The three R's (recession, reform, and results)
October 29, 2008
Dreading the pinch of a tight economy on your state's budget? You're not alone. According to the Center on Budget & Policy Priorities, nearly every state experienced flat or declining revenues in the first half of 2008 compared to last year, and 39 states have developed "budget shortfalls"--gaps between expected revenue and planned expenditures.
Since virtually every state is constitutionally required to balance its books each year, large spending cuts in most states are a near-certainty--and with school spending making up such a large portion of most state budgets, reductions in k-12 education are almost inevitable. Six years ago, the last recession saw more than two-thirds of states cut funding for elementary and secondary schools.
What's an education reformer to do?
For starters, you can tuck away in the back of your drawer the innovative plan that requires billions in new spending. Recessions reward reformers prepared to cut--admittedly a rare breed.
Done right--and bravely--recession-induced budget cuts are an opportunity to leave a state's public education system stronger than before. Why? A recession can provide the political will to restructure education systems for the better.
Using facts and figures from Connecticut as an example, here are six ways that states and districts can save money by improving efficiency and effectiveness:
1. Let Money Follow the Child. Right now, many states are paying school districts to educate children no longer present in their schools. When children leave a district school to go to a charter or magnet school, much of the state funding for that child stays with the district--driving up per pupil costs and forcing the state to spend even more to support these schools of choice because they wind up paying for the same child twice. Those policies were born of political compromise but can die out of fiscal necessity.
2. Consolidate Small Districts. District boundaries are drawn for all sorts of reasons, but rarely for the purpose of boosting efficiency and improving performance. According the Boston Consulting Group, districts smaller than 1500 students result in significant inefficiencies that drive up costs without strengthening student outcomes. In Connecticut, 63 of 169 districts have fewer than 1500 students--the result of district boundaries based on town borders established more than two centuries ago. In many cases, basic district services are reinvented and replicated over and over again in a way that raises costs and potentially lowers quality. While not a short-term fix, consolidating large numbers of small districts could have a long-term impact on the bottom line.
3. Slash Overhead in Large Districts. While districts under 1500 students suffer from inefficient economies of scale, districts larger than 10000 students often suffer from too much overhead. Anyone who has spent time in a big school district could speedily identify ineffective contractors, poor purchasing decisions, and unnecessary staff. In times of economic health, it's often easier to work around these problems than tackle them head on. But when cuts have to be made, reformers are well positioned to make the case for eliminating positions with little impact on student achievement, canceling underperforming contracts, and devolving more responsibilities and control to the school level through site-based budgeting.
4. Right-Size Facilities and Staff for Declining Enrollment. As the first of the "Echo Boom" generation (the children of baby boomers) makes its way out of the school system, the growth in the number of public school students will slow nationally and enter the beginning of a two-decade long decline in more than a dozen states. Last year, the total number of Connecticut students enrolled in public schools declined for the first time in 20 years. Bridgeport saw the largest decline, a drop of 3 percent in one year. By 2020, the number of students in Connecticut public schools will be down 17 percent. Significant savings can be realized by accelerating the shedding of schools and staff no longer needed to serve this smaller student population. When done in conjunction with a results-based framework that makes performance the key driver in the decisions of who and what schools get cut, reductions can also help lift overall performance.
5. Upgrade Transportation. While staffing and facilities costs comprise the bulk of education spending, smaller items such as transportation can add considerable costs to the bottom line. Last year, for example, Connecticut spent $558 per pupil on transportation--about 5 percent of total education spending. One approach to reduce costs is simply to make effective bus-contract negotiation a higher priority by ensuring that every contract is put out for competitive bidding and facilitating multidistrict contracts to realize greater economies of scale. A higher-tech approach with the potential for even greater savings would take a page from FedEx and UPS--create highly sophisticated computerized busing routes to minimize fuel usage and maximize efficiency.
6. Remove Barriers to Teaching. Recessions are tough on budgets but great for recruitment. Those hard-to-find math and science teachers are about to get at least a little easier to attract as recent grads and mid-career professionals seek more reliable employers in a down market. Last year, Bridgeport made news with a new program to import math teachers from India to fill its recruiting shortfall. This year, it may find more takers just by walking the ivied corridors of Yale. You won't necessarily need special bonuses or a larger recruitment budget to take advantage of this counter-cyclical opportunity, but you will need to embrace alternative pathways to certification and nonprofit programs such as Teach For America and The New Teacher Project that make it easier for non-ed-school graduates to enter the classroom.
These changes are not only a necessary response to a downturn in state revenue, but sound reforms in their own right that will help ratchet up the return on our public education dollars. When applied with rigor, they may also save enough money to keep new investments alive and growing in an economic downturn, whether it's the new KIPP or Achievement First school you're trying to woo to town, an upgraded state data system to better track student performance, or the support programs needed to turn around failing schools. And when the economy recovers and tax revenues follow suit, you will be well positioned to build upon this new, leaner, more efficient education system that you helped create when times were tough.