School Finance

Michael Podgusrky, Stuart Buck, and Renita Thukral

When Hurricane Katrina hit New Orleans in 2005, hundreds of public
schools were put out of commission and their staff placed on leave. Many
charters schools expanded to absorb the displaced students, and these charter
schools hired teachers from traditional schools to meet the enrollment demand. A
glitch, fixed by state legislation, was to allow the displaced teachers to
remain in the state teacher pension plan since some of the charter schools did
not participate in the state plan. In
2010 this temporary law expired. Many of these transplanted teachers remain
employed in charter schools and wished to continue to participate in the state
teacher plan. Legislation was passed to allow these transplanted teachers to
remain permanently in the state retirement plan, if—and this is a very big if—the
Treasury Department approved.

Are charter schools sufficiently “governmental” that
they can participate in state and local pension plans?

The Treasury Department held off ruling on the Louisiana case while it
worked on regulations that would provide new guidance on what it meant for a
plan to be a "governmental plan." In November, the Treasury
Department...

The Education Gadfly

Writers on the Gadfly Daily blogs analyzed issues from
around the country this week, discussing everything from the lessons that the Louisiana
Recovery School District
has to offer to the tough talk coming from New
York State
.

School choice was a big theme, with Fordham announcing the new editor of the Choice Words blog, Adam Emerson, who explained the
importance of “subsidiarity”
in education. On Flypaper, Mike argued that charter schools should approach
district collaboration
with caution and from a position of strength, while
Terry noted that Ohio has prime
examples
of getting charter-district relationships wrong on the Ohio Gadfly
Daily blog.

Stretching the School Dollar explained the flaws in a recent
school
funding court decision
and why paycheck
protection
needs to be a policy priority, while on the Common Core Watch
blog Kathleen argued that having a plan for CCSS implementation is a start—but
just a start
.

To stay on top of all Fordham’s wit and wisdom, be sure to
subscribe to the combined RSS
feed
....

Joshua Dunn
Associate professor in political science, University of Colorado-Colorado Springs

Guest blogger Joshua Dunn is an associate professor of political science at the University of Colorado-Colorado Springs. In this post, originally published in the Colorado Springs Gazette, he dissects a judge's flawed ruling in a recent Colorado school funding case.

In a 2001 interview, a little-known state senator and law school professor
from Illinois
cautioned that courts are “poorly equipped” for making public policy. Pointing
to problems with the legitimacy and ability of courts, particularly in the
field of education, he advised
seeking change through politics rather than through litigation. Sadly, both of
Barack Obama’s concerns were exemplified in a Colorado state court decision last December.

In the long-running Lobato
v. Colorado school finance case
, Denver District Court Judge Sheila
Rappaport declared that Colorado
is underfunding education by more than $2 billion per year. She said that the
seventeen-year-old Public School Finance Act violates the education clause of
the state Constitution, which says that the state legislature shall provide a
“thorough and uniform” system of public schools. She instructed the state
legislature to...

In case you missed it, Terry Ryan wrote a great post yesterday on the potential implications of Ohio's funding crisis for education in the state:

Ohio’s newspapers ran headlines today warning, “Money
crunch pushes Downtown roadwork way back
,” “Local
highway projects face delays
,” and “Last
phase of I-75/I-475 project stalls
.” The financial problems facing Ohio is
scaling back big time infrastructure projects that have been in planning for
years. According to the Columbus Dispatch
the Ohio Department of Transportation “proposes pushing back 34 projects that
had been planned to start by 2017 to dates as far off as 2036.
Jerry Wray, director of the Ohio Department of Transportation,
captured the problem when he told the Cincinnati
Enquirer:
"Unfortunately, this
is Ohio’s new reality. For too long, previous administrations have added more
and more to the list of projects knowing that there were more projects than
funds available. Their poor planning has put us in the position of making the
tough decisions and delivering the bad news to many communities throughout the
state that there is simply...

That’s the headline above Paul Peterson’s better-than-nifty
essay
on the Ed Next blog.

Peterson, director of the Program on Education Policy and Governance at
Harvard and Executive Editor of Education
Next
(of which I am a contributing editor), uses the Mac the Knife
reference to suggest that loyalties can be bought “for a pittance.” In this
case, it’s the National Education Association (NEA), which can, Peterson
argues,

…collect multi-millions of dollars through a check-off system
that generates revenues directly from teacher paychecks (unless a teacher
specifically objects),” and, a la the
villain of Mac the Knife, “invest in the work of less-advantaged non-profits
that ostensibly have entirely different agendas. Even a little bit of money can
produce a valuable ally somewhere down the line.

It’s a short essay, but is packed with evidence (from the Education Intelligence
Agency
) of NEA’s multi-tentacled reach, from a $250,000 grant to the Great
Lakes Center for Education Research and Practice (“which has migrated to the
University of Colorado at Boulder, which received another quarter million in
direct funding,” says Peterson) to $100,000 for Media Matters,...

