School Finance

StudentsFirst has made a thoughtful contribution to the burgeoning literature on school governance with its new policy brief Change the Leadership, Change the Rules: Improving Schools and Districts through Mayoral and State Governance. In it, the group argues that school boards have been largely ineffective in urban areas and examines two main alternatives: mayoral control and state control—the latter preferably via the “recovery district” model. It’s a short and snappy synopsis.

The Brookings Institute’s Hamilton Project has produced another worthy read: Thirteen Economic Facts about Social Mobility and the Role of Education is organized around three theses: inequality is on the rise against a backdrop of low social mobility; the U.S. is experiencing a growing divide in educational investments and outcomes based on family income; and education and smart interventions can help—such as those outlined in Caroline Hoxby’s Expanding College Opportunities project and Ben Castleman’s Summer Melt study. While the facts themselves are not new, the report offers an accessible and logical assemblage. Dig in!

On Monday, Michigan governor Rick Snyder chose finance expert Jack Martin to succeed Roy Roberts as emergency manager of Detroit Public Schools (DPS). Martin enters the ring with four decades of private- and public-sector experience under his belt, including stints as CFO of the U.S. Department of Education and emergency manager of Highland Park Schools (another troubled school district in the Detroit metro area). What’s more, he is himself a DPS graduate. Martin is surely well credentialed and...

In 2011, Milwaukee Public Schools (MPS) faced a dramatic and painful increase in employee retirement costs, driven primarily by a sharp rise in the bill for retiree health insurance, a program covered by collective-bargaining agreements between the district and its unions. In March 2011, however, the nation watched as Governor Scott Walker signed into law the Wisconsin Budget Repair Bill, also known as Act 10. By limiting collective bargaining to wages only, this measure gave MPS the authority to modify its retiree health program, and the Badger State’s largest school system has since acted upon that authority.

How did this happen? How much will it save? What would Milwaukee’s costs have been without this repair? How durable is the reform? What difference does it make at the classroom level? And what lessons might other states and districts draw from this experience?

In Milwaukee: Saved by Act 10…For Now, authors Robert M. Costrell and Larry Maloney analyze and project the future retirement obligations in Milwaukee and illumine how retirement reform can help to solve the pension-funding problem.

In which Terry celebrates cheating (sort of)

Terry livens up the airwaves, bantering with Mike about NCTQ’s blockbuster report, the Blaine Amendment, and Philly’s budget woes. Amber waltzes through the dance of the lemons.

Amber's Research Minute

Strategic Involuntary Teacher Transfers and Teacher Performance: Examining Equity and Efficiency,” by Jason A. Grissom, Susanna Loeb, and Nathaniel Nakashima, NBER Working Paper No. 19108 (Cambridge, MA: National Bureau of Economic Research, June 2013).

GadflyNew York City’s graduation rate dipped very slightly in 2012—information that was hailed as a win by Mayor Bloomberg, given that the class of 2012 was the first cohort not given the option to graduate with an easier-to-obtain “local diploma.”

The United Federation of Teachers has announced its support for former city comptroller Bill Thompson’s bid for mayor of New York City—the union’s first endorsement in a mayoral election in more than a decade. But have no fear, ye other candidates—Mayor Bloomberg has derisively dubbed the union endorsement a “kiss of death” (to which the union responded by likening Bloomberg’s approval as “worse than a zombie attack”). And Gotham politics continue.

Earlier this week, New Hampshire Superior Court judge John Lewis bucked U.S. Supreme Court precedent and ruled that the state’s tax-credit-scholarship program directed public money to religious schools, in violation of the state constitution’s Blaine Amendment—a provision banning government aid to “sectarian” schools that has its roots in the anti-Catholic bigotry pervasive in the late 1800s. (Blaine Amendments still exist in thirty-six other states.) Judge Lewis’s ruling marks the first time a tax-credit-scholarship program has been struck down on these grounds. Previously, the U.S. Supreme Court had determined that tax-credit-scholarship money never reaches the state treasury and thus cannot be considered public. An appeal in the...

GadflyAccording to the Times, ability grouping is back, after being unfairly stigmatized in the late 1980s and 1990s by misguided ideologues. We hope it’s true, because such grouping enables teachers to tailor their instruction to individual students appropriately—and can be used to match learning styles as well as achievement levels. (Free speech endures at Fordham, however, and not everyone concurs.)

Following school-board squabbles and the subsequent implementation of a new but compromised governance structure (by which the county executive appoints the district CEO and three school-board members), the Prince George’s County public schools have a new board chairman: NEA Director of Teacher Quality Segun Eubanks. We know and respect Eubanks and wish him the best of luck—but can’t help but smirk. What a classic case of the union sitting on both sides of the negotiating table.

