards adopted. H i g h standards, specialized service, continuity, improvement in service, and good morale are expensive. [See C h a p t e r XI]) 8. W h a t material or mechanical aids to education will be provided? H o w much? W h a t quality? W h a t purchasing methods or procedures will be adopted? W h a t standards for use of such materials? (Furniture, equipment, books, supplies, and other aids to learning which conform to the best scientific knowledge and highest standards will be relatively expensive.) 9. W h a t type of physical facilities or environment will be provided for the educational plan? W h a t standards of safety, protection, hygiene, and sanitation will be maintained? W h a t policies regarding the use of such facilities? ( T h e higher the standards and the greater the use, the higher the outlay involved.) 10. T o w h a t extent can the school utilize free and inexpensive community personnel and material resources in carrying out its objectives? ( T h e more the environment can be utilized, the lower the expenditures, all other factors being equal.) 1 1 . H o w are school activities and services to be scheduled? (A schedule which makes m a x i m u m use of personnel, materials, and physical plant at all times will increase services or decrease expenditures.) 24 Data needed. T h e caliber of educational planning taking place in a public school system will be relative to the data available for making decisions or formulating policies. M u c h of the data needed will be available within the school system, m u c h of it will require research within the system, and m u c h of it will not be available until a good deal of research has been done outside the system. T h e d a t a needed include the following: 1. Population and enrollment data, broken d o w n into characteristics, to anticipate present and future needs 2. D a t a on human nature, on social, economic, and political life and conditions, revealing educational problems and needed educational reforms 3. Summaries of all policies and decisions previously made, not only for immediate planning, but also for projecting them into the future to anticipate their effects or implications M

Sec pp. 288 ff.

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4. Personnel records for all employees, showing interests, abilities, preparation, experience, handicaps, talents, and all other data essential in planning 5. Analyses of all curricula, offerings, services, programs, and schedules, showing enrollments, rooms used, materials used, and all other pertinent data 6. Personnel records for all pupils served, showing interests, abilities, problems, progress, reactions, achievements, and other pertinent facts during and after school career 7. Records of criticisms, complaints, reactions, suggestions, experience, and ideas from all possible sources relating to present offerings 8. Standards, measuring instruments, techniques for appraisal, and data on the application of these to activities or services 9. Property records describing the physical facilities, furniture, equipment, books, supplies, and other instructional aids available 10. Summaries of the resources and personnel available in the community that might make a contribution to the program 11. Summaries of program elements, personnel, materials, and facilities needed in the past but not yet provided and the reasons therefor, and 12. Criteria, principles, or guides for assigning priorities to program elements when all desirable provisions cannot be made at a given time THE EDUCATIONAL

PLAN IN THE TOTAL

GOVERNMENTAL

PATTERN

Interdependence. Government and public education are complementary and interdependent. The public schools of one generation modify the citizenship of the next generation and so condition democratic government. T h e public schools by increasing the knowledge, raising the standards, and modifying the behavior of citizens affect the functions of government and the type and quality of services sought through governmental action. Public education by increasing the productivity of the nation increases economic ability to support all government. Good government depends upon good public schools; the survival of a government in a world of conflicting nations depends upon the effectiveness of its public schooling. Government, on the other hand, makes education possible through its contributions to the economic life of the nation by protecting the health of its citizens,

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by providing the peace and security essential for cultural advance, by contributing to research, by creating a structure for school government, and by providing a host of other services, such as highways for transporting rural children to high school, water supply for schools, police protection, and traffic control. Good government and good public schools are closely related, and the program of each should be balanced in relationship to the other. Responsibilities of school boards. Fiscal independence and separate units of government do not relieve school officials of responsibility for relating their educational plans to programs of other units of government. Public school boards are responsible, not only for the educational welfare of those whom they serve, but also for their total welfare. School board responsibility is a public responsibility, not an educational responsibility alone, or a local responsibility, or a state responsibility, or a sectional responsibility. School boards must see governmental services as a whole, not alone in the community, but in the state and the nation as well. They are responsible for conceiving their educational programs as an integral part of all government. There are governmental services which should not be curtailed to provide certain public school services which may be generally desirable. Health services may take priority over teaching Greek to everyone. Under certain conditions a highway may contribute more to future ability to provide education and other public services than will a new school building. During an economic crisis government action to increase the production and distribution of goods and services may do more to help provide schools and other essential services than keeping certain school services up to a certain level. In a period of national emergency, war or defense activities may have priority over certain peacetime activities of schools. To win the war may be more important for total welfare and education than "schooling as usual." School officials should be interested in, and should know, the total needs of government, and should make school decisions and compromises which are in the public interest when government is seen as a whoie. Another responsibility of school officials is to avoid duplication of services rendered by other units. Usually it would be far better for school forces to work for improvements or modifications in such services than to establish or maintain duplicating or competing services. School boards should utilize the services of other units of government

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to the utmost, seeking to work out cooperative relationships. A list of activities in which duplication should be avoided already has been given. 14 The very least school officials should do is to study carefully the budgetary requests of other units of government, attend other public budget hearings, and invite all public officials serving the same area to participate in their own budgetary discussions and hearings. Other public officials should be kept informed on the present and anticipated future needs of the schools. Obstacles to cooperation. In a particular unit of government, at a given time, there may be serious obstacles to coordination and balance between school services and other public services. The most serious obstacle is the political machine with budgets determined by party advantage and political pressure, with untrained, political administration and management, and with all the waste and inefficiency that accompany such government. When such conditions prevail school officials can hardly be expected to sacrifice desirable school services at the altar of political greed. They have met their responsibility when they strive to educate future citizens to put an end to such conditions and have cooperated as far as possible under the conditions. Another serious obstacle is lack of reciprocity. School officials cannot be expected to view educational plans as part of the total plans of government unless other public officials view their plans in terms of educational needs. In most units of government, support for any activity is more likely to be determined by the personal power of the executive involved and the pressure he can bring. Another difficulty is the turnover of public officials which takes place under present political arrangements. Obviously the complicated structure of government is a further obstacle. Since educational budgets generally are made by small units of government, temporary sacrifices in education, made to facilitate the functioning of larger units—local, state, and national— often become permanent. Conditions necessary Jor overview "budgeting." Before public budgeting can attain the ideal of balance and coordination, many conditions must prevail. The structure of government must be simplified. Professional administration, bona fide civil service, good budgetary procedures, and prudent and economical management must prevail in all units of government. Until such conditions are prevalent, the ideal can be attained to only a limited extent. " See pp. 203 ff.

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E v e n under the best of conditions balanced and coordinated public budgets will not be realized until criteria or principles are evolved for assigning priorities to certain governmental services under certain conditions. Until the adjustment of one budget to another can be put upon a rational basis, personal power, pressure, and arbitrary decisions, by a n official or group of officials, will prevail. T h e r e is but one ultimate test of the soundness of the total pattern of governmental spending and that is survival. Nations w h i c h have secured a good balance between governmental services and educational services should survive longest, other factors being equated. E a c h nation should study its o w n past experience and the experience of other nations so that it m a y ascertain, in advance, whether or not it is following a public policy for survival or extinction. EXPENDITURE

AND

REVENUE

PLANS

Expenditure estimatesThe spending program in the budget is a careful estimate of the financial requirements for carrying out the plan of action. It applies both to the long-term plans and the plans for any given year. Since w h a t can be spent in any one year determines, to a considerable extent, w h a t can be done educationally during the year, the expenditure plan, the revenue plan, and the educational plan must be considered together. A s shown in Chapter I V , it is not easy to translate the quantitative, and especially the qualitative, aspects of an educational program into expenditure requirements. First the goods and services required must be estimated, which is largely a matter of judgment. N e x t the costs or prices of these must be anticipated. In estimating costs or prices m a n y factors have to be taken into consideration—social policies, legal requirements, price levels and trends, salary and w a g e factors, and m a n y others listed in Chapter I V . T h e two major factors, of course, are salary and wage policies and adjustments to fluctuating prices and incomes. These problems will be taken up in later chapters. A n important guide for estimation is found in records, accounts, or analyses of past expenditures. 2 7 A n accounting system, w h i c h will reveal the costs of goods and services by function, character, undertaking, level, object, buildings, and other organizational units over a period of years, is a most valuable tool. Where such data reveal " See De Young, Budgeting in Public Schools, Ch. I l l for detailed procedures. , T See A. B. Moehlman, Public School Finance (1927), pp. 4 ff.

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trends, changes, or discrepancies, analyses of causes will often be found valuable for budgetary purposes. Nevertheless, few school systems know what various curricula, divisions, activities, services, or other units cost; nor will the accounting systems generally used reveal such cost data, 28 for even a single year. Many school systems are too small to provide economically for the kind of accounting needed in making budget estimates. Until many school units are reorganized and accounting practices are improved in most districts, expenditure estimates will be nothing more than guesses. (Accounting for this purpose will be taken up in Chapter X . ) In addition to summaries of legal requirements, schedules of payments of interest and principal coming due, schedules of insurance premium payments, salary schedule requirements, inventories, and unit cost studies, the school authorities should collect data on price trends and factors likely to affect prices, such as are published regularly by the United States Department of Commerce and Department of Labor and various commercial agencies. Up-to-date facts on prices of goods and services consumed by schools should be available at all times. There are a number of major expenditures for public schools which require long-term planning, taking into account economic trends and the business cycle. Salary and wage policies should be projected into the future to see what will happen under certain possible or probable conditions, such as changes in income, revenue, or living costs. Certain major undertakings, as the common school concept of secondary education, should be projected in terms of population, enrollment, and cost and revenue trends to estimate its ultimate or "terminal cost" and the ability to meet those costs.29 Capital improvements should be planned in terms of trends in order that they will be undertaken when capital is relatively plentiful, prices low, and interest rates low. Fixed charges, debt service, and other inflexible expenditures should be kept at a minimum in budgets, as long as the economy is subjected to periodic fluctuations in income, taxpaying ability, and prices. Inflexible budget requirements cause many of the budgetary difficulties of schools. In presenting expenditure estimates two methods are followed— " See A. B. Grace and G. A. Moe, Slate Aid and School Costs (1939), pp. 360 ff. " For a discussion of terminal costs see H. C. Morrison, The Management oj the School Monty (¡932), pp. 446 ff.

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the l u m p sum and the detailed or line item method. T h e l u m p sum method recognizes the difficulties in accurate estimation and the need for j u d g m e n t in administration. It holds the administration responsible for results. 10 It is valuable in so far as the l u m p sum items are based u p o n detailed estimates. It is dangerous to the extent that it fails to associate expenditure with program or services and the extent that appropriating bodies can evade responsibility for curtailments in services. T h e line item or detailed budget, on the other hand, attempts to meet these objections. It is valuable in so far as the details are planned or formulated by the administration. It is dangerous if the detail destroys initiative and j u d g m e n t . T h e budget should be sufficiently detailed to associate expenditure and service or results and to fix responsibility. 1 1 In presenting expenditure estimates all significant decreases or increases in expenditures should be explained. It is particularly important to justify any proposed increases in expenditures. Another controversial phase of expenditure planning is the allowance w h i c h should be m a d e for contingencies. Morrison defends the contingency fund, but would limit transfers from one category to an other. 82 Some states prohibit the inclusion of contingency funds in budgets. D e Y o u n g holds that the use of contingency funds should be limited, by keeping the amounts small, labelling the fund " e m e r g e n c y , " basing the amount upon previous experience, and using the funds only upon the approval of the board of education. 3 * Including a large contingency fund defeats the purposes of the budget and is the equivalent of " p a d d i n g . " T h e executive should be permitted to make minor transfers f r o m unencumbered balances within the m a j o r subdivisions of the budget. M a j o r transfers from one fund to another or from one m a j o r division to another should have board of education approval.' 4 Needfor economies. Public confidence in the administration of public education is the foundation of public school support. T h e size of the budget is no indication of its soundness. A small budget m a y be more lacking in wise expenditures than a large one. A large one m a y not guarantee so large a return on money spent as a smaller one. N o matter w h a t the size of the budget, local authorities must make every economy within their power, call attention to needed economies which the 11 See De Young, Budgeting in Public Schools, pp. 86 ff. " Ibid., p. 509. ** Morrison, op. cit., pp. 494 ff. 33 De Young, Budgeting in Public Schools, pp. 372 ff. M Ibid., pp. 370 ff.

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public is not yet ready to support, and urge state agencies to take steps necessary to achieve certain desirable economies. N o budget is defensible unless such steps have been taken; public confidence cannot be retained unless schools are economically financed. C h a p t e r X will discuss potential economies in school expenditures. Revenue estimates.,5 In m a k i n g revenue estimates it is not sufficient to figure anticipated state aid and other nontax revenues and then establish the local tax rate. T h e r e are long-term aspects of revenue planning as well as a n u m b e r of variables w h i c h should be considered annually. A m o n g the long-term problems to be considered are these: 1. W h a t proportion of total consumer expenditures is going for public education? 2. H o w willing are consumers to spend more of their incomes on public education? 3. W h a t are the trends in the economic life of which the community is but a part? 4. W h a t are the economic trends within the c o m m u n i t y — i n d u s t r y , production, income, and other d a t a w h i c h determine the local taxpaying ability? 5. W h a t effects upon local tax revenues will such factors as debt incurred by other units, taxation for other purposes, and state controls over local taxing and spending power have? 6. W h a t are the trends in local support for education—assessments, tax collections, and the like? 7. H o w m u c h of the burden of support should be shifted to state and Federal taxes? W h a t future changes in state and Federal aid can be anticipated? 8. W h a t returns can be expected in the future from the investment of trust funds and endowments? A most important consideration in determining w h a t should be spent upon public education is the total consumption of goods and services in a nation, state, or community. A civilization w h i c h is spending an undue proportion of its income on material goods and services w h i c h cater to temporary pleasures and satisfactions is heading for disaster. T h e r e must be a balance a m o n g present consumption, the creation of capital for future production, and the preservation of civilization and productive capacity through the education of the oncoming generation. M a t e r i a l goods and services without ideals, " See De Young, Budgeting in Public Schools, Ch. I V for detailed procedures.

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knowledge, standards, and understandings will not serve man's best interests. Only if public education has a proper place in the total pattern of consumption can a democratic civilization and private enterprise economy secure a balance among the various consumer possibilities, promote the general welfare, and survive. Makers of school budgets cannot afford to be provincial—their welfare is inextricably bound with that of others. They must understand national trends and adjust local practices accordingly. Studies of consumer expenditures, national, regional, state, and local, are the starting points in determining what should be spent for public schooling,*6 assuming that many desirable educational results are not being achieved within the unit concerned, because of lack of funds, and that the budgeters have plans of action for attaining the desired results. Citizens in one unit of government, moreover, are vitally concerned with the adequacy of educational provisions made in the budgets of all other units of government within the nation. What proportion of the national income is being spent in public education? How wisely is this being spent? How might the expenditures be improved? How much should be spent? These are the questions budget makers must answer. Knowing how much income should be spent on public education in relationship to total consumer expenditure patterns and trends will not assure adequate revenues. How willing are consumers to spend more on the education of the present generation and future generations than to spend money for the immediate satisfactions arising from the consumption of alcoholic liquors or gasoline for pleasure driving? 57 Another primary problem in planning revenues, therefore, is creating a willingness to spend money on public education. This is conditioned by the value placed upon education, the effectiveness of past schooling, confidence in the results obtained with moneys expended upon public education in the past, and the effectiveness of advertising and promotion to increase the consumption of material goods and services. Cultural promotion must be continuous, intense, and appealing if it is to compete with other types of promotion which are continuous, intense, and appealing. Such promotion is an integral part of the budgetary process. " Such studies have been made by the National Industrial Conference Board, National Resources Committee, and United States Department of Labor. »' See Chapter IV and F. W. Cyr, A. J . Burke, and P. R. Mort, Paying Jor Our Public Schools (1938), Ch. V.

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It is true that necessity and willingness are primary, but little c a n be accomplished unless there is machinery or techniques for raising the revenues. T h e price of education must be related to other prices and fluctuations in income. T h e tax structure, tax administration, revenue plans, spending for other governmental purposes, and governmental structure must be such as to permit the spending w h i c h is necessary and the public is willing to approve. T a x a t i o n , governmental spending, the structure of government, state and Federal aid plans, and all possible improvements in public finance institutions are subjects for thorough study by those responsible for school budgets.®8 In arriving at revenue estimates for any one budget legal limits on the taxing power of the unit, data on revenue receipts for a period of years, tax delinquency, valuations, balances on hand, economies effected or possible, expenditures of and taxes to be collected by other units of government, state and Federal aids, and other sources of revenue loom large. However, it should be realized that all support or taxes in the last analysis come out of income, w h i c h in turn depends upon the price structure. D a t a on payrolls, wholesale and retail sales, rents, living costs, and prices, therefore, are of utmost value in making annual revenue estimates. It should be remembered also that arbitrary limitations on the taxing power make " b u d g e t i n g " subsidiary to revenue. Under such conditions " b u d g e t i n g " becomes merely "planning the expenditure of a fixed r e v e n u e . " " Budget making, in the best sense, presumes taxing power and tax leeway. However, since the tax structure of many local units and states cannot reach the income produced in a national economy, good budget making cannot take place without a re-allocation of control over " b u d g e t i n g " to a governmental unit, which can reach the income, or without the creation of local administrative units capable of making good budgets, with the funds and tax leeway m a d e available by state and Federal aids. Balancing the budget. Perfect budgetary balance is impossible, because both the expenditure and revenue plans involve j u d g m e n t and prediction, and because certain variables, such as prices, continue to operate after the budget has been adopted. T h e best that can be expected is relative balance, with receipts and expenditures almost equalling each other. Large balances or deficits indicate poor esti38

See C y r , Burke, and M o r t , op. cil., C h . V .

" See Morrison, op. cil., p. 489.

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mating and planning. A balanced budget usually means one which shows a slight excess of revenues over receipts, both at the beginning and end of the budgetary period. Where budgetary estimates reveal a deficit, expenses must be cut or revenues increased. Where deficits begin to appear during the year, expenditures must be cut or borrowing must take place. Continued deficit financing is dangerous in small units of government, like school districts, and is highly controversial for larger units. 40 It is a gamble at best and can easily lead to insolvency. According to De Young, the balanced budget is more than a balancing of receipts and expenditures. It depends also upon the balance between the educational program, on the one hand, and the expenditure and revenue plans, on the other. These, in turn, depend upon the allocation of control between professional personnel and policy-making bodies and the cooperation and coordination secured in making the budget, not only within the school system but also within the area and among school districts and other units of government and with state and national agencies—governmental and nongovernmental. 41 BUDGETARY

CONTROL

Budgetary control of expenditures begins with the formulation of the budget, but the budget acts as a control throughout the budgetary period. The budgetary plans provide for spending money on the most essential activities, planning to get the most return for money spent. The attainment of these objectives, however, depends upon the control exercised throughout the life of the budget. Budgetary control requires accounting, standards or specifications for services and materials to be purchased, sound personnel and purchasing policies, standards for the use and consumption of goods and services, work plans, standards for performance, and means of appraisal or evaluation. The first step in budgetary control is transferring the various budget allotments to the accounts of the school district. Thus each department, division, unit, or branch of the service is held accountable for the amount which it is authorized to spend. Throughout the year these entries call attention to the original authorization, the amount 4

® See Buck, The Budget in Governments of Today, pp. 116 ff. De Young, Budgeting in Public Schools, Ch. V.

41

FIGURE I I I . T H E PROGRESS OF THE SCHOOL B U D G E T " "From C . A . D e Y o u n g , Budgeting in Public Schools (1936), p. 2 1 .

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spent to date, and the amount of the unencumbered balance. Hence, accounting and reporting are important in budgetary control. 41 The next step is carefully prepared work programs for each department, division, unit, or branch of the service having an appropriation authorized by the budget. Such a plan should show not only what is to be done during the year but also what goods and services are to be consumed, how much these will cost, when payments must be made, how much revenue will be taken in, and when this can be expected. Programs of this kind enable the executive to see the work of the school system as a whole, to anticipate expenditure requirements throughout the year, and to adjust any discrepancies between expenditure requirements and balances on hand at certain times.4* The allotment plan of budgetary control, a compromise between the lump sum and the detailed budget, is sometimes used in public administration as a means of control. Under this plan budgetary requests are made in detail, but appropriations are made in lump sums, with authority given to management to make monthly or quarterly allotments upon the basis of demonstrated need. It really forces the continuous preparation of work plans but can easily stifle initiative under certain types of management. 44 Accounts and work plans are valuable aids to budgetary control, but both are secondary to good management. T h e purchase of goods, their distribution, care, use, and control; the employment of personnel, their assignments, work loads, compensation, protection, and supervision; the operation, maintenance, utilization, and protection of plant; and all other aspects of management are the important factors in control. Regular audits and reports and occasional surveys by outside experts are necessary to assure good management. BUDGETARY

PROCEDURES

AND

TECHNIQUE

Detailed procedures and techniques for the preparation, presentation, interpretation, adoption, administration, and appraisal of budget msiking and budgetary control are beyond the scope of this chapter. The best single reference on public school budgets is that of De Young. Much valuable material will be found also in the works of Engelhardt and Engelhardt, Moehlman, Morrison, Reeder, and " Ibid., Ch. X . " See Buck, op. cit., pp. 456 ff. 44 See W. B. Munro, Municipal Administration (1934), op. cit., p. 37.

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Smith. The Proceedings of the National Association of Public School Business Officials contain many valuable reports on budgetary procedures and techniques. READINGS American Association of School Administrators (2), Ch. X V ; Buck (14); Campbell (20); De Young (48); Engelhardt and Engelhardt (65), Ch. X X I I ; Flocken (70), pp. 60-72; Grace and Moe (82), Ch. V I I I ; Linn (101), Ch. I V ; Moehlman (112), Chs. X I and X V I - X I X ; Morrison (118), Ch. X X ; Mort and Reusser (123), Ch. V I I ; National Survey of School Finance Staff (147), Ch. V I I ; Pittenger (159), Ch. III; Rainey (164), Ch. V I ; Reeder (165), Ch. I V ; Shultz (169), Ch. V I ; Simpson (170); Smith (174), Ch. V ; Twente (195); and Womrath (203), Ch. X I I I .

CHAPTER

X

PRUDENCE AND ECONOMY IN PUBLIC SCHOOL EXPENDITURES PRUDENCE AND ECONOMY

DEFINED

The prudential principle. It is to the interest of all the citizens of a state or a school district to get the maximum of educational opportunity with public school funds. As consumers taxpayers are interested in getting the maximum educational returns from school taxes. It may be accepted as an axiomatic principle of public school spending, therefore, that public funds appropriated for public schools should be used only for the support of public schools and should be spent in such a manner as to obtain the maximum return. In brief, the prudential principle demands that the school system should be so organized, financed, and managed that it will do the things agreed upon in such a way as to make sure that people are treated equitably, that discretion in action is not exercised by persons or agencies incapable of making good judgments, that funds are not lost or wasted, and that the school system is financially sound. This principle operates through the whole realm of education.1 The essence of the prudential principle is basically personal— competent, professionally trained personnel working in cooperation with able, wise, and trustworthy lay boards of control, supported by an alert, informed public opinion. Not mere governmental structure, allocation of control, budgetary procedures, legal restraints or safeguards, mandatory legislation, and audits, but good day-by-day management assures prudent spending. Prudence in management is a prerequisite to continued public support of schools. Waste and inefficiency ultimately will be discovered. Its discovery will weaken public confidence. When segments of the public are convinced that there are possible savings which have not been realized by management, public school budgets will be attacked. Lack of confidence in management, moreover, leads to drastic actions which often do not promote economy but which do 1

Mort and Reusser, op. cit., pp. 104-5.

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impair the effectiveness of public schooling. Elimination of waste and inefficiency, on the other hand, enables the schools to improve their services, thus increasing public faith and confidence in the schools. Economy definitions. Economy is a generally misunderstood concept in management. It frequently is confused with any retrenchment or reduction in existing expenditures. It often is made synonymous with downward adjustments in expenditures in relation to downward trends in income or prices. It is used in the sense of parsimony or excessive frugality. It is also used to mean the getting of the greatest amount of goods and services for the least financial outlay. Low initial expenditure is considered economy by some. Low unit costs are frequently regarded as a sign of economical management. Retrenchments or over-all reductions in expenditures by themselves do not mean economical management; indeed they may mean increased waste. W h e n applied on a state-wide basis through reductions in state aid applying to all districts, they penalize the districts which have been economically managed, reward the inefficient, and increase inefficiency and waste. T h e economically administered districts often are forced to curtail the quality of management or personnel, to eliminate sound programs, to postpone essential changes or maintenance, and to purchase items with low initial cost regardless of future costs, with the result that wasteful spending is increased. Such reductions do nothing to remove the causes of inefficient management where it exists. Adjustments to changed levels of income and prices are one indication of economical management, but downward adjustments alone do not mean economy. Indeed they mean increased waste and inefficiency when incomes and prices begin to rise again, through inability to retain a n d obtain qualified personnel, maintain services, and make the most desirable purchases of goods and services. Such adjustments must work two ways if they are to promote economy. Parsimony, low initial costs, and low unit costs certainly are not necessarily conducive to economy. Failure to provide adequate educational provisions may reduce the productive capacity of a community, state, or nation; hamper the working of economic institutions; and lower the general standard of living. Low initial costs may increase wasteful spending in the future through excessive maintenance costs and the necessity for premature replacements. Low unit costs may be nothing more than an indication of poor quality

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and inadequate quantity of educational services. There may be more waste in low unit costs than in high unit costs. T r u e economy in education is the wise or prudent spending of money. It means providing and maintaining educational services and standards and making educational adaptations which will enhance the productive capacity of the nation, insure the wise consumption of goods and services, facilitate the operation of economic institutions, and promote the general welfare and the survival of the nation. It means utilizing the most efficient combinations of personal services and material goods to achieve the results desired, but this is relative to efficiency of the economy as a whole. Efficient and m i n i m u m use of personnel is at a premium only when there is demand for the services in other endeavors. Extreme efficiency when there is widespread unemployment among persons of like abilities or talents is hardly economical. T r u e economy involves adjusting expenditures to upward and downward trends in prices and income, requiring careful decisions in long-term debts and the place of borrowing in current spending. It means careful attention to both quantity and quality in hiring personnel and making purchases, with consideration not only for present outlays but also for future costs. Economy can be judged only in terms of the return over a period of years, not in terms of initial expenditures alone. Economy is not a depression activity alone; it generally is more important to economize when the economic system is functioning efficiently. Economy in expenditure management cannot be divorced from economy in all types of school management. Collection of all moneys d u e the school system at the minimum cost; the securing of all income due from all sources, such as interest on balances; the protecting of all funds from loss through theft, graft, carelessness, or other acts or omissions; the avoiding of overpayments; the protection and maintenance of all property; the efficient management of personnel; the protection of the school district from public liability or lawsuits; and similar activities are all involved in economical administration. 2 Need jor caution. In the attempt to achieve economy in budget planning and daily administration caution should be exercised to avoid overemphasis on economy at the expense of equally important considerations. T h e morale of employees, the willingness to discard outworn policies and practices, the readiness to adopt new ends or '•See H . H . Linn, Practical School Economies (1934), C h . I I I .

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means, the broader public interest, the welfare of future generations, the attention to individual differences, and the maintenance of public faith and confidence are important considerations in expenditure management. T o m a k e economies which destroy the morale and enthusiasm of employees only increases friction and inefficiency, possibly wiping out the effect of the economies. Good judgment, consideration of all factors, and understanding and support on the part of all concerned are important in economical management.' T h e application of the prudential principle can easily impair the application of other principles, such as the adaptability principle, but it also can promote adaptability. It is a mistake to think that the only w a y to finance new enterprises or improvements is to increase total spending. V e r y frequently the elimination of waste and inefficiency in present spending will provide more leeway for adaptation than can be achieved through the local property tax or increased aid from other units of government. Economical management also often can assure greater equality of opportunity than can increased state aid to weak or inefficient units of administration. T h e proper application of the prudential principle cannot possibly conflict with the equally desirable principles of adaptability and equalization of opportunity. Fundamental elements. Prudence and economy in school district expenditure m a n a g e m e n t require: (1) adherence to sound principles in expenditure m a n a g e m e n t ; (2) adequate safeguards for protecting funds from loss, misuse, or mismanagement; (3) an accounting system w h i c h not only will serve as a safeguard and a check on management but also will provide essential data; (4) attention to the major decisions having the greatest potentialities for waste or economy; and (5) cooperation and assistance from, and direct action by, the state. PRINCIPLES OF ECONOMICAL MANAGEMENT Need jor principles. T h e facts and techniques of public school finance are too numerous to be kept in mind, too dynamic to be useful for very long, and frequently too specific to be generally applicable. Financial understanding, policy formulation, and management require a body of principles w h i c h will serve as a basis for expenditure decisions and action. Simpson says: H e (the s u p e r i n t e n d e n t of schools) needs principles against w h i c h h e m a y m e a s u r e propositions, scales w h i c h will help h i m test proposals a n d to sort ' See Mort and Reusser, op. cit., pp. 112 ff.

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and reject the wrong and to select the right. But most of all he needs principles which may be made the basis positively, not negatively, for the development of a program of finance to be fought for and built upon for a decade or a quarter of a century.4 Butterworth over twenty years ago observed: We need a philosophy of educational finance. School support is in a chaotic state. We have no clearly defined principles governing such problems as these: the proportion of all civic expenditures that should be used for the schools; the distribution of funds among city and rural schools, among elementary and high schools, among general and practical courses; the place of state, county, and district in raising funds; the control of these funds; methods of apportioning them. While a few conceptions have been accepted as fundamental and have been observed rather generally in practice, a study of existing conditions justifies the conclusion that all too frequently each school-finance problem has been solved as it arose with little or no regard to its relations with other problems.6 Such an observation would be about as true today as it was in 1918. The National Survey of School Finance staff in 1931 observed that: " A t the present time, American education seems to be at the juncture where we find we have accepted many practices without realizing that they are based on conflicting principles and ideals." 6 Principle defined. Principle generally is used in a very indefinite sense, meaning an element, a cause, an origin, a source, a fundamental truth, a general or settled rule of action, a law, a foundation or beginning for thinking, a tenet, a maxim, or an ultimate in philosophy. In this discussion a principle is defined as a generalization based upon fact, experience, or research, which may or may not now be a general or settled rule or policy, but which has been sufficiently criticized or tested to guide present decisions and action. The very nature of public school finance precludes "scientific principles" such as those implied in most writings on public school finance during the period 1910 to 1930. For example, there is no reason for assuming that there is an ideal proportion of total civic expenditures to be expended for public schools. It depends upon the nature, number, quantity, and quality of municipal services provided by the city government; the proportion of children in the population; the quantity and quality of the educational opportunities made available 4

A. D. Simpson, "Financing the Educational Process" in American Association of School Administrators, Schools in Small Communities (Seventh Yearbook, 1939), p. 348. ' J . E. Butterworth, Problems in State High School Finance (1918), p. v. • Research Problems in School Finance, p. 18.

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to all children; the percentage of pupils attending nonpublic schools; the relationships between general municipal authorities and school authorities; the percentage of school expenditures financed by other units of government; the percentage of other city revenues provided by other units of government; the services performed by overlapping units of government; the extent of borrowing and nontax revenues; and numerous other factors, none of which is likely to remain constant either in space or time. The same is true of most of the other relationships enumerated by Butterworth. Like all social sciences public school finance has few principles which can be regarded as scientific laws. What is done in public school finance depends upon the nature of government, economic conditions, social values and policies, social conditions, educational objectives, principles, and techniques, and other equally important dynamic social factors. Democracy as a form of government or social organization involves a minimum of philosophical absolutes or fixed premises from which clearly defined principles flow. The very essence of democracy is experimentation, expediency, compromise, and gradual adjustment, meeting problems as they arise. Public school finance does not lack principles. What it lacks are scientific, unchanging, or unchallenged principles. Useful generalizations. A study of statutes, state regulations, local practices, and the literature of school administration will reveal a number of principle-like generalizations which can contribute to economical management. Many of these are mentioned in the discussion of the budget, safeguards, and accounting. Many others are found in the literature of personnel management, purchasing, and business management in general. 7 Included among these are the following: 1. The routine or machinery of financial management should not interfere with careful decisions regarding expenditures. Wise expenditures are more important than elaborate recording of or accounting for unwise expenditures. 2. Employment and management of all personnel should be delegated to professionally competent personnel officers. 3. Qualifications or specifications should be established for each position, and all appointments should be made upon the basis of 7 See references on personnel management, purchasing, and business administration in the bibliography.

