School Finance

Creating Opportunity Schools coverThrough this report (prepared by Public Impact),
The Mind Trust proposes a dramatic transformation of public education in
Indianapolis, akin to the structural changes that have taken place in New
Orleans and New York City. It observes that great schools across the country
share a set of core conditions that enable them to help all students achieve.
Among these core conditions are the freedom to build and manage their own
teams, refocus resources to meet actual student needs, hold schools accountable
for their results(and close those that don’t perform), and create a system of
school choice that empowers parents to find schools that they want their
children to attend. To create success in the public schools of Indianapolis
(IPS), the Mind Trust proposes these bold moves: shift funding from the central
office to schools; give high-performing schools autonomy over staffing,
budgets, and curriculum; provide parents with more good choices; unite all
public schools under a new banner of quality called Opportunity Schools; and
allow the mayor and the City-County Council to appoint the IPS school...

Although state tax collections are on the rise,
and have returned to 2008 levels in many places, education advocates
shouldn’t kid themselves that the “new normal” of flat budgets and tough
resource allocation decisions will soon come to an end. Spending on
health care entitlements continues to grow rapidly,
according to the National Association of State Budget Officers’ most
recent report, while K-12 education loses ground as a share of state

The education reform community needs to think beyond the next levy
referendum when it comes to providing resources to our schools. Health
care reform — specifically, containing the cost of entitlements like
Medicare and Medicaid — has become a major issue impacting American
schools. While a few forward-thinking groups like the Massachusetts Business Alliance for Education have grasped this and become active on health care policy in their state capitals, it’s not on most people’s agendas.

Yet the simple arithmetic is unavoidable: Medicaid can’t continue to
grow faster than the long-term growth rate of the economy without
sucking up more and more of state budgets. Education aid necessarily
suffers under any...

State Rep. Matt Huffman is trying to build support for a promising effort
to expand private school vouchers to more working-class families in
Ohio. In order to appease recalcitrant school districts, whose
executives vocally oppose the measure, he may remove any benefit
youngsters in wealthier districts could hope to get out of the program,

Originally, the bill would have granted vouchers of up to $4,626
based on a family’s economic circumstances. But managers in more than
300 school districts have complained about the possible loss of state
and local funding, apparently afraid of competition for students’
dollars from the parochial school down the block. Huffman now wants to
limit the amount of each voucher to the total per-pupil aid the child’s
school district receives from the state. This means that children in
property-rich suburbs, where a growing number of poor families are concentrated,
could get just a few hundred bucks a year when they leave for a private
school, while many thousands of dollars stay with the school district.

It’s hard to imagine a worse trade-off: Districts get to keep the
cash without...

Van Schoales
CEO of A+ Denver

Guest blogger Van Schoales is the CEO of A+ Denver and a Colorado DFER advisory board member. This post originally appeared on the Democrats for Education Reform blog.

We recently did some research on the state of school turnarounds in Colorado. I was reminded of that great “spaghetti” western The Good, The Bad and the Ugly.
For those of you that don’t remember the movie, it was a tale of
intrigue, deceit and murder among three men (not so good, bad, and ugly)
in a quest for buried gold in the context of the chaos of the Civil
War. It’s one of my favorite movies for the remarkable cinematography,
directing, and character acting, not to mention one of the best scores
ever. Oh yes, there’s also the interesting sub-texts on war and the

So, what’s the connection with the federal School Improvement Grant
(SIG)/ turnaround schools program? The SIG program is hardly as
interesting as the movie, but turnarounds are filled with struggle,
conflict, and failure; often the only ones benefiting are the outside

Few issues as serious as the pension crunch are equally
as dull. Addressing unfunded liabilities and implementing defined-contribution
plans simply aren’t compelling calls to arms, despite the widening consensus
that the balance sheets of public-sector retirement-benefit systems pose grave threats to state budgets. That’s why the
clarity and concision found in this recent “solution paper,” penned by Josh
McGee for the Laura and John Arnold Foundation, are so valuable. The piece may be
light on detail, but that’s part of the point: It doesn’t aspire to wonky
analysis. Instead, it aims right at policymakers and the public in explaining
why the set payouts of the traditional defined-benefit (DB) retirement-benefit
structure are unsustainable. McGee efficiently makes the case that
irresponsible pols inevitably underfund DBs, explains the challenges in
projecting their costs, and lays out how they incentivize expensive (and
counterproductive) employee behaviors. He then outlines the major cost-saving
alternatives on the table—including defined contributions, cash-balance plans,
and “stacked hybrids.” (OK, it’s just a little wonky.) There’s far more to this
complex topic than McGee includes in this brief paper (case in point: Fordham’s
recent ...

