School Finance

Teacher pension systems around the country are falling into crisis due to poor investment returns, unfunded increases in benefits, and poor governance and management. The PIE Network just made thirteen great policy briefs available on how to advance education reform in the "new normal" of fiscal crisis in America's schools, and among them is a paper I wrote on the teacher retirement crisis.

I commend the full paper to your attention, but here are the key takeaways:

  • Traditional pension systems are bad for many teachers and aren't structured to attract the best young workers.
  • Retiree health care, which is free for many retired teachers, is a major contributor to cost growth in retirement benefits.
  • The time for reform is now. There are lots of good examples of pension reform in the public and private sector that school districts and states can draw on. Fordham has an upcoming publication profiling several such cases.

My colleague Raegen Miller at the Center for American Progress also released a paper on this subject recently that is well worth reading.

Pensions can be a very technical subject, but they're also soaking up growing chunks of school funding. It's...

Last night, in his speech before Congress, the President called for another round of stimulus spending, including $25 billion for school modernization and $35 billion for what the Administration calls "teacher rehiring," i.e., calling teachers back from layoffs pending for budget reasons. I'm skeptical that this will actually wind up helping schools much, however.

On the teacher front, we know from the Center on Education Policy's recent survey and other data that school districts mostly used their EduJobs money to protect fringe benefits and administrative staff while laying off teachers in the arts and other non-core subjects. [Update: CEP disputes my interpretation of the survey: see the comments below.] There is no reason to expect anything but business as usual from another round of subsidies. When the new money goes away, districts will still not have adjusted to the new normal, to their students' detriment. More subsidies just protect the status quo at great expense to taxpayers.

Funds for school modernization are nice as far as that goes. The emphasis on rural schools means the dollars are more likely to go to a high-need area. But having a nice building is not likely to jump start...

I shake my head every time I see stories like this: To Cut Costs, 120+ Districts Shift to 4-Day Weeks.

"It got down to monetary reasons more than anything else," Superintendent Larry Johnke said. The $50,000 savings will preserve a vocational education program that otherwise would have been scrapped.

The tradeoff here is not between a fifth day of school and voc-ed. That program was likely just the easiest to cut without running up against the union, school board, or some other stakeholder.

This feels so obvious I shouldn't have to write it, but the basic job of schools is schooling. What ancillary program, benefit, or perk could possibly be so important that it's worth cutting 20% of the core function of schools to preserve? And if you can't afford five days of school a week in your current configuration, reconfigure. Don't cut 20% of the main service taxpayers pay you to provide.

? Chris Tessone...

The latest Education Next poll results are packed-full of interesting findings on topics ranging from choice to merit pay, from NCLB to tenure reform. But particularly timely, in this era of fiscal austerity, are new insights about the public's views on school budgets. And guess what: On education, like everything else, Americans don't want to make tough choices. They want to keep taxes low while boosting school spending. Sound familiar?

Let's start with taxes. Question 25a asked: ?Do you think that local taxes to fund public schools around the nation should increase, decrease, or stay about the same?? Sixty-five percent of the public wanted taxes to remain steady or drop. The numbers were a little lower for African Americans, Hispanics, and parents, but not by much. (Half of teachers even expressed this view.) Interestingly, even more people (73 percent of the public) opposed raising local taxes, even if they were to be targeted to local (instead of national) schools.

OK, Americans don't want higher taxes. So they must want school spending to remain flat, right? Wrong. Question 3b queried: ?Do you think that government funding for public schools in your district should increase, decrease, or stay...

The debates surrounding Ohio’s biennial budget and other education-related legislation during the first half of 2011 were intense, and it’s no wonder. The state headed into the year facing a historic deficit, federal stimulus money was vanishing, and school districts were preparing for draconian cuts. Meanwhile, despite decades of reform efforts and increases in school funding, Ohio’s academic performance has remained largely stagnant, with barely one-third of the state’s students scoring proficient or better in either math or reading on the National Assessment of Educational Progress. Achievement gaps continued to yawn between black and white students and between disadvantaged youngsters and their better-off peers.

 Revised considerably by the General Assembly, Governor Kasich’s budget plan (House Bill 153), a 5,000-page document that both funded the Buckeye State through fiscal year 2013 and included dozens of education-policy changes, was signed into law on June 30. The Ohio House and Senate were also engaged during the spring in passing other legislation that impacts schools.

It’s time to take stock. To what extent have Ohio’s leaders met the challenges and opportunities before them in K-12 education? What needs to happen next?...

Friends don't let friends believe lazy LA Times articles about education budget cuts:

Last year, K-12 budgets were cut $1.8 billion nationwide. According to estimates by the National Assn. of State Budget Officers, cuts to K-12 for the new fiscal year may reach $2.5 billion.

"They've long since been cutting deep into the bone," said Michael Leachman of the nonpartisan Center on Budget Policies and Priorities, based in Washington.

CBPP may have an axe to grind here: they believe government costs what it costs and seem to have little interest in increasing the effectiveness of services. But it's too bad the Times didn't investigate these "historic cuts" a little more deeply.

The nation spends over $600 billion a year on K-12 education. So $4.3 billion in cumulative cuts over two years amounts to less than 1 percent of all spending. If you cut your household budget by 0.7%, would you call that "cutting deep into the bone"? No. Yet analysts and politicians are trying to sell you on the notion that schools can't absorb a 0.7% cut without getting rid of art, libraries, and thousands of teachers.

The truth is, the depth and...

We're looking at a long weekend for politicians, journalists, and finance professionals as the debt ceiling fight goes into extra innings. The House leadership has delayed a vote on the Boehner plan due to dissension in the Republican rank and file, and odds for a major deal don't look great. What are the implications for education if a deal doesn't happen?

The most immediate impact will be that the wall of money flowing on a regular basis from the feds to state and local governments may stop, since bondholders will get priority if the debt ceiling is not raised. States will have to contend with a loss of Medicare and Medicaid support, typically the largest portions of state budgets along with education. It's hard to imagine this not impacting states' education spending. Even short delays may force districts that are living "check to check" with no reserves to borrow cash. Minnesota schools have already been forced to do this by the government shutdown there.

The longer-term impact, even if a deal is reached, would come from a ratings downgrade on America's debt. Districts routinely sell bonds to finance the construction or renovation of school buildings,...

Florida deserves kudos for protecting about $55 million in funding for charter facilities in the face of budget cuts, but they're catching a lot of flak from traditional school advocates, EdWeek reports:

School district officials across Florida are bemoaning the Legislature's decision to cut traditional public schools out of?PECO?the Public Education Capital Outlay program. The state's 350 charter schools will share $55 million, while the approximately 3,000 traditional schools will go without.

"Every cent allocated for school construction went to charter schools," complained Lee Swift, a Charlotte County school board member who heads the Florida School Boards Association.

Swift said lawmakers should focus on "properly funded traditional schools" instead of pressing for more charters that drain resources from the traditional schools.

Charters are growing around the state, however, and many districts are stagnating or losing enrollment. Districts have also been flush with cash for construction in recent years even as charters have received less funding. Last year's Ball State report on charter funding inequity states that districts in Florida "encumber funds or withhold local sources from total funds available before providing charter schools with their 'fair share.'" Charters were already getting a raw...