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merit, after the qualifications of all applicants or recruits have been rated by experts. 4. All positions in the school system should be classified by the personnel officer according to caliber of personnel required, duties, amount of service rendered, and other factors; and salaries should be established for each classification. Skilled personnel certainly should not be assigned and paid for doing work which might be done by unskilled workers. 5. Personnel should not be dismissed for social, personal, religious, political, or other unjust reasons; the only grounds for dismissal should be incompetency, inefficiency, or other legal reasons. The service of each employee should be appraised by professionally competent supervisors, using objective measures in so far as possible, and retention and promotion should be made upon the basis of merit as determined by professionally trained supervisors. 6. Means and incentives should be provided for stimulating continuous improvement in service on the part of all personnel. 7. Means and incentives should be provided for encouraging or compelling personnel to take leave of absence during temporary disability and to retire in case of permanent disability or superannuation. 8. Purchases should be made by persons technically competent to judge utility, quality, value, cost, and other pertinent factors. 9. Purchases should not be made without due consideration of (a) future expenditures for maintenance, repairs, operation, and service, and (b) effects on other expenditures. Low initial cost plus high operating cost may not be economical; high original cost with the effect of lowering other expenditures may be most economical. 10. Money can often be saved indirectly through careful planning and management, such as (a) carefully worked out schedules of activities making maximum use of personnel, plant, and equipment; (b) the use of mechanical equipment for routine work when the saving is sufficient to justify the expenditure; (c) emphasis on prevention and safety, removing risks and hazards, and thereby reducing insurance and other expenses; and (d) frequent appraisals made of school property in order to adjust insurance coverage. 1 1 . The pay-as-you-go policy should be followed in so far as possible. Borrowing to meet current expenses should be avoided; all longterm debt for capital improvements should be carefully planned; interest payments should be reduced through incurring debt during depressions, refunding where possible, and issuing callable bonds

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where there is a possibility of quick repayment of the indebtedness. 12. The handling of supplies and equipment is an important element of expenditure management. Losses, wasteful uses, and damage or destruction due to careless management increase expenditures. Depreciation can be decreased by careful management. 13. F01 many purposes there are great advantages in standardization—it reduces the cost of replacements and repairs. 14. Price data without exact data on quantity and quality are meaningless. If specifications are not available, buy according to samples. Quality is very important, but it is relative to the use. Poor quality for certain uses is waste; high quality for other uses is waste. 15. Careful spending requires that a school system get the greatest quantity and quality for a given price through (a) wholesale or cooperative buying according to specifications whenever possible, giving due consideration to service, local politics, and costs of delivery; (b) purchasing by bids; and (c) attention to yearly price fluctuations and price trends. (If firms will offer lower prices during certain seasons, try to take advantage of this fact, giving attention to general price trends and any possible savings through borrowing if it is necessary. Buy in small quantities during a period when there are indications of falling prices.) 16. The business affairs of the school system should be so handled that the system can take advantage of any discounts allowed for prompt or early payment of bills unless the system is earning more in interest on its deposits than it would save. 17. When services or activities must be curtailed, choice should be made upon the advice of competent, professionally trained school administrators, and should be accompanied by future plans for making adequate educational provisions for the community. 18. The basic criteria in economical management are the general welfare of the nation and the particular welfare of the children and community served. Both the total demands for other public services— Federal, state, and local—and the demands made upon the schools must be weighed in making decisions.8 SAFEGUARDING

EXPENDITURES

Nature of safeguards. With the development of public school and public finance in general have come numerous safeguards to protect * See National Education Association, Research Division, Constructive Economy in Education (Research Bulletin, Vol. X I , No. 3, 1933), pp. 59 ff.

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public funds from loss or theft or to eliminate dishonesty, graft, or waste in financial outlays. Many of these safeguards are incorporated into legislative requirements, others are found only in well-managed school systems. Some of the safeguards are limited only to protecting income, others to protecting expenditures, but many of them apply to both income and expenditures. Most of them encourage prudent management or at least do not hamper it, but in recent years more restrictive measures have been introduced. The acceptable safeguards consist of authorizations, audits, surveys, records, accounts, reports, and certain legal requirements. T h e questionable safeguards consist of arbitrary restrictions on the taxing or spending power of school districts, review of budgets and expenditures, detailed mandatory legislation, and certain types of state audits, all of which were discussed in Chapter V I I . Authorizations. In public financial management it has become a generally adopted principle that the person, bureau, or agency authorized to create liabilities or make expenditures should not be the person, bureau, or agency to make disbursements. T h e Engelhardts state the principle in this way: " T h e responsibility and accountability for the receipt, care and disbursement of funds should be separated from those of the purchase, and payment of service or materials." 9 This principle applies to all funds managed by the school system, general as well as internal, the only possible exception being small petty cash funds. Responsibility and authority to create liabilities and make expenditures authorized by the budget most certainly should be delegated to management. Otherwise it cannot be held responsible for results. Management in turn may delegate responsibility and authority to a personnel officer or bureau, a purchasing agent or bureau, or other officers or bureaus. All proposed commitments, however, should clear through a central agency so that management may see each in relation to others. Responsibility and authority to authorize expenditures, make audits, check receipt of all goods and services, keep records and accounts, and perform other acts relative to financial management should be clearly allocated and generally understood. The custody of funds and the authority to make disbursements from funds need not be divorced from management. T h e treasurer may be responsible to management, but the chief executive and those whom * N. L. Engelhardt and Fred Engelhardt, Public School Business Administration (1927), p. 70.

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he has authorized to create liabilities or make expenditures should not handle funds or disburse funds. In public schools there often is a treasurer directly responsible to the board, but this is not objectionable as long as he is required to provide management with the reports or statements which it needs. V e r y frequently it is more economical for schools to use the treasury of another unit of government or to make the depository the treasurer. These practices also are satisfactory as long as management can secure the data it needs to carry on its functions. T h e treasury should be authorized to make payments only upon receipt of warrants or vouchers certifying the authorization, legality, and correctness of the claim and the receipt of the goods or services involved. 1 0 Audits and surveys. M o r e important than separation of authority in financial management is auditing. Good audits will discover errors, omissions, losses, or defalcations which can exist no matter how powers are separated. Such audits include four types: pre-audits, current audits, operational audits, and post-audits. 11 M a n a g e m e n t is responsible for making a pre-audit of all proposed financial liabilities or commitments to see that each expenditure is needed or justified, that the expenditure is authorized, that it is legal, and that there are unencumbered funds available to m a k e the expenditure. T h e decision as to the need or justification of the expenditure certainly is one to be made by the chief executive or one of his staff who is familiar with the total needs of the school system. Decisions as to how a service or a good conform to specifications or agreed-upon standards frequently require professional j u d g m e n t . Otherwise, many of the steps in a pre-audit can be performed by a nonprofessional officer. In a small school system part of the pre-audit may be performed by a competent clerk or secretary, and in a large system management m a y be aided by the budget office, the accounting office, or the comptroller's office, usually in the school system itself, but not necessarily. Pre-audits by outside agencies, except as they relate to the legality, authorization, and balances available to make payment, are not conducive to good expenditure management. Such pre-audits deprive management of its chief function, finding ways and means to achieve the objectives with the m i n i m u m outlay of resources. 10 11

See J. M . Pfiffner, Public Administration (1935), Ch. X V I I . See H. Walker, Public Administration in the United Slates (1937), pp. 254 ff.

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T o be of most value in management the pre-audit should conform to the following three principles: 1. Each item of expenditure should be approved beforehand by the chief executive or his deputy, after making certain that the item has educational value, that it is needed more than other items, that it is legal and conforms to the policies of the system, that it is suited to the use to be made of it, that it is economical, and that there are unencumbered funds available to pay for it. 2. All commitments should be considered in relation to other needs. Is this item needed more at this time than some other item? Management should keep a list of needs and not make any outlay unless it is near the top of the list, ranked according to urgency or importance. 3. Commitments should not be made without due consideration to (a) future expenditures (maintenance, repairs, operation, and service) and (b) effects upon other expenditures. Closely related to the pre-audit is the current or internal audit which checks the pre-audit approval or authorization of an expenditure, the rendering of the service or the receipt of the goods, the conformance with specifications, the orders or agreements, the prices charged, and the presence of errors or omissions in all documents or records involved. A l t h o u g h the checking of the goods or services against specifications, especially those relating to quality, requires professional skill and j u d g m e n t and must be performed b y professional officers, most of the steps in the current audit can be handled by the accounting officer or staff. T h e current audit should include all treasury operations. Collection of moneys due the school system, the issuance of receipts, deposit of funds, balances, and disbursements should be controlled through daily reports and periodic audits. 1 4 T h e operational audit or work audit aims to check performance during a given period with plans appearing in the budget or the work program. It is a most important function of management, requiring professional skill and technique. It is a task w h i c h cannot be delegated to a business or budget office, except possibly to check expenditure estimates against actual expenditures or to figure the unit costs requested by management. M a n y educational operations do not readily lend themselves to periodic audits. T h e objectives are too varied; the factors involved are too numerous; too m u c h depends upon past experiences; the results are cumulative and expanding, and the most valuable results do not easily lend themselves to measure» Pfiffner, op. cit., pp. 348 ff.

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ment or appraisal. Hence, operational audits by agencies of questionable competence in educational matters are of little value in management. Management is best promoted by occasional surveys of total operations and frequent surveys of detailed operations by qualified outside agencies such as state education departments and university specialists. Where unbiased audits are desired by controlling boards, outside expert appraisals may be undertaken. A research division can contribute much to operational audits if staffed with sufficient experts or specialists. The post-audit of all receipts and expenditures by outside auditors to check the legality, honesty, and accuracy of all records and transactions and to suggest possible improvements in management is the fourth type of audit. This audit may be detailed or it may follow a random sampling procedure. It may be done by private firms or state officials. In the case of public schools, such audits have the greatest value to management if they are done by specialists in school administration. Usually these are most apt to be available in audits made by state education departments. If possible an outside audit should be made every year, with a detailed audit alternating with a sampling audit if necessary. Proper post-audits not only do much to preserve public confidence but they also contribute to expenditure management. 11 The post-audit, like the survey by outside experts, is one of the best means available to the board of education for checking the competence and effectiveness of management. Procedures. The prudent expenditure of school funds for the purposes intended is facilitated by establishing sound procedures to be followed in such matters as budget preparation, collection and deposit of receipts, procurement, employment, payrolls, storage and distribution of materials, inventories, use of materials and plant, operation and maintenance of equipment and plant, office routine, record keeping, accounting, and auditing. Such procedures should discourage carelessness, waste, extravagance, loss, theft, or damage; conserve human material and financial resources; and increase efficiency, economy, and effectiveness. They should be as simple and as standardized as possible and should not waste the time of professional personnel. They should be appropriate to the size of the school system and their cost should bear a reasonable relationship to the 11

See Engelhardt aud Engelhardt, op. cit., pp. 840 if.

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potential economies or savings involved. They should be scrutinized from time to time to eliminate mere routine and outworn procedures. 14 The collection and deposit of funds is part of income management, but they cannot be divorced from expenditure management. All officials collecting or having custody of all school funds should be bonded—including tax collectors, treasurers, bookkeepers, auditors, business officials, or others who may collect receipts, make payments, or keep accounts. In so far as possible tax collection should be made by but one unit of government serving a given area. It is to the advantage of the schools to have taxes collected at the lowest possible cost. School authorities should cooperate with other agencies in promoting prompt tax collection. Information should be kept on trends in tax collection. School officials must keep informed on tax assessments and administration. Property underassessed or escaping assessment creates financial difficulties for the schools. Assessment rolls, tax lists and exemptions should be studied. Every effort should be made to have revenues from taxes and state aid coming in when they are needed. Much short-term borrowing is unnecessary. The treasury should be centralized and if practicable should be that of a fairly large unit of government to reduce the necessity of short-term borrowing. Great care should be exercised in selecting a depository and in so far as possible the depository should offer security for funds left in deposit. If the amount deposited is large, it may be desirable to use more than one depository, but each must meet legal requirements and provide adequate safeguards. Procedures should be set up for the issuance of serially numbered receipts for all funds received, and funds should be deposited the day they are received, and reported to the accounting office. Procedures should be established for collecting all moneys due the school system. If it is feasible, interest should be secured on bank balances. The depository under certain conditions might well be made the treasury. Property and investment of the public school system should be managed by experts, and periodic reports should be made of their status.15 14

For detailed procedures see Engelhardt and Engelhardt, op. cit., W. G. Reeder, The Business Administration of a School System (1929); H. P. Smith, Business Administration oj Public Schools (1929); and G. Womrath, Efficient Business Administration oj Public Schools (1932). " See American Association of School Administrators, Schools in Small Communities, Ch. X V I I ; and C. A. DeYoung, Budgeting in Public Schools (1936), Ch. X I . See also Fred F. Beach, The Custody oj School Funds (1933); H. H. Linn, Safeguarding School Funds (1929); D . S. Young, Control oj Available Public School Income (1928).

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T h e need for frequent audits of income m a n a g e m e n t and for making disbursements only on the basis of pre-audits a n d current audits was shown in the previous section. M a j o r procedures useful in expenditure m a n a g e m e n t will be summarized in the remainder of this chapter and the chapter on personnel (Chapter X I ) . Documents or records. T h e safeguarding of public school receipts a n d expenditures depends very largely u p o n certain original documents or records. Reports, accounts, and accounting procedures are no better t h a n these original evidences of accrued assets or liabilities. T h e n u m b e r a n d type of original documents or records available will be relative to the procedures established for the m a n a g e m e n t of income a n d expenditures, b u t certain ones should always be preserved, including contracts for personal services; contracts or agreements for the purchase of goods and services; invoices; all other evidences of financial liabilities such as j u d g m e n t s ; copies of bills issued by the school system; a n d all other evidences of moneys d u e the system, including correspondence, certificates, or tax rolls. Copies of requisitions, bids, or quotations, time sheets, payrolls, receipts issued, warrants or vouchers, canceled checks, and check stubs also are essential. W i t h o u t such records the auditing and appraisal of financial operations are m a d e difficult. I n keeping original records or documents, as in all routine features of expenditure m a n a g e m e n t , overelaboration should be avoided. O n l y the d a t a which are most useful in management should be kept. Duplication in such records should be avoided. Records should quickly yield a m a x i m u m of information with the m i n i m u m expenditure. Flexible, loose-leaf forms, serially prenumbered forms— bills, receipts, vouchers, and checks—and standardized or uniform sized records involving a m i n i m u m of clerical work should be used. Accounts, reports, and publicity. Accounts are both a safeguard and a n aid to m a n a g e m e n t ; therefore, they will be assigned a separate section in this chapter. T h r o u g h accounts school boards, m a n a g e m e n t , auditors, a n d investigators can at any time determine the status, history, a n d trends in expenditure m a n a g e m e n t in the system. Accounts are required for budgetary control. T h e fact that accounts are public records open to public inspection at all times is in itself a safeguard. Accounts, moreover, provide the d a t a required for making reports to school boards or other agencies. Voluntary or required re-

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ports or publicity on financial operations, a valuable safeguard and contributor to public confidence, must be based upon the accounting system. The effectiveness of all reports and publicity as safeguards, therefore, is relative to the caliber of accounting in the school system. Reports should be issued at least monthly by both the accounting officer and the treasurer for presentation to the board of education. These should not be overdetailed and technical. Periodic and annual reports should be prepared for the general public. These should be limited to fundamentals, should be simple, and above all should be interesting and attractive. Other safeguards. State laws, state department requirements, and city charters or ordinances contain numerous provisions designed to safeguard school expenditures. Procedures, forms, limitations, mandates, reports, standards, rules and regulations vary from state to state and among various types of districts within a state. The chief danger is that such controls or safeguards remain in effect long after they have become obsolete. Another danger is that such measures are adopted piecemeal, and their total effect upon management is never understood. Such legal safeguards should be reviewed periodically in relationship to each other. In so far as possible they should be left to state education departments. The most valuable safeguard which the state can provide is to define qualifications for employees charged with financial responsibilities, provide opportunities for professional preparation for such persons, establish certification requirements, and create conditions which will lead to the employment and retention of competent managers of school moneys. Provisions for the in-service improvement of persons already in service through leadership, research, and supervisory services are equally important. ACCOUNTING

FOR SCHOOL

MONEYS

Purposes. During the past quarter of a century an extensive literature on public school accounting has been developed. Since the Report of the Committee on Uniform Records (1912) 1 6 and Hutchinson's study of public school accounting in 1914, 1 7 a great deal of material from business accounting, public finance, surveys of school systems, research studies, theoretical discussions, and descriptions of actual practices has been added to literature on public school accounting. See p. 351.

17

J . H. Hutchinson, School Costs and School Accounting (1914).

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T h e resulting mass of unorganized or poorly organized, oftentimes conflicting, materials is confusing to school executives. Probably one of the greatest sources of confusion is the failure to recognize the f a c t that there are m a n y possible objectives in accounting and that v a r y i n g purposes lead to varying principles, procedures, or practices. T h e whole subject of public school accounting has been m a d e unnecessarily complicated for the administrator. N o doubt, such confusion and misunderstanding are partly responsible for the wide g a p w h i c h still exists between actual practices and w h a t has been considered desirable or ideal in public school accounting. T h e r e are at least five purposes served by accounting in public schools: (1) to provide data required for state reports; (2) to safeguard public school funds from loss, theft, waste, or misuse; (3) to promote budgetary control; (4) to provide information needed by management in recommending policies or changes in policies, preparing budgets, making decisions, carrying on operations, determining efficiency, and improving operations, or to provide d a t a required to solve many complex economic and fiscal problems involved in public school financial m a n a g e m e n t ; and (5) to provide information needed by the public, and school boards in particular, to appraise management. Prerequisites. T h e foregoing list of purposes indicates the value of accounting in expenditure m a n a g e m e n t , but certain conditions must prevail if accounting is to yield its potential values. A l l legal requirements relating to accounting should be reviewed from time to time. T h e purposes to be fulfilled by accounting in the school system must be decided upon. A c c o u n t i n g must be seen in its true perspective as an aid to management, not a substitute for it. T h e documents, records, forms, and procedures required to attain each purpose must be known. Responsibility for the accounts must be delegated to a person w h o understands their function and meaning. In so far as possible, the actual work should be done by persons w h o understand the significance of w h a t they are doing. O n l y the m i n i m u m , most simple, least expensive, most flexible, most usable forms, documents, statements, records, or methods, requiring the fewest clerical operations necessary to accomplish the purposes should be used. D u p l i c a tion in accounts should be avoided; accounts which yield information accurately and quickly should be used. T h e number of records is less important than the amount of time and effort required to keep

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them. All records should be related to each other. Management should be constantly on the alert to discover possible improvements in methods, records, or forms. T h e accounting system should be appropriate to the size of the school system and its cost should bear a reasonable relationship to the amount of expenditures or funds involved. State requirements. State requirements have little value except as they contribute to the safeguarding and management of expenditures in the various school systems affected. The financial data required annually by state education departments or other state agencies generally should be confined to facts useful to the local school system. From time to time state agencies should reexamine their required reports to eliminate duplication and data which are not compiled, data which are compiled but not used, and data which are compiled but not used enough to justify the time and effort involved in obtaining them. State requirements should aid and stimulate local management, not stifle it by making accounting predominantly the routine collection of data for the state. O n the other hand, accounts should indicate whether or not all legal requirements have been compiled with, for example, legal authorization of expenditures or legal use of certain funds. Where state forms, procedures, or methods are prescribed they should be utilized to the utmost extent to fulfill the purposes of accounting in the local system. Supplementary forms or modifications of state forms should be used where necessary. There is no excuse for allowing state requirements to hamper management. Safeguards through financial accounting. T h e t y p e of a c c o u n t i n g usually

required by law and found in actual practice is useful primarily as a safeguard. Its primary function is that of providing an historical record of all income received and all expenditures made. It is cash accounting. It shows how much cash was taken in during a year, how much was spent, and the balance left on hand. It is the simplest type of accounting and provides much data of value in other types of accounting. Cash accounting procedure usually involves two independent records of receipts and payments—one kept by the treasurer and the other by the accounting officer, bookkeeper, or clerk. T h e treasurer's record consists of a chronological listing of receipts and disbursements on an appropriate form or in the appropriate book. The other independent record consists of a chronological record or register of receipts similar to that of the treasurer and a chronological record or

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register of expenditures based upon each voucher. Where discrepancies exist between the two records, it is the responsibility of management to reconcile the two. T h e usefulness or effectiveness of cash accounting is relative to the following factors: ( 1 ) assurance that all income accruing to the school system from sales or rentals of property owned, sale and investment of securities, insurance adjustments, profits from business transactions, interest on balances and bank deposits, tuition, refunds, gifts, charges for services rendered, current taxes, delinquent or uncollected taxes, state and Federal aids, fines, fees, or other revenue sources is recorded; and (2) the validity, honesty, and accuracy of all original evidences of liabilities including contracts, purchase orders, payrolls, invoices, canceled checks and warrants, losses, judgments, legal settlements, or other claims. Budgetary control. Budgetary control means that management at all times must be able to determine quickly the unencumbered balance remaining in each appropriation, or the relationship between anticipated receipts and actual receipts. Encumbrance accounts show all commitments made or liabilities incurred, such as contracts for service or purchase orders, even though payment has not yet been made. Cash accounting, which merely shows how much has been spent, does not reveal the true balance which remains for further expenditures. Accounting for purposes of budgetary control requires that the amount appropriated for each undertaking or item in the budget shall be entered at the top of a page in an encumbrance record. When a contract is signed or a purchase order is issued or any other liability accrues, the amount is subtracted from the original appropriation. However, the accrued liability may not always equal the actual amount which must be paid. For example, a teacher may not be able to fulfill a contract and a substitute m a y be employed at a lesser amount. Hence it is necessary to supplement accrual accounting by cash accounting. Cash accounting for purposes of budgetary control requires that each payment out of an appropriation item in the budget be subtracted from the balance on hand in the appropriation in an expenditure ledger. There should be separate columns in the encumbrance rccord, one showing the payments made on encumbrances and the other the balance unpaid on encumbrances. T h e true balance may

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be provided by comparing the balance in the expenditure ledger with the balance unpaid on the encumbrance record. 1 ® As an aid to management. T h e complexity, difficulty, and cost of accounting are relative to the problems for which it must provide data—the use to be made of accounts. If the problem is simply to determine expenditures by buildings, services, subjects, grade levels, organizational units (for example, elementary), or other units, all that is required is an extension of cash accounting. Each expenditure must be allocated among the various services or units by means of a code and separate accounting records. A n account will be kept for each unit or service for which expenditure data are desired. If the problem is to determine cost in terms of goods and services actually consumed, the accounting procedures become much more involved. Inventories, allowance for prepayments, for example, insurance premiums, computed depreciation on furniture, equipment, and buildings, computed rent for land use, and obsolescence are important in cost accounting. T o a considerable extent it is estimation. 19 If the problem is to determine the economic or social costs of schools, the accounting becomes still more involved and even greater reliance must be placed upon estimation. 20 One of the major problems of financial management is the determination of values, services, or returns received for money spent. Accounting for this purpose is far from simple as was shown in Chapter I V . It is one of the most complicated accounting or research problems faced by management. Writers on school finance at one time put much emphasis on unit costs," a concept found extremely valuable in business management. With the advance of educational science and the great expansion of school services, both in quantity and quality, which have taken place in recent years, most of the unit cost theory as applied to educational costs is not valid, as was shown in Chapter I V . Nevertheless, unit costs still are stressed in publications of taxpayers' organizations and others not familiar with the problems involved. Accounting systems. Management should adapt its accounts to its " Sec De Young, Budgeting in Public Schools, Ch. V I and American Association of School Administrators, Schools in Small Communities, Ch. X V I . ' • S e e H. C. Morrison, The Management oj the School Money (1932), Chs. V-VI, V I I I , XVIII. " See Chapter IV and Morrison, Op. cit., Ch. III-IV. u See B. F. Pittenger, An Introduction to Public School Finance (1925), Ch. IV.

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own purposes, needs, and resources. However, many of the accounting systems for schools prepared by various states and organizations and individual specialists will be found most helpful in developing local adaptations. New York state developed one of the earliest state systems of school financial accounting." New York, 2 1 Pennsylvania, 14 California, 45 Iowa, 26 Texas, 27 and other states recently have issued helpful manuals. T h e United States Office of Education, 28 the National Education Association, 2 ' and the National Association of Public School Business Officials, 1 0 have all prepared materials. They are now cooperating in the preparation of a new handbook to be issued soon by the United States Office of Education. Among the specialists who have published works on school accounting are Engelhardt and V o n Borgersrode, 11 Fowkes, 12 M o e h l m a n , " and Peel. 14 Kemmerer developed a system of accounting by machine methods.' 5 MAJOR

POTENTIAL

ECONOMIES

Responsibility. School districts and local management operate within a legal framework established by state law. Governmental structure, the powers and duties of school officials, the division of responsibilities, legal requirements or restrictions, and other state regulations or supervision frequently limit what management can do to promote economy. For example, small districts, often taken for granted by local management, prevent certain major economies in management such as optimum use of personnel or reasonable class size. Local management is responsible for making every economy possible within the existing legal framework and for supporting movements to bring about the n H. E. Case, Handbook of Instructions for Recording Receipts and Disbursements jor School Purposes (rev. ed. 1933). " R e g e n t s ' Inquiry, Finance Staff, School Accounting and Financial Reporting (1939). 24 Lester K . Ade, A Uniform Accounting System jor School Districts (Bulletin No. 115, Department of Public Instruction, Pennsylvania, 1939). " California, State Department of Education, Handbook oj Instructions for Classification of School Expenditures (1939). " R . E. Williams. Uniform Financial Accounting for Iowa School Systems (1934). 1 7 Texas State Department of Education, Manual of Instructions in Financial Accounting (1933). "Bulletins, 1912, No. 3, and 1928, No. 24, and Circular, 1941, No. 204. " R e s e a r c h Division, School Records and Reports (Research Bulletin, Vol. V , No. 5, 1927). S 0 See Proceedings, 1938 and 1939. 31 F. Engelhardt and F. Von Borgersrode, Accounting Procedure for School Systems (1927). n J . G. Fowkes, Handbook of Financial Accounting for Schools (1924) and Principles and Practices of Financial Accounting for Schools (1934). " A . B. Moehlman, Public School Finance (1927), Chs. V I I I , X I I - X I V , X X - X X I I . M A. J. Peel, Simplified School Accounting Systems (1925). " W . W. Kemmerer, School Accounting By Machine Methods (1930).

PRUDENCE AND ECONOMY state cooperation a n d action required to attain maximum economy and efficiency. W h e r e legal provisions are responsible for local waste or inefficiency, budgets, reports, and other interpretative devices should call attention to this fact. T o o frequently school administrators perpetuate the existing legal structure by taking for granted or ignoring these real causes for inefficiency and uneconomical spending. T h e full attainment of many of the major potential economies outlined in this section will require state cooperation and action of the type outlined in the next section. Nevertheless, in many districts much improvement can be made without waiting for the state. Oftentimes voluntary cooperation among neighboring units, large and small, will help attain a reasonable degree of economy in operation. Local management should take the initiative in bringing about such cooperative relationships or undertakings. Personnel. O n e of the major potential sources of waste in public school management is in the employment, payment, and use of personnel. Outstanding examples of such waste include failure to employ or retain the most qualified; salary and wage levels which are out of line with the talents required; small class size; small pupil-teacher ratios, or uneconomical work loads; and assignment of work to highly trained, highly paid personnel which might be performed by persons with less training, receiving lower salaries. Since salaries and wages represent the major part of the school budget, such waste becomes serious. Because of their importance in public school expenditure management, the problems of employment and payment for personal services has been assigned a separate c h a p t e r . " T h e control of pupil-teacher ratio or work loads involves a great many factors, for example: the objectives to be attained; the skill of teachers; curriculum provisions, requirements, policies, and restrictions; organization; length of the school day; the size of the unit of administration; the size of the attendance area; the size and structyre of plant a n d other facilities available; adjustments to decreasing enrollments; and schedules. Small class size, pupil-teacher ratio, or small work loads in order to attain certain results do not mean waste if the objectives are being achieved a n d if equal or better results cannot be attained by more economical use of personnel, facilities, and materials. A school system " Chapter XI.

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which stresses individual attention and broad objectives will have to operate on a smaller pupil-teacher ratio than a system concentrating upon group mastery of a limited number of skills or subject matter, but this is relative to the technical skill and efficiency of the staff. Research has tended to support the hypothesis that larger classes are about as effective as smaller ones in mass instruction in textbook content, but research has not yet provided the answer for other objectives. The consensus of opinion and average practice would indicate that a class size of from twenty-five to thirty-five is optimum for most instructional purposes. The pupil-teacher ratio, of course, will vary depending upon the special services provided. Work loads will depend upon the objectives, curriculum, preparation required daily, services rendered, methods used, and many other factors. Achievement of results desired, methods and efficiency, and the health and morale of the teaching staff must be weighed in making decisions on class size, pupil-teacher ratio, and work loads. It is somewhat doubtful that extremely small class size or small pupil-teacher ratios ever can be justified educationally.' 7 Small class sizes, pupil-teacher ratios, and work loads, not related to the objectives sought and the results achieved, and caused by failure to utilize the most economical means, are the worst kind of waste. Indeed they imply more waste than is generally recognized, because they tend to keep salary and wage levels below those necessary to attract and hold the caliber of personnel required to attain best results.' 8 Small class size without qualified personnel has no educational advantage, except that unqualified teachers can do less harm. One of the most common causes of wasteful use of personnel is the small school district. High expenditure levels; small classes; low pupilteacher ratios; inefficient work loads; inefficient service due to the variety of services required of all personnel; and low salary levels which react unfavorably on the quality of personnel retained are the consequences of small school districts. The more enriched the curriculum and the broader the services rendered, the more wasteful become small units of administration. Small high school districts are more wasteful than small elementary districts. Even many of the newly created districts are too small to provide efficiently the breadth of offerings characteristic of modern public schooling. The remedy, of " See Encyclopedia of Educational Research, pp. 197 ff. See also H. H. Linn, Practical School Economies, pp. 138 ff. » See pp. 306 ff.

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course, is state action to create larger districts and to provide certain services on a state-wide basis, but in the meantime, economies are possible by cooperation among neighboring units.** W h y should a small district bordering on a city offer small enrollment technical vocational courses or small enrollment college entrance courses? Why should two small units not far apart, each provide full-time nurse service? Why should two neighboring districts each offer small enrollment language courses? Another partial way out is through alternating offerings. As long as the services are retained, steps to increase the pupil-teacher ratio up to an optimum level either by state action or voluntary cooperation among units, not only will be an economy, but also a means for improving the services rendered. 40 Another common cause for small classes and other wasteful uses of personnel—professional or other—-is unsatisfactory attendance areas, both in large and small school districts. Unless services are provided over an area large enough to provide enough children for efficient service, waste results. O f course, in sparsely settled areas the feasibility of transportation must be weighed. Young children cannot be forced to remain at school for a long time; no children should be forced to spend an unreasonable time being transported; and the comfort and safety of pupils must be considered at all times. Where transportation cannot be provided, educational opportunities must be made available even if waste and inefficiency result. Where the cost of transportation is out of proportion to the potential savings and the educational opportunities in the attendance area are reasonably satisfactory, it is better to operate the school in that area than to transport pupils. 41 Plant and physical facilities are a third cause of inefficient use of personnel. It is true that buildings are rather inflexible, but they should not be. In the past a degree of permanance or rigidity has been incorporated in educational plants which is not justified by nature of educational phenomena. School buildings like office buildings should be easy to alter as need arises. Even where buildings are rather inflexible every effort shouid be made to overcome the limitation. T h e " See T . Covert, Larger Units for Educational Administration—A Potential Economy. (Pamphlet No. 45, U. S. Office of Education, 1933); F. P. O'Brien, Economies Possible in Larger School Units. (Studies in Education, Vol. II, No. 3, University of Kansas, 1934). See A . G. Grace and G. A. Moe, State Aid and School Costs (1939), Part I, Chs. I V - V , and Part II, Chs. I V - V . 41 See H. A. Little, Potential Economies in the Reorganization oj Local School Attendance Units

40

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annual debt service required to make the alterations or the expense involved in completely abandoning the plant should be weighed against the potential savings. Every possibility of better utilization through schedule modifications should be tried. In the case of equipment or furniture adjustments are easy. Why should a high school continue to offer three small sections of typewriting instruction simply because it has only twelve typewriters? The annual waste of personnel service would pay for the additional typewriters over and over again. Intructional policies, curriculum provisions, organization, restrictions, and requirements which hamper the optimum use of personnel should be carefully reexamined to determine their educational value. Semi-annual promotions, for example, which frequendy reduce class size, have not proved their worth-whileness and have been abandoned by one school system after another. Failure to take steps to reduce failures through guidance and health services and insistence upon the attainment of arbitrary percentage standards in examinations often increase small classes; yet, none of these can be justified educationally. Arbitrary requirements for high school graduation never have proved their worth and always have been abandoned or modified. In spite of their questionable standing, certain high schools insist upon them with resulting adverse effects upon the effective use of personnel. Arbitrary internal grade organization and housing of pupils (for example, 8-2-4, 6 - 2 - 3 , o r 6 - 3 - 3 ) frequently have little effect upon the type of education offered; yet they often preclude the efficient use of personnel, especially where a small number of grades are grouped together for purposes of administration, instruction, and housing. All such matters should be carefully evaluated and judged in terms of the results attainable by alternative methods or procedures. Failure to adjust the staff to decreasing enrollments will decrease pupil-teacher ratios or class size and increase waste. With both elementary and secondary school enrollments declining, this becomes one of the most serious difficulties confronting school management in all types of school districts. Curtailment of new appointments, retirement at an earlier age, careful elimination of the incompetent, retraining competent personnel for other types of work, closing schools, combining classes, and abolishing unnecessary positions must accompany downward trends in registration. Failure to make such adjustments not only means present waste but it means future waste through

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curtailed salary schedules and the consequent deterioration in personnel. The necessary adjustments can be made by local management in the large units, but in small units adjustments to decreasing attendance can be accomplished only by district reorganization. The making of a program or a schedule offers management its greatest opportunity to plan for the economical use of personnel and physical facilities, particularly in the high schools. Schedule making goes far beyond the assignment of persons to a given duty, in a given place, at a given time. It involves an evaluation of each activity and a consideration of whether or not it needs to be offered every year or in every school. There is no reason why many small enrollment subjects cannot be alternated. There is no reason why certain specialized college entrance, vocational, technical, or other small enrollment courses should not be offered only at certain convenient regio nal centers. Schedule making, moreover, requires a careful appraisal of all physical facilities, planning for multiple use, for example, installing cafeterias for study halls, making alterations to existing plant, and the purchasing of additional furniture and equipment where necessary. It also requires some imagination in relation to timing. Why should all offerings come during certain hours of the day? Why should not certain advanced courses be offered at night when adults, out-ofschool youth, and high school students may enroll? Why should all periods be the same length year after year, day after day, and within a given day? Why should a school have the same number of periods every day? Why should all courses be for the same number of weeks? The schedule is almost as fundamental in management as the budget itself. Only through inventiveness, experimentation, and flexibility in schedule making can the maximum use be made of personnel and material. The schedule, next to the budget, determines the return received for money spent. The schedule controls the use of time, effort, and materials in a school system. The maximum curriculum enrichment for money spent is relative to the schedules made. Management should give schedule making the emphasis it deserves.42 The selection, assignment, scheduling, and use of noninstructional personnel also offers many possibilities for economies. Office and clerical work should be reduced to a minimum through simplified procedures, mechanical aids, and other means. In a large system a « See R. E. Langfitt, The Daily

Schedule and High School Organization Making a High School Schedule oj Recitations (1931).

