California's public schools continue to lay-off teachers, and the process by which they do this is as convoluted and illogical as one would expect in a bureaucratic system in which the needs of the students falls fairly low on the list of priorities. That's my take-away from a new report by the state's Legislative Analyst's Office detailing the teacher lay-off process as districts struggle with declining revenue in the face of shrinking budgets.

The big issue, however, isn't the arcane process of laying-off teachers, but what the system says about the inefficient way that Americans have decided to educate their kids. As the LAO reports, decisions about who stays and who goes are based on which teachers have showed up to work for the most years—i.e., seniority—rather than which ones are most effective and energetic. The hearing and appeals process, by which every laid off teacher gets an automatic hearing, adds enormous costs to a system that always claims to lack enough resources.

The LAO report only looked at one small, technical aspect of the public-school behemoth and was meant to offer a little advice for tweaking the lay-off process. It wasn't meant to provide a thorough analysis of school systems. But in some ways, that's what is so frightening about the report. Americans don't think twice about the way schools are designed. Few things are more important than educating children, yet we accept this current system the way Soviet citizens accepted long bread lines. No doubt, auditors in that system issued reports discussing ways to shorten the lines.

Don't include me in the chorus of those who claim that the schools are somehow "under-funded," even as K-14 education consumes more than 40 percent of California's general fund budget—not to mention all the local bond measures and federal funding. Usually, budget "cuts" in districts refer to the reduction in predicted rate of growth, not actual cuts. One of the nation's worst-performing systems, Los Angeles Unified School District, spends more than $29,000 per student each year, when all funding sources are included, according to a Cato Institute report. Its graduation rate of only 40 percent is appalling. LAUSD is particularly bad, but it isn't run that differently than your average suburban district.

Consider the LAO's chart of a declining teacher workforce over the past few years against this report in the Los Angeles Daily News from 2008: "[A] Daily News review of salaries and staffing shows LAUSD's bureaucracy ballooned by nearly 20 percent from 2001 to 2007. Over the same period, 500 teaching positions were cut and enrollment dropped by 6 percent. The district has approximately 4,000 administrators, managers and other nonschool-based employees—not including clerks and office workers—whose average annual salary is about $95,000."

Now consider this tidbit from the Sacramento Bee in June: "The number of educators receiving $100,000-plus annual pensions jumped 650 percent from 2005 to 2011, going from 700 to 5,400, according to a Bee review of data from the California State Teachers' Retirement System." Here's a Los Angeles Times headline from October: "California teachers lack the resources and time to teach science."

Is this an issue of money or spending priorities?

Instead of focusing on the little things, Californians ought to be thinking big thoughts about education. We can start by asking this question: Is the public education system one that best serves the students? The answer, even for people whose kids attend decent schools is, "Obviously not."

There's an endless call for reform. Some ideas are useful. For instance, vouchers, which let people take a portion of their school tax dollars and spend them at the school of their choice, or charter schools, which are government-controlled schools freed from some of the government-imposed red tape, offer some hope because they provide some level of competition. But I'm not calling for specific reforms here, but arguing instead for readers to conduct a thought experiment.

If we were tasked with providing an important service, how would we provide it? If, say, we were asked to create the best-possible chain of restaurants to serve hungry customers, would we buy a huge building, hire scores of extremely well-paid administrators and then impose a tax on local residents to fund the chain? Would we let a board of directors, elected from the community, choose the décor, the menu and the locations?

Would we empower a union to make hiring decisions and allow it to grant tenure to waiters and kitchen help, so that we could not fire them even if they were lazy and incompetent? Would we pay the most money to people who worked there the longest rather than to those who were the best workers?

When customers complained that we served too much meat and not enough pizza, would we shrug and ask them to elect board members who preferred pepperoni to cheeseburgers?

Would we pass laws mandating that people who live in neighborhoods near our restaurants eat there only—allowing them to eat elsewhere if they spend additional money or move to the neighborhood where the restaurant more closely meets their taste? Would we ignore the pleas of people who live near filthy restaurants that serve lousy food just because we live near one that at least keeps a clean kitchen and offers adequate meal choices?

Other observers have made similar analogies, and school officials always claim that schooling somehow is different. But it isn't.

Instead of tinkering around the edges and endlessly fighting for reforms that offer little hope of transforming the system, we need to redesign it from the ground up. Perhaps we should, in the words of the late reformer Marshall Fritz, "separate school and state" and allow the market to provide schools just as we allow it to provide food and other vital services.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity.