New Mexico spends too much on administrators and not enough on teachers

Nov 11, 2017

Commentary: New Mexico spends plenty on public schools but the results have been abysmal. Now a new study by Think New Mexico—my favorite public policy think-tank—proposes a solution that may improve public education at little or no cost to the taxpayer.

One would naturally expect that an increase in funding would result in better school outcomes. But we have not seen this in New Mexico. In fact, public funding has increased from just under $4,000 during 1992-93 academic year to $9,400 in 2013-14. New Mexico currently ranks 35th among the 50 states in public spending per student.

Yet despite better funding, New Mexico’s school performance remains embarrassing bad. In 2015, we ranked 50th in graduation rates.

New Mexico experience isn’t unusual. In fact, there is little or no relationship between per student spending and educational outcomes. Vermont and Utah do very well, but Vermont spends a lot more. Maine and Mississippi spend about the same per student, but Maine has much better educational outcomes.

Amount does seem to matter but what does matter is how the funds are spent. The more money that makes it to the classroom, the better is educational outcomes. New Mexico does not do a good job here. We rank an abysmal 43rd nationally in terms of administrative costs, with 57% of our classroom budgets going to administration. That is, even with a substantial increase in funded, the same proportion of spending is going into administrators, not to the classroom. The increased funding is used to finance bureaucracy, not teaching.

Think New Mexico is recommending a fix, which is to set an enforceable minimum percentage for classroom spending. To achieve this will mean reducing costs. The good news is that there are savings to be had that will make lowering administrative costs more doable.

New Mexico ranks third nationally in the percentage of K-12 funding coming from the state, behind only Vermont and Hawaii. This is good news for poor districts that otherwise wouldn’t have adequate resources. But that state money comes with strings. One recent study found that New Mexico school districts spend 66% more on state level reporting than their peers in other states. Reducing this reporting the state level reporting burden would release a lot of money for the classroom.

There are other expenses to be cut. New Mexico ranks 11th in the category of operations and maintenance. We also rank high in administrative costs. Of course, specific categories of savings will vary by school district. Still there is fat to cut and cut we should, and the savings diverted to the classroom. Another category of spending is on lobbying and public relations.

School district efficiency tends to rise with size as fixed costs can be spread over more students. But on the other hand, large districts don’t necessarily have better learning outcomes. Small districts have advantages that larger district don’t share, like more homogenous populations, and better parent teacher cooperation.

Think New Mexico will be lobbying the legislature this session for its suggested changes. I hope they succeed.

Chrisopher A. Erickson, Ph.D., is a professor of economics at NMSU. His wife was a long time teacher with the LCPS. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at