Many thanks to Todd Engdahl and crew for including a link to my 2006 report on school funding data in today’s story about the latest Colorado Fiscal Policy Institute quest to aim for the middle:

Colorado ranks 47th in the nation in total state spending per $1,000 dollars of personal income, and 45th in state spending per capita, according to a study released Thursday by the Colorado Fiscal Policy Institute.

Spending for K-12 schools and higher education is in similar ranges, said the report, which has an interesting title – “Aiming for the Middle.”

Data for the report, compiled primarily from U.S. Census Bureau figures, in most cases is at least a couple of years old.

“This data is from when the state’s economy was in good shape, so we know it only goes downhill from there,” commented Carol Hedges, institute senior fiscal policy analyst.

I guess it’s my job as an “anti-tax type” to supply some context. First, if Hedges provided that quote alongside the “spending per $1,000 of personal income” statistic, it could hardly be more misleading.

Let’s look more carefully at the equation. As the economy tanks, growth in personal income (denominator) contracts. Meanwhile, Amendment 23 continues to drive revenue increases (numerator) to K-12 education. To review math lessons from years gone by, a bigger numerator and smaller denominator would suggest Colorado, if anything, may have moved up in the rankings.

But the whole measurement presumes that more personal income demands proportionally more be spent. For example, Americans spent a considerably smaller share of their household incomes on food than three or four decades ago. Does that mean we have a food funding crisis?

Another quote:

“Colorado has a systemic revenue problem, plain and simple,” Hodges said. “The state simply doesn’t have the revenue needed to support the public services that Coloradans rely on, knowingly or not, every single day, and that’s a threat to our collective future and to our economy.

If you look simply at rankings among states, that may seem to be the case. But is keeping up with the Joneses (aka “Aiming at the Middle”) on government inputs really the goal? A couple changes over time to consider, based on data from the Census Bureau and from the National Center for Education Statistics. Compare Colorado in 1991-92 (the year before TABOR) to 2005-06 (the most recent year with consistent data available):

• Total state and local government dollars spent per resident grew from about $4,360 to $7,806 — an increase of 18 percent after inflation
• Total K-12 public education dollars spent per pupil grew from $5,470 to $9,897 — an increase of 19 percent after inflation

Government is collecting and spending significantly more now than before TABOR. Why then don’t we have the revenue necessary to support public services? Are public agencies becoming less efficient as they grow larger? How much exactly is enough? At what point do we say government is spending the right amount?

Some states increase spending faster than others. However, Colorado governments (including schools) are spending more real dollars all the time. We can argue why it is the case and what it means, which might open the door to honest, creative new solutions for how we finance public services and how we can deliver them more efficiently.

But issuing reports based solely on rankings of input amounts among the states gives a seriously incomplete picture more likely to lead us to the wrong solutions. Maybe Colorado should try to lead and show the Joneses another way besides merely aiming for the middle.

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