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Todd Greco: Schools aren’t businesses; budget cuts often hollow out programs
Summary
In a brief school finance lesson, Todd Greco argued that public schools lack a profit motive and have many fixed costs — staffing, buses, debt service and mandates — so budget reductions typically reduce extracurriculars and advanced programs before they affect core classroom needs.
Todd Greco delivered a short school finance lesson explaining why public schools cannot be managed like private businesses and why budget reductions tend to erode program offerings rather than proportionally reduce staffing.
Greco opened by saying he often hears people assume schools can simply trim expenses the way businesses do. “Schools are not businesses. We don't have a profit motive,” he said, and that difference is the number-one reason schools don’t respond to revenue declines the way a restaurant or shop would.
He used a restaurant example to illustrate the point: a restaurant with fewer customers can cut variable costs by sending staff home, but schools have many fixed obligations. Greco listed examples: classrooms need teachers regardless of whether 10 or 30 students attend; bus routes must run; transportation is provided for students who live two miles or more from school; and districts must meet debt service, heat and electricity bills.
Greco said state and federal mandates add further constraints on how districts can alter services. As funding is reduced, he said, districts typically protect core instruction first while extracurriculars, electives, athletics and advanced programs such as AP offerings are cut. “As cuts start to be impacted … the result is a hollowed-out program,” he said, arguing that students on the far right of his illustration receive an education “less than what they deserve.”
He closed by directing listeners to the Dodge Exchange for additional information about referenda and local school finance matters and wished viewers a good night.
The presentation focused on structural differences between public education funding and private-sector budgeting and did not include motions, votes, or explicit policy proposals.