As I was reading Richard Vinen’s op-ed about Margaret Thatcher from this weekend’s New York Times,
I couldn’t help but think of Florida’s beleaguered governor. Rick Scott
ran as a staunch Tea Partier dead set on getting public spending under
control, cutting $1.35B from the state’s education budget last year.
With the 2012 elections looming, however, Scott has suffered a crisis of nerves,
calling for a billion in new money for education — and no new reforms
of note — in an effort to improve his flagging popularity. He has turned
to the kind of likability-oriented politics that Thatcher eschewed in
her program to remake 1980s Britain.

Scott is not alone. After losing a ballot measure over his signature public-sector reform, Ohio’s John Kasich declared, “It’s time to pause,” despite the fact that voters largely support
the education reform portions of the law. Where 2011 was defined by
tough discussions about how to balance competing state-level priorities
in an era of austerity — with teacher unions frequently on the losing
end of those battles — many politicians gearing up for 2012 are striking

This latest from the Department of Education—the
first national analysis of school-level funding—confirms what countless smaller
studies have implied: Schools with higher proportions of poor students often
receive less funding than lower-poverty schools in the same district. In fact,
more than 40 percent of Title I schools had lower per-pupil personnel expenditures
than non-Title I schools in their districts. This finding holds across multiple
measures of expenditures, from teacher salaries to non-personnel resources—and
despite the feds’ efforts at ensuring “comparability.” For those scratching
their heads as to how this could possibly be so—doesn’t Title I’s
“comparability provision” mandate that districts spend about the same for all
the skinny
: Schools can prove comparability without figuring in teacher salaries. Per Title I rules, the number of staff must be comparable, not
how much they’re paid. Thing is, low socio-economic status schools often have
newer, cheaper teachers. This is an onion of an issue—with onerous layers of
salary structure, staff placement, and control of funds—and there’s no easy
solution. (Even the policy
brief that ED released
with this report agrees.) But one thing’s for...

Charged up by our governance conference last week, Dave DeSchryver says we should open the black box
of school finances and shine some much needed light on how school
dollars are really spent. This kind of accountability, with some
easy-to-use tools along the lines of, is sorely needed as
education budgets have ballooned out of control.

But hoping that district leaders will be shamed into spending more
frugally is not enough. How do I know? Because even when they’re
required to report on financial problems publicly, district leaders and
politicians are utterly shameless in nearly all cases, tinkering around
the edges rather than facing facts.

Take Montgomery County, Maryland. Last week the county released a report showing the school district’s pension costs have increased by 369 percent
over the past eight years. The state pays for teacher pensions, but the
county is on the hook for everyone else’s plan.  The council president
claims this is “a huge cause for concern,” but no one is seriously
considering changes to build a better retirement system. They’re pushing
for quick fixes, increasing teacher contributions to a fundamentally

A major impediment to improving outcomes for disadvantaged children
in the nation’s schools is misallocation of the more than $600 billion
we spend annually on K-12 education. Marguerite Roza from CRPE and Cindy Brown from the Center for American Progress brought up this very point at our governance conference this morning. (Live feed is here if you want to tune in.)

The Department of Education just released a national study
(pdf) confirming with hard data what many experts have said for years:
rigid salary schedules established are a major source of inequity within
school districts. (It’s important to stress that this is not a
“loophole,” but a carefully structured policy embedded in most contracts
at the behest of teacher unions.) Here’s CAP’s Cindy Brown in the New York Times:

A few researchers have documented the problem with
statewide data in Florida and some other states, said Cynthia Brown, a
vice president at the Center for American Progress,
a liberal research group. “But I’m excited because this is the first
time that data documenting the problem has ever been collected


Two-thirds of schools in the UK were closed for a day recently as
teachers went on strike over proposed changes to pensions. Unions are
trying to force the government’s hand during negotiations over
contributions to the pension system, which has become unaffordable
(there as here in the US) due to rising life expectancy and rules that
permit retirement as early as 55.

The UK’s schools minister, Nick Gibb, didn’t mince words in condemning the strike:

Mr Gibb said: “Strikes benefit no-one – they will disrupt
pupils’ education, hugely inconvenience parents, and damage teachers’

“It’s irresponsible to strike while negotiations are ongoing. Many
parents will struggle to understand why schools are closed when the
pension deal on the table means that teachers will still be better
rewarded than the vast majority of workers in the private sector.

“Reforms to public sector pensions are essential – the status quo is
not an option. The cost to the taxpayer of teacher pensions is already
forecast to double from £5bn in 2006 to £10bn in 2016, and will carry
on rising rapidly as life expectancy continues to improve.