NCPA - National Center for Policy Analysis


January 27, 2009

A new GOP budget plan in Arizona has slashed funds for education.  The preliminary budget plans envision a 2.5 percent decrease in the Department of Education's budget and a 16.2 percent cut in university budgets.

The 2.5 percent cut should be manageable, says Matthew Ladner, vice president for research at the Goldwater Institute.  In 1960, Arizona schools spent a whopping $404 per pupil; adjust that for inflation and that translates to about $2,800 per pupil in today's dollars.  Today, Arizona public schools receive more than $9,000 per pupil in total revenues.

However, there are certainly areas to cut before letting teachers go, says Ladner.  Research shows that:

  • Students would be much better off if schools did let their most ineffective teachers go and redistributed the students to more effective instructors.
  • Teacher quality has been found to be 10 to 20 times more important than class size in achieving student learning gains.
  • Schools could thereby cut their spending and improve student learning simultaneously.

A 16 percent reduction in university spending is a more serious matter.  Returning to first principles, we should recognize that by a wide margin the biggest beneficiary of a university degree is the recipient, not his next door neighbor, says Ladner.  The moral case for forcibly taking money from, say, plumbers, and giving it to university administrators is not nearly as strong as some would have you believe.

In a situation where cuts must be made, cutting university subsidies while increasing tuition is entirely justified.  On the other hand, continuing to allow public universities to operate as academic and financial transparency-free zones can only be justified if they raise almost all of their own money, concludes Ladner.

Source: Matthew Ladner, "Arizona can cut spending while improving student performance," Center for Educational Opportunity (Goldwater Institute), January 20, 2009.


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