To help close its $304 million budget deficit (brought on in large part by skyrocketing pension costs), the school district of Philadelphia announced that it has pink-slipped 3,783 employees: 676 teachers, 283 counselors, 127 assistant principals, and 1,202 noontime aides—a move that Superintendent Hite called “nothing less than catastrophic.” We hate to say, “I told you so”…...

A Crash Course in Teacher Pensions

A Crash Course in Teacher Pensions

Dara Zeehandelaar, author of The Big Squeeze: Retirement Costs and School District Budgets, explains teachers pensions and the difference between defined benefits and defined contribution plans that states offer teachers.

After a judge ruled last year that Los Angeles was in violation of the Stull Act—a forty-year-old state law signed by Governor Ronald Reagan requiring that principal and teacher evaluations include student-achievement measures, and spurred on by Los Angeles’s ongoing attempt at obtaining a district-level NCLB waiver, Los Angeles Superintendent John Deasy announced that, as of next year, the district will “fully implement the evaluation changes” tested in an ongoing pilot program.

After three years of failed negotiations and angst galore, New York City has a teacher-evaluation plan. Teachers’ evaluation ratings will be comprised of student-test scores (20 to 25 percent), school-established measures (15 to 20 percent), and in-class or video-recorded observations (55 to 60 percent). But don’t break out the celebratory flan just yet! Some are balking at plans to assess subjects like art, gym, and foreign languages, and at least one mayoral candidate has already come out against the plan.

On Tuesday, D.C. councilmember David Catania announced seven proposals that could reform the District’s public education system dramatically—including a five-year facility plan and a process for handing over surplus buildings to charters. For her part, Chancellor Kaya Henderson expressed interest in some pieces (e.g., more money to low-performing high schools) but resisted the more dramatic ones (e.g., a set metric that would mandate closure for consistently underperforming schools)....

There’s no shortage of bad news in education these days, nor any dearth of stasis, but at least education reform is a lively, forward-looking enterprise that gets positive juices flowing in many people and that is leading to promising changes across many parts of the K–12 system. We are focused on making things better—via stronger standards (Common Core), greater parental choice (vouchers, charters, and more), more effective teachers (upgrading preparation programs, devising new evaluation regimens) and lots else.

The big squeeze

When it comes to pension reform in the education realm, however, it’s hard to stay positive. Here, we’re saddled with a bona fide fiscal calamity (up to a trillion dollars in unfunded liabilities by some counts) and no consensus about how to rectify the situation. No matter how one slices and dices this problem, somebody ends up paying in ways they won’t like and perhaps shouldn’t have to bear. All we can say is that some options are less bad than others.

Today’s new Fordham study examines how three cities (and their states) are apportioning the misery—or failing to do so. This analysis pulls no cheery rabbits out of a dark hat, but it definitely illustrates the nature and scale of the pension-funding problem and describes a couple of painful yet, in their ways, promising solutions (or partial solutions) to it. As you will...

Teachers and other employees of the School District of Philadelphia receive their retirement benefits from the Pennsylvania state retirement plan for schools, which includes both a defined-benefit pension plan and a modest retiree health benefit. The cost of the former is expected to rise quite substantially and, as this technical analysis will show, presents a daunting burden for the district in the near future.

What will the burden of retirement benefits actually be in the future? What impact will it have on the School District of Philadelphia’s budget? How much effect could this have on the classroom?

In Paying the Pension Price in Philadelphia, authors Robert Costrell and Larry Maloney analyze and project the future retirement obligations in Philadelphia and illumine the nature and scale of the pension-funding problem.

 

 

When it comes to pension reform in the education realm, it’s hard to stay positive. Here, we’re saddled with a bona fide fiscal calamity (up to a trillion dollars in unfunded liabilities by some counts), and no consensus about how to rectify the situation. No matter how one slices and dices this problem, somebody ends up paying in ways they won’t like and perhaps shouldn’t have to bear. All we can say is that some options are less bad than others.

In The Big Squeeze: Retirement Costs and School-District Budgets, we analyze and project how big an impact the pension and retiree health care obligations will have on the budgets of three school districts: Milwaukee Public Schools, Cleveland Metropolitan School District, and the School District of Philadelphia.

The Big Squeeze: Retirement Costs and School-District Budgets is a summary report by Dara Zeehandelaar and Amber M. Winkler, based on three technical analyses conducted by Robert Costrell and Larry Maloney to be released by the end of Summer 2013.

Pages