(1938); R. C. Puckett,

PRUDENCE AND

ECONOMY

pooling of clerical assistance promotes economy. 4 1 T h e employment of bus drivers who also can make repairs and aid in the operation and maintenance of plant and of janitors who are qualified as skilled artisans; the use of women for janitorial work; the staggering of work schedules; and the in-service training of all noninstructional employees are valuable aids to economy in operation. 44 Careful planning in transportation, housing pupils, and all auxiliary enterprises such as cafeterias will reveal potential savings in personnel or better use of the personnel available. T h e expansion of the curriculum to include socalled "fads and frills" often is attacked as a cause of low pupilteacher ratios and high costs or waste. T h e educational value of some of the newer curricular offerings would be easier to prove than the values achieved through certain traditional offerings, but that issue need not be discussed. T h e argument lacks validity anyway. If the children are in school and if they are not enrolled in the so-called "fads and frills," they must enroll in some other activity. T h e added cost of these other activities will about wipe out the saving resulting from the elimination of the "fads and frills." It is true that a large number of electives often tends to reduce the pupil-teacher ratio, but this generally is due to small districts, inadequate attendance areas, poor planning, or improper scheduling. Purchasing and related activities. T h e purchase, storage, distribution, care, protection, and use of school property is replete with opportunities for economy. Oftentimes the greatest economies can be effected by state purchases of standardized items like buses, tires, and gasoline, but there are numerous opportunities for economy through voluntary cooperation and local action. There are numerous examples of school districts uniting with neighboring districts or other units of local government in purchasing. Very often a school district can profit by taking advantage of centralized purchasing in a large unit of local government like a city or a county. 46 There are outstanding examples of good purchase programs in local districts, large and small. 44 The success of a purchasing program is dependent upon ability to See Engelhardt and Eiigelhardt, Public School Business Administration (1927), Chs. V I I and X ; Linn, Practical School Economies, pp. 52 ff. and Ch. V I I . 44 See Linn, Practical School Economies, pp. 194 ff. 4 1 Grace and Moe, op. cit., Ch. I X . *' T . Covert, Centralized Purchasing and Distribution 0/ School Supplies (Circular No. 112, U. S. Office of Education, 1933). 41

ago

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ECONOMY

judge values in terms of original cost, specifications, suitableness for purposes intended, probable length of usefulness, depreciation, upkeep, or obsolescence. Most important of all, management must know that the proposed purchase is needed more than other possible purchases and that the purchase will contribute to the attainment of the results desired. In the case of most products management is not able to judge values without the aid of a testing laboratory which can be provided economically only in a large administrative unit. T h e drawing up of specifications is in itself an undertaking only for specialists. 47 Unless specifications can be provided for all items to be purchased and unless testing facilities are available to see that purchases conform to specifications, management must buy on the basis of samples, make use of private testing services,48 or secure guarantees or certificates that materials conform to certain specifications. Materials prepared by the National Bureau of Standards, Consumer's Research, 4 » and Consumer's Union and other agencies contain helpful suggestions. T h e National School Supply Association has contributed much to trade practices. Striving for simplification and standardization, purchasing in large quantities, competitive bidding, and taking advantage of seasonal price advantages usually promote economy. 60 Occasionally the purchase of used goods or goods sold at forced sale results in economies. Advantage always should be taken of cash discounts. 51 T h e purchase of land and the making of capital improvements occur infrequently, but because of the large expenditures usually involved, extreme caution must be exercised. Land for school sites should be purchased years in advance before subdivision and building have created high land values. Frequently land can be acquired through delinquent tax proceedings. Capital expansion or improvements should be postponed if possible during war booms or during the upward swing of an inflationary movement. T h e y should be See Committee on Specifications, Official Minimum Manufacturing Standards and Specifications for Text Books (1939); R . W . Hibbard (Ch.), School Supplies (Bulletin No. 6, National Association cf Public School Business Officials, 1938; also Bulletin N c . 1, 1932). 4 * See National Bureau of Standards, Directory of Commercial and College Research Laboratories. ** See E. J . Brown and R . D . E. By all, Consumers Research in School Supplies (Bulletin of Information, Vol. X V I , No. 9, Kansas State Teachers College, 1936). 60 Engelhardt and Engelhardt, Public School Business Administration, C h . X X V I I . " S e e Linn, Practical School Economies, C h . V ; Reeder, op. cit., C h . X V I ; H. P. Smith, op. cit., pp. 267 ff.; and Womrath, op. cit., C h . X V for detailed suggestions.

47

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291

undertaken during depressions and when prices are falling. Painstaking research, surveys, and planning should precede capital undertakings. The erection of a new plant should be avoided if possible through changes in attendance areas, organization, or scheduling. The cost of remodeling old buildings should be weighed against the cost of new structures. Competent architects, consultants, and inspectors should be employed. Pride, real estate promotion, and local pressures should be resisted.52 One of the greatest wastes in school capital improvements is overemphasis upon permanence. Enrollments, needs, curricula, techniques, knowledge, and most educational phenomena are not constants. Trends fluctuate; emphasis on objectives changes with the times; knowledge advances as science advances; and means are being improved. Obsolescence is more to be feared than depreciation. School buildings are not enduring monuments. Structures must be flexible and easy to remodel. Expensive stone, metal, wood, or ornamental materials should be minimized in school building construction. Utility, hygiene, safety, simplicity, and beauty are primary considerations, but they can be achieved with due attention to the equally important elements of probable usefulness and flexibility. Rigid structures can mandate wasteful use of personnel and materials for decades. In planning capital outlays careful estimates should be made of the effects of such undertakings upon current operating expenses. Prudent purchasing procedures have little value unless accompanied by prudence in the storage, distribution, care, protection, or use of property. Procedures and controls must be established which will make it easy for personnel to secure the materials which they need to carry on their work, but which will prevent waste or dishonesty in distribution and use. Procedures for the storage and distribution of materials and standards for the care and use of materials are essential in prudent management. Equipment and buildings should be operated in such a manner and repairs and maintenance should be such that they will last for their periods of probable usefulness with the minimum of expense. Property should be protected against loss or damage " S e e Linn, Practical School Economies, Ch. X I I I ; N. L . Engelhardt and Fred Engelhardt, Planning School Building Programs (1930); American School and University; Proceedings 0/ the National Council on Schoolhouse Construction; N. L. Engelhardt, J r . , School Building Costs (1939); A . B. Moehlman, Public School Plant Program (1929); National Society for the Study of Education, The Planning and Construction oj School Buildings (1934 Yearbook, Part I).

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through removing causes for losses and through carrying adequate insurance. 5 1 Debt service. Debt service, long-term debt in particular, often represents one of the greatest wastes in public finance. Payment of high interest rates on a debt for a plant which could be replaced at half its original cost, when money can be borrowed at half the original rate, is not uncommon. Not only is this itself a wasteful use of public funds, but it often increases the amount of waste in other expenditures by forcing unwise reductions in the quality of personnel and materials used and by forcing postponement of maintenance and other unwise curtailments in the operation, care, and protection of property. 54 T h e management of debt service involves many fortuitous factors, because it depends upon forecasts of future developments. T h e only safe policy is to avoid the creation of debt through the "pay-as-youg o " policy. 5 5 Short-term borrowing can be avoided through seeking reforms which will spread tax and state aid payments over the entire fiscal year. M u c h long-term borrowing can be avoided by careful planning and management of capital outlays. Every possible adjustment should be tried before capital improvements are made. Incurring long-term debts to finance current expenses is a bad practice. Where it is absolutely necessary to incur long-term debt obligations, there are no certain ways of guaranteeing economy. T h e trends in the price level and construction costs should be studied over a long period of time. Obviously buildings should be erected when prices are low and interest rates low, as they usually are during a depression. However, there usually is a long interval between depressions. States ordinarily can secure lower interest rates than small units of government and states can create revolving funds which can be loaned to smaller units at reasonable rates of interest. When prices are high and interest rates high, callable bonds should be considered. Sinking " See Engelhardt and Engelhardt, Public School Business Administration, Chs. X V I - X V I I and X X V I I I - X X I X ; J . H. Hixon, Fuel Saving Practices and Devices (Bulletin 946, New York State Education Department, 1930); N. L. Engelhardt, C. E. Reeves, and C. F. Womrath, Standards for Public School Janitorial-Engineering Service (1926); Linn, Practical School Economies, Chs. V and I X - X ; A. N. McCullough, A Critical Analysis of the Fuel Management Program Jor Schools (1937); C. E. Reeves and H. S. Ganders, School Building Management (1928); H. M. Schwartz, Improvement in the Maintenance of Public School Buildings (1926); Southern States Work Conference in School Administrative Problems, School Plant Operation and Maintenance in Southern States (1940); G. Womrath, op. cit., Chs. X I I - X V I I and R . B. Taylor, Principles of School Supply Management (1929). M See Grace and Moe, op. cit., Ch. X I . " See Don L. Essex, Bonding Versus Pay-As-Tou-Go in the Financing oj School Buildings (1931).

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293

f u n d s or reserve funds g e n e r a l l y are not r e c o m m e n d e d b y public finance writers, b u t lack of g o o d m a n a g e m e n t is the m a i n o b j e c t i o n . " C o m p e t e n t m a n a g e m e n t in b o o m periods should g i v e careful consideration to sinking funds, at least moderate-sized funds for short periods, taking the precautions necessary to avoid the limitations of s u c h funds. W h e r e bonds must be issued in a period of relatively high prices the following precautions should be taken: 1. C a r e f u l consideration to serial bonds 2. A m o r t i z a t i o n of the d e b t at once, a m o r t i z i n g as m u c h as possible during the early years 3. Issuance of bonds for as short a period as the fiscal c a p a c i t y of the district will p e r m i t ; a n d 4. A r r a n g e m e n t of p a y m e n t s at a time w h e n there will be funds available to p a y t h e m w i t h o u t short-term b o r r o w i n g T h e economical m a n a g e m e n t of b o n d i n g also requires c o m p e t e n t e c o n o m i c and legal a d v i c e , g r e a t care in c o n f o r m i n g to all legal requirements, c o m p e t i t i v e bids, careful advertising and marketing, a n d careful a c c o u n t i n g . 6 7 Transportation. T r a n s p o r t a t i o n service must b e p r o v i d e d as economically as possible. It m a k e s h a r d l y any direct contributions to education, its f u n c t i o n b e i n g limited to getting children to e d u c a tional opportunities. A n y m o n e y spent o n transportation in excess of w h a t is required b y reasonable safety, comfort, a n d convenience is waste, and often m e a n s c u r t a i l m e n t in essential e d u c a t i o n a l services. A l t h o u g h transportation expense still represents a relatively small part of total expenditures, it is g r o w i n g in i m p o r t a n c e a n d offers m o r e opportunities for waste t h a n most services p r o v i d e d . T h e efficient a n d e c o n o m i c a l m a n a g e m e n t of transportation begins w i t h the f o r m u l a t i o n of standards for convenience, comfort, a n d safety, m a n y of w h i c h are i n c o r p o r a t e d into laws or into the regulations of state education departments, state public service commissions, or other agencies h a v i n g jurisdiction over transportation. S i n c e they are a m a j o r d e t e r m i n a n t of transportation costs, such requirements should be e v a l u a t e d f r o m time to time and standardized in so far as possible. L a c k of u n i f o r m standards increases the cost of e q u i p m e n t " S e e Engelhardt and Engelhardt, Public School Business Administration, pp. 443 ff.; F. C . Ketler, Reserve Funds in Public School Finance (1931). " See Linn, Practical School Economies, C h . X I I ; Engelhardt and Engelhardt, Public School Business Administration, Chs. X V I I I - X I X ; J . G . Fowkes, School Bonds (1924); M u n i c i p a l Finance Officers Association, Marketing Municipal Bonds (1935).

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and operation. Adherence to national standards makes possible mass production and the economies w h i c h g o with it.' 8 T h e efficient and economical m a n a g e m e n t of transportation requires state action, large units of administration, and cooperation with other units of government, because standards, routing (particularly avoidance of overlapping and the transporting of more than one load with each conveyance), size and type of conveyance, road conditions, bridges, traffic, and laws and regulations are such important factors. However, local m a n a g e m e n t through prudent planning, accounting, selecting of personnel and equipment, assigning of personnel, and care in the operation and maintenance of equipment c a n attain a great m a n y economies. T h e recent literature on transportation contains a great deal of helpful material on transportation management." Insurance. Insurance is another expenditure w h i c h requires careful management if it is not to be wasteful of public moneys. T h e first step toward economy is to eliminate hazards and remove causes of property losses or lawsuits. Every precaution against fires, injuries, theft, and other insurable risks should be taken by local management. 6 0 In the case of buildings, overinsurance or underinsurance should be avoided through reappraisals of values from time to time, especially w h e n construction costs have changed significantly. Self-insurance by large units of government or a state or mutual insurance under state auspices often will prove to be the most economical procedure.* 1 I n purchasing insurance, economies c a n be effected through careful studies of losses in relation to premiums paid by school districts and b y securing revisions in the classification of school risks. 62 T h e employment of an insurance adviser, paid in part at least u p o n the basis " See National Conference on School Bus Standards, Minimum Standards for School Buses (1939); National Safety Council, School Buses—Their Saje Design and Operation (1936). " See J . E. Butterworth and V . Ruegsegger, Administering Pupil Transportation (1941); A . R . Meadows, Safety and Economy in School Bus Transportation (1940); M . C . S. Noble, Fupil Transportation in the United States (1940); W . G . Reeder, The Administration oj Pupil Transportation (1939). , 0 See Engelhardt and Engelhardt, Public School Business Administration, C h . X V I I ; Reeder, op. cit., C h . X I V ; New Y o r k State School Boards Association, An Insurance Program for Guidance oj School Boards (1936); N . E. Viles, Improving the Insurance Program in Local School Districts (1934). *' See Grace and M o e , op. cit., C h . X ; and O . P. Gruelle, Slate Insurance of Public School Property in Kentucky (Bulletin Vol. 11, No. 3, University of K e n t u c k y , Bureau of School Service, 1939). 0 See W . T . Melchior, Insuring Public School Property (1925); H . A . Smith, Economy in Public School Fire Insurance (1930).

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295

of the economies effected; keeping adequate records; keeping up-todate inventories; the prompt repairing of all losses or the settling of possible liability claims; the purchasing of blanket policies; and the purchasing of long-term policies staggered so as to keep annual costs fairly uniform, often will yield worth-while savings. Auxiliary agencies and undertakings. T h e n u m b e r of auxiliary agencies

and undertakings found in a school system is extremely variable. Such activities should be scrutinized for economies like any other aspect of management. Attendance service,' 4 health and nurse services," library service," cafeteria service,' 7 so-called extra-class activities," and other activities each present special problems which have been studied by specialists. The administrator should be familiar with these services and take whatever steps are necessary to assure their economical management." STATE ACTION AND COOPERATION TO PROMOTE PRUDENCE AND ECONOMY

The extent of state responsibility. Maximum economy in public school spending cannot be achieved without state action and cooperation. As shown in the previous discussion the scope of state responsibility for prudent and economical management is far-reaching. State action is required to bring about reorganization of local governmental structure; elimination of costly tax collection procedures; elimination of small wasteful school administrative units, especially high school units; establishment of a central treasury system and centralized purchasing; consolidation of other duplicating and over11 See National Association of Public School Business Officials, Insurance Practices and Experience of City School Districts of the United States and Canada (193a; being revised and brought up-to-date). M See T . L. Austin, Waste in Expenditure Due to Nonattendance (1927); F. E. Emmons, City School Attendance Service (1926); A. O. Heck, Administration of Pupil Personnel (1929). •• American Association of School Administrators, Health in Schools (20th Yearbook 1942); M. E. Chayer, School Nursing (1931); U. S. Office of Education, Organization and Administration of School Health Work (Bulletin 1939, No. 12, 1940); J . F. Williams and C. L. Brownell, Administration of Health and Physical Education (1934). " J . Gardiner and L. B. Baisden, Administering Library Service in the Elementary School (1941); M. R. Lucas, The Organization and Administration of Library Service for Children (1941); M. Wilson, School Library Management (1939). • 7 M. D. Bryan, School Cafeteria (rev. ed., 1938). 18 H. C. McKown, Extra-Curricular Activities (rev. ed., 1937). New York State Education Department, Safeguarding, Accounting and Auditing of Extraclassroom Activity Funds (Bulletin No. 1144). Albany, N. Y.: The Department, 1938. " See also Linn, Practical School Economies, Ch. X I V .

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lapping locail governmental functions or services; attainment of reasonable debt limits; provision of safeguards to protect funds from loss, waste, or misuse, for example, standardized bonding, budgetary and accounting requirements, standards for depositories, uniform reporting procedures and forms, required publicity, and audits; and the improvement of local management through pre-service and in-service preparation, certification requirements, merit appointments, research, surveys, formulation of standards for guidance, and supervision. Attainment of maximum economy in use of personnel, purchasing, capital outlays, debt service, transportation, and insurance also require state action or cooperation. The state cannot exercise its responsibility by merely retrenching on state aid or offering incentives for local retrenchments. Such actions do not remove the causes of imprudent spending or waste; they do not represent constructive steps for improvement. In fact, retrenchment often increases waste by forcing undesirable curtailments in well-managed districts, and it frequently does not eliminate any waste in poorly managed districts, merely shifting the wasteful expenditure to local tax revenues. In applying the prudential principle through direct state action and cooperation it is easy to violate other basic principles, especially the adaptability principle. Adaptability, however, does not demand a hands-off policy on the part of the state. There is a prudence in the restrictions on bond issues—debt limits—since they are safeguards which prevent one generation from mortgaging too heavily the future of another generation. The state also can provide other safeguards— supervision, laws, accounting procedures, audits, reports, hearings, checks and balances—to see that money is spent honestly on public education. The state can establish a type of district structure and take other steps which will be conducive to good management and the securing of the maximum return with public school funds. It can establish minimum standards and procedures for the guidance of local authorities and make expert advice available to them. It can eliminate costly, wasteful, and inefficient practices which do not directly affect the educational process, for example, on such matters as tax collection, insurance, transportation, purchasing, operation and maintenance, capital outlays, and debt service. The state can provide certain services directly, such as technical schools, teacher education, and transportation, where such direct state action will

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improve the service and reduce the cost. None of these applications of the principle will violate the adaptability principle. Examples of state action. States are gradually coming to recognize their responsibilities for the prudent management and spending of public school moneys. Some states have made significant progress in reorganizing local units of administration. Delaware has only the state unit and fourteen independent districts. West Virginia reorganized on the county basis, and Maryland and U t a h have few independent units, being reorganized on the county basis. Most southern states have strong county units, the state unit being very powerful in North Carolina. Progress is being made in the supervisory and auditing services rendered by state education departments. Most states provide budget forms. 7 0 A t least twenty states provide for regular state audits of school financial affairs. 71 A l a b a m a , Florida, K e n t u c k y , N e w Jersey, N e w York, Ohio, and Pennsylvania are among the states which have taken the lead in rendering financial services for local districts, but only a beginning has been made in any of these states. In various states are found examples of direct state action, the study of which should offer guidance to other states. Delaware and North Carolina have pioneered in state-administered transportation. 72 A l a b a m a has made advances in state participation in planning capital outlays, pooling short-term borrowing through a public school corporation, and creating a state insurance fund. 7 1 Florida, Michigan, North Dakota, South Carolina, and Wisconsin have taken the lead in self-insurance of state-owned property. North Dakota, South Carolina, and Wisconsin have included schools in this coverage. California requires cooperative purchasing of school supplies among rural districts. New York allows certain districts to make purchases through the State Division of Standards and Purchases. In M a i n e the State Education Department administers schools in sparsely settled areas. Connecticut, Massachusetts, and New York have established regional centers for certain technical courses. Further research probably would reveal other examples of potential economies through state action. T . Covert. Financing of Schools as a Function of State Departments of Education, p. 11 (Bulletin 1940, No. 6, M o n o g r a p h No. 3, U . S. Office of Education, 1941). 71 Ibid., p. 24. 71 See Meadows, op. cit., pp. 182 ff. 7 1 See A l a b a m a Education Association, The Education Bulletin (Vol. I V , N o . 9, J a n u a r y 70

15. »940)-

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Research and survey recommendations. Recent research studies and survey reports tend to stress the responsibility of the state unit in assuring the maximum return from school expenditures. Outstanding among these is the Regents' Inquiry Report in New York state, which among other things recommended: I. Establishment of the following conditions by the State Education Department for apportionment of state aid in order to assure its wise management: (1) Reasonable teacher load; (2) Adequacy of services—transportation, health, guidance, supervision, and others; (3) Proper maintenance of plant; (4) Adequacy of plant and equipment; (5) Proper accounting, reporting, auditing, and budgeting; (6) Maintenance of school 190 days and properly enforced attendance laws; (7) Employment of qualified teachers and administrators; and (8) Adequacy of the educational program. 74 II. Improvement of the training program for school administrators, with emphasis on broad preparation for public administration and educational leadership, with certification based upon examinations similar to those used for admission to the bar or the medical profession. Provide technical preparation for non-professional officers, pre-service and in-service. 76 I I I . Improvement of local management of financial affairs through research and planning service, bulletin service, in-service training opportunities, demonstration installations, manuals of business practice, field cooperative service, and cooperative services such as pooling of auditing services, cooperative purchasing, cooperative mutual insurance, and pooling of insurance appraisal requirements. 7 * I V . Amendment of the Education Law to include the following minimum budgetary requirements: (1) Assignment of definite and exclusive responsibility to the superintendent for the preparation of the budget estimates, and to the board of education (except in fiscally dependent cities) for revision of the estimates and enactment of the appropriation resolution; (2) Inclusion in the budget of all revenue and expenditure estimates covering all funds; (3) Presentation by the superintendent of summary tables and a budget statement outlining the financial and educational condition of the district and describing the proposed financial and educational program for the 74

Grace and Moe, State Aid and School Costs, p 254. " Ibid., pp. 256 ff. Ibid., Ch. VI.

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299

coming year; (4) Itemization of estimated revenues and expenditures in detail, according to the classification prescribed by the State Education Department; (5) Limitation of the total estimated expenditures of each fund to the total estimated cash receipts thereof; (6) Presentation as an integral part of the budget of a work program which includes a description of new policies, proposed activities, enrollment estimates, unit cost data, and other pertinent information relating to administration of the school system during the budget year; (7) Publication of the tentative budget in newspaper or pamphlet form for general distribution; and (8) A public hearing prior to final action on the appropriation resolution. 77 V . Installation of an accounting system which will include preaudits, control accounts, an account for each fund, records for complete budgetary control, accrual recording, perpetual inventory records, periodic reports, post-audits, common terminology, classification by schools, flexibility, and accounting for all internal funds (extra class). 78 V I . Promotion of cooperative purchasing, preparation of standards or specifications for purchases, competition among vendors, testing services, a state-wide insurance system, control of local indebtedness, reserve fund, pay-as-you-go policy in long-term debts, and elimination of short-term borrowing through balances and revision of the revenue program. 7 9 Such recommendations are typical of recent conclusions found in various research studies and survey, but they should be examined carefully before they are accepted in toto. If the recommendations numbered two, three, and Jour were carried out there would not be any need for many of the state controls presumed in number one. If item one were really enforced, it would be far better to go to complete state control and support of the program. Strict adherence to it practically would eliminate the need for local management. Control of pupil-teacher ratio easily can mean control of the results attained. Standards for adequacy likewise can substitute state control over the ends and means. Safeguards as to length of term, employment and retention of competent personnel, budget making, accounting, reporting, and auditing, on the contrary, can aid and improve local management. " Ibid., pp. 355-56. "Ibid., Chs. I X - X I .

78

Ibid., pp. 359 ff.

3°°

PRUDENCE AND

ECONOMY

READINGS American Association of School Administrators (2), Chs. X I V - X V ; Cooper (36); Davis (45); De Young (48), Part I I I ; Engelhardt and Engelhardt (65); Forbes (71); Foster (72); Fowkes (74); Grace and Moe (82), Part I I ; Henzlik (90); Linn (101); Michigan Education Association ( i i o ) ; Moehlman (112), Part I I and Chs. X X - X X I I I ; Morey and Diehl ( 1 1 5 ) ; Morrison (118); Mort and Reusser (123), Part I I ; National Education Association (133) and (143); National Survey of School Finance Staff (147), Chs. V I - V I I ; Pfiffner (156), Parts I I and I I I ; Reeder (165); Smith (174); Walker (200), Part II; Walker and others (201); and Womrath (203).

CHAPTER

XI

IMPROVED PERSONNEL POLICIES AND ECONOMICAL EXPENDITURES AIMS OF PERSONNEL

POLICIES

Major objectives. T h e personnel policies of a public school system should promote the following objectives: ( i ) attract qualified candidates for positions and discourage the unqualified; (2) hold able, skillful, and successful personnel in the system and eliminate the unfit; (3) provide incentives and means for continued improvement in service; (4) increase efficiency and morale of all personnel by assuring (a) satisfactory working conditions, (b) adequate rest and recreation, (c) reasonable outlays for maintenance of health, and (d) resources sufficient to meet temporary disabilities or emergencies; (5) enable teaching personnel to acquire a high cultural status for the best possible teaching; and (6) permit all personnel to acquire social and economic status commensurate with their responsibilities or duties. The quality of public schooling is determined to a considerable extent by the intelligence, energy, enthusiasm, character, educational background, and professional skill of teachers (their total personalities) . Good buildings, courses of study, mechanical aids, books, equipment, and supplies contribute very little except as they are used intelligently by teachers. The primary purpose of personnel policies, therefore, is to attract and hold persons with the qualifications required for superior teaching. An equally important objective is to enable such persons to continue to render valuable and efficient service. This requires continued growth and cultural development, for according to Elsbree; " O f all groups in the community, teachers have first claim to a broad cultural background—not by virtue of their own personal worthiness, but because the development of cultural tastes and ideals in the younger generation rests mainly in their hands." 1 Relationship to salaries. The recruiting and retention of good teachers depend largely upon salaries. When the general level of teachers' 1

W. S. Elsbree, Teachers' Salaries (1931), p. 4.

IMPROVED PERSONNEL

POLICIES

salaries is low relative to earnings in other occupations, the teaching profession cannot recruit the most able youth. During and immediately after the First World War, teachers' salaries in the United States were very low relative to other occupations. In 1913 their average yearly salaries were 45 percent of the average of all Federal government employees, 48 percent of the average of all salaried employees, 53 percent of the average yearly earnings of gainfully occupied persons in general, and about 86 percent of the average wages of workers in industry. 2 Whereas teachers could earn 50 percent more a week than common laborers in 1910, by 1920 teachers and common laborers were receiving about the same return.* Under such conditions there was no incentive for able youth to invest in the educational background and professional preparation required for teaching. The Annual Report of the Education Department of New York state for j 920 deplores the fact that, " A t the beginning of the school year 1 9 1 9 1920 the registration in our state normal schools had reached the lowest point within a decade." 4 During that year over 2,300 persons were allowed to teach in the state on temporary licenses even though they were not qualified. Nearly 6,000 were teaching with certificates for which not even high school graduation was required. Another 9,000 had licenses requiring only about six weeks' preparation beyond high school. Only about 15,000 out of 60,700 teachers employed that year had normal school or college graduate certificates; and the remainder had certificates most of which required but a year or two of preparation beyond high school.5 Failure of youth to prepare for teaching and abandonment of the profession by a large number of experienced teachers were the consequences of the low level of salaries from 1 9 1 0 to 1920. High professional standards and continued improvement in service follow an improvement in the economic status of teachers. During the decade 1920 to 1930, teachers' salaries generally were increased and teachers again were able to earn more than common labor. By 1930 the average weekly salary of teachers rose to about $41 6 as compared 1

National Education Association, D e p a r t m e n t of Classroom Teachers, The Economic Welfare of Teachers (1931), p. 25. * W . R. Burgess, Trends of School Costs (1920), p. 71. 4 University of the State of New York, Seventeenth Annual Report of the Education Department (>92i), P- 344 Ibid., pp. 222-23. • Derived from U . S. Office of Education, Statistics of State School Systems, ¡935 -1936, P- 56-

IMPROVED PERSONNEL

POLICIES

with $23 7 for common labor and $55» for skilled labor. Although the economic status of teachers remained below that of skilled labor, large numbers of persons, both men and women, again were willing to invest in pre-service and in-service preparation for teaching. Licenses for teaching requiring no professional preparation were abolished in New York state. Requirements for teaching were increased from high school graduation to college graduation or one year beyond college graduation. Thousands of teachers in service were willing to spend money to obtain professional preparation beyond the state minimum requirements. By 1938 only about 6,000 of the nearly 90,000 teachers in New York state had licenses which did not require at least graduation from normal school or its equivalent. • Professional preparation requires a large initial o u t l a y w h i c h teachers are not likely to make unless a reasonable financial return is assured them. If the teacher's salary is so low that she must either devote her out-of-school hours to m a k i n g her o w n clothes, d o i n g her o w n laundry, cooking,

and

cleaning, or else on o d d j o b s to help defray expenses, she will h a v e litde time and less energy for those outside interests w h i c h would contribute to her effectiveness in the classroom. 1 0

The present war is showing how failure to adjust teachers' salaries to trends in other incomes and price increases leads to teacher shortages and a deterioration in the qualifications of teachers. BASIC

POLICIES

AFFECTING

SALARIES

AND

WAGES

Merit appointments. Salary schedules and salary levels alone cannot accomplish the purposes of personnel policies. T h e school authorities must be free to seek the best qualified candidates for each vacancy. Regulations giving preference to local candidates, regardless of how they compare with other candidates, defeat the purposes of personnel policies. Such local preference rules in most instances prevent school authorities from seeking the best teachers available and make it difficult to defend and maintain adequate salary schedules. Where positions in the public schools can be secured through political pressures or influence, the defensible reasons for paying good salaries are no longer present. 7 An estímate based upon U. S. Bureau of the Census, Statistical Abstract of the United States, 1939, p. 332. * An estimate based upon ibid., p. 342. * Thirty-fifth Annual Report of the Education Department, p. 42. 10 Elsbree, op. cit., pp. 3 and 4.

IMPROVED PERSONNEL

POLICIES

A good statement of sound personnel policies accompanies the published salary schedule of the Springfield, Mass., public schools. T h i s reads as follows: 1. M e r i t as j u d g e d b y all pertinent standards is the sole criterion by which teachers are selected. 2. T h e use of political, social, or other pressures automatically disqualifies candidates for positions from further consideration. 3. T h e

immediate relatives of members of the School Committee,

members of the Board of Examiners, and of ranking administrative

of

and

supervisor)- officers, are not eligible for positions in the Springfield Public Schools. 11

G o o d public schools cannot be had unless public school authorities are free to select the best qualified candidates for each position, unless appointments are m a d e solely upon merit, unless there is freedom from pressures in appointments, and unless the salaries paid are high enough to attract well-qualified persons into the teaching profession. T h i s principle is so sound, so simple, so understandable that any school system w h i c h gives it full publicity can rally public support to defend itself from pressure g r o u p s — b o t h from those seeking positions for w h i c h they are not qualified and from their supporters w h o attempt to undermine the quality of the schools and thereby make easy the reduction of salaries and expenditures at some later date. Stated qualifications. Salary policies designed to obtain and retain well-qualified personnel presume that a school system outline the m a j o r responsibilities of each position and draw u p a statement of the qualifications required to perform such duties. In describing the character of the work to be done, attention must be given to standards or quality of workmanship. T h e routine teaching of spelling might be done fairly well by any of the lowest one-fourth of the graduates of teacher education institutions, but facility in using the written word in recording ideas or emotions probably could be taught well only by a small percentage of the highest fourth of the graduates. Obviously the latter ability will require a higher salary level than the former. T h e more that is expected of teaching personnel, the greater must be the incentives offered persons to engage in the work. H i g h levels of native ability, vitality, broad cultural background, professional skill, radiant personality, and outstanding character are scarce, and public schools must compete with other institutions, public and private, for such qualities. u

Springfield, Mass., School Committee, Personnel Policies (1941), p. 1.

