Ep. 384: Priorities of State and Local Governments – with Ben Scafidi

August 14, 2023

How are schools growing their numbers in staff members without growing the same number in students? Ben Scafidi joins Mike McShane to talk about his recent report, Priorities of State and Local Governments From 1994 to 2022 which highlights the public schools’ staffing surge over the years. 

Mike McShane: Hello and welcome back to another edition of EdChoice Chats. I have a special guest on the line today, Kennesaw State’s own Ben Scafidi. Ben, great to have you on the podcast. 

Ben Scafidi: Hi, Mike. Thanks for having me. 

Mike McShane: No problem. And also, you have an affiliation with EdChoice. You’re a fellow of some description. 

Ben Scafidi: I’m a Friedman Fellow. 

Mike McShane: Oh, fantastic. I wasn’t sure whether, because I think of you, you are a distinguished fellow, you are a senior fellow, senior only in the sense of wisdom, not necessarily in age, but a Friedman Fellow, I think that’s also quite appropriate for you. 

Ben Scafidi: Well, thank you. That’s very kind. I’m really thankful for my affiliation with EdChoice. 

Mike McShane: And we are thankful for you. And one of the things that you’re doing as part of your affiliation with EdChoice is you have a new paper out. I believe it is entitled Priorities of State and Local Governments From 1994 to 2022, and has the subtitle, K–12 Public Schools Have Been the Major Employment Priority. Before we get into the details of this paper, I feel like it builds on work that you have been doing for some time. You’ve done I think a couple papers under the general title of The Staffing Surge or Back to the Staffing Surge. So, maybe before you tackle what you did in this paper, can you give the kind of Ben Scafidi, is it the oeuvre, the area? I don’t know, I’m running out of nouns to describe it, but maybe sort of set the stage with the previous work that you’ve done for us on this topic area. 

Ben Scafidi: Yeah, I’ve actually written three reports for EdChoice on the staffing surge, and the first one was about 10 years ago, and what I noticed was that public schools kept increasing their employment far and above what was needed to accommodate student enrollment growth. And I noticed this was going on in recent decades, but then I was able to look back all the way to 1950. So, this has been going on in this country since 1950, where public schools just keep throwing bodies at the problem and hiring more and more staff, and more of them are not teachers, so they’re hiring more non-teachers and increasing it far and above the growth in students. So for example, since 1950, public school employment growth has grown about seven and a half times as fast as the growth in the number of students they serve. So, this is very expensive to the taxpayer and it’s got a lot of opportunity costs to the public school system itself. 

Mike McShane: And now I think in subsequent papers you wrote, because listeners might be hearing that and say, “Well, if you go back to 1950, schools were very different in 1950. They were segregated. Students with special needs weren’t integrated in schools either.” But I know in some of your subsequent work you looked at post-integration, post IDEA and other elements, and if I’m right, if I’m remembering this correctly, the general pattern still holds. 

Ben Scafidi: Yes. I actually call it the modern staffing surge after 1992, because I agree with everything you said. Public schools needed to hire more staff in the ’50s, ’60s, and ’70s to accommodate the integration of special needs students into the public school system. Before 1970, special needs students were largely excluded. Also, when public schools were racially integrated, we needed more staff because African American schools during the era of segregation were given almost no taxpayer funds, so that was needed. And so in my work, I’ve always said we really should focus on the post-1992 period, because that is well after all of that integration. But like you said, the pattern still holds. While it’s not quite as dramatic, we’re still adding more bodies in the public school system, more than what is needed to accommodate growth in students. 

Mike McShane: And you used the term opportunity cost, which is a fantastic way of thinking about all of this. Can you give listeners some ballpark? When we talk about all of these people that we hired, if let’s say growth of non-teaching staff and teaching staff had basically just sort of kept pace with student growth post ’92, what are we talking about here? How much money are we talking about? Or maybe what’s equivalent? Like instead of hiring all of these people, we could have done something else with that money. I think just to give people a sense of the scale of all of this. 

Ben Scafidi: Yeah, that’s a great point you make, Mike. And in my prior work, what I showed was that if the staffing surge had not occurred and we had only increased staffing after 1992 at the same rate as the growth in students, we could give every teacher like a $14,000 raise. That is a big deal, because teacher salaries have been largely flat in this country over the last 25 or so years. So think about all the money that we could have been giving to teachers, but instead we use that money to hire more and more bodies outside the classroom. 

