At the Kansas Education blog, a post titled Is 65 Percent the Solution? examines some of the arguments and policy considerations surrounding the popular proposal that schools must spend at least 65 percent of their funds in the classroom.
Whatever that — “in the classroom” or on “instruction” — means. And that’s part of the point. Determining what counts as expenditures in the classroom versus (allegedly wasteful) administration is somewhat arbitrary.
Besides — and the post mentions this — markets provide a powerful incentive for firms to operate not only efficiently, but effectively, too.
I believe that market competition provides the incentive and imperative for firms to organize themselves in the way that will best meet the needs of their customers. Under market competition, it might turn out that in some cases, under some circumstances, it might be best for students if more was spent on administration and management. Laws that dictate how school funds should be spent would prevent this discovery from being made.
The public schools, isolated from competition, don’t face these incentives. They organize themselves based on their own needs rather than the needs of their customers. I don’t think there’s much way to change that except for schools to face market competition, and they resist that in every way.