IMPROVED PERSONNEL POLICIES A most fundamental decision to be made in establishing salary policies relates to the qualifications required for elementary school teachers as compared with those for secondary school teachers. For generations the requirements in elementary schools have been lower than those in secondary schools and average salaries also have been lower. In 1839 the typical elementary school teacher had not more than an eighth grade education; in 1890 the level was approaching high school graduation; in 1910 it had nearly reached high school graduation; in 1921-1922 it stood at between one and two years of work beyond high school; and by 1930-1931 exceeded two years. 11 By 1942 New York state and a number of other states had raised the requirement to four years. The preparation of elementary school teachers, therefore, gradually has been approaching that of secondary school teachers; the standard requirement for high school teaching has been college graduation or its equivalent." In New York and many other states there now is a gap of only one year between the preparation required for elementary school teachers and that required for secondary school teaching. Growing knowledge of child nature, the learning process, and the effects of early education upon subsequent education and behavior have brought about the change in qualifications for elementary school teaching. Modern elementary school teaching requires about the same amount of preparation as does secondary school teaching, the only significant difference being in the content of the course of study. Salary schedules slowly have been adjusting themselves to the changed status of elementary school teachers, but the differentials between elementary and secondary school salaries have not been eliminated to the same extent as differences in qualifications. Studies made in 1905 and 1913 discovered no salary schedules which paid the same salaries to elementary school teachers as were paid to high school teachers with the same qualifications. 14 As early as 1919 the National Education Association urged that salaries be differentiated not on the basis of position, but on the basis of qualifications and responsibilities.1,6 Between 1924-1925 and 1938-1939 the disparity between B. W . Frazier, Development of State Programs for the Certification of Teachers ( U . S. Office of Education Bulletin, 1938, N o . 12), p. 74. »» Ibid. 14 National Education Association, Committee on Equal Opportunity, Progress and Problems in Equal Pay for Equal Work (1939), p. 7. " Ibid. 11

306

IMPROVED PERSONNEL

POLICIES

elementary and secondary school salaries in cities decreased, but in 1939 average elementary school salaries still were only about 78 percent of those in the secondary schools as compared with about 76 percent in 1 9 2 5 . " However, there has been a very definite trend toward eliminating discrepancies in salaries based solely upon position. In 1938-1939 over a third of the salary schedules in cities of over 30,000 population provided equal pay for classroom teachers with equal qualifications and equal duties. 1 7 In these cities the salary status of elementary teachers is about 85 percent of that of secondary school teachers. 1 8 Pupil-teacher ratio. T h e policies adopted by the school system relative to the amount of a given service to be m a d e available to each child has an important bearing upon salary levels. If the pupilteacher ratio is allowed to get too small, it is likely to force a reduction in salary levels and a deterioration in personnel. Districts paying teachers on the average only $790 a year had an annual per pupil expenditure about equal to districts p a y i n g teachers on the average $2,000 a year in N e w York state in 1935-1936. 1 9 T h e factor responsible for this anomaly is low pupil-teacher ratio. T h e general value of small classes is admitted; yet, if classes are allowed to become so small that a school system cannot afford to pay adequate salaries to secure and hold good teachers, small classes become a liability both to teachers and pupils. O n the other hand, if salaries are set at such a high level that a district must maintain unduly large classes, teachers cannot render their best service o w i n g to overwork, pupils receive very little attention, and the high salary schedule becomes a burden to both teachers and pupils. Policies affecting pupil-teacher ratio in the various school services are basic in determining salary levels. W h e r e the public school enrollment is decreasing, the problem of pupil-teacher ratio becomes serious. School systems w h i c h do not adjust the number of employees to the lower enrollments often are forced to reduce salaries—not once but many times. T h e first reduction is assumed to eliminate the salary problem, but as the pupilteacher ratio continues to go d o w n with decreasing enrollment, another reduction becomes necessary, and so on. G i v e n salary levels presume given pupil-teacher ratios and any d o w n w a r d trend in ratios is bound to create salary or revenue problems. Failure to adjust " Ibid., p. 10.

" Ibid., p. 8.

18

Ibid., p. 11.

" Arvid J. Burke, "Interpreting Average Teachers' Salaries in New York State," New fork Slate Education, X X V I I (Dec., 1939), 240.

IMPROVED PERSONNEL POLICIES

307

ratios to decreased enrollment forces salary levels down and ultimately lowers the quality of teaching. Tenure and retirement. What a school system can afford to pay teachers with maximum qualifications is determined to a large extent by the amount of turnover among the teaching personnel. A system with a reasonable balance among age groups, with a reasonable number of retirements, and with a reasonable number of young new entrants annually can maintain a higher level of salaries than one with a high percentage of teachers on the maximum, few retirements, and no new entrants. Under most salary schedules the cost of maximum teachers' salaries must be offset to some extent by an approximately equal number of minimum salaries. One reason for the salary difficulties of many school systems is the fact that the salary policies presumed the continuance of a certain amount of turnover through disability, marriage, retirement, death, withdrawal, and other reasons. When economic difficulties and the improved status of the profession reduced turnover, the planned salaries cost more than was anticipated. Campaigns for reduced salaries followed as a consequence. Where a salary schedule presumes a given amount of turnover and the age at which teachers retire voluntarily is rising, the salary schedule can be maintained to some extent by stimulating voluntary retirement or lowering the compulsory retirement age. Both methods have been tried. A few systems have instituted a system of decrements after teachers reach a certain age, that is, the salary is reduced so much every year the teacher remains in the system after a given age. Instead of decrements it might be better for organized teachers to encourage voluntary retirement, when teachers are eligible for it, for the good of others in the profession and the quality of public schooling. Where teachers refuse to cooperate with the profession, it might be possible to withhold increments for a certain number of years prior to retirement, the amount withheld to be repaid to the teacher providing he retires when eligible. Arbitrarily lowering the compulsory retirement age by legislation often does not allow enough flexibility for systems to adjust to conditions where it might be desirable to retain older teachers even though they are eligible to retire. Furthermore, the high cost of early retirement must be weighed against any potential savings in salaries before a decision can be made. Other benefits. Naturally personnel and salary policies must take into

308

IMPROVED PERSONNEL POLICIES

consideration other c o m p e n s a t i o n p r o v i d e d for employees, especially n o n m o n e t a r y returns, such as provision for health, safety, c o m f o r t and rest, free housing, free transportation, free medical attention, opportunities for a d v a n c e m e n t , sabbatical leave w i t h p a y , sick l e a v e provisions, insurance, disability retirement allowances, superannuation retirement allowances, cultural opportunities, provisions for recreation, vacations, opportunities for c o o p e r a t i v e purchasing a n d credit, and similar items. A l l policies o n such matters should be summ a r i z e d a l o n g w i t h salary policies a n d should be considered as a n integral p a r t of the salary policies of a system. W h e r e schedules are a d o p t e d such policies should b e m a d e part of the schedule. Social policy. Besides strictly e d u c a t i o n a l policies there are certain considerations of social policy w h i c h a f f e c t the personnel and salary policies of p u b l i c schools. O n e of the m a j o r social issues relates to sex a n d m a r i t a l status. T h e traditional social policy in the U n i t e d States has b e e n to p a y higher salaries to m e n teachers than to w o m e n teachers regardless of m a r i t a l status. In 1905 the m a j o r i t y of salary schedules f a v o r e d m e n teachers, 2 0 the a v e r a g e salary of w o m e n h i g h school teachers b e i n g o n l y a b o u t 69 percent of that paid men. 2 1 T e n states, including N e w Y o r k , n o w h a v e laws prohibiting teachersalary discriminations based u p o n sex, 22 a n d the trend is t o w a r d w i p i n g out such differentials. 2 ' T h e N a t i o n a l E d u c a t i o n Association C o m m i t t e e o n Salaries recently a d o p t e d the following principles: " T e a c h e r s of e q u i v a l e n t preparation, experience, and teaching load should receive e q u a l p a y regardless of sex." 2 4 A n o t h e r traditional policy has b e e n that of dismissing or p a y i n g lower salaries to m a r r i e d w o m e n teachers, b u t this policy is g r a d u a l l y b e i n g a b a n d o n e d as tenure a n d m i n i m u m salary laws are e x t e n d e d . A more recent d e v e l o p m e n t has been the recognition of the d e p e n d e n c y load of m a r r i e d teachers t h r o u g h a system of f a m i l y allowances. T h e N a t i o n a l E d u c a tion Association C o m m i t t e e f o u n d that: A more serious consideration in the persistence of salary discriminations is the larger economic burden which married men have had to carry. Many 10

National Education Association, Report of the Committee on Salaries, Tenure, and Pensions, ('9°5>. PP- '9® ffn Ibid., p. 16. a National Education Association, Committee on E q u a l Opportunity, Progress and Problems in Equal Pay far Equal Work, p. a I. " Ibid., pp. 14 ff. M National Education Association, Committee o n Salaries, Problems and Principles in the Scheduling of Teachers' Salaries (1940), p. 13.

IMPROVED PERSONNEL

POLICIES

boards of education have been influenced by the apparent justice of a salary differential in favor of this group and not infrequendy have extended the provision to cover all men regardless of marital status. The reason for the latter step has never been fully clarified. . . . Those who oppose the dependency argument have pointed out that women teachers are carrying on the average a relatively heavy load of dependency and that unmarried men teachers cannot fairly be singled out for special consideration. Others contend that the economic dependency of the individual teacher should have no place in the payment of salaries; that rewards, related to the kind of service rendered, should be adequate to attract individuals with the requisite qualifications and should provide for the average dependency load of all teachers rather than for that of individuals. Regardless of these objections several school systems are now experimenting with the plan of granting family allowances to both men and women teachers who have dependents. Precedent for this practice is found in the salary schedules of certain European countries including France, Germany, and Holland where stipulated allowances are provided to care for the children of teachers. While American communities have been reluctant to introduce this innovation, six school systems were reported to be operating a system of family allowances in 1938-1939 and about twenty other communities paid bonuses to married men or to heads of families. When allowances for dependent children are available for women teachers as well as for men there is less basis for charges of sex discrimination. 26 In the South it has been the practice to pay Negro teachers less than white teachers with the same qualifications and experience." In October, 1940 the United States Supreme Court refused to review a case in which a lower court held that such discriminations based solely upon race and color violated the Fourteenth Amendment of the Constitution. Since the Supreme Court denied the petition for review, the refusal has the effect of sustaining the lower court decision. 27 Another type of social policy affecting public school salaries is Federal or state minimum standards regarding hours, wages, conditions of employment, unemployment insurance, compensation insurance against disability, and old age or survivor's benefits insurance. U p to the present time the major social welfare legislation affecting teachers' salaries hits been minimum salary laws and compulsory retirement provisions. Twenty-four states have some type of minimum salary legislation for teachers. 18 T h e difficulty with most of the laws, " Ibid., pp. 14-16. See also Elsbree, op. tit., pp. 33 ff. " See National Education Association, Committee on Equal Opportunity, Progress and Problems in Equal Pay for Equal Work, pp. 26 ff. " AUson et al. v. School Board oj City of Norfolk ei al. ( 1 1 2 F 3d 992). " National Education Association, State Minimum Salary Standards for Teachers, 1940, p. 7.

3io

IMPROVED PERSONNEL

POLICIES

with the possible exception of California, Delaware, Maryland (white teachers only), and Washington, is that the minima are too low as indicated by Table 2 2 : " TABLE 22.

M I N I M U M S A L A R I E S FOR T E A C H E R S C O M P A R E D W I T H

MINIMUM

W A G E BUDGETS FOR W O M E N W O R K E R S IN I N D U S T R Y

State California Colorado

New Jersey New Y o r k

Pennsylvania

Minimum Salaries for Teachers All teachers $1,320 Less than 2 years' training, 712.50 9 ^ - m o n t h term 1,000 2 years training 1,200 4 years' training 900 All teachers Rural 760 and 800 Cities except New York 1,000, 1,100, 1,200 Rural (under 5,000) 800 Cities 1,000, 1,200

Minimum-Wage Budget— Amount Necessary to Maintain in Health and Decency an Industrial Woman Worker» ('939)b 105 (•937) 975

(1938) (•938)

1.14® 1,161

('938)

'.095

* U. S. Department of Labor, Women's Bureau. State Minimum Wage Budgets for Women Workers Living Alone (1939), p. 2. (Mimeographed). b San Francisco data.

Thirty-three states have retirement or pension systems for public school teachers,*0 and membership for new teachers is compulsory in most of these systems.11 Recently there have been bills before Congress which would permit a state not having a retirement system for teachers to extend the old age and survivor benefit provisions of the Social Security Act to teachers and other public employees through voluntary compacts between the state and the Federal Government. M FACTORS

DETERMINING

SALARY

AND

WAGE

LEVELS

Factors outlined. In addition to the fundamental policies enumerated above there are a number of other factors which determine the salaries paid in a public school system, such as earnings in other occupations, "Ibid., p. 18. National Education Association, Research Division, Status of Teacher Retirement (Research Bulletin, Vol. X I X , No. 1, 1941), p. 6. a National Education Association, Research Division, Analysis of the Statutory Provisions for State Teachers Retirement Systems (1939), p. 9. a For example, Bill H. R. 488a, 1941, introduced by Rep. Healey.

IMPROVED PERSONNEL POLICIES

311

living standards and costs of living, cost of preparation for teaching, supply of and demand for teachers, public opinion, taxable resources, the tax base used, Federal and state aid, public expenditures for other purposes, size of community, type of community, and size of school district. Some of the factors, such as size of community, type of community (especially rural versus urban), and size of school district, although they do exert a considerable influence on the level of salaries," are by themselves relatively unimportant considerations and should be eliminated in the determination of salary policies. The most significant factors, on the other hand, are earnings in other occupations, living standards and living costs, and cost of preparation, but these cannot be considered apart from supply and demand, public opinion, taxable resources, the tax structure, and total governmental spending. Earnings in other occupations. No matter what qualifications are established and what other educational policies are adopted by public school authorities, the ability of a public school system to attract and hold qualified and desirable personnel will depend upon a factor beyond the control of public school authorities, namely, earnings in other occupations. It is an axiom in economics that workers tend to migrate from low-paid, overcrowded occupations to better-paid, less crowded callings in the absence of arbitrary restraints on occupational mobility. Evidence has been presented in this chapter to show that this elemental law of economics applies to public school teaching. When secretaries with high school preparation or less can earn more than elementary school teachers with four years of college preparation (a condition which exists at the present time), a sufficient number of qualified young persons will not make the investment required for teacher preparation, and experienced teachers will tend to leave the profession, as was true during the First World War and is true during the present war. When engineers, business executives, and others with high qualifications are unemployed or underpaid relative to teachers, there will be an influx of persons seeking temporary employment as teachers, as was true during the depression. The teaching profession requires persons who are willing to devote all their vocational energies throughout their entire vocational lives to the essential task of teaching. T o secure and retain such persons, " See D. H. Cooke, Problems of the Teaching Personnel (1933), pp. 96 ff.

312

I M P R O V E D PERSONNEL P O L I C I E S

the general level of salaries in all communities in a state over a long period of time must be high enough relative to average earnings in other occupations to make teaching an attractive career—one worth the investment in professional preparation. High teacher salary levels in a single community will enable that community to recruit the best talent available, but this condition will not make available a sufficient number of capable persons in the profession. Higher than average teacher earnings in a state for a short period of time, such as a depression, will bring about a temporary improvement, but the results will T A B L E 23.

M E D I A N A N N U A L SALARIES OR INCOMES OF C O L L E G E G R A D U A T E S

IN V A R I O U S PROFESSIONS OR O C C U P A T I O N S A F T E R BEING OUT OF COLLEGE EIGHT YEARS,

1935"

MEDIAN S A L A R Y OCCUPATION

Men

Women

MEDIAN S A L A R Y OCCUPATION

Men

3.300

Manufacturing

2,480

Medicine

3.032

Engineering

2,460

Law

B a n k service

2,217

P u b l i c office

3.013 2,650

Agriculture

2,070

Architecture

2,600

Pharmacy

2,067

Insurance

2,600

T e a c h i n g (college

Dentistry

Research

2.555

Forestry

2,425

included)

2,043b

R e a l estate

2,017

G e n e r a l business

2.550 2,522

Ministry

>.950

T e l e p h o n e corporations

2,508

Journalism

Merchandising

2,480

Clerical

1.875 1,816

'.575

Nursing

Women

i.793b

1,188 2,000

• U . S. Office of Education, Economic Status of College Alumni (Bulletin 1937, N o . IO, 1939) p. 72. b Includes mostly college and high school teachers. T h e average public school teacher's salary in 1935 was not over $1,250. See U . S. O f f i c e of Education, Statistics oj State School Systems, 1935-1936, p. 56.

not be lasting. As a result of the war teaching as a career has lost most of the improved economic status it gained temporarily during the recent depression. Fewer persons are seeking admission to teacher education institutions, and some already are abandoning teaching for other occupations. In establishing teachers' salaries, therefore, the two most important considerations are: (1) What has been the economic status of teachers relative to that of other occupations throughout an entire state both in periods of prosperity and depression? (2) What can persons with equal, lesser, or greater qualifications than teachers earn in the state or the community?

I M P R O V E D PERSONNEL POLICIES

313

A certain degree of caution needs to be exercised in gathering or interpreting data on earnings in various occupations. Reliable figures on earnings in some occupations, such as private practitioners of professions and nonsalaried business men, are difficult to obtain; and the best data available are estimates. Earnings of salaried employees in the public service or in the service of a corporation, on the other hand, can be ascertained with a higher degree of accuracy. Prevailing TABLE 24. ESTIMATED ANNUAL EARNINGS IN SELECTED OCCUPATIONS IN THE UNITED STATES, 1 9 2 0 - 1 9 3 6 *

Occupation

Medicine Law Engineering Dentistry Architecture College teaching Journalism Library work Ministry Social work Skilled trades Public school teaching Nursing Unskilled labor Farming Farm labor

Present Value of Average Earnings for a Working Lifetime $108,000 105,000

95.300 95.400 82,500

69,300 41.500 35.000 41,000 51,000 28,600 29,700 23,300 15,200 12,500 10,400

Average Earnings per Tear S4.850 4.730 4,410 4,170 3,820 3.050 2,120 2,020 1,980 1,650 ».430 1.350 ',310 795 580 485

Estimated Percentage Average of Plus or Average Age of Minus Working Entrance Error in Life in into Estimates Tears Occupation 20 27 42 35 20 22 43 25 45 24 40 22 43 2 10 44 5 2 46 45 3 46 25 23 '5 44 25 20 '5 45 18 «5 44 48 21 05 10 21 30 20 18 44 18 «5 51 18 '5 5'

* Taken from Harold F. Clark, Life Earnings in Selected Occupations in the United States (>937). PP- 5 ff-

rates of wages of union labor generally can be secured. However, all figures used for comparisons should be averages covering both the upswing and downswing of the business cycle. Since some occupations are almost closed to women and since others are almost closed to men, sex differences must be noted in the comparisons. Most studies have shown teaching to be among the most poorly paid occupations or professions even during depressions, as illustrated by Tables 22 and 24.

3

i4

IMPROVED PERSONNEL

POLICIES

T w o outstanding facts in the Clark study deserve special attention. First, the economic status of teachers during the period studied averaged above that of unskilled labor and below that of skilled labor ¿is shown in T a b l e 24. Second, the average public school salary was exactly equal to the average earnings in all occupations, namely, $1,350 a year.* 4 However, most teachers are women, and Clark concludes that incomes of women teachers probably are higher than the average earnings of women in all occupations.* 5 T h i s is not true, however, during a war. Living standards and costs of living. Differences in living standards a m o n g school districts are more significant than differences in the costs of living at a fixed standard in establishing salary levels. In the first place it is practically impossible to live at a uniform standard in different communities. T h e same standards of housing, for example, cannot be applied to both densely settled and sparsely settled communities; the standards suitable for the sparsely settled area would be prohibitively costly in the densely settled area and vice versa. O t h e r factors make for differences in transportation needs and facilities, recreational opportunities, clothing outlays, and other items. In the second place, there are wide differences in community living requirements. A suburban community of well-educated, professional families will require teachers to live at different standards than will a rund o w n mill town. Even if community requirements did not vary w i t h living standards, the standards of living assured teachers cannot be too far from the standards typical of the community. If teachers' living standards are too low relative to community standards, c o m petent teachers either will not be attracted to the community or will not remain in it. If teachers' living standards are too high relative to community standards, public opinion will tend to be unfavorable to the teaching profession. A l t h o u g h a community on the average may be living at a standard rather high or low relative to other communities, there will be differences in standards within the community. Not only are there a great m a n y possible standards purchasable with the same income but incomes vary, oftentimes very widely. W h a t standards shall teachers be able to maintain? Standards which will attract and hold good teachers and enable them to improve in the service, of course; but these are relative and variable. M

Clark, op. cit., p. 3.

" Ibid.

I M P R O V E D PERSONNEL POLICIES T h e determination of salary policies should be preceded by a study of living standards in the community. •• Only in this way can public schools be certain that teachers can live at standards equal to those generally afforded persons of equal ability and equal responsibilities in other callings. T o attract able persons into teaching, what minimum standard of housing should teachers be able to obtain? What diet? What clothing? What medical care? What transportation? What savings? What community activities should they be able to participate in? What professional activities? What means should exist for personal and professional growth? In connection with such studies it is possible to get a measure of public opinion on teacher living standards. A study made by the Fact Finding Committee of the New York State Teachers Association showed that a large group of parents wanted the teacher "to live on a social and economic plane consistent with the dignity of her profession and the level of the families whose children she teaches."" The group also wanted the teacher's standard of living to include in addition to adequate food, clothing, shelter, transportation, personal care, and medical attention; allowances for attendance at lectures, concerts, operas, and dramatic presentations; summer school attendance once every three summers; travel at least one summer in five; reading material and books; participation in community life; recreation; purchase of life insurance; and savings.*8 There are two difficulties involved in considering living standards as an important basis for salary policies: first, the fact that numerous living standards are possible on any given income depending upon the ability of the individual person concerned to make wise consumer decisions; and second, the fact that teachers have varying dependency loads. However, very low levels of income automatically preclude most living standards; and adequate salaries assure a wide variety of standards. Hence, all that school authorities can do is provide salaries high enough to purchase the agreed-upon living standards in the community, assuming the teacher has average managerial ability and an average dependency load. " For suggestions in making such studies see National Education Association, Research Division, Local Studies of Teacher Status (Procedures in Salary Scheduling Bulletin No. 3,

'939)-

" W. W. Soper and others, The Social, Cultural, and Economic Status oj Public School Teachers in New York State (1937), p. 37. " Ibid., pp. 19 ff.

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Having defined living standards for teachers, two questions of cost arise: (i) How much do the standards cost in one community as compared with others? and (2) How do the costs of the living standards vary from time to time? T o answer these questions use must be made of cost of living indices. Cost of living indices, although they are widely used in determining salaries, are generally misunderstood and misused. Among the facts misunderstood and responsible for misuse are the following: There are extremely wide variations in living standards. There are almost as many costs of living as there are living standards. A single uniform living standard must be presumed for constructing a cost of living index. Cost differences measured by the index apply only to the hypothetical standard used, and caution must be used in making inferences about costs of other living standards. The standard of living used in most cost of living indices is that for a four-person family having a a relatively low income and spending the major portion of its income for food, clothing, and shelter. Among the factors which rule out a single index for all living costs are these: (1) Some prices are rising while others are falling and some prices are increasing or decreasing more rapidly than others. (2) Different standards of living include different goods and services. For example, the low salary standard used in most cost of living indices contains no allowances for college tuition, professional dues, books, travel, lectures, community activities, meals in restaurants, and other items which should be included in living standards for teachers. There are many thousands of choices in spending any income. The items purchased will vary from time to time. (3) Even if the goods and services included in two living standards were the same, which is practically impossible, the influence of certain items and certain prices on costs may vary. For example, the family standard commonly used presumes nearly 40 percent of the budget spent for food. Naturally, price changes in foods will greatly affect a cost of living index based upon the standard. However, in a teacher's standard of living food might account for only about 15 percent of the total expenditure. Changes in food prices would not affect the total cost of the teacher's standard so much. (4) Even if the goods and services included in two standards are of the same general type, they may differ in quality; and the prices for different quality items may not behave in the same manner. There is no reason to assume that rents for tenements or

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flats included in the usual index will show the same differences in costs as apartments and residences in suburbs. Available cost of living indices aire valuable in indicating possible differences, changes, or trends, but they measure these precisely only for the standard assumed in the index. Although it is probable that other standards may reflect pronounced upward or downward differences, the exact degree cannot be inferred from a single index. If inferences are to be made, they often can be made more validly by considering separate components of an index. Since teachers' standards generally are made up of expenditures of over 50 percent for miscellaneous items, the "sundries" component of the common cost of living index may be a better indicator of changes in costs of teachers' standards than the total index." Whenever available cost of living indices are used to indicate upward or downward trends in living costs or changes in the purchasing power of the dollar, there should be accompanying data showing why the trends do or do not apply to teachers. When a single cost of living index is used to make comparisons between living costs in communities, differences in community living standards must be taken into account. Comparisons made to date among communities apply only to low-salaried workers and are not wholly reliable even for them, because there is no assurance that the same standard was measured in communities compared and because in practice it may not be possible or desirable to live at such a uniform standard. 40 Up to the present time no index of teacher living costs has been constructed and kept up to date, first, because it is extremely difficult to construct a valid and reliable index, and second, because constructing and keeping such an index up to date would be very expensive. The start in making the index of cost of living is a theoretical quantity and quality budget of goods and services generally purchased by teachers. If it were possible to determine the minimum standard of living conducive to efficient teaching, the budget for such a standard would make a good starting point. Where it is possible to define the standards of living typical of certain groups of teachers, such budgets " For a discussion of living standards see D. P. Harry, Cost oj Living of Teachers in the State oj New York (1928), Chapters I I and I I I . See also W. C. Eels, Teachers' Salaries and the Cost oj Living (1933); National Education Association, Research Division, The Teacher's Economic Position (Research Bulletin, Vol. X I I I , No. 4, 1935), Chapter V I I . 40 See Arvid J . Burke, "Cost of Living and Teachers' Salaries," New York State Education, X X V I I I (Oct., 1940), 35-38, 77-78.

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make good bases. However, since the validity of any standard constructed at this time is unknown, it might be best to use several apparently reasonable but different budgets or standards in making studies of the purchasing power of teachers' salaries. Among the items included in the budget, housing is one of the most important, yet one of the most difficult to formulate into standards. It is important because it involves hundreds of satisfactions, determines social status to a large extent, has considerable bearing upon one's health, involves a wide variety of aesthetic and comfort factors, and has profound effects upon expenditures for other purposes, especially through transportation costs. Housing is difficult to formulate into standards because it is but a means to a number of other satisfactions and because it is greatly affected by population density and the area of the region over which a given density is spread. That housing is but a means to satisfying other standards can be illustrated by temperature. Temperature conducive to bodily well-being means better insulated and heated buildings in a cold climate than in a warm climate. Temperature conducive to bodily comfort, however, involves well-insulated buildings in any climate with provisions for both heating and cooling. That density of population makes uniform standards impractical is also easy to show. A single dwelling erected on a lot 50 feet by 100 feet might be practical for everyone living in a sparsely settled area, but it becomes more impractical and expensive as the density of population increases; in the central part of large metropolitan areas it becomes almost impossible owing to high land values. The kind of housing to be priced in a teacher's standard of living, however, must be stated rather definitely because prices of all types of housing do not follow uniform trends. The prices of renting rooms in private residences do not tend to fluctuate to the same extent as do rentals for private residences. Apartment house rentals are likely to fluctuate in a different manner from types of housing not involving as many price considerations, for example, prices for janitor service, elevator service, and maid service. The costs of home ownership may not behave in exactly the same way as rentals. If schools are far removed from a given standard of housing, transportation costs must be considered as well as rental costs. Housing costs plus transportation costs probably are the best single index of differences in total cost of living at standards in which the costs of these have a significant place in the budget. Expenditures for

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these two items affect the costs of hundreds of other items which enter into a living standard. Density of population increases land values, increases the need for public utilities and services, and inflates housing costs. Spread of population within an urban or metropolitan region increases the cost of transportation and inflates the cost of public improvements or services. A person must choose between housing having proximity to stores, schools, churches, and other institutions where housing costs are high, or housing in more remote sections with increased costs of transportation and lower housing costs. Urbanism and metropolitanism with high land values, great dependence upon public utilities, and need for transportation have an inflationary effect both on living standards and living costs. In sections of metropolitan areas will be found communities with abnormally high standards of living and living costs. High living costs tend to go along with high property valuations, but valuations will vary by a higher percentage than will the costs of living at a given standard—differences in living standards again. High taxes are both a cause and an effect of high costs of living at given standards. Another important budget item is food, but this also involves difficulties. The cost of food frequently includes almost inseparable expenses for personal pleasure, social entertainment or approval, and aesthetic factors. Although the price of board changes very little from time to time, the standard or quality of food provided varies considerably. Restaurant prices for various types of meals is a better index of the cost of board at a given standard. Pricing of quantity budgets of various items of food is the best index of the cost of food for families or teachers who prepare their own food. It is not likely to change to the same extent as boarding at a given standard because the latter involves other prices, especially service charges. Pricing food items involves a great deal of field work and statistical service. Clothing, the third large budgetary group, is not easy to formulate into standards because to a large extent it involves personal tastes, social approvals, fashions, and customs, varying according to sex, age, climate, and life activities. The facts that many clothing items are sold at uniform prices throughout the country and that teachers may purchase clothing items in a variety of places other than where they teach further complicate the problem of pricing clothing items. Aside from housing, food, and clothing, the items for which teachers might spend their incomes run into the thousands. This miscellaneous

I M P R O V E D PERSONNEL P O L I C I E S group of expenditures is the most difficult group of all in determining price changes. Family expenditures will differ from expenditures of single persons. Sex and age differences must be allowed for. Expenditures will vary from year to year; for example, the purchase of a new automobile may be a large item in the budget one year, the purchase of furniture the next year, and a trip to Europe the third year. Personal philosophies, habits, and tastes, community customs, science, and social changes make for frequent changes in expenditures for miscellaneous items. Furthermore, with such purchases the possibility of making them outside the community is gready increased. Any measurement of price changes of miscellaneous items will be but a rough approximation. Since the selection of items to be priced must be made rather arbitrarily and since the weights assigned any given item will be even more arbitrary, the changes found will be valid only to the extent that actual expenditures approximate the budget set up. For teachers, the miscellaneous group should include certain items which do not appear in workingmen's budgets. The budget used by the United States Department of Labor includes house furnishings, street car fares, movies, daily newspapers, health care, laundry, personal care including toilet supplies, telephone, and smoking supplies. The teacher's budget certainly should include radio purchase and operation, magazine subscriptions, books, stationery, and other school supplies purchased by teachers for their own use, postage, professional dues, tuition charges, admission charges for lectures and concerts, traveling expenses (domestic and foreign), expenses for the support of community activities and institutions, gifts, and certain expenses of personal care not provided for in the workingman's budget, such as dry cleaning, hairdressing, and feminine hygiene. If an automobile is included in the budget, allowance must be made for license fees, depreciation, insurance, garage rent, gasoline and oil, service and seasonal care, parts and repairs, tolls, and parking charges. U p to the present time teachers have been forced to accept fluctuating living standards because of the lack of reliable data on changes in living costs. In the absence of corrections for changes in living costs state minimum salary laws and relatively fixed salary schedules mean different standards of living for teachers in different communities and fluctuating standards over a period of time for teachers in the same community. As prices fall the status of teachers approaches that of

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skilled labor; as prices rise their status approaches that of unskilled labor. Unfortunately rising prices have their most serious effects upon the lowest paid teachers who already have the narrowest choice in living standards. Teachers' salaries tend to lag in adjusting either to rising or falling prices, and the adjustments usually are very crude— sometimes too little, sometimes too much. 41 Cost of teacher preparation. The effect of salary policies upon the number and quality of persons selecting teaching as a career is relative to the cost of preparation. Assuming that average teachers' salaries are higher than those of private secretaries, the difference in salaries may not be sufficient to encourage the investment in the extra preparation required for teaching. Salary levels for teachers must be based in part upon the cost of teacher preparation—both pre-service and in-service. The cost of teacher preparation is determined by two circumstances —the length of preparation required and trends in the annual cost of higher education. It is common knowledge that the length of preparation required for teaching has been increasing, even during the depression when salary levels were being reduced. Evidence of these trends already has been presented. Another fact, not generally recognized, is that the annual cost of higher education also has been increasing, even during the depression. Prior to the depression, there was a steady upward trend in college tuition and other costs of college education.42 During the depression, decreased returns on endowments forced many private colleges to increase tuition charges; and decreased appropriations or increased responsibilities forced state institutions to increase fees and other charges made upon students.4* Supply and demand. Decreasing enrollments, fewer teaching positions, unemployment in other occupations, insecurity in private employment, and the improved economic status of the teaching profession made supply and demand a critical issue in determining salary policies for public schools during the depression. The manpower shortage 41

St. Paul, Minn.; San Diego, Inglewood, and Santa Monica, Calif.; and Fordson, Mich., decrease or increase teachers' salaries according to the U. S. Dept. of Labor Index, but this practice is subject to all the limitations of such an index when applied to different living standards. 41 See T . Arnet, "Trends in Tuition Fees in State and Endowed Colleges and Universities in the United States from 1928-192 gthrough 1936-1937," Journal oj Higher Education, X I (Feb., 1940), 100-02. 41 See F. E. Engleman and E. Whitworth, "Whither Student Tuition and Fees in Our State Teachers Colleges," School and Society, L I (May 1 1 , 1940), 621-24.