Mike McShane: Yeah, and I think that’s a really important point, because in those earlier papers you do sort of disaggregate, you talk about we have as a baseline, this is the growth in students, and you also have the growth in teachers and then the growth in non-teaching staff. And the growth in non-teaching staff is much faster, but even so, the growth in teachers outpaces the growth in students. And so yeah, that’s kind of an interesting sort of pitch where we had, do we want to pay teachers more or do we want to have smaller class sizes? And it seems like overwhelmingly the choice was we want smaller class sizes, but as a result we’re paying teachers less.  

Ben Scafidi: Yeah, we did go with smaller class sizes, and I think researchers and policymakers knew that was going on in real time, because everyone seemed to be in favor of that. Parents wanted it, interest groups, teachers unions wanted it. And so this country, we did that. We decreased class sizes, but that had an opportunity cost on teacher salaries. But what I think people didn’t know until I did this work for EdChoice was the tremendous growth in non-teaching staff was far and above the increase in teachers. 

Mike McShane: So, now let’s talk about your most recent paper, because I think one of the interesting contributions that it makes is it asks that essential question that all social scientists have to ask, which is compared to what? So in your previous work, you sort of compared the growth of teaching and non-teaching staff compared to student growth and said is it growing faster, is it growing slower? What I think is interesting about this paper is that you choose to compare the growth in teaching and non-teaching staff to other municipal employees to say like, “Oh, is this just something that’s happening in education? Maybe this was a government hiring bonanza and schools were just part of it.” So, let’s do that, compared to what? So, how does the growth in education employment compare to employment in other government sectors? 

Ben Scafidi: Yeah, I really break it down into three sectors. K–12 public schools, public higher education, and the third sector is all other state and local government functions. Everything from highways, to corrections, to police, sewer and water, et cetera. And so I have those three sectors. And I should note that the data I’m using is from the U.S. Census Bureau, and they do not count charter schools in their analysis that are separate from their district. So if a charter school is, let’s say, approved by a state government, they’re their own district, but they’re not counted by the Census Bureau. So these are district public schools and charter schools that were approved by their districts. So, it’s been well known among state legislators for at least a couple of decades that, oh, public universities and public colleges, they’re just adding administrators, they’re adding staff above what was needed to accommodate enrollment growth. 

And what I found was, from 1994 to 2022, there was something to that. The number of public higher education students in this country increased about 25% and the number of public higher education staff increased about 36%, so 11 percentage points more growth in employment in public higher education relative to the growth in students. So, that was a modest staffing surge, but that has been on the radar of state policymakers for at least 20 years. K–12 public schools, the staffing surge was much more dramatic. Over the same time period, 1994 to 2022, public school students, again in district public schools, increased only 7.5% over this time period. But the number of public school staff increased almost five times as much. While the number of students went up 7.5%, the number of public school staff went up over 35%. That’s a tremendous staffing surge, again, on top of the decades-long staffing surge in public schools that preceded that. So, while we’ve been focused on the higher ed staffing surge, the K–12 public school staffing surge was much bigger. 

Mike, you brought up earlier that I had been thinking about this issue for 10 years or so. It actually started exactly 20 years ago. I was Education Advisor to the Georgia Governor, and the teachers groups would come in to see me in my office at the State Capitol and they would be very angry and say, “Why are K–12 public schools always at the back of the line? Why are we not a priority?” And you see this in every single state. For decades, public school leaders, teachers unions, researchers, advocates for public schools always say, “Why aren’t we making children a priority? Why are our public schools not a priority?” And what I think this report shows is they are the priority. That is just exactly backwards. 

In the report, I have two quotes. Honestly, I just Googled it, “K–12 is not a priority,” and I just picked the first two, and one was a 2023 report from a think tank in Kentucky and they said K–12 public schools are no longer a priority. And I said, “Well, they’re no longer a priority? Well, in Kentucky, they’ve only increased students 2% in public schools, but public school staff have gone up 29% from 1994 to 2022. How is that not a priority?” And then in all other state and local government population went up 22%, the staff only went up about 10%. 

So, of course they’re the main priority, but then this think tank says, “We’re not the priority, K–12 public schools.” And then I quote a former governor of your state, Missouri, and he said, “The legislature doesn’t make K–12 a priority.” Same story, right? They are the priority. And so I knew that was ridiculous in 2003 when I heard it, because I can read numbers, but I think a lot of people are under this false belief because, again, they just repeat it over and over and over that public schools aren’t a priority when they are the main priority. 

