Fiscal conservatives often smile when liberals talk of government spending as “investment.” To those conservatives, investment is just a positive euphemism for loose spending that leads to higher taxes.
That philosophy is one reason that the Republican-led General Assembly has choked state spending. Current state spending in inflation-adjusted dollars is almost 6 percent less than it was in 2008, according to budget watchers at the N.C. Justice Center.
But now comes a Wake County schools study that shows public spending on education is a form of investment that yields a healthy return. And that result indirectly raises questions about just how much taxpayers are losing under the state’s policy of keeping government spending well below its historic share of the state economy.
In Wake, a study by N.C. State University economist Michael Walden sought to determine the overall economic impact a growing school district, the state’s largest, has on the local economy. The study, partially funded by the school system, found that increased spending for quality schools boosts the local economy.
Never miss a local story.
And Walden is not an ideologue. He is an experienced teacher and researcher whose opinion is sought by lawmakers, for example, of all political persuasions.
The study’s findings shouldn’t be a surprise, but for skeptics, here goes: The school district has a $1.4 billion operating budget and a $1 billion school construction program. The district employs 18,000 people – that’s people who buy houses and cars and groceries and clothes and stimulate the local economy, benefiting merchants.
The district has 157,180 students, whose families put time, energy and money into the schools. The study projected that the district’s operating budget stirs $1.6 billion a year in spending in the local economy. The district’s capital spending – construction and related expenses – generated $1.1 billion in the local economy, and that money is directly associated with jobs created.
Walden went deeper: There are economic benefits, his study notes, from a good school system that improves the academic performance of students. Students who gain high school diplomas make $1.6 billion in additional income over their lifetimes. Those successful graduates save the county money on public assistance spending, crime and health care expense, and because they have more money to spend, they also boost property values.
This study demonstrates what enlightened public officials know: Investment in education is a dividend-producer, not some kind of drain on the treasury.