I M P R O V E D PERSONNEL POLICIES and the unfavorable economic status of teachers have made supply and demand of teachers also a serious wartime problem. Generally the law of supply and demand has been interpreted to mean that the greater the supply of teachers relative to the demand, the less school authorities have to pay in salaries; and the greater the demand relative to the supply, the more they have to pay. Unfortunately the relationship between the two factors is not so simple. Low salaries can lead to scarcity of teachers and thereby give an impetus to higher salaries; high salaries can lead to overcrowding and the lowering of salaries. Moreover, supply is not a simple concept; nor is demand. The supply of teachers in a practical sense is the number of licensed teachers who are seeking employment or can be induced to seek employment within a state at a given time. It really equals all employed teachers who are not on tenure and who intend to continue teaching, plus all other eligible candidates seeking teaching positions. The National Education Association's Committee on Supply, Preparation, and Certification of Teachers recommends the following definition: The current supply of teachers for positions of any given type is equal to the number of persons not employed in positions of this type during the preceding year who are certificated (or eligible for certification) and who are available for appointment to positions of the type under consideration in the year being studied.44 This definition, however, should be interpreted to mean teachers employed the preceding year within a given state. Furthermore, teachers employed during the preceding year should be excluded only if they are certain to be re-employed. Many who are not re-employed or do not care to be re-employed in the same type of position will be included in the supply. Supply defined even in such a narrow sense is difficult to measure and control. When certification requirements were lower than they now are, tens of thousands of life certificates were issued. Very frequently these low-grade life certificates were very general, permitting teachers to teach almost anything to almost anyone. Thousands of persons holding such licenses have left teaching for other occupations, for marriage, or for other reasons. Many of them may decide to return 44

National Education Association, Teacher Supply and Demand: A Program of Action (1941), p. 2 1 .

I M P R O V E D P E R S O N N E L POLICIES to teaching in any one year. Moreover, other thousands of persons holding higher grade, more specialized licenses good for life or for a long period of time are no longer teaching, but may seek employment at any time. Persons from other states eligible to teach under the requirements in a certain state may move in to that state at any time and seek employment as teachers. Many graduates of colleges not under the control of the state may seek positions as teachers; many graduates of state teacher institutions may decide not to teach. Since there is no central agency where all potential candidates must register their intent to seek employment as teachers during a given year, it is practically impossible to measure accurately the supply of teachers. Another complicating factor is that many local school authorities have requirements higher than those set up by the state. This factor reduces the supply for the districts of the higher requirements for teachers, but increases the supply for the districts which will accept the lowest requirements. As Morrison says: A literally enormous number of independent districts are always competing with one another for labor in the presence of a great labor reserve. Most of the districts are fiscally unable to pay more than casual labor wages. . . . Competition is thus always in the direction of low wages and not in the direction of minimum wages for maximum quality.4® The supply of teachers is relative to the standards or requirements of the local school district. Small rural school districts seem to be less willing and less able to establish high standards; hence the vicious cycle of oversupply, low salaries, and low qualifications operates at its worst in rural areas. The supply of teachers can be controlled only through the gradual elimination of old low-grade life certificates, raising local requirements, creating larger school districts, limiting the number of candidates admitted to state teacher education institutions, and limiting the number of licenses granted graduates of private colleges and persons from out-of-state or state residents with out-of-state preparation through a system of examinations or other means. Only through such controls can salary trends be stabilized and higher quality teaching be promoted. Up to the present time there never has been any oversupply of well-qualified candidates for teaching positions. Low state 46

H . C . Morrison, The Management of the School Money (1932), p. 229.

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or local standards are the biggest reasons for an apparent oversupply and the consequent leveling down of salaries and reduction of the number of well-qualified applicants for teaching positions. D e m a n d in a quantitative sense merely means the total number of teaching positions vacant at a given time; but demand in a qualitative sense is much more difficult to define. Demand, of course, varies according to positions, rank, type of school, geographic location, and local programs; yet qualifications for similar positions may vary widely depending upon local standards. Statistics on quantitative demand, classified according to positions, rank, type of school, and geographic location, are available for states like New York, but reliable d a t a on the qualifications sought for each type of vacancy are seldom available. It is this qualitative d e m a n d which really determines the supply of teachers, making due allowance for such factors as opportunities in other callings, salary levels, and the cost of preparation. T h e uncontrolled operation of supply and demand in determining teacher salary levels will not make for good public education. Qualifications will be determined not by the educational program, but by the level of salaries paid. Shifting from j o b to job will be substituted for thorough pre-service preparation and accumulated professional growth and experience. Financial instability and insecurity will destroy morale. Overcrowding will alternate with periods of teacher scaracity. Public support. T h e only teacher salary policies which will remain in force are those which the public will continue to support. Unless the public wants good schools, understands that good schools require good teachers, and realizes that salary policies are established to promote good schools, teachers' salaries are always in jeopardy. All organizations interested in civic well-being should participate in the formulation of salary policies and should be kept informed on the reasons for present salary policies or changes in policies. T h e public in general should be kept informed continuously through every possible means. T h e first step in gaining such public understanding and support is having definitely established policies and standards that are defensible. W i t h public confidence and support, the actual securing of the financial backing necessary to carry out salary policies will be m a d e easier, but support will be limited according to the taxable resources of the community, the functioning of the tax system, expenditures for

I M P R O V E D PERSONNEL POLICIES other public services, especially debt service, and the amount of state and Federal financial aid given the community. School authorities and those interested in sound personnel policies should be in possession of the facts on all these matters. If a school district lacks taxable resources, the community must unite with other communities in securing the state and Federal aid needed to equalize educational opportunities. If expenditures for other purposes is the limiting factor, all items of public expenditure should be scrutinized critically to find every possible constructive and sound economy. If the tax system is not functioning properly, school authorities must unite with other agencies seeking reform and improvement in the tax system. Lack of taxable resources, improper functioning of tax laws, improper tax laws, or public spending should not be regarded as inflexible barriers to good public schools through sound salary policies. SALARY SCHEDULES

Reasons jor salary schedules. I n the absence of a n automatic salary

scale or schedule, teachers must bargain individually with school boards. Because merit is practically impossible to measure accurately and objectively and because personal and psychological factors cannot easily be eliminated, individual bargaining is almost certain to give the advantage to the aggressive, the politically powerful, the personally influential, and those who can use other forms of pressure. For the same reasons, morale among the entire teaching force is apt to be bad when compensation is determined upon the basis of individual bargaining. A salary schedule, on the other hand, is impersonal and objective, and eliminates many petty psychological conflicts. It is easier to administer than individual bargaining. It also simplifies budget making. It increases security and makes for stability in employment. It improves the status of teaching as a profession. A salary schedule, however, presents its own problems; it has limitations; and there are dangers to be avoided. First of all, a salary schedule should not determine educational, personnel, and salary policies; rather the schedule should grow out of and be a means for putting agreed-upon policies into effect. There also is the danger that the equalizing effect of a salary schedule will weaken initiative to do a better than average job, but this danger can be avoided by a good supervisory program and a properly conceived schedule. Moreover, there are weaknesses in certain existing schedules which should not

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or need not be continued, for example, concentrating all increments during the first few years of service, not providing a sufficiently high maximum to promote best efforts, and inflexibility in adjusting to changed conditions. The disadvantages can be overcome and the advantages are great. As Elsbree concludes, " I t is no longer a question of whether or not a school system shall have a salary schedule; the problem today is how to formulate the most effective schedule."" Principles. Several statements of principles of salary scheduling have been made. For example, Lewis lists the following: 47 1. A minimum age, certificate, amount and kind of training should be required of all beginners. 2. Other factors being the same, the teacher in one grade should receive as much salary as the teacher in any other grade or school division. 3. Salary increases and attainable maximum should be so arranged that (a) they offer a career in teaching; (b) they induce the best young men and women from high school to prepare for teaching; and (c) they secure constant improvement during the time of teaching. 4. T h e more and better the academic and professional preparation that a teacher has, other factors being equal, the more salary she should receive. 5. T h e more successful experience a teacher has had, other factors being equal, the more salary she should receive. 6. There should be enough flexibility in the salary schedule to provide extra pay for teachers of extra ability. 7. Between the sexes there should be, wherever possible, equal pay for equal merit, equal training, equal experience, and equal work. A more recent statement of principles includes these additional ones:48 8. T h e construction of teachers' salary schedules and the formulation of salary policies should be undertaken jointly by classroom teachers, school administrators, school board members, and interested laymen. 9. T h e use of so-called efficiency ratings as a basis for salary awards is impractical and inadvisable in public education. 10. T h e relationship of professional and academic qualifications to the location of teachers on the salary scale should be clearly stated in the rules and regulations governing the operation of the schedule and regular appraisal should be made of individual teacher qualifications. 11. Provision should be made in a salary schedule for definitely announced salary increases to be awarded regularly at fixed intervals of time until a given maximum salary is reached. 12. Teachers' salaries should be based in part on the cost of maintaining an appropriate standard of living. Elsbree, op. cit., p. 6. E. E. Lewis, Personnel Problems of the Teaching Staff (1925), pp. 276 ff. National Education Association, Committee on Salaries, Problems and Principles in the Scheduling 0/ Teachers' Salaries, pp. 6 ff.

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In changing from one schedule to another, a number of principles have been developed including these: 4 ' 13. No teacher's salary should be reduced as a result of the new schedule. 14. All new teachers coming into the system should be placed on the new schedule at once, provided that the minimum qualifications are met. 15. All teachers' salaries should be increased at least to the minimum to which their preparation entitles them, except in the case of those teachers whose inefficiency has been clearly demonstrated. 16. Teachers who have been receiving more than the minimum for their group should receive no regular annual increment until the group has been advanced to their present level. 17. Teachers who have been receiving more than the maximum for their group should not be eligible for further increases until further preparation is secured. 18. Teachers who come into the system with teaching experience should be placed above the minimum for their group. Generally two years of experience outside the system should be equal to one in the system. Other principles are implied in the discussion of basic policies and factors in the preceding two sections of this chapter. Schedule types. Usually salary schedules are classified as position-type or preparation-type (the single salary schedule). 50 T h e real difference, however, is in the fundamental policies or principles being carried out. T h e position-type schedule and its variations provide higher salaries for teachers in certain positions regardless of preparation, that is, high school teachers automatically get higher salaries than elementary school teachers. T h e single salary schedule provides equal salaries for teachers with equal qualifications and equal responsibilities regardless of position. 61 Obviously most position-type schedules are a carry-over from the period when the difference between the preparation for high school teaching and that for elementary school teaching was much higher than it is today. Often merit provisions are combined with either of the foregoing types, and the schedule is referred to as a merit-type. Under the last type salary increments depend wholly or in part upon ratings by others. All these types contain many subjective elements. In the first two the decision as to the relative value of preparation and experience must be made on subjective considerations. The relative weightings given to experience and preparation in determining salaries are sub4,D.

H. Cooke, Administering the Teaching Personnel (1939), p. 297. See Elsbree, op. cit., Ch. I V . " See L. L. Morris, The Single Salary Schedule (1930); R. R. Bowles, The Operation and Effect oj a Single Salary Schedule (193a). 40

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j e c t to wide variations in practice. T h e merit-type schedule attempts to overcome the limitations of assuming that given amounts of preparation or given amounts of experience are equally v a l u a b l e . " H o w ever, rating at the present time is itself a very subjective process and has serious effects upon morale. Arguments for and against the three major types often involve questions of cost. T h e cost of any schedule depends upon the amount of the m i n i m u m salary, the number of increments, the size of increments, the rate of turnover among the staff, trends in enrollment, and similar factors. There is no basic reason why one type of schedule should cost more than another. O f course, if all teachers were assured the same salaries as the highest paid teachers on a position-type schedule, there can be no doubt that the single salary schedule would cost more, all other factors being equated. A n advantage of the position and preparation-type schedules over the merit-type is the greater ease with w h i c h most predictions can be made. N o t only is the merittype schedule subject to unpredictable annual changes, but the amount of merit recognized in any one year m a y depend upon the fiscal situation rather than upon the amount of merit. Generally, separate schedules are provided for classroom teachers, administrative and supervisory employees, special professional services, clerical or office employees, skilled or semi-professional services, and unskilled labor. Schedule provisions. A salary schedule is more than a statement of minimum salaries, increments, and m a x i m u m or super-maximum salaries. It should contain a statement of all school board policies and state laws affecting teacher salaries (these basic policies have been discussed elsewhere). It should summarize the qualifications for each type of position and the laws, rules, and regulations regarding appointments, tenure, dismissal, and retirement of all personnel. Provisions regarding sick leave, leave of absence, sabbatical leave, marriage and maternity, travel allowances, expense accounts, insurance, medical care, allowance for summer school attendance, allowance for dependents, allowance for extra duties, and similar personnel policies should appear in the schedule. Regulations affecting prior service in other systems, substitute service, probationary teachers, in-service preparation, transfers, abolishing positions, pay rolls, frequency of payment, discipline, local residents, and other administrative rules M

L. P. Young, The Administration of Merit-Type Teachers' Salary Schedules (1933).

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and procedures affecting personnel and their compensation should appear in the schedule." Where different schedules are in force for different types of work, such as supervision, maintenance, or administration, such schedules should be included along with the teacher schedule. There are certain legal requirements which must be met in a state like New York, such as filing a copy of the schedule in the State Education Department, providing a minimum salary of at least a given amount, paying a minimum number of increments of a stated minimum amount, making at least monthly payments, requiring uniformity for all positions,54 and prohibiting discriminations based upon s e x . " Usually the legal requirements are so low that they do not affect salary levels in large, satisfactory organized school districts. However, the payment of fixed increments is made mandatory in the first years of service even though a school system may find it a better salary policy to provide a fixed minimum salary during the probationary period (usually three years) or to spread the increments over a longer period of time. Formulation and adoption of a schedule. Procedures and techniques for formulating and adopting salary schedules have been summarized by research workers such as Elsbree," Cooke, 67 and the National Education Association Research Division. 68 The Research Division recently issued six very practical bulletins on procedures in salary scheduling. These are: (1) Organizing for Work; (2) What Facts Are Needed?; (3) Local Studies of Teacher Status; (4) Estimating Costs; (5) Presenting the Facts; (6) The Story of Salary Scheduling in Fourteen City School Systems. Organization for salary schedule formulation will depend upon the size, history, and conditions in a particular school system. A school system may call in an expert or group of experts to formulate a schedule for consideration by the school board, teachers, and other interested groups. A school system may delegate the responsibility " For a study of these items see P. A. Cowen, Teachers' Salary Schedules, (University of the State of New York Bulletin No. 1173, 1939). " Article 33B and Sections 490 and 492 of the Education Law. " Section 569 of the Education Law. *• Elsbree, op. cit., Ch. V I and his studies of individual cities such as New Rochelle, N. Y., Yonkers, N. Y., and Greenwich, Conn. " Cooke, Administering the Teaching Personnel, Ch. I X . " The Preparation oj Teachers' Salary Schedules (Research Bulletin, Vol. X I V , Nos. 1 and 2, 1936. Parts I and II).

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to the superintendent of schools. The superintendent or the school board, often at the request of the teaching staff, may organize a committee of school board members, teachers, administrators, other employees, and lay members to formulate a schedule for consideration. At the present time this "unified approach" or "democratic approach" is gaining in acceptance. Facts should be available on the following: (i) the present salary policies and schedules and how they work; (2) a reasonable minimum salary; (3) a desirable maximum salary; (4) size and number of annual increments; (5) ultimate cost of the schedule; and (6) financial resources to meet the costs. In studying the effects of present salary policies, facts like these are pertinent: teachers leaving the system for other systems or for other employment; the relative qualifications of new entrants as compared with new entrants in other systems; in-servicc preparation of teachers at varying salary levels in the system; living standards of teachers at varying salary levels; responsibilities assumed by teachers at varying salary levels; evidences of long-time changes in personnel accompanying upward or downward adjustments in salary levels; and effects of varying salary levels over a period of time on such factors as pupilteacher ratio and services provided for pupils. The determination of a reasonable minimum salary depends largely upon what constitutes a minimum standard of living conducive to good teaching and the cost of maintaining that standard. 59 Another consideration is the number of years of experience and the amount and cost of preparation required. Earnings in other occupations and other factors which enter into the maximum salary are not so important in studying the minimum. It is true that minimum salaries paid in other communities will have a bearing upon personnel recruited, but ambitious teachers will accept a relatively low minimum if the maximum is high enough. It is a mistake to offer a high minimum at the expense of a high maximum, because there will be a certain degree of turnover among new recruits anyhow, and the system eventually will probably lose many of its best teachers to other systems with higher maximum salaries. T h e minimum which a community must pay relative to other communities is relative to the maximum. In establishing a maximum salary the major considerations consist in making teaching an attractive career for persons of ability and " Sec Elsbree, op. cit., pp. 23 ff. and pp. 91 ff.

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background and attracting and holding good personnel in the school system. Special attention should be given to cost of preparation for the position, earnings in other occupations, teachers' salaries in other communities, possible changes in price levels, the possible cost, the budgetary problems, the ability of the community to pay, and the possibilities of state or Federal aid. Facts relative to the cost of certain desirable cultural experiences for teachers, such as foreign travel or summer school attendance, are useful in determining the maximum salary. According to Elsbree, the place to start is with the maximum required to attract the most qualified and then to work down from that.«0 The maximum salary which a community can provide for teachers is dependent to a large extent upon the size and number of salary increases granted between the minimum and the maximum. If the annual increments are large and can be earned in a short period, either the maximum will be relatively low or the possible cost of the salary schedule will be relatively high. If the increments are small and spread over a longer period of time, then the maximum can be made relatively high, at a reasonable cost, depending upon turnover, tenure, retirement age, and other factors. Facts on various combinations, different sized increments, various numbers of increments, and varying frequency of increments should be worked out. Increments do not have to be the same every year; they do not have to be given every year; they need not be given during the probationary period; they need not be the same for all positions; and they do not necessarily have to be automatic and may be conditioned upon satisfactory service. Decrements also are possible. Facts also should be made available on the possible influence of various combinations of experience and preparation in determining increments and maximum salaries." In granting increments there are a number of unsolved problems. It is not known definitely when teachers reach maximum efficiency, how long they continue to grow, and when their service begins to decrease in value. Data on this problem would be extremely valuable in deciding upon the number, size, and frequency of increments or decrements. There is little evidence on the ages when teachers have to assume their greatest responsibilities for family and community life and when their living needs are greatest. Such data would be extremely pertinent in determining policies relating to increments. ,0

Elsbree, op. cit., pp. 100

ff.

" See Elsbree, op. cit., pp. 107 ff.

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Nor is much known about the relative value of various services as a basis for salary differentials in schedules. Finally, facts are needed on the transition from the old to the new schedule. WARTIME SALARY

ADJUSTMENTS

Rising prices. Wholesale and retail prices have been rising steadily since 1932." When war broke out in 1939 wholesale prices had recovered about 50 percent of the decline between 1926 and 1932 and the cost of living for a low-salaried family budget had made about the same recovery." Since the undertaking of the defense program in 1940-1941 and the entrance of the United States into the war, wholesale prices have taken a sharp upward trend. Between December, 1940. and December, 1941, wholesale prices on the average went up about 17 percent.'4 By February, 1942, the wholesale price index was almost back to the 1926 level, about 20 percent above February, 1 9 4 1 . " The cost of living of low-salaried workers has not kept pace with the wholesale price advance, but in February it was about 13 percent above the 1935-1939 average and only about 10 percent below the 1926 level." The cost of living at other standards may have experienced somewhat higher or lower rises, but the trend has been upward for all. Income trends. Income as a whole has been increasing at a higher rate than prices. The 1941 national income estimated at nearly ninety-five billion is nearly 23 percent higher than the 1940 income and nearly 15 percent above the 1929 peak of about eighty-three billion." If the trend for the first six months continued throughout the year, an annual income of over 1 1 0 billion can be expected for 1942." Between 1940 and 1941 agricultural income rose over 40 percent and salaries and wages in general nearly 25 percent.69 Wage rates in private industry have increased more than total wages and salaries because the total includes government employees and others receiving relatively fixed incomes.70 Net interest, rents, royalties, and ° The Economic Almanac for ¡941-1942, pp. 129 and 132. " Ibid. Survey oj Current Business, Feb., 194a, p. 12. " Ibid., April, 1942, p. 53. M Monthly Labor Review, April, 1942, p. 1,003; Statistical Abstract of the United States, 1940, p. 328. 17 Statistical Abstract oj the United States, 1940, p. 314; Survey oj Current Business, Feb., 1942, p. 12. Survey oj Current Business, Oct. 1942, p. 3. •• Ibid., Feb., 1942, p. 12. 70 See National Education Association, Research Division, Schools and Current Economic Trends (Release No. 3, 1942), p. 9.

M

IMPROVED PERSONNEL

POLICIES

dividends have not shown significant increases, but business or corporate savings doubled between 1940 and 1941. 71 Teachers' salaries. Average teachers' salaries have been increasing slowly since 1934, and by 1940 were back to the 1930 level; but they have not been keeping up with the rise in living costs. T h e average public school teacher's salary for the nation was $1,420 in 1930; it dropped to $1,227 ' n '934» ^ stood at about the 1930 level in 1940." National data are not available for 1941, but the National Education Association estimate shows no significant increase over 1940" and this is substantiated by the figures for New York state. Median salaries for public school teachers in New York state for 1941 were about the same as they were in 1940. 74 However, during 1941 and 1942 many school districts have been making cost of living adjustments for public school teachers according to the National Education Association. 7S Danger of inflation. Salary adjustments alone probably will not assure an adequate supply of well-qualified teachers and protect the economic status or living standards of teachers. Teachers and other public employees have never been able to keep up with rising prices through salary increases. Public budgets and taxes always are slow to react to changed conditions. There is always a lag of a year or more. Moreover, wage and salary increases, either in private industry or in public employment in a seller's market, cause prices to rise still further; and inflation goes on. Public salaries never catch up until deflation begins. Unless all groups cooperate to prevent inflation, the resulting depression after the war will cause untold suffering not only to those in private employment, but also to public employees. Teachers and other public employees along with persons on fixed income have the most to lose when prices continue to rise. They, above all groups, must support price control and rationing. Indeed, it is probable that those two measures will do more to protect their living standards than will salary adjustments alone. Support of price control and rationing, most important of all, will increase the ability of the nation to win the war and survive after it is over. It is argued by some that since teachers' wages come out of taxes Survey oj Current Business, Feb., 1942, p. 12. See p. 56 and Schools and Current Economic Trends, p. 14. " Ibid. u New York State Teacher» Association, Teacher Salary Tabulation for 1940-1941 (1942). " For example, their release of Dec., 1941. n

n

IMPROVED PERSONNEL

POLICIES

and since taxes reduce purchasing power and prevent inflation, taxes for higher teacher's salaries will help prevent inflation. This is a fallacy. Most taxes merely represent a transfer of purchasing power from one group to another. Taxes for public schools are in this category. Increased taxes for increased salaries to public employees transfer the increased purchasing power to government employees and do nothing to prevent inflation. As this section is being written the President of the United States has ordered a stabilization of wages and salaries. Since upward adjustments are permitted to correct maladjustments and inequalities, the objective seems to be to slow the rate of increase in prices, not to establish an over-all ceiling. It is very likely, therefore, that inflationary trends will continue. If they do, teachers have no alternative but to seek salary adjustments. Unless teachers' salaries keep pace with other incomes and prices, the existing teacher shortage will become worse and the quality of public education will suffer. Low salaries, inadequate salary schedules, and maladjustments in salary schedules will have to be corrected. Public interest and enlightened public policy will require such adjustments. T h e merit of wartime salary adjustments in any state or community depends upon a number of conditions, such as the adequacy of the salary provisions relative to such factors as the qualifications required, earnings in other occupations, reductions made when prices were falling, community price trends, and the supply of personnel available with equal or better qualifications. Each community or state must be considered as a separate problem. READINGS Bowles (10); Clark and others (29); Cooke (34), Chs. I I - I X , and (35), Chs. I - V I I I and X I I - X I X ; C o w e n (38); Dix (49); Eels (62); Elsbree (63); Lewis (100), Chs. I X - X V I I ; M o e h l m a n (112), C h . I X ; Morris ( 1 1 6 ) ; Morrison (118), Ch. X I V ; Mort and Reusser (123), C h . X I I I ; Mosher and Kingsley (124); National Education Association (131), (132), (137), (139), (140), (141), and (144); Pyle (163); Soper and others (178); Spencer (179); and Y o u n g (205). D a t a relating to teachers' salaries can be obtained from the N a t i o n a l Education Association, Research Division (bibliographies, salary tabulations, and salary schedules). Other statistics can be located through the guide in Appendix I.

CHAPTER

XII

DEFENSIBLE SPENDING FOR PUBLIC SCHOOLS DEFENSIBLE SPENDING

DEFINED

Public school objectives. Part I of this book has tried to show that civilized life, national survival, stable and effective government, high living standards and material wealth, and personal happiness and well-being require the right kind of education no matter what form of government or economic system a nation has adopted. Democracy and a private-enterprise economy, however, place a high premium on education for all. T h e survival of democracy requires the maximum development of individual citizens, widespread knowledge on fundamental issues, great emphasis upon personal integrity and h u m a n relationships, and ability to think independently because the decisions and behavior of each citizen affect the rights and welfare of all citizens. Under a private-enterprise economy the individual consumer is supreme. His decisions determine what is to be produced, who is to produce, and what values are to prevail. Private enterprise like democracy presumes widespread knowledge upon the part of individual persons. T h e willingness of individual men to work for remote objectives, their judgment as to how much to save and in what to invest, their decisions as to occupation and vocational preparation, their decisions as to buying and selling or expending income, and their decisions on other enonomic matters such as tariffs affect the peace and prosperity of all. Individual knowledge, ability to communicate with others through language and numbers, health, good citizenship, character, maximum development of individual capacities, ability to think, a sense of values, consumer judgment, and vocational efficiency are essential if a democracy and a free-enterprise economy are to function satisfactorily. Survival of our nation in a world of powerful conflicting national groups; the internal security and stability in government and human relationships essential for survival and economic prosperity; the maintenance of a reasonable balance between material, human, and cultural values (also essential for survival and economic well-being);

33^

DEFENSIBLE SPENDING

the perpetuation of democracy; and the continuance and success of a private-enterprise economy justify every objective toward which the public schools are working. Health, safety, command of the tools of learning and communication, civic competence, character development, discovery and development of individual capacities and talents, development of a sense of values, preparation for home and family life, consumer competence, and vocational competence all can be justified. T o the degree that they can be attained through public education will our nation, culture, democracy, and private-enterprise economy continue to serve our welfare. T o be most defensible, public school spending must be striving to achieve these objectives. Yet, it can be defensible if it contributes to only one of these objectives. The founders of our public school system were not aware of the potentialities of the institution which they were building up. Either they expected more than existing technique or limitations would permit, or they ignored the potentialities of such a small attainable objective as literacy. Literacy has made possible the huge markets which make modern standards of living possible. Literacy is the key to victory in the struggle of nations. The attainment of literacy alone has paid for the cost of public education in the past and has paid big dividends as well. Those practical business men of the past who opposed the extension of public education were not aware of its potential contributions to economic life. Public school means. It has been shown that, owing to labor-saving machinery, division of labor, and intense specialization, it is possible under our economy to release children and teachers from other productive work in normal times without reducing living standards. Child labor generally is not needed in such an economy. Greater life-span economic returns can be attained by prolonging the educational careers of children. The release of adults for teaching and other work connected with schools can be justified on the grounds that most teachers are women who have few opportunities in other productive endeavors, and by the fact that under normal conditions there tends to be a supply of men who cannot immediately be absorbed in the economic system. It is not sufficient to release a sufficient number of teachers if the objectives of public education are to be realized. Those released must possess the necessary native ability, educational background, experience, specialization, and professional skill. Teachers must be assured

DEFENSIBLE SPENDING

337

a living standard which will give them the energy, health, rest, recreation, cultural experiences, professional growth, self-respect, security, and enthusiasm required to attain the purposes of public education. Arrangements must be made to attract and retain capable persons in the teaching profession, to provide opportunities for the best possible pre-service and in-service preparation, and to give them the materials essential in their work if financial outlays are to be defensible. T h e curricula, courses of study, techniques, and other means used by capable teachers to achieve the objectives cannot be justified on the grounds of faith and tradition. It is not sufficient to assume that certain disciplines like Latin and mathematics which have proved valuable for a selected group of the ablest students are the best means to use for all students regardless of ability. Individual abilities, talents, and limitations of persons must be discovered and the right education provided for each in so far as this can be determined. Hit-or-miss mass procedures will not assure the maximum attainment of the objectives for each citizen, allowing for his heredity, past experience, and environment. It is true that teaching techniques are still imperfect and means for evaluating educational outcomes are even more imperfect. Nevertheless, to be fully defensible, public school expenditures must be such as to obtain a teaching staff which has mastered the existing techniques. Furthermore, provision must be made for improving techniques through research and experimentation. T o be justifiable, school expenditures must include outlays for challenging or testing the techniques used to attain objectives. As long as most teachers are women lacking opportunities for other productive work and as long as thousands of men with high ability are doing work which could be done by persons with less ability, it is economically sound to recruit sufficient able men and women to staff the schools, to provide them with the most thorough preparation, and to provide whatever else is necessary to make their work effective. Even in war periods failure to provide sufficient personnel is hard to defend, because women can be trained for most educational work, including physical and vocational education. Of course, there is a limit to the number of persons who safely can engage in any given occupation, as will be seen in a moment, but one million persons engaged in educating children in a nation of 150 million hardly reach the limit. Balanced life activities. Public education is only one of many important

338

DEFENSIBLE SPENDING

life essentials, including food, housing, clothing, medical attention, transportation, recreation, and cultural satisfactions. Each of these is vital; no one should be curtailed at the expense of others. However, as long as we are spending only about 3 percent of our income on public education (no more than is spent on advertising material goods), over 5 percent of our income on alcoholic beverages, and nearly as much on tobacco and personal appearance as upon education, there is no danger of expanding education at the expense of other important life activities. Indeed, there is greater danger of our expanding transportation at the expense of education and other essentials. We are spending about 11 percent of our income on transportation, much of which is nonessential as the war has proved. The war also has shown that there is enough waste in our expenditures for food, clothing, and shelter to more than pay for education. Effective consumer education in the future probably can pay the entire cost of public education just as literacy has done in the past. Public finance. Even if the present expenditure for public education is defensible economically, the question can be raised concerning approximately three billion dollars of public funds for this purpose. Is this public outlay defensible? It has been shown that there are no known limits to public expenditure when a nation is considered as a whole, assuming an economically sound tax system which adjusts to changes in price levels and incomes. State and local public finance cannot be so easily defended. It is difficult to design a state or local tax system which will not adversely affect economic life, because most producers must compete in a national market, and unduly high state or local taxes may put a locality at a disadvantage in competition with other localities and thereby weaken or destroy the tax base. Federal taxes, on the other hand, can come closer to affecting all producers alike. Hence, it is to be expected that defensible spending for defensible public education will require substantial support from the Federal Government in the coming decades. This policy is sound because attainment of most of the objectives of education will affect the well-being of all citizens in all parts of the nation by promoting national survival, democracy, and successful private enterprise. Basic factors. Up to this point, public school spending has been considered in the aggregate. What are the factors which must be considered in determining whether or not expenditures are defensible

DEFENSIBLE

SPENDING

339

in a particular c o m m u n i t y or state? T h e s e also h a v e been discussed in P a r t I and include the following m a j o r factors: 1 1. D i f f e r e n c e s in e d u c a t i o n a l p r o g r a m s . A l l e d u c a t i o n is not the sameIn a n y o n e school system w h a t is i n c l u d e d u n d e r e d u c a t i o n will v a r y f r o m y e a r to y e a r , the differences w i d e n i n g as l o n g e r time intervals are c o m p a r e d . A m o n g school systems e x t r e m e v a r i a t i o n s will be f o u n d . T h e o b j e c t i v e s w h i c h a school system is a c t u a l l y t r y i n g to a c h i e v e will v a r y . T h e c a l i b c r of personnel e m p l o y e d to a c h i e v e purposes will show e v e n w i d e r differences, a n d the m e a n s e m p l o y e d — s e r v i c e s , p r o g r a m s , c u r r i c u l a , m e t h o d s , a n d organization—will vary considerably. 2. D i f f e r e n c e s in pupil p o p u l a t i o n s . W i t h i n a n d a m o n g school systems the n u m b e r of children a n d the c h a r a c t e r i s t i c s of p u p i l p o p u l a t i o n s , such as age levels, ability levels, e c o n o m i c status, p a r e n t a g e , h e a l t h a n d physical characteristics, h o m e b a c k g r o u n d , a n d c o m m u n i t y e x p e r i e n c e s will d i f f e r . T h e n u m b e r of children to be e d u c a t e d o b v i o u s l y will a f f e c t e x p e n d i t u r e s , b u t the characteristics of p u p i l p o p u l a t i o n m a y be m o r e potent in d e t e r m i n ing e x p e n d i t u r e s , a factor w h i c h is n o t so o b v i o u s to the l a y m a n . 3. I n c o m e . In order to a t t r a c t a n d hold c a p a b l e personnel, p u b l i c schools m u s t consider i n c o m e trends. If c a p a b l e persons are to be a t t r a c t e d into the profession a n d kept in the profession, schools must p r o v i d e i n c o m e s w h i c h are c o m m e n s u r a t e with w h a t persons w i t h similar abilities c a n e a r n in o t h e r o c c u p a t i o n s . A state or a c o m m u n i t y w i t h a high level of i n c o m e m a y h a v e to p a y m o r e to get c o m p e t e n t personnel than one w i t h a l o w e r level of inc o m e . In a n a l y z i n g the e x p e n d i t u r e s of a n y one state or c o m m u n i t y , trends in i n c o m e must be studied; for e x a m p l e , the i m p r o v e d e c o n o m i c status of w o m e n in most o c c u p a t i o n s h a s h a d a p r o f o u n d e f f e c t u p o n the cost of p u b l i c school spending. 4. Prices. I n c o m e p a y m e n t s a n d o t h e r factors affect price levels as b e t w e e n t i m e intervals a n d b e t w e e n places. P r i c e differences a m o n g c o m m u n i t i e s a n d states a n d trends in prices, or the p u r c h a s i n g p o w e r of the d o l l a r , must be taken into a c c o u n t . 5. E c o n o m i c resources. O n e of the m o s t influential factors a f f e c t i n g e x p e n d i t u r e levels is e c o n o m i c a b i l i t y to p a y taxes. Poor states or c o m m u n i t i e s s i m p l y c a n n o t a f f o r d to p u r c h a s e a defensible q u a n t i t y or q u a l i t y of e d u c a tional services. 6. D e n s i t y of p o p u l a t i o r . E x t r e m e sparsity of p o p u l a t i o n m e a n s that a sufficient n u m b e r of pupils c a n n o t be b r o u g h t together at a r e a s o n a b l e transportation cost to p r o v i d e e c o n o m i c a l instruction. A g i v e n q u a n t i t y a n d q u a l i t y of e d u c a t i o n will be costly in sparsely settled areas. Nevertheless, this e x p e n s e is defensible u n d e r d e m o c r a t i c principles. E x t r e m e density of p o p u lation, on the other h a n d , seems to be a c c o m p a n i e d b y h i g h e r i n c o m e a n d price levels. 7. District structure. E v e n w h e r e sparsity is not o p e r a t i n g , small units of 1

For other factors see pp. 68 ff.