Mike McShane: And I think it’s also much bigger than other municipal employees, or other just like state employees as well, that even though we’ve seen larger population growth, I mean that’s the one that sort of reverses it. So I think you have public K–12 students grew at 7.5% versus 35.6% for public school staff. Higher ed, sure, it grew at 35.8% of staff, but students grew at 25.5%. But interestingly, with the government employees, while resident populations grew 32.3%, other state and local government staff only grew 11.6%. 

So, I don’t know, is there a political economy? Do you have any sort of explanation, hypothesis, guess, whatever? It’s just a podcast, which I think we’ve learned people can say pretty much anything they want to on these things and it’s fine. I don’t know if there’s some loophole or whatever. But as you look at these numbers and especially the differences between sectors, do you have an explanation for that, or what do you think happened? 

Ben Scafidi: Well, let’s back up. Earlier you brought up the concept of opportunity costs, and in my prior work, the opportunity cost I looked at was we could have used this K–12 public school staffing surge money to pay teachers more. Here, I show a big opportunity cost is all other state and local government outside of public education and public higher education, staffing has not even come close to keeping up with the increase in the populations they serve. Like you said, populations went up by almost a third in this country from 1994 to 2022, but all other state and local government staff only went up 11.6%. And so what I showed in the report is that some functions actually had declines in municipal employment and state employment while their populations were growing. 

Now, why is this going on? I have a couple of theories. I’m very careful in the paper to say we need to study this more, and I think people aren’t really aware of this and we do need to study it more. But one theory is welfare reform in 1996. That likely lessened the need for caseworkers for transfer programs to low-income Americans. Another one is criminal justice reform. There’s less need for corrections staff. Other things were there was more privatization, like instead of having the government pick up your garbage every week, like where I live, we have a choice of private sector haulers. We’re required to have garbage pickup, but it’s a free market and we get to pick which hauler we want, so those are not government employees. 

So, I think the combination of welfare reform, criminal justice reform, and just privatization has led to this tremendous, you could say staffing retreat, among other state and local government functions. Now, is all of that retreat warranted? Probably not. And I think state officials and researchers need to look into this and look at various functions and say, “Are we having enough employees in these other areas?” But again, taxpayers are only going to pay so much money. They get angry and no one wants to pay higher taxes. And so if we’re putting all of our tax money into K–12 district public schools, that’s less money for these other functions. 

Mike McShane: So now, you also look at this across states. Did anything stand out to you? Like there were certain states that really caught your attention? Did you see any patterns or see anything with respect to state-by-state variation? 

Ben Scafidi: Yeah, Connecticut had the biggest public school staffing surge. Their student population from 1994 to 2022 only increased by a half a percentage point, less than 1%, but their public school staff increased almost 51%. So, like a hundred times the increase in staff as the increase in students. That’s silly. And I triple-checked that. But other states have big ones like that too, but what was interesting is the population of Connecticut increased 14%, but all other state and local government staff outside of K–12 schools, outside of higher ed, that decreased 10% while the population was increased 14%. So, that’s just silly. 

Another state that’s interesting is New Hampshire. Their public schools in the state of New Hampshire, they saw a decrease of students by 11.2%, but their staffing increase by 55%. So, they had this dramatic increase in staffing to serve fewer students. And again, their employment growth in all other state and local government didn’t come close to keeping up with their growth in population. 

Mike McShane: Yeah, and it looks like states like New York, Ohio, Pennsylvania had similar trends, where you saw in some cases rather substantial losses in student population, but still substantial. Not necessarily to that degree of growth, but still pretty strong growth. I think I see in this report New York lost 13% of its students, but its education employment grew 26.5%, and Ohio, they lost about 13.5%, and yet education staff grew 26.7%. So yeah, definitely seeing that in lots of different places. 

Ben Scafidi: Well, Mike, let me pick up on that. 22 states saw enrollment declines in their K–12 district schools during this time period, but 19 of those 22 states increased staffing, so they had more employees to serve fewer students. 

Mike McShane: So, is there some sort of fiscal reckoning coming? Do you see this, is this a sustainable, is this something we’re just going to continue to perpetuity? It seems like there were some states, like Michigan, it looks like they both lost students but also decreased their numbers of education staff, and that would seem to think they’ve been on some rough financial times, so I don’t know if there was a point where the rubber met the road, where it’s like, “Hey, we can’t just continue adding and adding staff even when we’re losing students.” Or does this just keep going, the taxpayers will continue to foot the bill for this, as long as they can keep getting people to vote for it, they will? Is there some sort of reckoning to come? 

