Taxpayers are paying for the schools, the schools do contribute to the economy in a big way, but are also massive externalities on the communities. Perhaps by scaling back a big on admin and other costs the people will get a better bang for their buck -- as well as having their own kids gain the instruction.
I am not sure why state schools exist if not to teach the state students, esp. if taxpayers have to fund them. Is it strictly a jobs program then, to feed local profs, staff, restaurants and so therefore they have a duty to the taxpayer to just bring in the most income?