34°

DEFENSIBLE

SPENDING

school administration and small attendance areas will inflate costs. Probably such a structure and organization cannot be defended. Yet, if the people of a state permit them to exist, they must be willing to pay the price. 8. Governmental structure. Overlapping units of government, such as the state, county, city, village, town, and special district, sometimes provide educational services or meet the costs of certain goods and services used by schools, such as water, light, psychological service, or health service. Often one school district will pay for public library services, police protection at school street crossings, recreation, and health services which in another district are paid for by some other unit of government. Such variations must be discovered and allowed for in comparisons. 9. Units of measurement. Public school expenditures represent a heterogenerous aggregate of goods and services. Although there are well-defined, unchanging units for measuring expenditures for specific goods like coal, and somewhat imperfect measures for special services like janitorial work, there is no unit for comparing the aggregate, and there probably never will be as shown in Chapter IV. Such a unit as current expense per pupil has practically no meaning. Variations must be explained in terms of the factors here enumerated, together with other factors discussed in the chapter referred to above. 10. Willingness. The sense of values of a population and its confidence in school management determine willingness to spend money on public schools, an extremely crucial factor. A population with low cultural and educational standards will not spend as much for education as an enlightened population. Unfortunately, such conditions form a deplorable cycle—low standards resulting in poor schools, poor schools resulting in low standards. National and state leaders, professional and laymen, must take the initiative to break this cycle, especially in rural America and large politically dominated cities, if the welfare of all is to be promoted and protected. Confidence depends upon establishing the conditions essential for defensible spending, including the elimination of indefensible spending and effective interpretation of expenditure facts to the public. CONDITIONS ESSENTIAL FOR DEFENSIBLE SPENDING In Part I I of this book, the conditions which must exist to attain defensible spending in a particular state or c o m m u n i t y were listed a n d discussed. T h e s e include a sound governmental structure, general competence in m a n a g e m e n t , proper b u d g e t a r y m a n a g e m e n t , p r u d e n c e a n d economy in m a n a g e m e n t , and sound personnel m a n agement. Governmental structure. E x t r e m e decentralization in school district structure practically m a n d a t e s extreme inequalities in educational opportunities, short-sighted policies, unskilled m a n a g e m e n t , a wasteful use of personnel a n d materials, inertia, and inability to a d a p t to

DEFENSIBLE SPENDING

34»

changed conditions. Overlapping units of local government lead to conflicts of jurisdiction, undue complexity, waste, and overlapping services—for example, legal, tax collection, purchasing, accounting, maintenance, plant, treasury, and borrowing. If certain controls, for example, budgetary, are transferred from school districts to some other unit of government, the school district becomes an almost useless appendage of local government, the school board having to assume responsibility for policies determined by another legislative body. Indiscriminate extension of Federal and state controls, on the other hand, retains the expensive machinery of decentralized administration without the potential adaptability or flexibility inherent in home rule. There is centralization with the disadvantages of both centralization and decentralization. Extreme centralization of structure, especially in a very large state or the nation as a whole, provides an opportunity for minority groups or pressure groups to determine policies and control education, stifles initiative and flexibility, weakens public interest, neglects local problems and conditions, and makes all sections suffer the effects of incompetence in management. Reallocation of control by itself accomplishes very little; control must be accompanied by expert management on all levels. Assuming that this precaution has been taken, the following recommendations regarding control have been made: (1) In small states serious consideration should be given to complete state support and control of education, taking into account the strengths and weaknesses of large city school administration. As long as state school management is subject to the control of the people, it is just as democratic as local management. (2) In large states the structure of all local government should be simplified, large units of school administration should be created, certain state-wide controls and safeguards should be extended, and certain educational functions and services should be provided directly by the state government. Among the controls which may be extended are: debt limits; supervision of the affairs of school districts in default on their obligations; temporary control in districts where local administration has failed to function effectively; formulation of standards for the guidance of local officials; enforcement of minimum standards as to school attendance, teacher preparation, merit appointments, tenure, and salaries; establishment of uniform budgetary procedures and accounting systems; requirement of periodic reports and publicity; and provision for outside post-audits and pre-audits

342

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SPENDING

(limited to the legality of budgetary items) by state education departments. A m o n g the functions which m a y be supported and administered directly by the state may be included transportation, architectural and engineering services, state borrowing or revolving funds for the financing of capital improvements, insurance, purchases according to specifications accepted by local management, teacher education, advanced technical education, field services in technical aspects of school management, research, and the administration of schools in sparsely settled, decadent, or submarginal areas. (3) N o matter whether schools are administered by a state agency, local units, or both, certain cooperative arrangements should be worked out with other units of government in such matters as taxation, budgets, purchasing, capital outlays, borrowing, legal services, accounting, treasury, libraries, health, recreation, and other welfare provisions. Managerial provisions. Expert management, specialized enough to master existing knowledge and technique, is a prerequisite for defensible spending on the Federal, state, or local levels of government. T h e best possible improvement in school management cannot be achieved by local action alone; nor can it be attained at once. Minim u m standards for the certification of school administrators and other specialists required for efficient m a n a g e m e n t must be established in many states and increased in most states. Provisions for the professional preparation of administrators must be improved and opportunities provided for the preparation of other personnel engaged in management. In-service preparation should be provided for those in service through institutions of higher education and the state education departments. Merit appointments of administrators and all other personnel should be safeguarded. Boards of education must become informed on the meaning of management, the responsibilities and authority which management should have, and the legitimate functions of management. T h e status of management should be defined by law without defining duties in detail. T h e school system should be organized so as to pool the best knowledge, thinking, and skill of the entire staff in determining policies, with clear-cut lines of responsibility for carrying out policies, and provisions for appraising both the policies and the way they are being carried out. Educational management and financial management should not be divorced in organization. Educational decisions usually affect spending more than financial decisions. Those responsible for financial management should

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SPENDING

343

not be in a position to determine educational policies or hamper the achievement of the purposes w h i c h the schools are trying to attain. Responsibility for both educational and financial affairs should be given to a superintendent w h o is qualified to see the broader aspects of both. T h r o u g h direct state action, the creation of larger units, and cooperative arrangements, school administrators should have the services of specialists in such technical fields as auditing, accounting, personnel management, transportation, insurance, purchasing, property management, borrowing and bonding, school plant planning, and research. Budget provisions. N e x t to the general improvement in management, the budget contains the greatest possibilities for improving public school spending. T h e budget is not a mere statement of estimated receipts and expenditures. It is a plan of action for the future. It is a careful weighing of educational needs against other needs for private and governmental services and an evaluating of one educational d e m a n d against others to provide the best possible educational results with the funds w h i c h c a n be m a d e available from Federal, state, and local sources, with careful estimates of the expenditures required for each provision. It is a most important tool of management, an indication of the caliber of management, and the best means of public control over school spending. T h e budget should be such as to show the people the purposes of the schools, w h a t provisions are to be made to attain purposes, the reasons or justification for each,the approximate cost, the estimated revenues needed, and facts on the ability of the unit of government to provide its share of the revenues. T h e public should have such d a t a in order to make intelligent decisions on the quantity and quality of schooling it wants to provide at public expense. Sound budget m a k i n g and management means: ( i ) clear understanding of the purposes to be achieved by the schools; (2) a continuous evaluation of the means employed to attain the objectives, resulting in definite plans of action for the future; (3) cooperation with other units of government so that there is a balanced program of action for government as a whole; (4) accounting systems and research w h i c h will reveal pertinent data on population trends, educational needs, income, prices, taxpaying ability, expenditures or costs, revenues, and factors affecting these; (5) achievement of all potential

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operating economies attainable by the unit itself and cooperation with other units to secure the economies which can be attained only by state or cooperative action; (6) cooperation with other units, Federal, state, and local, to get a sound tax system and adequate revenues. A budget should be inclusive of all operations administered by the school system; be prepared by a professionally trained executive with the assistance of specialists and other staff members familiar with detailed problems, procedures, and operations; be carefully studied and approved by the board of education; be widely publicized, with public hearings encouraged; be flexible enough to permit administrative adjustments to new or changed conditions; when once approved, be the authorization for all financial operations; and be administered by the executive. Prudence and economy. Prudence and economy in public school management are essential to secure maximum educational opportunities and to maintain public confidence in public education. Prudence requires that the funds and property of a school district must be protected from loss, destruction, theft, waste, or misuse; funds must be spent for the purposes for which they were appropriated. Economy means that purposes must be achieved with least outlay of personal services and materials and that optimum combinations of personnel and materials must be used for attaining a given purpose. Prudence is required at all times, but economy is most essential during war or inflation, when goods and services are scarce and there is no widespread unemployment. During depressions or periods when there are unemployed and it becomes necessary to adjust school expenditures to prevailing income or price levels, it is important to be economical in the use of goods and services, but it may be more important and desirable to maintain or increase employment opportunities, providing this results in more or better educational services for the community, state, or nation. Economy is not synonymous with low expenditures. There may be more waste in low expenditures than in high expenditures when each is evaluated in terms of the results obtained. Economy demands upward adjustments in expenditures in periods of rising incomes and prices in order to maintain effective services. At all times, economy must be considered in relation to the objectives to be realized. Prudence in financial management involves: (i) a carefully prepared

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345

budget; (2) an accounting system which will reveal unencumbered balances for purposes of budgetary control, which will protect funds from loss, theft, or misuse, and which will reveal the data on expenditures and income needed in budget making and management; (3) safeguards such as authorizations, records, business procedures, and reporting; (4) pre-audits to determine if an expenditure is justified in terms of purpose and its effect on future expenditures and other needs if it is legal and properly authorized, and if there are unencumbered funds to meet it; (5) current audits to check the receipt of goods and services and conformance to specifications and prices, to discover errors and omissions, and to check records; and (6) post-audits by outside auditors to check the legality, honesty, and accuracy of all transactions and to discover possible improvements in business procedure. The major potential economies in public school spending can be achieved by good educational administration rather than by good financial management. Adequate returns for money spent depend very largely upon the recruiting, selection, maintenance of morale, improvement in service, and use made of personnel. Next to the budget the most important tool of management is the work schedule. It decides the use made of both personnel and materials. Able, well-prepared, well-paid personnel should not be assigned work which can be done by persons with less ability and preparation who can be employed at a lower cost. Equally important is the selection of the means used to achieve purposes—programs, curricula, methods of grouping pupils, teaching methods, and special services. Means must be constantly evaluated and compared with other means. Discredited practices, such as semi-annual promotions, which increase expenditures without increasing returns, should be discarded without delay.Specifications for goods and services should be relative to the use to be made of each. More expensive materials should not be used where less expensive materials can be used. Such educational decisions have the greatest effects upon public school spending. Wise decisions regarding such matters are more important than elaborate records of unwise spending. The greatest contributions which financial management can make to economy are: (1) establishment of a purchase program handled by buyers capable of judging utility and quality relative to initial cost, future costs for service, operation, and maintenance and effects

346

DEFENSIBLE

SPENDING

upon other expenditures, taking advantage of standardization, discounts, quantity purchases, cooperative buying, bids, and seasonal purchases, and taking into account price trends; (2) avoidance of debt through careful planning and the pay-as-you-go policy; and (3) compilation of economic and financial data which will make possible economies in operations without affecting results adversely. T h e attainment of maximum prudence and economy in school operation requires state action and cooperation. Small school districts and overlapping and duplicating governmental services which create waste in the use of personnel and materials and which make it difficult to attain economy in other phases of management must be eliminated. T h e state can provide many services most economically on a state-wide basis. T h e state should establish safeguards such as debt limits, budgetary forms and procedures, accounting systems, requirements for certification, standards for merit appointments, field services, audits, research, and surveys. Personnel management. All but a relatively small percentage of public school expenditures are for personal services, instructional and noninstructional. Personnel management, therefore, has great possibilities for increasing returns for money spent. Economy in the management of personnel is difficult to attain. Justifiable adjustments to lower income and price levels obtained at the expense of the morale, enthusiasm, and efficiency of employees increase waste. Defensible reductions in staff to adjust to decreased attendance, which result in a feeling of insecurity on the part of all employees, are economies of doubtful value. Efficient personnel management requires democracy in organization and professional relationships, a full understanding of the facts by all employees, skillful leadership, a fine sense of human values, allowance for emotional factors, and the adoption of policies which are accepted by most employees because they are convinced of their necessity and their fairness. T h e ends sought through personnel management are: ( 1 ) the securing of the most qualified personnel available for each position; (2) the retention of the able, skillful, and successful and the elimination of the unfit; (3) the provision of an atmosphere and incentives for efficient service; (4) the stimulation of increased efficiency and morale; and (5) encouragement for all employees to improve their economic, social, and cultural status. T h e intelligence, energy,

DEFENSIBLE SPENDING

347

enthusiasm, character, background, and professional skill of all employees determine the quality of public education. T h e recruiting and retention of good personnel depends largely upon salary and wage policies, but high salary schedules do not guarantee these unless there are professional selection by management, merit appointments, and in-service efficiency determined by competent professional management. Specifications or qualifications should be drawn up for each position, professional or nonprofessional. A reasonable balance should be maintained between class size, or pupil-teacher ratio, and the caliber of personnel. Tenure during competency with no dismissals for political, personal, or other extraneous reasons should be provided. Protection against disability and old age should be extended to all employees. Among the important factors to be recognized in establishing salary and wage policies are earnings in other occupations, living standards and living costs, cost of professional or occupational preparation, supply and demand, and public support. In wartime or inflation, greater emphasis should be put upon price control and rationing than upon salary and wage adjustments. In such periods, adjustments should be limited in so far as possible to correcting maladjustments and inequalities. INDEFENSIBLE

SPENDING

Although the attainment of the purposes of public education would justify either present total spending and much greater future spending for public schools, nevertheless, constructive economies are possible in particular communities and states. The elimination of indefensible spending, however, will not result in economy unless the following principles are applied: 1. Attainment of purposes. T h e mere elimination of specific indefensible expenditures without attention to steps which should be taken to increase the effectiveness of public schools is not economy. The greatest waste can come from failing to spend enough to attain the conditions essential for defensible spending. In most school systems, money saved through economies should be spent to improve the personnel and means required to attain public school objectives. 2. Removal of causes. Economy must be achieved by specific action to remove the causes of indefensible spending, for example, governmental structure, outmoded state mandates, traditional practices of questionable value, failure to make merit appointments, political control, management by un-

348

DEFENSIBLE SPENDING

trained personnel, or failure to establish safeguards. High spending is not by itself an indication of waste: there m a y b e more waste in low expenditures when results are considered. Arbitrary reductions in state support, tax limits, and undesirable controls which hamper the efficient to penalize the inefficient are not justified. 3. Human reactions. Economies realized at the expense of the morale and efficiency of school employees result in a net loss. Emotions as well as facts must be taken into account. Time should be taken to secure the understanding, cooperation, and equity essential for lasting results. Personnel management and democratic organization should be strengthened and solutions should be worked out by the management and staff in the unit of government involved. 4. Positive action. Positive action to improve management, budget making and administration, prudence and economy in management, and personnel will be more effective in the end than negative actions or controls. Mandatory legislation, legal restraints, budgetary control, and legal safeguards are no substitute for efficient day-by-day management and operation. 5. Perspective. Immediate financial savings resulting in future waste or increased indefensible spending are very questionable. Postponement of small repairs which result in high maintenance costs in the future; purchase of items at low initial cost without regard to future cost for services, operation, or maintenance; deterioration in the caliber of management or personnel; and a curtailment of effective programs which will handicap children for years to come, can hardly be defended. 6. Economics. In thinking of economy, the veil of finance must be lifted to see the economics. In adjusting school expenditures to lower income or price levels, when there is widespread unemployment, it may be most unwise to eliminate personnel. It may be much sounder economically to make the maximum saving on personnel during a period of war or inflation when there is a shortage of manpower. Real economy is determined by the use made of personal services and materials; not alone by the amount of money spent. 7. Adaptability. In applying the principles of prudence and economy it is very easy to violate the equally important principles of adaptability and flexibility. The freedom and initiative needed to discover new needs and improved procedures and methods for getting results, to discover and discard outworn policies and practices, and to adjust to the particular needs of communities and population differences easily can be destroyed by restrictive measures. MAINTENANCE

OF PUBLIC CONFIDENCE

Throughout this book the necessity for maintaining public confidence in public schools and their management has been stressed. If educators do all that they can to make public schools effective in achieving their functions with the least outlay of personal services and materials, they will have done much to retain public confidence.

D E F E N S I B L E SPENDING

349

Educators alone, however, cannot do all that must be done to realize these ends. They must not only interpret what they are doing to the public, but also take the lead in getting the public to see how much depends upon it. Through budgets, budget hearings, publicity, personal contacts, reports, school papers, and every other means of interpretation at their disposal, educators must familiarize the public with the purposes of the schools, the operation of the schools, the educational needs of the community and the children which are not being met, and the conditions which must exist for effective public education and defensible public school spending. Above all, the public must be familiar with the purposes the schools are striving to attain, the importance of attaining these purposes to preserve democracy and private enterprise, to assure the survival of our nation, and to promote the welfare of all. The public must realize the values of public education, must desire to attain these values, and be willing to make the financial oudays required if public school spending is to be made most defensible.

APPENDIX

I

GUIDE TO THE LITERATURE ON PUBLIC SCHOOL FINANCE D E V E L O P M E N T OF T H E S U B J E C T EXISTING knowledge on public school finance has been developed largely during the past four decades.1 The scientific study of financial management began with the studies of Strayer 1 and Elliot in 1905* and Updegraff in 1912. 4 The Department of Superintendence and the United States Office of Education Committees on Uniform Records and Reports ( 1 9 1 2 ) ' and Hutchinson (1914)' laid the groundwork for present accounting and reporting practices. Committees of the National Education Association on teachers' salaries, pensions, and costs of living (1913-1918) inaugurated an era of intensive research on these problems. The Research Division of the National Education Association, beginning in 1923, started a series of researches into the economic basis for and tax support of public schools.7 The National Association of Public School Business Officials has made significant contributions to management through its proceedings and bulletin series, as has also the United States Office of Education. Cubberley (•905) 8 made the first intensive study of state financial assistance to school districts. Thorough studies of individual states began with Kent's study in Minnesota* and UpdegrafFs survey in New York state,10 followed by a numTHE

1 Sec National Survey of School Finance Staff, Research Problems in School Finance, Washington, D . C.: T h e American Council on Education, 1933, pp. 1 ff. * George D . Strayer, City School Expenditures. New York: Teachers College, Columbia University, 1905. 1 E. C. Elliot, Some Fiscal Aspects oj Public Education in American Cities. New York: Teachers College, Columbia University, 1905. 4 H . Updegraff, Study oj Expenses oj City School Systems (U. S. Bureau of Education Bulletin, 191a, No. 5). Washington, D. C : Government Printing Office, 1912. * Report oj Committee on Unijorm Records and Reports (U. S. Bureau of Education Bulletin, 1912, No. 3). Washington, D. C.: Government Printing Office, 191a. ' J . H . Hutchinson, School Costs and School Accounting. New York: Teachers College, Columbia University, 1914. 7 National Education Association, Research Division, Facts on State Educational Needs (Research Bulletin, Vol. I, No. 1). Washington, D. C.: the Assn., 1933. * E. P. Cubberley, School Funds and Their Apportionment. New York: Teachers College, Columbia University, 1905. ' R . A. K e n t , A Study oj State Aid to Public Schools in Minnesota. (Studies in the Social Sciences, No. 11). Minneapolis: University of Minnesota, 1918. 10 H . Updegraff, Financial Support (Rural School Survey of New York State, Vol. III). Ithaca, N . Y.: Joint Committee on Rural Schools, 1932.

GUIDE TO LITERATURE ber of other surveys culminating in the pioneer work of Mort in New York state, 1925. 11 T h e first national study of school finance problems was conducted by the Educational Finance Inquiry Commission between 1921 and 1923. T h e reports of the Commission were published in thirteen volumes and covered all sections of the country. T h e authors and titles of the studies are given below. EDUCATIONAL FINANCE INQUIRY VOLUMES

Published by the Macmillan Co., 1923-1924 1. The Financing of Education in the State of New York by George D. Strayer and Robert Murray Haig 2. Elementary School Costs in the State oj New York by R . O . Stoops 3. The Cost and Support oj Secondary Schools in the State oj New York by Charles W . Hunt 4. Bibliography on Educational Finance by Carter Alexander 5. The Fiscal Administration oj City School Systems by J. R . M c G a u g h y 6. Financial Statistics oj Public Education in the United States, 1910-1920 by Mabel Newcomer 7. The Cost oj Education in Calijornia by E. P. Cubberley and J. B. Sears 8. The Financing oj Education in Iowa by William F. Russell, T . C. Holy, and others 9. The Financing oj Public Schools in the State oj Illinois by H. C. Morrison 10. The Political Unit oj School Finance in Illinois by Floyd W . Reeves 11. The Public School Debt in Illinois by George W . Willett 12. A Study oj Public School Costs in Illinois Cities by Nelson B. Henry 13. Unit Costs in Higher Education by E. C . Elliott and E. B. Stevens Space does not permit listing the many studies which grew out of the work of the Commission; for example, the study of Mort grew out of the work of Strayer and Haig. T h e impetus given research by the Inquiry is partly responsible for the over 5,000 publications on school finance published in the United States, between 1923 and 1931. 12 A b o u t the same time Swift and his collaborators began a series of studies of school finance systems in the various states." T h e second nation-wide study, T h e National Survey of School Finance, was authorized by Congress in 1931. T h e Survey staff prepared the volume on Research Problems in School Finance, already referred to, and the bibliography mentioned in the next section. O w i n g to the fact that the appropriation was not continued, the Survey did not undertake the ambitious program outlined but confined itself to a study of state support. 14 Paul R . Mort, The Measurement oj Educational Need. New York: Teachers College, Columbia University, 1934. u National Survey of School Finance Staff, Research Problems in School Finance, p. 3. 1 1 See Alexander bibliographies in next section for complete list of these. " P. R . Mort (Dir.), State Support for Public Education. Washington, D. C . : American Council on Education, 1933. 11

GUIDE TO LITERATURE

353

T h e emphasis prior to 1920 largely was upon the problems of local finance. During the decade 1920-1930 there took place a great development both in the techniques of local financial administration and state support. Beginning about 1930 the emphasis shifted to Federal aid, but state finance problems continued to hold their own. The National Survey of School Finance oudined hundreds of problems in state and local finance which have not yet been solved, or for the solution of which satisfactory techniques have not yet been developed. The study of Federal relations to education and Federal aid for education began shortly after the First World War with the work of the National Emergency Committee on Education and with the publication of Keith and Bagley's work ( 1 9 2 0 ) " and Swift's study (1922). 16 The National Advisory Committee report in 1 9 3 1 1 7 helped clarify the issues raised after a decade of controversy over the issue. The Advisory Committee on Education, appointed by the President in 1936, conducted a number of researches basic to a program of Federal aid for public schools. The Committee issued a report 18 and nineteen studies, all of which were published by the United States Government Printing Office in 1938 and 1939. Another study was issued by a separate agency." These publications and the large amount of unpublished data gathered by the committee should stimulate research in Federal aid during the next decade, as the Educational Finance Inquiry did in the decade 1920-1930. The studies issued by the committee included: P U B L I C A T I O N S OF T H E A D V I S O R Y COMMITTEE

1. Education in the Forty-eight States. Payson Smith, Frank W. Wright, and others. 2. Organization and Administration of Public Education. Walter D. Cocking and Charles H. Gilmore. 3. State Personnel Administration: With Special Reference to Departments of Education. Katherine A. Frederic and W. D. Cocking. 4. Federal Aid and the Tax Problem. Clarence Heer. 5. Principles and Methods of Distributing Federal Aid for Education. Paul R . Mort, Eugene S. Lawler, and Associates. 6. The Extent of Equalization Secured through State School Funds. Newton Edwards and Herman G. Richey. 7. Selected Legal Problems in Providing Federal Aid for Education. Robert R . Hamilton. " J . H. Keith and W. C. Bagley, The Nation and the Schools. New York: Macmillan Co., 1920. " F. K. Swift, Federal Aid to Public Schools. (U. S. Bureau of Education Bulletin, 192a, No. 4). Washington, D. C.: Government Printing Office, 1922. 17 National Advisory Committee on Education, Federal Relations to Education. Washington, D. C.: American Council on Education, 1931. " T h e National Advisory Committee on Education, Report oj the Committee. Washington, D. C.: Government Printing Office, 1938. 11 N . Edwards, Equal Educational Opportunity jor Youth. Washington, D. C.: American Council on Education, 1939.

354 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

GUIDE T O LITERATURE Vocational Education. John Dale Russell and Associates. Vocational Rehabilitation 0/ the Physically Disabled. Lloyd E. Blauch. The Land-Grant Colleges. George A . Works and Barton Morgan. Library Service. Carleton B. Joeckel. Special Problems 0/ Negro Education. Doxey A. Wilkerson. The National Youth Administration. Palmer O . Johnson and Oswald L . Harvey. Educational Activities of the Works Progress Administration. Doak S. Campbell, Frederick H. Bair, and Oswald L. Harvey. Public Education in the District of Columbia. Lloyd E. Blauch and J . Orin Powers. Public Education in the Territories and Outlying Possessions. Lloyd E. Blauch. Education of Children on Federal Reservations. Lloyd E. Blauch and William L. Iversen. Educational Service for Indians. Lloyd E. Blauch. Research in the United States Office of Education. Charles H. Judd.

T h e first comprehensive textbook on public school finance was written by Pittenger in 1925. This and the general works which followed are listed in the bibliography (Appendix II). BIBLIOGRAPHIES AND

INDEXES

Although there is an extensive body of literature on educational or public school finance, there are two bibliographies and an index which make it relatively easy to locate references on any educational finance problem. T h e two bibliographies cover the literature up to 1931; and the index covers the literature since 1929. They are: 1. Carter Alexander, Bibliography on Educational Finance (Educational Finance Inquiry Commission Report, Vol. I V ) . New York: Macmillan Co., 1924. Covers the literature up to 1923. 2. Carter Alexander and T . Covert, Bibliography on Educational Finance '923-1931 (a National Survey of School Finance report) (U.S. Office of Education Bulletin, 1932, No. 15), Washington, D . C . : Government Printing Office, 1932. 3. Education Index (1929 to date) under such headings as auditing, bonds, budgets, business administration, economy, education (economies and values), education and state, emergency education, equalization, extracurricular activities (finance), Federal aid, salary schedules, school buildings (cost), school finance, state ¿lid, taxation, teachers (pensions and salaries), textbooks (cost), tuition fees, unit costs, and vocational education (Federal aid). Selected bibliographies are found in the February issues of the Elementary School Journal under "Selected References on School Finance and Business Management." Others are published occasionally by both the United States

GUIDE TO LITERATURE

355

Office of Education and the Research Division of the National Education Association. Recent bibliographies on particular problems or topics often can be located through The Bibliographic Index. Bibliographies and reviews of research on school finance and business administration appear every three years in the April number of the Review of Educational Research. So far such reviews were published in the April, 1932, 1935, 1938, and 1941 numbers. For publications on economics, taxation, public finance, and public administration the following indexes can be used: (1) Public Affairs Information Service, (2) Industrial Arts Index, (3) Agricultural Index, (4) United States Catalog and Cumulative Book Index. The American Economic Review, National Municipal Review, Tax Policy, Quarterly Journal of Economics, American Political Science Review, Journal of Political Economy, Political Science Quarterly, and the Public Administration Review list or review publications relating to public finance. Public Management, Municipal Finance, American City, Taxes, State Government, The Tax Review, Barron's, and Business Week all contain current articles relating to public finance. The Public Administration Clearing House in Chicago and the Institute of Public Administration and the National Municipal League in New York City are among the sources of information upon public administration and public finance. STATISTICS Statistics pertinent to school finance problems are voluminous, but they are not easy to locate. For general suggestions on finding statistics see: Carter Alexander, How to Locate Educational Information and Data, Ch. X X I I I . (Revised edition.) New York: Teachers College, Columbia University, 1941. Two excellent guides to sources of statistics are published by the United States Department of Commerce. The latest editions of these now available are: 1. U . S . Dept. of Commerce, Bureau of Foreign and Domestic Commerce, Market Research Sources, 1940. Washington, D.C., Government Printing Office, 1940; and 2. Sources of Regional and Local Current Business Statistics (1940). Washington, D.C.: Government Printing Office, 1940. The Monthly Catalog of United States Government Publications prepared by the Superintendent of Documents is valuable in locating current statistics published by Federal agencies. The American Statistical Association Bulletin contains a digest of statistics gathered by public and private agencies. Summaries of statistics which are convenient to use in school finance work include the following: 1. Biennial Survey of Education in the United States. (U.S. Office of Education publication). Washington, D.C.: Government Printing Office.

356

GUIDE TO LITERATURE

2. World Almanac (annual). New York: New York World Telegram. 3. Statistical Abstract oj the United States (annual). Washington, D . C . : Government Printing Office. 4. The Economic Almanac (annual). New York: National Industrial Conference Board. 5. Handbook of Labor Statistics (annual by U. S. Bureau of Labor Statistics). Washington, D . C . : Government Printing Office. 6. Tax Systems of the World ( T a x Research Foundation). Chicago, Commerce Clearing House Inc. 7. Yearbook of Labor Statistics. Geneva, Switzerland: International L a b o r Office. 8. Agricultural Yearbook (annual by the United States Department of Agriculture). Washington, D . C . : Government Printing Office. 9. Commercial Atlas and Guide (monthly). Chicago: R a n d McNally & Co. 10. Municipal Yearbook (annual) Chicago: International City Managers Assn. Among the main sources of school finance statistics the following should be found helpful: Source 1 . United States Bureau of the Census (Price List 70)

2. United States Office of Education (Price List 3 1 )

3. United States Department of Commerce (Price List 62)

4. I'nited States Department of Agriculture (Price List 68) 5. United States Depart-

Type of Statistics Agriculture, births, crime, financial statistics of states and cities over 100,000, formal education, government employment, housing, industrial and business statistics, income, metropolitan areas, manufactures, migration, population, rentals, retail trade, school attendance, tax delinquency, value of farms, value of homes, vital statistics, wages, wholesale trade Attendance, city schools, expenditures, Federal expenditures for education, higher education, nonrevenue receipts, per capita costs, per pupil costs, private schools, pupil-teacher ratio, revenues, rural-urban data, salaries, secondary schools, school debt, school term, teachers, trends, value school property Business conditions, business indicators, credit, employment, finance, income, inventories, long-term debt, markets, prices, private debt, losses, production, sales, taxation, trade, wages Credit, income, land use, marketing, prices, production, taxation Consumer purchases, construction, family

GUIDE T O LITERATURE ment of Labor (Price List 33) 6. Federal Reserve System 7. National Resources Planning Board 8. U . S. Treasury Department 9. Social Security Board

ro. National Industrial Conference Board, New York City 11. National Education Association Research Division

12. Dun and Bradstreet Inc. New York City

13. T a x Institute Philadelphia, Pa. 14. National Municipal Review New York City

357

income, cost of living, employment, payrolls, prices, rents, wages, union wage scales Business conditions, credit, department store sales, money rates Consumer income and expenditures, housing, natural resources, population studies, urbanism Building and construction costs and trends, income, governmental expenditures Employment, family composition, labor requirements, labor supply, occupations, status of workers, wages, fiscal capacity of states Building, business conditions, cost of living, employment, governmental expenditures, income, prices, production, public debt, taxation, wages Economic data, enrollment trends, expenditures for luxuries and amusements, governmental expenditures, leave of absence, salaries, salary schedules, school expenditures, school revenues, sick leave, taxation, teaching load Bank clearings, bonded debt, business indices, building, commercial failures, market conditions, tax delinquency, trade, prices Assessments, tax burden, tax yields, taxpaying ability Assessed valuation, bonded debt, fiscal years, ratio of assessed to true value, special assessments, tax rates for various purposes (cities)

APPENDIX

II

GENERAL BIBLIOGRAPHY i. American Association of School Administrators, Critical Problems in School Administration (12th Yearbook). Washington, D.C.: The Association, 1934. *2. Schools in Small Communities (17th Yearbook). Washington, D.C.: the Association, 1939. 3. Standards for Superintendents of Schools. Washington, D.C.: the Association, 1939. 4. American Municipal Association, Information Reports. Chicago: Public Administration Service. (Cover purchasing, personnel, insurance, etc.) 5. Anderson, William, The Units of Government in the United States (Public Administration Service Publication No. 42.). Chicago: Public Administration Service, 1934. (Revised 1942). *6. Ashby, L., The Efforts of the States to Support Education as Related to Adequacy and Ability. New York: Teachers College, Columbia University, 1936. 7. Bagley, W. C., Determinism in Education. Baltimore: Warwick and York, 1925. 8. Beach, Thomas, and D. H. Smith, Business Economics. London: George Routledge & Sons, 1929. 9. Benson, George C. S., The New Centralization. New York: Farrar and Rinehart, 1941. 10. Bowles, R. P., The Operation and Effects of a Single Salary Schedule. New York: Teachers College, Columbia University, 1932. 11. Bowyer, V. L., "Relation of Public School Support to Subsequent Per Capita Wealth of States," Elementary School Journal, X X X I I I (Jan.-Feb., 1933), 333~45> 417-26. 12. Briggs, T . H., The Great Investment (Inglis Lecture in Secondary Education). Cambridge, Mass.: Harvard University Press, 1930. 13. Brown, S. W., The Secularization of American Education. New York: Teachers College, Columbia University, 1912. 14. Buck, A. E., Public Budgeting. New York: Harper Bros., 1929. 15. Buck, A. E., The Budget in Governments Today. New York: Macmillan Co., 1934. *i6. Buehler, A. G., Public Finance (2d. ed.). New York: McGraw Hill Book Co., 1940. 17. Burgess, W. Randolph, Trends of School Costs. New York: Russell Sage Foundation, 1920. 18. Butterworth, J . E., Problems in State High School Finance. Yonkers, N. Y.: World Book Co., 1918.

