A local educational and political issue is brewing in metro Atlanta that provides a great example of the inherent dangers of complicated schemes designed to avoid charging the customer for a service.
Government loves to construct mechanisms so that some people get the service free, some at a discount, and others pay much more to make up the difference. Public education is a prime example of such free lunch programs as nobody pays directly; instead we all pay taxes that are used to fund education, but the level of taxes paid is unrelated to the number of children a family has in school.
With the DeKalb County schools suffering through a rough patch thanks to board dysfunction, a movement has taken shape to create an independent school district in the city of Dunwoody. While Georgia has a number of cities with independent school districts (Atlanta, for example), the state has capped the creation of new public school districts. Dunwoody needs the state Legislature to help it accomplish its stated goal. While the Legislature considers whether to help, it should consider the more important question: What is the real motivation of Dunwoody parents?
The parents say they are worried about educational quality, but all the DeKalb County School District’s problems with accreditation are related to the behavior of the school board, not concern over the education the kids receive. The recent removal of six board members by the governor and the appointment of a new board and Michael Thurmond as interim superintendent should reassure the parents. Certainly, those actions should buy the district some time while the Southern Association of Colleges and Schools considers the fate of the district in light of these concrete steps to address the problems with the board.
Numerous parents have shown up for meetings and taken advantage of opportunities to express their concern about DeKalb schools. Why would the parents in Dunwoody be the ones who are interested in forming their own district? Well, since I am an economist, I naturally look for an economic reason.
There is no public data on the number of students in the DeKalb County School District who live in Dunwoody, but census data suggests there are probably about 7,200. The school district has more than 97,000 students, so Dunwoody makes up only between 7 and 8 percent of the children in the district.
According to county property tax digests, Dunwoody is a high-value region, containing about 15 percent of the school district’s property value. That is, Dunwoody is paying about twice the share of school property taxes as the share of students it sends to those schools.
DeKalb schools levy a property tax at the rate of 23.98 mills (dollars per thousand of assessed property) to cover their spending of almost $4,400 per student of local dollars (out of $9,400 total spending per student).
To raise the same $4,400, a Dunwoody school district would only need a millage rate of 12.5. It appears that Dunwoody could form its own school district and save a lot on school property taxes. In fact, the owner of a $200,000 house might save more than $800 per year.
This column is not meant to ascribe hidden motives to Dunwoody parents working to create their own school district. The fact that Dunwoody property owners might save a lot of money if they got their own school district does not mean that is their motivation. However, I suspect it has occurred to some of them.
The more important lesson here is that as long as our society continues to construct schemes by which we finance things in ways that ask some to pay a lot while others pay a little (or nothing), there will be resistance. People getting the free lunch are happy, but those stuck with the bill will seek a fairer system in which they pay for what they get, but not for what others get as well.
