Are Dunwoody parents interested in education or economics in proposal to flee DeKalb schools?

By Maureen Downey (AJC.com)

Jeffrey Dorfman is a professor of applied economics at the University of Georgia. Here is an interesting piece he wrote on the economics of Dunwoody breaking away from DeKalb and forming its own school system. (Such a move would require a statewide referendum to change the state constitution.)

That topic is likely to come up Sunday night when interim DeKalb school chief Michael Thurmond meets with the Dunwoody Homeowners Association.

By Jeffrey H. Dorfman
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 that 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 Georgia Legislature to help them accomplish their stated goal. While the Legislature considers whether to help, they should consider the more important question: what is the real motivation of the Dunwoody parents?

Dunwoody 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 any concern over the education the kids receive. The recent removal of six board members by the governor and the appointment of Michael Thurmond as interim superintendent should reassure the concerned parents of Dunwoody. 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 the DeKalb County 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 within the DeKalb County School District who live in Dunwoody, but census data suggests there are probably about 7,200. The school district has over 97,000 students, so Dunwoody makes up only between 7 and 8 percent of the children in the district.

According to the county property tax digests Dunwoody is a high-value region of the county, containing about 15 percent of the property value within the county school district. That is, Dunwoody is paying about twice the share of school property taxes as the share of students that they send to those schools.

DeKalb County 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 their own school district and save a lot on school property taxes. In fact, the owner of a $200,000 house might save over $800 per year in property taxes.

This column is also not meant to ascribe hidden motives to the Dunwoody parents who are 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.