The Boston Fed Agrees

By Steve Poftak
September 8th, 2008

In 2007, the UMASS Donahue Institute released a report on the impact of affordable housing on municipal finance. It contained this provocative statement:

[The Donahue Institute's] analysis showed that school teaching staff levels and overall expenditures increased independently of changes in enrollment.

Now, Peter Francese of the New England Economic Partnership (see their members here), writing in the Boston Federal Reserve Bank’s Communities & Banking magazine says the same thing:

The total cost of running a school district or a municipality is not materially affected by year-to-year fluctuations in the number of students or citizens.

Cape Cod’s Barnstable County, Massachusetts, for example, has 15 school districts, which served about 26,800 students in the 2006-2007 school year, 13 percent fewer than in the 2000-2001 school year. Despite the drop of more than 4,000 students in that period, spending for public education in those districts increased 26 percent from 2000 to 2006. Although Barnstable County may be an extreme example, a similar story of declining enrollments combined with rising spending can be found across New England.

This is interesting for Pioneer for two reasons — first, in the context of affordable housing (for which it was intended) an as a unwitting contribution to the charter school debate, which frequently centers on the topic of the funding ‘lost’ by sending districts.