Study: LA Fails the ‘Efficient Spending of Taxpayer Money’ Test … Would You Believe, Ranked 55th

HERE’S WHAT I KNOW-The consumer financial site WalletHub has released a study assessing how efficiently some of America’s largest urban centers apply taxpayer money on key expenditures and LA is at the bottom of the list. WalletHub analysts compared 78 cities for Return of Investment (ROI) on Adjusted Education, Adjusted Law Enforcement, and Parks & Recreation ROI. LA ranked at 55. 

How did the analysts come up with the ranking? The Adjusted Education and Law Enforcement ROI metrics were based on previous studies. Both categories were adjusted for statistics like poverty and unemployment rates. The education ROI scores also took into account single parent households and families where English is a second language. Parks & Recreation ROI was assessed by dividing “Total Parkland Acreage within City Limits” by “Total Parks & Recreation Expenditures.” 

LA scored a respectable 14 on Parks & Rec ROI. Houston ranked #1. Education and Law Enforcement didn’t fare nearly as well. 

Why did LA miss the grade on education and law enforcement? WalletHub analyst Jill Gonzalez explains, “Los Angeles is spending a lot of money on education, $1,801 per capita, but the average percentage of students who scored at or above passing level is quite low at just 42.73% (reading and math, standardized tests – 8^th grade.) Thus, the taxpayers’ dollars are not being spent efficiently.” 

Gonzalez adds, “The same can be said of police spending. Los Angeles has a lower crime rate than several other cities, but the city is also spending a lot more money to reach it, at $594 per capita." 

Spending alone may not directly correlate to improved test scores or low crime rates, as there are additional variables. However, Gonzalez notes, “The public spending efficiency impacts the quality of life in a city, as it shows what type of services it offers in return for higher or lower tax rates. Generally, residents are happier with their tax rate if they feel they’re receiving quality services in return.” 

What are some practices in the cities that perform better in education and law enforcement spending? “Cities that perform well in education and law enforcement have low expenditures per capita, high percentages of students completing standardized tests while maintaining a low dropout rate, and low crime rates." 

While Los Angeles may have a way to go in terms of improving the ROI on public schools and law enforcement, we can be happy with the Parks & Rec. LA ranks way above Sacramento (60), San Francisco (62), and Las Vegas (60.) 

See more at WalletHub’s 2016 Cities with the Most Efficient Spending. 

(Beth Cone Kramer is a successful Los Angeles writer and a columnist for CityWatch.) Prepped for CityWatch by Linda Abrams.