School Finance

The Republican presidential field is beginning to take shape, and candidates and maybe-candidates are figuring out where they stand and what to say. Sooner or later, they will need to say something about education. May we suggest a few talking points? Or, better yet, a potential speech for a GOP candidate?

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[caption id="" align="alignright" width="250" caption="Photo by Josh Berglund 19"][/caption]

Folks, you know that our education system is tattered. Some of it is fine, but too much is mediocre or worse. Once the envy of the world, American schools are losing ground to those in Europe and Asia. Today, many countries are out-teaching, out-learning, and out-hustling our schools?????????and doing it for a fraction of the cost.

Meanwhile, failed education systems in our cities worsen the odds that the next generation will climb out of poverty into decent jobs and a shot at the American dream. And as much as many of us prefer not to notice, way too many of our suburban schools are just getting by. They may not be dropout factories, but they're not preparing anywhere near enough of their pupils to revive our economy, strengthen our...

Times are tight for school budgets, which is one reason Fordham and others have dedicated new attention and energy to doing more with less. Being conscious of cost-effectiveness is about more than pinching pennies, however; it also enables schools to get the very best quality for the dollars they spend on services.

Nathan Levenson, managing director of the District Management Council and a former district superintendent in Massachusetts, highlights this in an interview today with StudentsFirst, talking specifically about special education and early intervention:

I like to simplify this topic, and assert that only three things really matter in early intervention -- reading, reading, and reading. The stats are clear -- reading is the gateway to all other learning. Children who struggle in reading are over-referred to special education and often never catch up. This is especially sad, since we have "cracked the code" on how to teach reading. The National Reading Panel and the What Works Clearing House spell it out. Some districts feel they don't have enough money to implement a best practice reading program, but our studies have shown that typically it costs 1/2 to 1/5 as much as the current mish-mash of elementary support

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Only halfway through 2011, a number of states have reformed their laws governing public sector workers' benefits, a few of them in dramatic fashion. The need to close the yawning gap between promises made to workers and the dollars saved for them on states' balances sheets is evident. According to a recent analysis, the average household will have to pay $1,398 in additional taxes every year for the next 30 years to fund retiree benefits, with New Jersey taxpayers on the hook for $2,475 per year per household before that state's recent reforms.?Even more optimistic commentators recognize that the funding ratios reported by states themselves rely on rosy assumptions about investment returns that are not likely to be borne out in reality.?Consequently, states have begun to adjust contribution rates, close loopholes, and otherwise modify pension and retiree healthcare benefits.

It is worth noting that most of these reforms leave public-sector workers, especially those newly-hired, worse off. In many states, this is a necessary evil, with budgets straining and taxes being ratcheted ever higher. Some states have done better than others in making fundamental reforms to address the sustainability of workers' benefits without soaking new workers or taxpayers,...

While everyone is following New Jersey's public union bombshell vote, my friend E.J. McMahon of the Empire Center in Albany reports on a new maneuver by the New York State United Teachers to end run? the property tax cap being promoted by new Governor Andrew Cuomo.? ?As McMahon says, the cap is not even through the state legislature yet and NYSUT is trying to circumvent it:

An egregious fiscal abuse on its own terms, the bill (S.4067-A) would allow school districts across the state (except for New York City) to issue 15-year bonds to cover a portion of their rising teacher pension costs over the next several years ? at least $1 billion in all, by one estimate.? The measure was introduced two months ago at the behest of the New York State United Teachers (NYSUT) as a way of reducing pressure on teachers to make contract concessions.

The drama in Albany continues.

--Peter Meyer, Bernard Lee Schwartz Policy Fellow

As if the teachers unions need another reason to hate charter schools, here's one: The finding, from a new Fordham Institute report, that when given a chance to opt out of state pension systems, many charter schools take it. Furthermore, a fair number of these charters replace traditional pensions with nothing at all.

Why is this such a big deal? It's not just that unions will worry that charter schools are mistreating their teachers. More fundamentally, if charter schools continue to multiply, and they are allowed to opt out of state retirement systems, those systems will collapse under their own weight--an outcome the unions will fight to the death.

First some background. The new Fordham study, by Michael Podgursky and Amanda Olberg, examines six large states where charters are allowed to opt out of the traditional pension system. In a few of these states, including California and Louisiana, most charters stay in the system. (That's largely because teachers in those states don't participate in Social Security; see the report for an explanation about that.) But in other states, including...

South Carolina is in hot water with the Education Department over the state's failure to meet federal maintenance of effort requirements for special education spending. ED is threatening to dock South Carolina $111 million in federal aid after rejecting a waiver request. The Palmetto State has cut SPED support for three years running due to budgetary pressure.

Federal mandates are coming under attack across the board, often for good reason. Idaho has announced it will refuse to comply with NCLB ? not ask for a waiver ? while the Council of Chief State School Officers is planning to blitz Arne Duncan with waiver requests. In South Carolina's case, however, lawmakers felt they couldn't continue to privilege special education students over every other recipient of state dollars. The state could, of course, have made its case more compelling by matching spending cuts with an agenda of effectiveness in education services, possibly?following Massachusetts' example of outsourcing services to more cost-conscious providers.

The federal response ? that states should allow special education spending to balloon in a time of fiscal austerity when everyone else in the school system is pressured to be more efficient ? is senseless. Washington's...

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