GENERAL BIBLIOGRAPHY

19.

20. *2i. 22. •23. •24. 25. 26.

27. 28. 29. 30. 31. *32. 33. 34. 35. 36. *37-

359 Caldwell, A. B., and A. J . Burke, A Study of Financial Support and Educational Opportunity in the One Teacher School Districts of New York State (Educational Monograph No. 5). Albany: New York State Teachers Association, 1936. Campbell, R. G., State Supervision and Regulation of Budgetary Procedure in Public School Systems. New York: Teachers College, Columbia University, 1935. Carr, W. G., School Finance. Stanford University: Stanford University Press, 1933. Chatters, C. H., and A. M. Hillhouse, Local Government Debt Administration. New York: Prentice-Hall, 1939. Chisholm (Chism), Leslie L., The Economic Ability of the States to Finance Public Schools. New York: Teachers College, Columbia University, 1936. The Shifting of Federal Taxes and its Implications for Public Schools. Madison, Wis.: Journal of Experimental Education, 1939. Cillé, F. S., Centralization or Decentralization. New York: Teachers College, Columbia University, 1940. Clark, H. F., "Contributions to Education of Scientific Knowledge in Economics," in National Society for the Study oj Education ThirtySeventh Yearbook, Part II. Bloomington, 111.: Public School Publishing Co., 1938. The Cost of Government and the Support of Education. New York: Teachers College, Columbia University, 1924. The Economic Effects of Education as Shown by the Statements of Economists. Bloomington, Ind.: Bureau of Cooperative Research, Indiana University, 1928. Clark, H. F., and others, Life Earnings in Selected Occupations in the United States. New York: Harper and Bros., 1937. Clark, J . P., The Rise of a New Federalism. New York: Columbia University Press, 1938. Cocking, W. A., and K. R. Williams, The Education of Administrators. Washington, D.C.: American Council on Education, 1940. Commission on the Legal Structure of Rhode Island, Schools for Our Children. Providence: the Commission, 1941. Committee on Public Administration of the Social Science Research Council, Case Reports in Public Administration. Chicago: Public Administration Service, 1941. Cooke, D. H., Administering the Teaching Personnel. Chicago: B. J . Sanborn and Co., 1939. Cooke, D. H., Problems of the Teaching Personnel. New York: Longmans, Green and Co., 1933. Cooper, W. J., Economy in Education. Stanford University: Stanford University Press, 1933. Cornell, F. G., A Measure of Taxpaying Ability of Local School

360 38. 39. 40. 41. 42. 43. *44. 45. 46. 47. 48. 49. 50. 51. 52.

*5354. 55. •56. 57.

GENERAL BIBLIOGRAPHY Administrative Units. New York: Teachers College, Columbia University, 1936. Cowen, P. A., Teachers' Salary Schedules (Bulletin No. 1173). Albany: University of the State of New York, 1939. Cubberley, E. P., Public Education in the United States. Boston: Houghton Mifflin Co., 1934. —-— Public School Administration. Boston: Houghton Mifflin Co., 1929. State School Administration. Boston: Houghton Mifflin Co., 1927. Curoe, P. R. V., Educational Attitudes and Policies of Organized Labor in the United States. New York: Teachers College, Columbia University, 1926. Cyr, Frank W., Responsibility for Rural School Administration. New York: Teachers College, Columbia University, 1933. Cyr, F. W., A. J . Burke, and P. R. Mort, Paying for Our Public Schools. Scranton, Pa.: International Textbook Co., 1938. Davis, Hazel, Personnel Administration in Three Non-Teaching Services of Public Schools. New York: Teachers College, Columbia University, 1939. Dawson, H. A., Satisfactory Local School Units (Field Study No. 7). Nashville: George Peabody College for Teachers, 1934. De Young, Chris A., Budgetary Practices in Public School Administration. Evanston, 111.: Northwestern University, 1932. Budgeting in Public Schools. New York: Odyssey Press, 1936. Dix, Lester, The Economic Basis for the Teacher's Wage. New York: Teachers College, Columbia University, 1931. Doughton, Isaac, Modern Public Education; Its Philosophy and Background. New York: D. Appleton-Century Co., 1935. Dublin, L. I., and A. J . Lotka, The Money Value of a Man. New York: Ronald Press Co., 1930. Edmonson, J . B., The Legal and Constitutional Basis of a State School System. Bloomington, 111.: Public School Publishing Co., 1926. Educational Finance Inquiry Commission: see McGaughy, J . R.; Newcomer, Mabel. Educational Policies Commission, Education and Economic WeilBeing in American Democracy. Washington, D.C.: the Commission, 1940. The Purposes of Education in American Democracy. Washington, D.C.: the Commission, 1938. The Structure and Administration of Education in American Democracy. Washington, D.C.: the Commission, 1938. The Support of Education in Wartime. Washington, D.C.: the Commission, 1942. The Unique Function of Education in American Democracy. Washington, D.C.: the Commission, 1937.

GENERAL BIBLIOGRAPHY 58. Educational Research Association of New York State, T h e Problem of School Costs and A Supplementary Report. Albany: the Association, 1940-1941. 59. Edwards, Newton B., Equal Educational Opportunity for Youth. Washington, D.C.: American Council on Education, 1939. 60. T h e Courts and the Public Schools. Chicago: University of Chicago Press, 1933. *6i. Edwards, N., and H. C. Richey, T h e Extent of Equalization Secured through State School Funds (Staff Study No. 6 of the Advisory Committee on Education). Washington, D . C . : Government Printing Office, 1938. 62. Eels, W . C., Teachers' Salaries and the Cost of Living. Stanford University: Stanford University Press, 1933. 63. Elsbree, W . S., Teachers' Salaries. New York: Teachers College, Columbia University, 1931. 64. Engelhardt, Fred, Public School Organization and Administration. Boston: Ginn and Co., 1931. 65. Engelhardt, N. L . and Fred Engelhardt, Public School Business Administration. New York: Teachers College, Columbia University, 1927. 66. Survey Manual for Business Administration in Public Schools. New York: Teachers College, Columbia University, 1935. 67. Engelhardt, Fred, and F. V o n Borgersrode, Accounting Procedure for School Systems. New York: Teachers College, Columbia University, 1927. 68. Findlay, J. J., " T h e Economics of Education," in Foundations oj Education, Vol. I. New York: Henry Holt Co., 1925. 69. Fish, C. R., T h e Rise of the Common Man. New York: Macmillan Co., 1927. 70. Flocken, Ira G., "School Budget" in Proceedings of the National Association of Public School Business Officials. Pittsburgh: the Association, 1935. 71. Forbes, Russell, Government Purchasing. New York: Harper Bros., 1929. 72. Foster, E. M . (ed.), Financial Accounting for Public Schools (U. S. Office of Education, Circular No. 204). Washington, D . C . : Government Printing Office, 1941. 73. Foster, W . A., Education Pays the State (U. S. Office of Education Bulletin, 1925, No. 33). Washington, D . C . : Government Printing Office, 1925. 74. Fowkes, John G., Principles and Practices of Financing Accounting for Schools. Milwaukee: E. M . Hale & Co., 1934. 75. Frasier, G. W., T h e Control of City School Finances. Milwaukee: Bruce Publishing Co., 1922. 76. Frederick, K . A., and W . D . Cocking, State Personnel Administration (Staff Study No. 3 of the Advisory Committee on Education). Washington, D . C . : U. S. Office of Education, 1939.

362

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77. Frostin, F. W. and others, Some Variables in Comparative Public School Accounting (Bulletin No. 12). Lansing: Michigan Education Association, 1930. 78. Garber, L. O., The Legal Implications of the Concept of Education as a Function of the State. Minneapolis: Educational Test Bureau, Inc., 1934. 79. Gaunmitz, W. H., Economic Status of Rural Teachers (U. S. Office of Education, Bulletin, 1937, No. 13). Washington, D.C.: Government Printing Office, 1939. 80. Gorseline, D. E., Effect of Schooling Upon Income. Bloomington, Ind.: University of Indiana, 1932. *8i. Governor's School Survey Commission, Reconstruction of the System of Public School Support in the State of New Jersey, Vol. II. Trenton: the Commission, 1933. *8a. Grace, A. G., and G. A. Moe, State Aid and School Costs (Regents' Inquiry Report Volume). New York: McGraw-Hill Book Co., 1939. 83. Grimm, L. R., Our Children's Opportunities in Relation to School Costs. Springfield: Illinois Education Association, 1938. •84. Groves, H. M., Financing Government. New York: Henry Holt & Co., 1939. 85. Hansen, A. O., Liberalism and American Education in the Eighteenth Century. New York: Macmillan Co., 1926. 86. Harry, D. P., Cost of Living of Teachers in the State of New York. New York: Teachers College, Columbia University, 1928. 87. Hayes, H. Gordon, Our Economic System, Vol. I. New York: Henry Holt & Co., 1918. *88. Heer, Clarence, Federal Aid and the Tax Problem (the Advisory Committee on Education Staff Study No. 4). Washington, D.C.: Government Printing Office, 1939. 89. Henry, N. B., and J. G. Kerwin, Schools and City Government. Chicago: University of Chicago Press, 1938. 90. Henzlik, F. E., and W. M. Richards, Practical Economies in School Administration (Monograph No. 3). Lincoln: University of Nebraska, 1932. *gi. Hillhouse, A. M., and R. B. Welch, Tax Limits Appraised (Publication No. 55). Chicago: Public Administration Service, 1937. 92. Hobson, J. A., Economics and Ethics. New York: D. C. Heath and Co., 1929. 93. Holmstedt, R. W., State Control of Public School Finance (Bulletin of The School of Education, Vol. X V I , No. 2). Bloomington, Ind.: University of Indiana, 1940. *94- Howard, M. S., Principles of Public Finance. Chicago: Commerce Clearing House, 1940. 95. Kiekhofer, W. H., Economic Principles, Problems and Policies. New York: D. Appleton Century Co., 1936.

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363

96. Kilpatrick, Wylie, State Supervision of Local Budgeting. New York: National Municipal League, 1939. 97. State Supervision of Local Finance (Publication No. 79). Chicago: Public Administration Service, 1941. 98. Langfìtt, R. E., The Daily Schedule and High School Organization. New York: Macmillan Co., 1938. *gg. Leet, G., and R. M . Paige, (eds.), Property Tax Limitation Laws (Publication No. 36 revised). Chicago: Public Administration Service, '936100. Lewis, E. E., Personnel Problems of the Teaching Staff. New York: Century Co., 1925. 101. Linn, H. H., Practical School Economies. New York: Teachers College, Columbia University, 1934. 102. Lund, John, Education of School Administrators (U. S. Office of Education Bulletin, 1941, No. 6). Washington, D.C.: Government Printing Office, 1942. '103. Lutz, H. L., Public Finance (3d ed.). New York: D. AppletonCentury Co., 1936. 104. Lyon, L. S., and others, Government and Economic Life. Washington, D.C.: The Brookings Institution, 1939. •105. Maine School Finance Commission, The Financing of the Public Schools of Maine. Augusta: the Commission, 1934. 106. Marshall, A., Principles of Economics (8th ed.). London: Macmillan Co., 1920. 107. Matzen, J. M., State Constitutional Provisions for Education. New York: Teachers College, Columbia University, 1931. 108. McGaughy, J. R., The Fiscal Administration of City School Systems (Educational Finance Inquiry Commission Report, Vol. V). New York: Macmillan Co., 1924. *iog. McGuire, S. H., Trends in Principles and Practices of Equalization of Educational Opportunity. Nashville: George Peabody College for Teachers, 1934. 110. Michigan Education Association, School Economies through Efficient Administration and Management (Bulletin No. 22). Lansing: the Association, 1931. i n . Mill, J. S., Principles of Political Economy (Abridged edition by J. L. Laughlin). New York: D. Appleton Co., 1884. 112. Moehlman, A. B., Public School Finance. Chicago: Rand, McNally, 1927. 113. School Administration. Boston: Houghton Mifflin Co., 1940. 114. Morey, L., Introduction to Government Accounting (2d ed.). New York: John Wiley and Sons, 1936. 115. Morey, L., and O. W. Diehl, Municipal Accounting (rev.). New York: John Wiley and Sons, 1942. 116. Morris, L. L., The Single Salary Schedule. New York: Teachers College, Columbia University, 1930.

364

GENERAL BIBLIOGRAPHY

• 1 1 7 . Morrison, H. C., School Revenue. Chicago: University of Chicago Press, 1930. 118. T h e Management of the School Money. Chicago: University of Chicago Press, 1932. *i 19. Mort, Paul R., Federal Support for Public Education. New York: Teachers College, Columbia University, 1936. *I20. Mort, Paul R . (Dir.), State Support for Public Education. (National Survey of School Finance.) Washington, D . C . : the American Council on Education, 1933. 121. Mort, P. R , and F. G. Cornell, Adaptability of Public School Systems. New York: Teachers College, Columbia University, 1938. 122. American Schools in Transition. New York: Teachers College, Columbia University, 1941. *i23. Mort, P. R., and W . C . Reusser, Public School Finance. New York: McGraw-Hill Book Co., 1941. 124. Mosher, W . E., and J . D . Kingsley, Public Personnel Administration. New York: Harper Bros., 1936. 125. Municipal Finance Officers Association, Publications on Accounting. Chicago: Public Administration Service. 126. Munro, W . B., Municipal Administration. New York: Macmillan Co., 1934. 127. Myrdal, Gunnar, Population, A Problem for Democracy (the Godkin Lectures, 1938). Cambridge: Harvard University Press, 1940. 128. National Association of Public School Business Officials, Bulletins and Proceedings. Pittsburgh: the Association. 129. National Committee on Municipal Accounting, Grovernmental Accounting Bibliography (Bulletin No. 13) and publications on municipal accounting. Chicago: Public Administration Service. 130. National Education Association, Schools and Business. Washington, D . C . : the Association, 1930. National Education Association, American Association of School Administrators: see American Association of School Administrators. 131. National Education Association, Committee on Salaries, Problems and Principles in the Scheduling of Teachers' Salaries. Washington, D . C . : the Association, 1940. 132. National Education Association, Department of Classroom Teachers, T h e Economic Welfare of Teachers (Sixth Yearbook). Washington, D . C . : the Association, 1931. National Education Association, Educational Policies Commission: see Educational Policies Commission. 133. National Education Association, Research Division, Constructive Economy in Education (Research Bulletin Vol. X I , No. 3, 1933). Washington, D . C . : the Association, 1933. 134. Facts on School Costs (Research Bulletin Vol. X , No. 5). Washington, D . C . : the Association, 1938.

GENERAL BIBLIOGRAPHY •135. 136. 137. 138. 139. 140.

141.

142. 143. 144. 145. 146. 147. 148.

149.

*I50. *i51. 152. 153. 154. 155.

365

Financing Public Education (Research Bulletin Vol. X V , No. 1). Washington, D.C.: the Association, 1937. Modern Social and Educational Trends (Research Bulletin Vol. X I I , No. 5). Washington, D.C.: the Association, 1934. Procedures in School Salary Scheduling (Six Bulletins). Washington, D.C.: the Association, 1939. School Costs and State Expenditures, 1930-1939 (Research Bulletin, Vol. X I X , No. 3). Washington, D.C.: the Association, 1941. Statutory Status of Six Professions (Research Bulletin Vol. X V I , No. 4). Washington, D.C.: the Association, 1938. Teacher Personnel Procedures: Selection and Appointment (Research Bulletin Vol. X X , No. 2). Washington, D.C.: the Association, 1942. The Preparation of Teachers' Salary Schedules (Research Bulletin, Vol. X I V , Nos. i and 2). Washington, D. C.: the Association. '936The Rural Teacher's Economic Status (Research Bulletin, Vol. X V I I , No. 1). Washington, D.C.: the Association, 1939. The Teacher Looks at Teacher Load (Research Bulletin, Vol. X V I I , No. 5). Washington, D.C.: the Association, 1939. The Teacher's Economic Position (Research Bulletin, Vol. X I I I , No. 4). Washington, D.C.: the Association, 1935. Why Schools Cost More (Research Bulletin, Vol. X V I , No. 3). Washington, D.C.: the Association, 1938. National Industrial Conference Board, The Economic Almanac. New York: the Board, annually. National Survey of School Finance Staff, Research Problems in School Finance. Washington, D.C.: American Council on Education, 1933.. Newcomer, Mabel, An Index of the Taxpaying Ability of State and Local Governments. New York: Teachers College, Columbia University, 1935. Financial Statistics of Public Education in the United States, 1910-1920 (Educational Finance Inquiry Commission Report, Vol. VI). New York: Macmillan Co., 1924. Norton, John K., The Ability of the States to Support Education. Washington, D.C.: National Education Association, 1926. Norton, J. K., and M. A. Norton, Wealth, Children, and Education. New York: Teachers College, Columbia University, 1938. Norton, T . L., Education for Work (A Regents Inquiry Report). New York: McGraw Hill Book Company, 1938. Norton, T. L., Public Education and Economic Trends. Cambridge: Harvard University Press, 1939. Pennsylvania State Education Association, Report of the Committee on Survey of School Costs. Harrisburg: the Association, 1939. Perloff, Harvey S., Modern Budgetary Problems. Cambridge: Harvard University Press, 1940.

366

GENERAL BIBLIOGRAPHY

156. Pfiffner, John M . , Public Administration. New York: Ronald Press, 1935157. Pigou, A . C., T h e Economics of Welfare. London: Macmillan Co., 1920. 158. Pitkin, Royce S., Public School Support in the United States during Periods of Economic Depression (Teachers College, Columbia University, Doctor's Dissertation). Brattleboro, Vt.: Stephen Daye Press, 1933*i59- Pittenger, B. F., A n Introduction to Public School Finance. Boston: Houghton Mifflin Co., 1925. 160. Powell, O . E., Educational Returns at Varying Expenditure Levels. New York: Teachers College, Columbia University, 1933. 161. President's Research Committee on Social Trends, Recent Social Trends in the United States. New York: McGraw-Hill Book Co., 1933. 162. Puckett, R . C., Making a High School Schedule of Recitations. New York: Longmans, Green and Co., 1931. 163. Pyle, T . P., T h e Teacher's Dependency Load. N e w York: Teachers College, Columbia University, 1939. •164. Rainey, Homer P., Public School Finance. New York: Century Co., 1929. 165. Reeder, W . G., T h e Business Administration of a School System. Boston: Ginn and Co., 1929. *i66. Regents' Inquiry into the Character and Cost of Public Education in the State of N e w York, Education for American Life. New York: McGraw-Hill Book Co., 1938. 167. Reusser, W . C., and R . R . Hamilton, " L e g a l Phases of School Budgetary Procedure" in Reconstructing Education through Research (1936 Official Report). Washington, D. C.: American Educational Research Association, 1936. 168. Senior, Nassau W., Industrial Efficiency and Social Economy, Vol. I. New York: Henry Holt and Co., 1928. *i6g. Shultz, W . J., American Public Finance (2d ed. rev.). New York: Prentice-Hall, 1938. 170. Simpson, Alfred D., "Budgetary Process as an Instrument for the Realization of Home R u l e , " Harvard Educational Review, X I (May, 194O, 339-346171. "Financing the Educational Process," in Schools in Small Communities (Seventeenth Yearbook). Washington, D . C . : American Association of School Administrators, 1939. 172. Slichter, S. H., Modern Economic Society. New York: Henry Holt and Co., 1931. 173. Smith, Adam, T h e Wealth of Nations (Harvard Classics). New York: P. F. Collier and Son, 1909. 174. Smith, H. P., Business Administration of Public Schools. Yonkers, N . Y . : World Book Co., 1929. 175. Smith, P., F. W . Wright, and others, Education in the Forty-eight

GENERAL BIBLIOGRAPHY 176.

177. 178.

179. 180. 181. 182. *I83. 184. 185. *i86. 187. 188. 189. 190. *i91. *ig2. 193.

367

States (The Advisory Committee on Education Staff Study No. 1). Washington, D.C.: Government Printing Office, 1939. Soper, Wayne W., "Cost of Education Compared with Other Governmental Costs" in American Educational Research Association, Practical Values of Educational Research. Washington, D.C.: the Association, 1938. Legal Limitations on the Rights and Powers of School Boards with Respect to Taxation, New York: Teachers College, Columbia University, 1929. Soper, W. W., R . F. Hayes, and H. P. French, The Social, Cultural, and Economic Status of Public School Teachers in New York State (Educational Monograph No. 6). Albany: New York State Teachers Association, 1937. Spencer, P. R., A State Minimum Teachers' Salary Schedule. New York: Teachers College, Columbia University, 1932. Standiford, F. W., Principles Governing Salary Schedules in Cities 20,000 to 50,000 (Master'sThesis). Chicago: University0fChicag0,i930. Strayer, George D., Jr., Centralizing Tendencies in the Administration of Public Education. New York: Teachers College, Columbia University, 1934. Strayer, G. D., and N. L. Engelhardt, (Directors), Report of the Survey of the Public Schools of Pittsburgh, Pennsylvania. New York: Teachers College, Columbia University, 1940. Strayer, G. D., and R. M. Haig, The Financing of Education in the State of New York. New York: Macmillan Co., 1923. Studenski, Paul and Paul R . Mort, Centralized Versus Decentralized Government in Relation to Democracy. New York: Teachers College, Columbia University, 1941. Sundelson, J . W., Budgetary Methods in National and State Governments (Special Report No. 14). Albany: New York State Tax Commission, 1938. Swift, F. H., Federal and State Policies in Public School Finance in the United States. Boston: Ginn and Co., 1931. Tawney, R . H., Some Thoughts on the Economics of Public Education. London: Oxford University Press, 1938. Tax Foundation, Tax Facts and Figures. New York: the Foundation, 1941. T a x Institute, Financing the War, Philadelphia: the Institute, 1942. Tax Institute (Tax Policy League), Tax Relations among Governmental Units. Philadelphia: the Institute, 1938. T a x Institute, Tax Yields. Philadelphia: the Institute, published annually since 1939. The Advisory Committee on Education, The Report of the Committee. Washington, D. C.: Government Printing Office, 1939. Thorndike, E. L., Education as Cause and as Symptom. New York: Macmillan Co., 1939.

368

GENERAL BIBLIOGRAPHY

194. Tildsley, J . L., The Mounting Waste of the American Secondary School (Inglis Lecture in Secondary Education). Cambridge: Harvard University Press, 1936. 195. Twente, John W., Budgetary Procedure for a Local School System. Montpelier, Vt.: Capitol City Press, 1922. 196. U. S. Bureau of the Census, Statistical Abstract of the United States. Washington, D.C.: Government Printing Office, Annually. (Contains sections on Federal, state, and local expenditures.) 197. U. S. Library of Congress, Division of Bibliography, Cost of Government. Washington, D.C.: The Library, 1940. 198. U. S. Temporary National Economic Committee, Taxation, Recovery and Defense (Monograph No. 20). Washington, D.C.: Government Printing Office, 1940. 199. Vieg, John A., The Government of Education in Metropolitan Chicago. Chicago: University of Chicago Press, 1939. 200. Walker, Harvey, Public Administration in the United States. New York: Farrar and Rinehart, 1937. 201. Walker, T. G., and others, School Supply Management (Report of Southern States Work Conference on School Administrative Problems). Tallahasse: State Education Department, 1941. 202. Willoughby, W. F., The Financial Condition and Operation of the National Government, 1921-1930. Washington, D.C.: the Brookings Institution, 1931. 203. Womrath, G., Efficient Business Administration of Public Schools. Milwaukee: Bruce Publishing Co., 1932. 204. Yakel, Ralph, The Legal Control of the Administration of Public School Expenditures. New York: Teachers College, Columbia University, 1929. 205. Young, L. P., The Administration of Merit-Type Teachers' Salary Schedules. New York: Teachers College, Columbia University, 1933.

INDEX Accounting, 233, 234, 254, 277; purposes: literature on, 278; prerequisites, 279; state requirements: safeguards, 280; for purposes of budgetary control, 281; as aid to management, 282; systems, 282 f. Adaptability principle, 1 1 2 , 267, 296; definitions, 1 1 3 ; application, 1 1 4 f. Administration, see Management Advertising and sales promotion, 154 f., 161 Advisory Committee on Education, 74, 192 f.; researches and publications, 353 Age, working, 42; school, 124 Alabama, 65, 73, 76,81, 83, 84, 88, 187, 297 Allotment plan, 262 American Association of School Administrators, 218, 219, 232 American Council on Education, 218 American faith in public education, 3 ff.; see also Public American Farm Bureau Federation, 183 American Institute of Public Opinion, 31 American School Board Journal, excerpts, 60 American Youth Commission, 3 1 ; quoted, >94 Antisocial uses of education, 143 Arizona, 32, 65, 66, 76, 85, 86, 89, 10411 Arkansas, 64, 65, 73, 76, 83, 84, 88, 104«, 183 Ashby, L., 74, 75 Assessed property valuation, 78 ff. Attendance, see Enrollment Audits and surveys, 273-75 Australia, 197 Authority to create liabilities and make expenditures, 272 f. Beach, Thomas, and D. H. Smith, quoted, 161 Bibliography, data on, 10; guide to the literature on finance, 3 5 1 - 5 7 ; general bibliography, 358-68 Bond issues, 292, 293 Borrowing, see Debt; Deficit Buck, A. E., budget study, 237, 240, 243, 260 Budget, responsibility for, and problems in, budget making, 7; revenue and budgetary difficulties, 32-35; conflict over control by school districts and municipal governments, 174-82; the case for fiscal

independence, 175; for dependence, 178; extent and outcome of dependence, 181, 182; object of, and forms, of state budgetary review, 186, 187; the integrating element for all aspects of management, 216; control of spending through improved budgets, 237-63, 343; definition and functions, 237 f.; importance, 238; consequences of poor, 240-42; status in government, 240; essentials of sound budget making, 242-45; reforms needed, 244; educational plan of action, 245-51; group responsibility for, 246; balanced, 246, 259; major considerations: objectives, 247 f.; educational plan in the total governmental pattern, 251-54; conditions necessary for overview budgeting, 253; expenditure and revenue plans, 254 f.; lump sum, and line item or detailed, methods of estimating: need for economy, 256; budgetary control, 260-62, 281, chart, 261; allotment plan, 262; procedures and technique, 262 f.; for minimum standard of living, 317 Buildings, see Plant Burgess, W. R . , 52, 53 Burke, Arvid J . , 70, 8 1 , loin and A. B. Caldwell, 94 P. R . Mort, and others, 95 Bus drivers, 221, 289 Business, and taxpaying interests, organized, 31 f.; dependence upon security and culture, 145 ff. Business management, 2 1 3 ff., 233; see also Management Butterworth, J . E., quoted, 268, 269 Caldwell, A. B., and A. J . Burke, 94 California, 32, 33, 34, 52, 57, 66, 73, 77, 83, 85, 86, 89, 104/1, 108, 187, 219, 221, 283, 297, 310 California, University of, 221 California Tax Digest, excerpt, 30 Capital formation, 141 f., 146, 160 Capital outlays by state, 200 Capital improvements, 290 Carr, W. G., 44 f. Cash accounting, 280 Census, Bureau of the, 15, 16, 19, 39, 83

37°

INDEX

Centralization, 5, n 6, 133 f., 190, 341; v. decentralization of control, 195-903; existing pattern*, 195 f.; complete state support and control, 196 f.; controls not inconsistent w i t h local home rule, 199; extension of central controls, 199; governmental reorganization, 199, 20a; in case of complete federal control, 203; perpetuation of centralized government or church, 206, 207 Child care aided by science, 127 Child labor, 4 1 , 123 f. Children, ratio of. to adults: to income, 74 Child welfare, 123 ff. Chisholm (Chism), L . L . , 73, 74, 191; quoted, 33 C h u r c h schools, 108, 132, 205-9; see also Private schools Cille, F. S., 202 Cities, see Municipalities Citizens' Public Expenditure Survey, 31. 32, 171, 172 Civilian Conservation Corps, 20, 37, 39, 6 1 , 134, 193-94; abolished, 195 Civil responsibility for education, 106-9 Civil service employees, 223 Clark, H . F . , 313, 3 1 4 ; quoted, 12, 143 Class education, 133 Class size, 285 Co-education established, 124 Colleges, median incomes of graduates, 312; increasing costs, 321 Colorado, 32, 34, 65, 66, 76, 85, 89, 104»!, 187, 310 C o l u m b i a University Council for Research in the Social Science, 73 Commission on T e a c h e r Education, American Council on Education, 218 Commission on the Reorganization of Secondary Education, report on objectives, 129 Committee of Fifteen on Elementary Education, 129 Committee of T e n on Secondary School Studies, 128 Committee on Elementary Education, N e w Y o r k State Council of Superintendents, 129 Committee o n U n i f o r m Records, 278 Committee type of organization, 230 f. C o m m u n i c a t i o n and its basis, 150 Communities, factors affecting expenditures, 68-70; price differentials, 83-86; set also Districts; L o c a l governments Compulsory schooling, 41, 42, 106

Connecticut, 33, 57, 65, 76, 83, 85, 86, 89, 104«, 105, 133, 202, 219, 297; decentralization encouraged by state support, 110 f. Constitution, U . S . : left control over education to the states, 106, 107 Constitutional tax limits, 182 ff., 188 Constitutions, controls incorporated in, 188 Consumer, importance: economic ignorance: spending, 1 5 1 - 5 7 ; see also Public Consumer's Research, 290 Consumer's Union, 290 Consumption, of goods and services, 137, 140; specific contributions to, 1 5 1 - 5 7 ; education for, 155 Contingency funds, 256 Control over education and spending, seriousness of problem, 5; growing demand for: causes of extension, 1 7 1 - 7 4 ; two types, 174; local control and fiscal independence, 174-82; control by state, 182-90; by Federal government: resulting studies and controversies, 190-95, 202; extreme centralization B. extreme decentralization, 195-203; controls accepted as not inconsistent with local home rule, 199; coordination and cooperation among local units, 203-5; fiscal independence and tax leeway, 203; abolishing separate districts, 204; financing and control of separate or private schools, 205-9; summary of recommendations made, 341 Cooke, D . H . , salary schedules, 327, 329 Cornell, F. G . , index of taxpaying ability, 80 and P. R . Mort, 70, 95, 112; quoted, "3 Costs, defined: uses of, 92; data, 102; unit costs, 102, 282; in terms of human values, 136 f.; self-liquidating, 137, 144; economic, of school spending, 137-43; attendance, 138; of adult employment, 138 f.; consumption of goods and services, 140; at expense of savings and capital formation, 141; land use: waste, 142; antisocial uses of education, 143; significance of cost of living in determining salary levels, 314, 3 1 6 - 2 1 ; indices, 316; budget for determining, 317 Cubberley, E. P., 117 Culture and security, 144-51, 161 Data, sources of, 9; guide to the literature, 3 5 ' - 5 7 ; general bibliography, 358-68

INDEX D a w j o n , H . A., 435 D e b t , public, 20, 28 D e b t service, a8, 200, 292 f. Decentralization, 6, 106, 340; origin of stimulation policy, n o ; equalization aid: limitations, 1 1 1 ; adaptability principle, 119, 1 1 3 ; its application, 114; effects, 115; future possibilities, 115 f.; abandonment? 116, 133; inequalities and impotence resulting from, 195; extreme, v. extreme centralization, 195-203 (see also Centralization); results of democratic control over education, 206, 207 Defectives, education of, 125 Deficit financing, 20, 28, 260 Delaware, 65, 77, 83, 84, 86, 89, 95, 105, ' 3 3 . ' 9 7 . ' 9 s . '99. 2 I 9> a 9 7 . 3 1 0 D e m a n d , see Supply and demand D e m o c r a c y in organization, 227 ff. Denominational schools, 107, 108, 132 f., 205-9; see Private schools Depository and treasury, 276 Depressions, expenditures during, 18, 20; effects upon education, 3, 20, 31 f., 41, 108, 130, 228, 321; taxpayers associations, 31 f.; tax-limitation, 183; effect upon legislation in behalf of children, 4 1 ; upon expenditures from 1930-40, 5 6 6 1 , 64; earlier depressions, 56 f.; reasons for downward trend, 58 f.; increased Federal spending and support, 190 D e Y o u n g , C . A . , functions of budget, list 240; budget study, 243, 246, 256, 260, 261, 262 District of Columbia, 108 Districts, school: number of, 13; structure, 80, 8 7 - 9 1 ; effect upon, of payment-for -effort policy, 112; conflicts with municipal governments over fiscal control, 174-82; the case for independence, 175; for dependence, 178; extent and outcome of dependence, 181, 182; made useless by complete state control, 190; question of abolishing, 204; small, in use of personnel, 285; see also Local governments Documents or records, 277 Doing a. thinking, functions, 227, 230 Earnings in occupations other than teaching, 310, 3 1 1 - 1 4 ; see also Salaries Economic criteria of spending, 24 ff. Economic life, ignorance of, and education for, 151 ff. Economic resources as measure of taxpaying ability, 81

