Keeping Money in Classrooms

California initiative would ensure that only 5 percent of money spent in school districts goes to administration.

Californians are preparing to draw a controversial line in the ever-shifting sands of education spending.

They call it "95-5," and the idea is to put 95 percent of school dollars into classrooms, leaving only 5 percent for administrators.

An outgrowth of the concerns over bureaucratic waste that have fueled the charter-school and school-voucher movements in several states, 95-5 is a state crusade that may find converts nationwide as overcrowded and budget-strapped school districts desperately hunt for money to spend on classrooms, learning aids, books, and teachers without raising taxes.

But with 91 percent of California districts currently spending more than 5 percent on administration, many education officials here say such a strict spending plan will only cause trouble. As the debate develops, states are watching to see which way California goes.

"States across the country are watching the California example for lessons they can glean in public attitudes," says Dave DeSchryver, policy analyst for the Center for Education Reform, an education advocacy group in Washington. "If [the initiative] passes, it will become the model of what others will try. If it fails, it will be the model of what not to try."

The issue is particularly important here because California schools, on average, spend more than the nation as a whole on administrative costs (4 to 10 percent compared with a national average of less than 5 percent). And supporters of the California initiative say the high administrative spending is tying up much-needed money.

"We need smaller class sizes, more teachers, updated textbooks, computers, after-school programs, an end to social promotions as well as cleaner and safer schools," says Tyrone Vahedi, senior staffer for the California state board of equalization and spokesman for the initiative, called Proposition 223. Noting that a provision similar to 95-5 has passed the US Senate, he says: "We don't need more bureaucrats downtown who never see our children."

Shifting spending

By mandating a single budget recipe for the state's 993 school districts, the new California measure would reduce average statewide spending on administration by 2.3 percent, saving between $700 million and $1.3 billion per year, statewide. It is believed to be the first voter initiative in the country to mandate such a formula.

"There has been a feeling in this country that education has become a jobs program instead of a way to teach our youths," says Mr. DeSchryver. "This is part of a larger movement to move away from that and give more to the students."

Despite the state's recent economic turnaround, in which hundreds of millions in revenue surpluses have been designated for use in reducing class size, California has been on the slide for two decades in the amount of money it spends per student. From 1973 to 1993, the state moved from first to below 40th nationwide. Teacher salaries have also plummeted as well as student scores on scholastic aptitude tests.

Uncertain consequences

But even though Prop. 223 carries the promise of shifting funds from administration to classroom, it is far from clear whether the measure will affect all types and sizes of school district equally.

Nine hundred of the state's 993 districts now spend more than 5 percent of their funds on administrative costs - a situation that would, if the measure passes, put them in jeopardy of a fine of $175 per student.

"We believe this penalizes the vast majority of California school districts, which are small," says Julie White, spokeswoman for the Association of California State Administrators (ASCA), which is among a broad coalition of groups fighting the initiative. "Just by the nature of the way administrative costs are divided in smaller districts, the ratio needed [for administration and overhead] is higher."

She and other foes contend that proponents for the measure, which include Los Angeles Mayor Richard Riordan, are out to give larger school systems an advantage because of their flexibility and larger economies of scale.

"We have all the same expenses and overhead, but fewer kids," says Lisle Staley, director of research and evaluation for the 11,000-student Santa Barbara school district. "If enacted, Proposition 223 will be hunky-dory for large districts but will really hurt us."

Some neutral observers contend that trying to implement a single formula for the state's hundreds of different districts is bullheaded and unreasonable. They hold that while such an idea may sound good on paper, in reality it is untenable, and they add that the average administrative costs per school statewide is actually a reasonable figure that is better left alone.

As is usual with citizen's initiatives, much of the debate is centered on the wording and interpretation of details.

The 95 percent of funds earmarked for "direct services to pupils" include salaries of teachers, nurses, counselors, principals, and other people who give pupils "immediate and unbrokered services."

Meanwhile, the list of services and activities on the administrative side includes district management, payroll, purchasing, public information, fiscal services, staff development, and also curriculum planning.

"This is a case of the state getting overinvolved in micromanaging stuff that is better left to the individual districts," says Gary Hart, co-director of the Institute for Education Reform of California State University. "My experience is that the schools just spend their time trying to figure out how to work their way around such bookkeeping minutiae while in the meantime the kids don't get taught any better."

A better answer?

Students might be better served, say Hart and others, if voters overhauled state laws mandating compliance with red-tape operations such as annual audits and fiscal reviews, rather than limiting the amount schools can spend meeting them.

Despite high-profile opposition, from such bodies as the state PTA, the California Business Roundtable, ACSA, and the Los Angeles Unified School Board, Prop. 223 is highly favored by likely voters - as high as 80 percent in some statewide polls.

Opponents hope to whittle down that margin by voting day with the use of phone banks, and urging voters to visit information Web sites. But they are currently outgunned nearly 15 to 1 in fund-raising.

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