Real World Economics: Econ 101 explains district budgeting dilemmas

The St. Paul Public School District’s need to close a projected $100 million deficit for the coming year, discussed in recent weeks, is not unique. Similar situations prevail for school districts large and small across the state. Moreover, the same underlying problem is hitting many other institutions, including churches, scout troops and American Legion posts. The phenomenon is more than nationwide. Other industrialized countries face it as well, especially in Europe. For economics teachers, it illustrates at least two important introductory principles, plus several others. One is “age structure of...