Last week, Philadelphia’s Blue Ribbon
Commission on Catholic Education made the dispiriting but long-expected
announcement that the Archdiocese will
close or consolidate
nearly 50 schools. Keeping more than 150 schools open
with enrollment down a third over the past decade is creating enormous cost
pressure for the city’s parochial schools, and the Commission saw consolidation
as the best hope for saving the nation’s first diocesan school system, a key
part of Philadelphia’s heritage founded by St. John Neumann.

As we described in our 2008 report, Who
Will Save America’s Urban Catholic Schools?
,
Catholic schools face
major challenges in the form of declining enrollments, fewer vowed religious
sisters and brothers available to teach students, and shifting population and
demographic patterns. These pressures don’t only impact Catholic Americans,
however. Anything that weakens the nation’s parochial schools means bad news for
education generally, for three reasons:

  • Catholic schools are
    relatively cheap.
    According to data from the National Catholic
    Educational Association
    , the average per pupil cost for Catholic elementary
    schools is just under $5,500, and the cost for high schools is less than
  • ...

Through a set of carefully selected and presented
research findings (he attaches seventy-five endnotes to his eighteen-page
paper), Rutgers University education professor Bruce Baker uses this report to
refute what he calls the reformers’ “mantra”—that increased education spending,
in and of itself, will not lead to higher student achievement. Baker addresses
three related policy questions: Does money matter? Do schooling resources that
cost money (like class-size reduction) make a difference? And should states boost
funding for schools? Backed by his cherry-picked data, he answers yes to all
three. “When schools have more money, they have greater opportunity to spend
productively. When they don’t, they can’t,” his argument goes. Does that sound
to anyone else like a case for a blank check (unsurprising from the Shanker
Institute, a creature of the nation’s second-largest teacher union)? To his
credit, Baker does offer this disclaimer: There may be “better and more
efficient ways to leverage the education dollar toward improved student
outcomes.” In that case, we agree, because that’s the “mantra” most reformers
have actually been reciting.

For more on
this topic, check out Chris Tessone’s new
...

In this post, guest blogger Bill Tucker, managing director of Education Sector, responds to "The Costs of Online Learning," a paper released today as part of Fordham's Creating Sound Policy for Digital Learning series.

The latest in Fordham’s digital learning policy series
tackles the tricky question of cost. And while the paper cannot offer
definitive answers for policymakers and school leaders, it does provide a
helpful primer on the overall economics of online and blended learning.

The top-line findings, that blended learning models cost an
estimated $8,900 per pupil (+/- 15%) and fully online schools cost $6,400 (+/-
20%), will surely be repeated in statehouse policy battles throughout the
country. But, those who actually read the short brief will quickly realize that
the authors have bent over backwards to caveat their findings in multiple ways.
The most important of these caveats? The author’s cost figures reflect
estimates of what online and blended schools are currently spending, rather
than what they should be spending. In other words, since we have little
understanding of how spending relates to...

Last
month, the District of Columbia’s
CFO discovered
a nice chunk of unexpected revenue
, some $42 million, had come the city’s
way. The mayor promptly called for half of the money to go to the District’s
public schools. In apparent disregard of the law, however, the mayor wants to
give the whole $21M windfall to DCPS, bailing them out for a loss of federal funding
and mismanagement of the district’s food service and merit pay programs. See
Bill Turque’s characterization of the budget holes this bailout will fill:

DCPS said the extra $21.4 million budgeted by Gray is needed to address
several issues: Congressional cuts in federal payments ($4.5 million); overruns
in food service caused by higher labor and food costs and lower federal
reimbursements ($10.7 million); mandated merit-based salary increases for
teachers ($2.8 million); and the rising cost of excessed non-instructional
employees who were removed from school budgets but are being carried on the
central office books.
Privately, senior Gray administration officials said DCPS finances have
historically been plagued by cost overruns, attributable to persistent
overspending by school...

Money talk can put people off, especially in education, where the mantra for decades has been, "Just spend more!" In the "new normal" of flat education budgets, however, more money is not easy for school boards and administrators to find.

In many places, this has meant across the board layoffs and a reduction in services provided to kids. This new era presents a tough challenge for superintendents and school budget officers charged with balancing the budget and doing right by the youngsters in their charge. Schools must be empowered (and incentivized) to deliver instruction more effectively, improving both quality and cost-efficiency. Fordham works to provide resources for school leaders to do just that, as well as provide analysis and advice to policymakers hoping to make the jobs of K-12 leaders easier. (Check out our policy brief from last year for a few ideas for state policy.)

On this blog, I'll examine a broad range of topics related to school finance: state funding formulas, healthcare and retirement benefits for teachers, parent access to financial data, and more. I'll be joined from time to time by other experts from the non-profit and public sectors as well.

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