The Power to Destroy

By Doug French
  • Monday, January 27, 2003

In his famous McCulloch vs. Maryland decision, Supreme Court Chief Justice John Marshall wrote, “The power to tax involves the power to destroy.” Today, over 180 years after those words were written, Governor Kenny Guinn stands ready to use the power of taxation to destroy thousands of Nevadans’ jobs and livelihoods. Guinn and his tax-increase panel believe that $1.1 billion (some days it’s more, some days it’s less) is needed to balance the state’s budget, while maintaining the existing level of state services.

But any conversation about the state budget quickly turns to the topic of K-12 education and the contention that more money is needed to pay teachers. Carlos Garcia, Clark County School District czar, wants the Gang of 63 to “dare to be average.” Garcia wants more money taken from Nevada taxpayers to raise education spending to an average of other states.

Ken Lange, of the Nevada State Education Association teacher union, asks, “What kind of Nevada do you want in 10 years?” What he, too, wants is more money for teachers. That will make his Nevada better, but not that of taxpayers. Political consultant/insider Pete Ernaut argues that “people will accept an increase in taxes…if they’re buying better education…”  

Does more taxpayer money for education mean that government’s education product will better? Not hardly. There are no reputable studies that support the argument that increased funding improves education. Washington, D.C. spends the most on public education per student and sports some of the worst test scores nationally. At the same time Utah and North Dakota, the two states that spend the least per student, have some of the highest test scores. Montana has the highest test scores, yet on spending is in the middle of the pack. Mississippi is dead last in test scores but in real terms spends a large amount per student, given the state’s low cost of living. If there is a correlation between spending and anything, it’s that the states spending the most on public education tend to have the highest cost of living. Thus, when teacher unions have political power, the cost of living tends to increase.

In private schools of course the per-pupil cost is much less than in public schools. As economist Llewellyn Rockwell explains, “The per-pupil cost of public schools averages $6,000, compared with $3,100 for private schools. In other words, all else being equal, we could abolish all public schools and the taxes that support them tomorrow, let the market replace them with private schools, and cut the total cost of education by nearly half.”

So private school teachers—seeing just half the spending of public schools—must be really unhappy, right? Not at all. In 1997 the National Center for Education Statistics concluded:

“Despite poorer pay, private school teachers as a group are more satisfied than public school teachers with their jobs. In the aggregate, private schools seem to offer a greater sense of community, greater teacher autonomy in the classroom, and more local influence over curriculum and important school policies. In addition, on average, private schools have a climate that would appear to be more conducive to learning, including greater safety and fewer problems caused by students having poor attitudes toward learning or negative interactions with teachers. Finally, private school students take more advanced courses than do public high school students. They also appear to follow a more rigorous academic program overall…”

So this idea that Nevada taxpayers will be happy to hand over more tax loot, because their kids’ education will then be so much better, is nonsense. What is certain is that it’s competition in the education business, not more money, that creates better student performance. As long as the state’s counties have local monopolies on K-12 education, the product will be inferior and overpriced—like any other monopoly-produced product.

At a minimum, the Clark and Washoe County school districts should be broken up so that competition between districts could develop, bringing down costs and improving the product. Parents who don’t like the schooling  their kids are getting could move into a better district. Plus, the annual cost savings from deconsolidating the districts could easily be in the hundreds of millions of dollars.

Tragically, Governor Guinn, the ex-superintendent of schools, wants to put hard-working Nevadans’ jobs at risk so he can throw more money down bloated, bureaucratic school district rat holes. Not only would his scheme leave Nevada’s children with the same substandard education. It could even leave their parents unemployed.

Doug French is executive vice president of a Southern Nevada bank and a policy fellow of the Nevada Policy Research Institute.

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