Ben Scafidi: The famous economist, Herbert Stein, the father of Ben Stein, has this famous quote, it said, “Something will go on until it can’t anymore.” And I think you’re right, at some point, states aren’t going to have enough money to spend on district public schools. And as I pointed out in previous reports, I wouldn’t care so much about the staffing surge in K–12 public schools if we had this big return in student achievement, but we don’t seem to be getting that. Student achievement seems to be pretty stagnant over many decades, and so it seems like we’re investing all this taxpayer money but not getting a return, and that’s why I think this is worrisome, and so I think we need to look to alternatives to the current K–12 public school system. 

But if you look later in the report, there’s all these declines in lots of state and local government functions that I think are worrisome, like highways. We have 11.4% fewer highway employees between 1994 and 2022. We have more and more cars on the road, more and more population, and traffic is getting worse. That doesn’t seem like a good thing. And then natural resource employment. People care about the environment, especially at the state and local level where like in Flint, Michigan, you want your water tested, right? I want my water tested, but natural resource employees are down 6% even though the population went up by almost a third. So I mean, it’s just what are your priorities? 

Mike McShane: Well, the other word, I’m channeling our colleague and friend Marty Lueken on this, but the other thing that just keeps coming up to me is the word pensions. That if we’re seeing declining student populations but increasing adult populations, yes, we see costs in the immediate term when we’re paying salaries and healthcare benefits and all the things that are related to that, but these are also creating long-term liabilities, that if current trends continue, that’s a cost that we may not see for 20 or 30 years, but if we have a dramatically smaller student population or even a somewhat smaller student population and a huge pool of retirees that are created out of that, that just continues to sort of put the squeeze. 

And I think, look, we see this in states, right? If you look in Illinois or Rhode Island or states that have really suffered under these pension burdens, if you look at their budget pie over this time period, you just see that pension slice getting bigger and all of this stuff, K–12 included, but especially in some of these other areas that you talk about, just continuing to get squeezed. That seems to me to be an implication of your paper. Do you agree? Am I wrong, or what do you think? 

Ben Scafidi: No, no, no, you’re exactly right. It’s actually worse than what you’re saying. Marty Lueken, the great Marty Lueken at EdChoice, he and I were talking a few years ago and we called it a double whammy. When you’re adding more and more bodies to the K–12 public school system above what’s needed to accommodate enrollment growth, that’s money to hire all those folks that can’t be used to pay down pension debt, but then you’re putting them into a pension system that’s already underfunded. So it’s like a double whammy to the pension system. Not only you’re not using that money to help the problem now, you’re making the problem even worse in the future. And so Marty has done excellent think on the pension problems, but this staffing surge just makes it worse. 

Mike McShane: Okay, so this has been a lot of doom and gloom, and I think that both you and I dispositionally are not necessarily doom and gloom people. So, if we want to end on a higher note, is there anything that you saw in this that was encouraging? Were there some states that were being responsible? Is there anything? Pull me out of the sadness of what I’ve taken away from your paper in the last 25 minutes or so. 

Ben Scafidi: Now, I think if you look at the staffing retreat in other state and local government, a lot of that might be productivity increases. And so maybe we don’t need more staff in a lot of these areas and maybe governors and state legislators and mayors and city councils and county commissions, et cetera, maybe they’re doing a good job of being good stewards of the taxpayer resources. The old Tiebout model, right? People can vote with their feet and move to communities that have efficient governments and are spending money wisely. Maybe that’s what’s going on, is people are moving to places that have efficient governments, and so we don’t need all these extra staff at that level. So I think, again, I think people need to do a lot more research into this area, not only policymakers, but also researchers. 

Mike McShane: Well, everyone listening, Ben’s paper is entitled Priorities of State and Local Governments From 1994 to 2022. Ben, thank you so much for being on the podcast today. 

Ben Scafidi: Thanks, Mike. Thanks for having me. 

Mike McShane: And as always, folks, you can check out our website, www.edchoice.org. You can find Ben’s paper and a whole lot of other interesting stuff. Please subscribe to our podcast. You’ll get interviews like this one with fascinating, interesting, helpful researchers, our politics roundups, our polling roundups, all of that cool stuff, interviews with educational entrepreneurs and school leaders, all of those things. Please sign up. And as always, I have to thank our wonderful podcast producer Jacob Vinson, who edits all of this stuff together and makes us sound wonderful, and thank all of you for listening to another edition of EdChoice Chats.