371

Economics of public school spending, 13667; meaning of, in money transactions, 136; in costs, 136-43 (see also Costs); g e n e r a l e c o n o m i c contributions of schools, 1 4 3 - 5 1 ; specific contributions to consumption, 1 5 1 - 5 7 ; to production, 158-65; war and economic ability to provide schooling, 165-67 Economy and prudence in expenditures, 256, 264-300, 344 ff.; definitions, 264 ff.; caution in applying prudential principle, 266 f. ; principles of economical management, 2 6 7 - 7 1 > safeguarding expenditures, 2 7 1 - 7 8 ; authorization, 272; audits and surveys, 273 ff.; procedures, 275 f.; records: accounts: reports, 277; accounting, 277, 278-83 (see also A c c o u n t i n g ) ; major potential economies, 283-95; r c ~ sponsibility for, 83; use of personnel, 284, 346; purchasing, care of property, and related activities, 289 ff.; debt service, 292 f.; transportation, 293 f.; insurance, 294 f. ; state action and cooperation, 295-99; research and survey recommendations, 298 f.; personnel policies, 301-34 (see also Personnel); principles necessary in attainment of, 347 f. Education, public: governmental units supporting, 12, 15; organized groups trying to break down confidence in, 31 f.; types supported by Federal and state governments, 37 ff.; reasons for m a k i n g it universal and compulsory, 40 f.; new and improved services as cause of increased spending, 43-48, 125; causes of inequalities of opportunity, 81, 90; relationship between opportunities for, and expenditure levels, 9 1 - 1 0 1 ; five classes of data required for study of, 92; broad assumptions, 95 ff. ; unlimited variations in quantity and quality, 102; ideals and policies, 105-34 (see also Ideals); historical background, 105, 133; principle of civic responsibility for, 106-110, 112, 133, 175; denominational and other private schools, 108, 132, 205-9; extension of opportunities through equalization principle, 117; improved standards re environment, 127; class education, 133; economics of spending: determining costs and contributions, 136-67 (see also Economics); contributions to economic life, 137, 143 ff.; recent and earlier trends compared, 227 f.; reorganization of secondary education, 249; objectives

372

INDEX

Education (Continued) and meara, 3 3 5 ff.; percentage of public income spent on, 338 Educational factors affecting expenditure levels, 69 Educational Finance Inquiry Commission, 1 1 3 ; first national study conducted by: volumes published, 352, 354 Educational plan of action in budget, 24554; group responsibility, 246; major considerations: objectives, 247 f.; data needed, 250 f.; plan in the total governmental pattern, 2 5 1 - 5 4 ; interdependence, 2 5 1 ; responsibility of school boards, 252; balance and coordination, 253 Educational Policies Commission, 116, 162; major objectives outlined in its reports, 130; quoted, 143, 153, 155, 156, 165, 194 Education Index, 354 Edwards, N., 74; quoted, 81 and H. G. Richcy, 66 Efficiency principle, 1 1 3 , 1 1 8 ; see Adaptability Elementary education, study influencing, 129; six objectives, 130; teacher qualifications, 305 f. Elsbree, W. S., 329, 3 3 1 ; quoted, 301, 303, 326 Employment, economic cost of removal from, 1 3 8 - 4 ° Engelhardt, F.,and F. Von Borgersrode, 283 Engelhardt, N. L., and F . Engelhardt, 262, 272 Enrollment, total, and in schools, 37; reasons for phenomenal expansion, 40; statistics of growth, 1870-1930, 40, 143; effect upon expenditures, 43; during depression, 59; war, 6 1 ; when economic loss or gain, 138; relation to use of personnel, 286, 287 Equalization aid for local districts, 1 r 1 ff. Equalization principle, evolution: nature of, 1 1 7 ; definition, 1 1 8 - 2 1 ; implications for expenditures, 121 f.; future, 122 Equipment, see Plant Executives, see Management: Superintendent Expenditures, future problems, 3 - 1 0 ; major problems, 3 - 7 ; dynamic nature: consequences of inertia, 8; sources of data, 9 f.; governmental, 1 1 - 3 6 ; trends and their causes, 37-63; expenditures defined: types of education supported, 37-39; upward trend prior to 1930, 39 f.; four

reasons for increases, 40-55; attendance, 40 ff.; new and improved services, 43 ff.; distribution of expenditures, 1914-30, 48; changed status of teaching profession, 48 f.; decreased purchasing power of dollar, 53, 55; trends during depression and recovery, 1930-40, 5 6 - 6 1 ; during war and postwar periods, 6 1 - 6 3 ; variations and their meaning, 64-104; extent: among states 64-66; within states, 66 f.; factors affecting levels: community, 68, price: educational, 69 f.; ability and willingness to support schools, 70-81; differences among states, 72 ff.; within states, 77-81; price differentials, 81-86; state, 82; community, 83; population density: urbanism, 86 f.; district organization, 87-91; educational opportunities, 9 1 - 1 0 1 ; study of the factors, 92 ff.; broad assumptions, 9 5 - 1 0 1 ; expenditures for personnel, 96 ff.; defensible comparisons, 1 0 1 - 4 ; data limitations, 101 f.; uses: legitimate, 102 f., indefensible, 103 f. political and social ideals and policies underlying, 105-35 (see also Ideals); economics of spending, 136-67 (see under Economics); control of: intergovernmental and interinstitutional relations, 171-209 (see also Control); financial management, 2 1 3 ff.; and revenue plans and estimates, 254-60; two methods followed in presenting estimates, 255 f.; prudence and economy, 264-300 (see entries under Economy); defensible spending, 335-47, 349; m a j ° r factors in determination of, 338 ff.; essential conditions, 340-47; public, and cost of education, 338; indefensible spending, 347 f. Federal child labor amendment, 124 Federal Government, tax burden, 4; activities supported, 15 ff., 37-39; war outlays, 22; resulting increases in spending, 23; tax increases, 33; earliest responsibility for education, 106, 108; support by, an established principle: basic principles implied in its activities, 108; support and controls by, 6, 134, 190-95; nationalism, 190 f.; special aids, 191 f.; independent agencies: resulting conflicts, 1 9 1 , 193-95; studies by special committees: general aid, 192 ff.; limitations which should accompany extension of aids by, 202; aids to inprove budgeting, 245; defensible spending will require support from, 338;

INDEX studies on its relations to, and aid for, education, 353 f.; set also Government; Governmental spending Financial management, 2138°., 333; set Management Fiscal independence, conflict over, 174-83 (set also Budget); doctrine of local initiative posited upon tax leeway and: steps for retaining, 303 Flexibility, 113 f. Florida, 65, 76, 84, 88, 1040, 181, 397 Fowlkes, J . G., 383 France, 16, 33 Frasier, G. W., 178 Friends of the Public Schools, 32, 133 Future spending problems, 3-10; set Expenditures Garber, L. O., quoted, 106 Georgia, 64, 65, 66, 73, 76, 83, 84, 88, 104*, 105, 181 Germany, 16, 32, 87 Goods and services, consumption of, 137, 140; culture a determinant, 146 Government, structure of: reorganization, 5; controls by, 5 f.; multiple objectives, 11, 15, 19; units supporting activities of, 13, 15; number of units in U.S., 13; available and continuous services, 13; ultimate wealth enhanced by activities of, 34; parasitic and detrimental activities, 35; interest in, and responsibility for, education, 105-10; history, 105 f., 133, 133; meaning, 106 ff.; varying interpretations, 109; conflicting ideals: controversies, 132-34; intergovernmental relations and control of school outlays, 171 — 209 {see also Control); public and school budgeting, 237 ff.; educational plan in the total pattern, 251-54; interdependence, 351; school board responsibility, 252; obstacles to cooperation, 253; set Federal; Local; States Governmental spending, 11-36; analyzed, 11-16; cautions in interpretation, 13; analyses of national totals, 14; of state and local, 15; prewar trends, 16-22; growth in U.S.: in other countries, 16; analysis of trends, 18 ff.; expenditure and national income, 21; causes of growth: war outlays, 22; evaluation of, 23-28; ideological conflicts, 23; economic criteria, 24 f.; political and practical considerations: factors limiting public spending. 26 f.; effects of total spending upon

373

school expenditures, 28-36; factors affecting spending, 28 f.; psychological effects, 30; organized pressures for reduction, 31 f.; arbitrary limits, 33; budgetary and revenue difficulties, 32 f.; public confidence put to the test, 35; effects of increased spending, 171 Grace, A. G., and G. A. Moe, quoted, 119 Great Britain, 16, 32, 87 Grimm, L. R., 94 Groves, H. M., 22 Gunnison case, 175 Haig, R. M., see Strayer, G. D. Halter, H., 31 Handicapped, the, 135 Hayes, H. G., quoted, 160 Health and safety education, 16a Heer, C., 18 Henry, N. B., 181 Heredity, 150 Higher education, increasing costs, 321 High schools, cause of increased expenditures, 44; ascendency of science o v « classics, 160 Hobson, J . A., quoted, 148, 149 Holmstedt, R . W., 187 Hours of labor, 123 Housing, median rentals, 82 ff.; item in cost of living, 318 f. Humanitarian ideal and individual worth, 122-26 Hutchinson, J . H., 278 Idaho, 33, 65, 66, 76, 84, 88 Ideals and policies underlying spending, 105-35; governmental interest and responsibility, 105-10; decentralization, 106, 110-16; equality, 117-22; humanitarian ideal and individual worth, 122-26; scientific ideal, 126-38; changed objectives, 128-31; nineteenth century, 128; twentieth, 139; future, 130; conflicting ideals, 132-34 Illinois, 31, 60, 65, 76, 80, 83, 85, 86, 87, 89, 95, «04«, 184 Income, national, 2t; devoted to war promotion, 22; development, 1869-1930, table, 53; trends in, 1930-1940, table, 58; inadequacies of data on wealth and. 71; family, relationship to school expenditures, 81; level of, as index of living standards, 97; adjustment to changed levels of, 265, 266; wartime trends, 332; public, and cost of education, 338

374

INDEX

Indexes, for approximating tax paying capacity, 80; on education, 354; on economic subjects and administration, 355 Indiana, 39, 60, 65, 76, 84, 89, 10411, i 8 i , 183, 187. 2 , 9 , L.„ . Individual, discovery of special abilities and talents, 163 Individual worth and the humanitarian ideal, 1 a 2-26 Industrialism, effect» of, 41, 79 Industrial revolution, 123 Inflation, 333 f. Insurance, 294 f. Interest on debt, 20, 292 Intergovernmental and interinstitutional relations and control of school outlays, «71209 (see also Control) Iowa, 32, 65, 76, 85, 89, 104n, 187, 219, 283 Italy, 16 Janitors, 221, 289 Jones, Howard P., quoted, 173 J u u l L a w , Illinois, 184 Kansas, 65, 76, 84, 88, 104»«, 186 Kemmerer, W . W . , 283 Kentucky, 32, 65, 66, 73, 76, 80, 84, 88, i04n, 219, 297 Kerwin, J . C . , 181 Kiekhofer, W . H . , quoted, 148, 149, 151, «53» >57 .. . Knowledge and culture as contributions to wealth, 144-5» Labor, economic status of teachers in relation to, 49, 52, 57, 141, 302, 310, 313; children and women, 123 ff.; promotion by, of schooling and child welfare, 124 Labor, Department of, cost of living budget, 320 Land, use, 142; purchases, 290 Lawler, E. S., 74 Legal status of management, 224 f. Lewis, E. E., salary scheduling, list, 326 Liberalism, stimulus to reform movements, 122 Life certificates, low-grade, 322, 323 Line and staff type of organization, 231 Literature on finance, guide to, 351-57; development of subject, 351 ff.; bibliographies and indexes covering, 354 f.; statistics, 355 ff.; general bibliography, 35&-€8 Living standard, see Standard Local governments, declining importance as taxing unit, 4; activities supported,

12; units of, in U.S., 13; analysis of support, 15 ff.; taxes, 33, 34 (see Taxation); community factors affecting expenditures, 68, 70; community differences, 8 3 86; public education made subordinate to, 112; reorganization of ,the alternative to further centralization, 199, 202; coordination and cooperation among local units, 203-5; property tax leeway, 203; see also Districts; Government London, 87 Louisiana, 65, 73, 76, 83, 84, 88, 133 Lutz, H. L., 22, 26; quoted, 16, 144 Lyon, L. S., and others, quoted, 148, 150 McGuire, S. H., quoted, 119 Maine, 57, 65, 66, 76, 84, 88, 94, 104», 187, 202, 297 Malone, Paul E., quoted, 174 Management, importance and nature of, 6; dependence of future upon, 36; efficiency of administration a reason for fiscal independence, 177; control of spending through improved, 210-36; meaning and significance, 210-14; public, 2 1 1 ; school, 2 1 1 ; categories of executive responsibilities, 212, 213; of school finance, 213; analyzed, 2 1 4 - 1 6 ; scope: major elements, 215; professional preparation for financial, 216-22; outline chart, 217; national agencies, 218; superintendent, 218 ff.; other business personnel, 220 f.; state officers, 221; merit appointments, 222-24, 225; methods used, 222 f.; legal status, 224 f.; organization and professional relationships, 225-34 {see also Organization); technical services, 234-36; size of satisfactory unit, 235; prudence and economy in expenditures, 264-300 (see also Economy); accounting as an aid to, 282; a prerequisite for defensible spending, 342; see also Superintendent Marshall, A., quoted, 165 Maryland, 32, 65, 76, 83, 84, 89, 133, 199, 297, 310 Massachusetts, 32, 57, 65, 77, 79, 80, 85, 86, 89, 1041, 105, 117, 132, 202, 297 Measuring instruments, 93 ff. Men teachers, salaries, 52, 308 Merit appointments, 222-24, a2 5> 3°3 tMerit-type schedule, 327 Metropolitan areas, expenditure levels, 87,90 Michigan, 31, 32, 33, 57, 65, 76, 83, 85, 89, 104«, 181, 183, 186, 297

INDEX Mill, J . S., quoted, 144 Minnesota, 3a, 65, 76, 85, 89, 104«, i n , 1 8 1 , 183, 351 Mississippi, 64, 65, 73, 74, 76, 83, 84, 88, 104«, a a i Mittouri, 32, 65, 76, 84, 88, 104» Model T a x Plan, 73 Moe, G. A., quoted, 119 M o e h l m a n , A. B., a 12, 2 1 3 , a6a, 383; quoted, 1 1 6 , 1 1 9 , 226 Money transactions, 136 M o n t a n a , 32, 65, 77, 85, 86, 87, 89, 104a Morrison, H . C., a8, 122, 197, 256, 262; quoted, 62, 78, 120, 140, 323 Mort, Paul R., 70, 73, 93, 94; quoted, 113; on equalization principle, 1 1 9 , 120, 121 and F . G . Cornell, 9 5 , 1 1 2 ; quoted, 1 1 3 and W . C. Reusser, 176; quoted, 113, 116, 120, 134, 197, 264 A. J . Burke, and others, 95 E. S. Lawler, and others, 74 Mortgage Bankers Aiiociation, 183 Municipal Administration (Munro), 177 Municipalities, number of, 13; fiscal problems, 34, 204; effect upon, of paymentfor-effort policy, 1 1 2 ; conflict over budget control, 174-82 (set alio Budget); population, 196 Munro, W . B., quoted, 177 Myrdal, G u n n a r , quoted, 158 National Advisory Committee on Education, 192, 353 National Apartment Owners Association, 183 National Association of Building Owners and Managers, 183 National Association of Colleges and Departments of Education, 2 1 8 National Association of Manufacturers, 3a National Association of Public School Business Officials, a 18, 220, 263, 283 National Association of Real Estate Boards, '83 National Bureau of Standards, 290 National Conference of Real Estate Taxpayers, 172, 183 National Education Association, 283, 333; reform committees appointed by, 128, 129; salary recommendations, 305, 308, 326 ——Committee on Supply, Preparation, and Certification of Teachers, 322 Research Division, 16, 3in, 55, 329 National Grange, 183

375

National Industrial Conference Board, estimates by, 17 National School Supply Association, 290 National Survey of School Finance, 72, 268; quoted, 213; congressional authority: studies by, 35a, 354 Research Problems in School Financera; excerpt, 126 National Youth Administration, 20, 37, 6l . ' 3 3 . '34> ' 9 3 ! Federal-state conflict over control of, 194 f. Natural resources, 161 Nebraska, 3 1 , 32, 65, 66, 76, 84, 88, 104«, 219 Nebraska Federation of County Taxpayers League, 31 Negro teachers, 309 Nevada, 33, 66, 73, 77, 83, 85, 86, 87, 89, 1 1 7 , 183, 196 Newcomer, Mabel, 73; estimates by, 17; index of tax-paying ability, 72, 74 New England policy, 105 New Hampshire, 32, 3 3 , 6 5 , 76, 84, 89, 105, 187, 2 1 9 New Jersey, 3a, 33, 66, 77, 80, 83, 85, 86, 87, 89, 90, 94, 95, 104«, 1 1 7 , 133, 1 8 1 , 183, 1 8 7 , 3 1 9 , 2 3 4 , 2 9 7 , 3 1 0 New Jersey Taxpayers' Association, 32 New Mexico, 3a, 65, 66, 76, 83, 84, 88, 1 8 1 , 183, 187 New York City, 3 1 , 87, 90, 1 1 7 , 123; per pupil expenditure, 67; population, 196 New York State, 12, 19, 30, 3 1 , 33, 34, 45, 5 1 , 52, 56, 64, 66, 67, 70, 73, 77, 79, 80, 81, 83, 85, 86, 87, 89, 90, 95, 104«, 105, n o , m , U 2 , 1 1 7 , 1 1 9 , 129, 132, 133, 184, 185, 186, 187, 196, 202, 219, aas, 283,397,30a, 3 0 3 , 3 0 5 , 3 0 6 , 3 0 8 , 3 1 0 , 3 2 4 , 329. 333. 35'> 352; specialized services in schools, 45 f.; unqualified teachers, 49, 302; Regents' Inquiry re education in, 94, 95, 122, 174, 298 f.; recommendations of state control in, 173 f.; residents in metropolitan areas, 196; low registration, 30a New York State Commission for the Revision of the T a x Laws, state controls recommended, 1 7 3 ; quoted, 184 New York State Conference of Mayors, quoted, 179 New York State Council of City and Village Superintendents, 139 New York State Economic Council, 32, 133; excerpt from Letter, 30 New York State Taxpayer, excerpts, 172

376

INDEX

N e w Y o r k State Teacher» Association, 194, 315 North C a r o l i n a , 5 7 , 65, 66, 73, 76, 83, 84, 88, 10411, 105, 133, 183, 186, 187, 197. ' 9 s . 397 North D a k o t a , 33, 65, 66, 76, 85, 88, 397 Northwest O r d i n a n c e , 105 Norton, J . K . , 7a and M . A . Norton, 73, 74, 75 Objectives and means of education,

tag,

•3". 335 ffOccupational-pattern changes, 4a Occupations other than teaching, earnings in, 30a, 310, 3 1 1 - 1 4 ; see also Salaries Office of Education, 37, 39, 90, 10a, 218, 383 O h i o , 32, 34, 57, 6o, 65, 76, 83, 85, 89, 104«, 181, 183, 185, 297 O k l a h o m a , 33, 65, 73, 76, 83, 84, 88, 104a, 181, 183 O l d age pensions, 34 Oregon, 65, 76, 85, 89, 104*1 Organization, and professional relationships, 335-34; definition, 325; traditional or business type, 226; democratic, 337; interrelated functions of thinking or planning and doing or executing, 237 230 ff.; type proposed, 229; chart, 231; for financial management, 233 Parasitic activities, 25 Parochial schools, 32, 108, 133; see Private schools Payment-for-eflort policy, 110 ff. Peel, A . J . , 283 Pennsylvania, 32, 35, 56, 65, 67, 76, 83, 84» 89, 95. i o 4"> ' ° 5 . " 2 . >3». >33. ' 8 1 , 187, 219, 283, 297, 310 Pension legislation, 34 Personnel, importance as factor in finance system, 118, 121; economic cost of removal f r o m production, 138-40; selection of executives, 2 1 1 , 212, 222 ff.; financial management and personnel decisions, 215, 216; merit appointments, 222-24, 225, 303; as core of school system, 231; principles applied in relationships. 232; economy or waste in use of, 284-89, 346; improved personnel policies and economical expenditures, 3 0 1 34; aims of policies: relationship to salaries, 301 f.; policies and factors affecting salaries and wages, 303-10; stated qualifications, 304 f.; tenure, re-

tirement, and other benefits, 307; social policy, 308; salary schedules, 3 3 5 - 3 2 ; wartime salary adjustments, 332 - 34; proportion of educators to pupils, 337; set also Management: Salaries: Superintendent: Teachers Pfiffner, J . M . , 178 Pigou, A . C . , quoted, 163 Pitkin, R . S., quoted, 20, 57 Pittenger, B. F., 59, 117 Plant and physical facilities 386,, 388; new public standards, 137 f.; purchasing and related activities, 289-92 Policies and ideals, see Ideals Political controls, schools, independence of, 176 Political criteria of spending, 26 Polls of public opinion, 30, 35 Poor, treatment of, 123 ff. Population, growth, 4 1 ; effect of density, 43, 86, 88 f.; urban, 43, 196; percentage in schools, 43; largest cities compared with states, 196 Position-type salary schedule, 337 f. Powell, O . E., 94 Preparation-type schedule, 337 f. Pressure groups, organized, 31 f. Prices, 27, 58, 355, 359, 365; factors affecting expenditures, 69; differentials, 8 1 86; state, 83 ff.; community, 83; u p w a r d trend, 333; public salaries never keep u p with, 333 Principles, of economical management, 3 6 7 - 7 1 ; defined, 268; generalizations, 269 ff. Private schools, 33; control and financing of, j 08, 133 f., 191, 205-9; direct democratic control, 206; the unified school system, 308 Private o. governmental spending, criteria determining choice, 24 ff. Producer and consumer relations, 153 ff. Production, as criterion of spending, 24; economic cost of removal from, of children, 138; of school personnel, 138-40; specific contributions to, 158-65; modern capacity, 158; education for, and means of, 59; productivity of all workers increased, 164; during and after war, 167 Professional preparation for financial management, 216-22; see also M a n a g e m e n t Professions other than teaching, earnings, 302, 310, 3 1 1 - 1 4 ; see also Salaries Program, difficulties of defining as foundation for finance system, 120

INDEX Progressive principle, 1 1 3 , 1 1 8 ; see also Adaptability Property tax, see Taxation Property valuation, 78 ff. Prudence and economy in expenditure*, 364-300, 344; the prudential principle, 364, 267 (see also Economy) Psychological effects of spending, 30 Public, confidence of, as foundation of school finance, 3 ff., 29, 35, 62, 204, 214, 264, 348 f.; factors generally misunderstood, 4; attitude toward taxes, 27, 30 (see also Taxation); polls of opinion, 30, 35; importance of, and spending by, consumer, 1 5 1 - 5 7 ; accounts open to, 277; opinion re teacher living standards, 315; support of teacher salary policies, 324 Publie Administration (Pfiffner), 178 Publie Administration in the United States

377

and educational plans, 254-60; longterm problems, and variables, in making estimates, 257; raising the revenues, 959 Revenue system, 4 Reward-for-effort, n o f f . Rhode Island, 57, 64, 65, 76, 85, 89, 95, 10411, 183, 197, 219 Richey, H. G., 66 Roman Catholic Church, 132 Rope, F. T., 31 Rural schools, revenue difficulties, 34

Safety education, 162 Salaries and wages, of teachers and labor compared, 49, 52, 57, 6 1 , 141, 302, 310, 3 1 3 ; differentials, men and women teachers, 52, 308; effect of rising standards of living, 53; percentage of school expenditures, 54; effect of depression, 57, (Walker), 178 59; reasonable assumptions, 96-99; rePublic budgeting, 238 lationship of personnel policies to, 3 0 1 Public management, 2 1 1 3, 347; teachers', relative to other occuPublic school finance, 8 ff. ; see also Budget pations, 302, 310, 311—14; basic policies Expenditures; Taxation affecting, 303-10; merit appointments, Pupils, expenditures per pupil, 43, 46, 48, 303; stated qualifications, 304; discrepan54, 55,58; variations in per pupil expense, cies based upon position, 305; pupil67; use of statistics on per pupil expenditeacher ratio, 306; turnover: benefits, tures, 1 0 1 - 4 307, 310; social policy, 308; minimum«, Pupil-teacher ratio, 46 f., 90, 99; factors in 309 f.; factors determining, 310-25; control of: as measurement of economy, living standards and costs of living, 314; 384 ff.; relation between salary levels cost of preparation, 321; supply and deand, 306 mand, 321 ff.; public support, 324; Purchasing, consumer, 152 ff. schedules 325-32; reasons for, 325; Purchasing and related activities, 289-92 principles of scheduling, 326; three types, Purchasing power of money, effect of 327; provisions, 328; formulation and changes in, 43, 55 adoption of schedule, 329; determination of minimum and maximum salaries, Rainey, H. P., quoted, 60 330; wartime adjustments, 332-34; averReal estate interests, 172, 183 ages since 1934: inflation dangers, 333 Records or documents, 277 Sales promotion and advertising, 154 f., 161 Reeder, W. G., 262 Sales tax, 185 Reform movements, 122 ff. Savings, private, 141, 160 Regents' Inquiry, New York State, 94, Schedule making, 288 12 2 ; summary of findings, 95 ; recommen- Schedules, salary, see under Salaries dations re state responsibility, 174, 298 f. School districts, see Districts Rentals, median, 82, 83, 84 f. Science and its effects, 126-28; advance in, Reports, expenditure, 278 160 Raearch Problems in School Finance, 342; ex- Secondary education, study of and report cerpts, 126, 2 1 3 on: seven cardinal objectives, 129; reRetirement of teachers, 307, 310 organization, 249; differentials between Reusser, W. C., and P. R . Mort, 176; teachers in elementary schools and, 305 f. quoted, 1 1 3 , 116, 134, 197, 264; on Security and culture, 144 ff. equalization principle, 120 Senior, N. W., quoted, 146 Revenue and budgetary difficulties, 32-35 Services and goods, consumption of, 137, Revenue plan, considered with expenditure 140 f.; culture a determinant, 146

378

INDEX

Shultz, W. J . , 1 4 3 ; quoted, 19, 25 Simpson, A . D., quoted, 1 1 3 , 1 1 9 , 267 Sinking fundi, 293 Slichter, S. R . , quoted, 147, 152 Smith, Adam, quoted, 138 Smith, D . H., and Beach Thomas, quoted, 161 Smith, H. P., 263 Smith-Hughe« Act, 191 Social and political ideals, see Ideals Social policy affecting personnel, 3 0 8 - 1 0 Social Security Act, 3 1 0 South Carolina, 65, 73, 76, 83, 84, 88, 297 South Dakota, 3 3 , 65, 76, 83, 84, 89 Specialized services, 45 f., 1 2 5 Spending, see Expenditures Standard of living, ways in which government spending can reduce, 26; as basis for salary policies, 52, 53, 96 f., 1 4 1 , 3 1 4 - 2 1 ; trends showing spectacular rise in, 5 3 ; indexes of, 97 f.; budget for determining minimum standard, 3 1 7 States, the dominant taxing power, 4; activities supported, 12, 15, 37; taxes, 33 (see also Taxation); variations among, in expenditure levels, 64-66; variations within, 66-68; relationship between economic resources and school expenditures, 72 ff.; differences among, of economic ability to pay taxes, 72-77; differences within, 7 7 - 8 1 ; price differentials, 82 f.; history of educational policy, 105 f., 1 3 2 , 1 3 3 f.; responsibility for education, 106 ff., 1 1 2 , 1 3 3 f., 1 7 5 ; decentralization through state support, 11 o ff.; financial provisions involving equalization principle, 1 1 7 ; control by, 174, 182-90; through tax limitation, 182 ff.; and budgetary review, 186 f.; other controls, 187; those incorporated in constitutions and statutes, 188 f.; implications, 189; complete support and control by, 196-99; certification requirements for administrators, 219; state action re financial management, 2 2 1 ; action re budgeting, 244; accounting requirements, 280; and systems, 282 f.; action and cooperation to promote prudence and economy, 295-99, 346; extent of responsibility, 295; examples of action, 297; research and survey recommendations, 298; functions which may be supported and administered by, 342; see also Government Statistics, inadequacies limit analyses of expenditures, 1 3 ; guides to sources, 355 f.

Statutes, controls incorporated in, 188 Stimulation, principle of, 11 o ff. Strayer, G. D., 1 1 6 and R . M . Haig, 1 1 2 ; summary of factors which determine expenditures, 28 f.; on equalization principle, 120, 1 2 1 Strayer, G. D., J r . , 200 Studenski, Paul, 22 Superintendent, selection and appointment of, 2 1 1 , 2 1 2 , 222 f., 225; assistants, 2 1 3 , 223, 234-36; preparation, 2 1 8 - 2 0 ; certification requirements, 2 1 9 ; legal status, 224; finance responsibility, 234; see also Management Supply and demand, as issue in determining salary policies, 3 2 1 - 2 4 ; defined, 322, 324; demand in quantitative and qualitative sense, 324 Swift, F. H., quoted, 197 Tawney, R . H., quoted, 150 Taxation, causes affecting willingneu of public to pay, 3; decline of local, dominance of state, taxing power, 4; collections compared with national income, 22; a factor in spending, 27, 28, 29, 32 f.; public's attitude toward, 30 f.; "taxpayer movement" to avoid, and organizations supporting it, 30 ff., 1 7 1 - 7 3 ; taxpaying ability, 71 ff.; differences among states, 72 ff.; within states, 77 ff; indices for approximating ability to pay, 80; question of use of, for other than public schools, 108, 132, 205; tax limitation, 182-86; origin, 183; results, 185; opposition to limits, 184; replacement taxes following, 185; Federal control through taxing power, 1 9 1 ; effect upon initiative of local districts, 199; retention of property tax leeway, 203; taxing power and leeway presumed in budgeting, 259; collection, 276; inflation not prevented by, 334; T a x Foundation, 32; agency for taxpayer movement, 3 1 , 1 7 1 ff. Tax Front, The, excerpt, 32 T a x Policy League (Tax Institute), quoted, 33. >88 Teachers, pupil-teacher ratio, 46 f., 90, 284, 306; preparation, 48 f.; changed status of profession, 48-54; unqualified, 49, 302, 322, 3 2 3 ; certification requirements, 49; economic status in relation to common and skilled labor, 49, 52, 57, 61, 1 4 1 , 302, 3 1 0 , 3 1 3 ; salaries, 49-54, 96-99 (see Salaries); effect of improved

INDEX status of women, 51; effect of standard and coit of living, 52,96-99, 141,314-31; employment of, an economic gain, 139; codes of ethics for, 933; personnel policies in relation to salaries, 301-34 (see entries under Personnel: Salaries); relation of professional standards to economic status, 303; need of stated qualifications, 304-6; differentials between elementary and high school requirements, 305; tenure: retirement: other benefits, 307, 310; differentials based on sex, 308; on race, 309; cost of preparation, 331; supply and demand, 331-34 Technical services, 234-36 Tennessee, 33, 60, 65, 73, 76, 84, 88, 104« Term length, 43 Texas, 34, 65, 76, 84, 88, 104«, 187, 383 Thinking, organization effective for, 228, 229 ff. Transportation, 47, 93, 200, 293 f., 318 Treasury and depository, 276 Unemployment, 41, 139 Unit cost theory, 102, 282 United States, see under Federal Government United States Chamber of Commerce, 32 Unit of measurement, 93 ff., 235 Updegraff, H., 112 Urbanism, 42; factor in salary increases, 51; relation to expenditures, 67, 87-90 Utah, 32, 65, 76, 84, 88, 104«, 183, 198, 199, 219, 297 Value concepts, 136

379

Vermont, 65, 76, 84. 89, 10411, 105, n o , 197, 219 Virginia, 65, 76, 84, 88, 104« Vocational guidance and preparation, 163 f. Von Borgersrode, F., 283 Wage Hour Act, 124 Wages, variation in rates, 82, 84 f.; see also Salaries Walker, Harvey, quoted, 177 War, effects of, 3, 17, 18, 22, 108, 131, 166 trends during Second World W a r : postwar period, 61-63; Federal support and controls increased by, 190; effect upon teacher«, 311, 312, 314; salary adjustments, 332-34 Washington, state, 34, 65, 76, 85, 89, 104«, 183, 186, 310 Waste, economic, 142 f., 154, 157 Wealth and productive capacity, causes: contribution of schools, 144-51 West Virginia, 65, 76, 84, 88, 104«, 183, 185, 187, 199, 297 Willoughby, W. F., quoted, 28 Wisconsin, 33, 65, 76, 83, 84, 89, 104«, 297 Women, emancipation of, 42; effect upon teachers, of changed status, 51; advance* in education of, 123, 124 f.; employment opportunities, 139; workers in industry, salaries, 310 Working age, 42 Work loads, see Pupil-teacher ratio Wyoming, 32, 66, 77, 85, 86, 87, 89, 104«, '97 Youth Needs Committee, New York State Teachers Association, 194