Hardly a minute has gone by without the media sounding off about President-elect Donald Trump’s cabinet nominations. However, one department has garnered more attention than others: the Department of Education).
Trump has stated that eliminating the Department of Education and devolving governance of education to the states would be one of the first actions of his second administration, and his choice for secretary, Linda McMahon, may or may not share Trump’s goal. The Heritage Foundation’s Project 2025 has also called for the elimination of the Department of Education
This alarms leaders of teacher advocacy organizations. The president of American Federation of Teachers (AFT)—the second largest teacher’s union in the country—stated, “Donald Trump and Republican elected officials have said they want to eliminate the Department of Education, which oversees programs that invest in low-income schools and help fund education for students with disabilities, but if they listen to what the voters have said, they will work to strengthen public schools, not dismantle them.”
Given Trump’s comments, the AFT has good reason to fear the incoming administration. If the Department of Education is eliminated, then the stranglehold teacher unions have on education policy would be greatly diminished. This reform promises significant benefits.
William Fischel, in his seminal paper entitled, “Homevoters, Municipal Corporate Governance, and the Benefit View of the Property Tax,” highlights the fact that centralization in public school funding has led to worse education outcomes. Why? Fischel states:
“Local funding provides a benefit-cost discipline on local voters who own homes in the district. Consider a local superintendent’s proposal to improve schools by adding more teachers. Under local property tax funding, this has a positive and a negative effect on voters. If the additional teachers raise the quality of education, home values will rise, which pleases most homeowners in the same way that capital gains please stockholders. But the additional need for funds will raise property taxes, and it is widely established that higher taxes will reduce home values. Thus local voters have an incentive to adopt cost-effective school measures, which makes their schools more efficient.”
This same effect is not felt at the state level. Fischel explains:
“State officials cannot rely on the housing market to guide them. Capitalization of the net benefits of school spending in home values, which guides (at least in part) local officials, does little to influence state officials. States are too large for the statewide housing market to give much systematic evidence about school quality compared to other states. Homeowners seldom search for homes among states like they do among the scores of local governments that characterize most metropolitan areas.”
Fischel further argues that childless voters are less inclined to care about state-level school policy because “as long as they own homes that they can sell to someone with school-age children, childless voters are interested in the quality of schools and other local public goods…at the state level, this interest is nearly zero.”
But if the state governments do not serve the interests of homeowners, then whom do they serve?
Fischel answers:
“Teachers’ unions displace homeowners as the most influential group at the state level. Unions may be effective in raising average spending per pupil, but at the same time they make that spending less efficient by insisting on work rules that they would not be able to obtain at the local level. Local boards have to deal with the union, too, but its influence is mitigated in most districts by the fact that local voters, who are mostly homeowners, monitor the board’s spending more closely. At the state level, homeowners are far less influential because state spending affects home values much less than local spending.”
Economist Ludwig von Mises made a similar argument with public enterprises in his treatise Human Action. Mises writes:
“These publicly-owned and operated enterprises are subject to the sovereignty of the market. They must fit themselves, as buyers of raw materials, equipment, and labor, and as sellers of goods and services, into the scheme of the market economy. They are subject to the laws of the market and thereby depend on the consumers who may or may not patronize them.”
Under municipal funding, the patrons of public schools are the local voters. However, as local funding is displaced by federal funding, schools become increasingly beholden to the interests of a new patron: teacher unions. The cost of local voters discovering the best policy and organizing to assert their preferences is too high. Teachers unions have a vested interest in cost-ineffective education policy and possess the organizational structure to assert their interests.
If this effect is so disastrous on the state level as Fischel argues, then the same is true at the national level.
When the power of regulating and funding schools coalesces at the federal level, the natural consequence is that national teacher unions become more influential. They will support more funding for education while also pushing for rules that require less out of teachers. The result? Worse educational outcomes per dollar of funding.
Education needs more local discipline. Decentralization would accomplish this—making school boards more responsive to the demands of local homeowners while also making the policies demanded more cost-effective. This might reverse the feeling of uneasiness people have with education policies.
Decentralization is ultimately what Trump supports by advocating for the elimination of the Department of Education. Eliminating this federal department will create an environment in which voters and public officials are incentivized to adopt policies that improve educational outcomes. Therefore, advocates for education reform must urge Trump to fulfill this promise and resist the fear-mongering tactics of teacher unions.
