Stretching the School Dollar

The Washington Post this weekend lobbed some serious accusations at the Montgomery County Board of Education, calling recently revealed health care savings a "slush fund." This is the latest development in a battle between the school board governing this high-spending, wealthy suburban district and the County Council that exercises putative control over the county's budget.

In this go-round, the council cut $25M from the schools budget, after which the school board suddenly found $21M in health care savings, which it promptly used to reverse an expected increase in the proportion of health care costs paid by teachers. The Post, a vocal parents' group, and others are unhappy the savings weren't used more directly in the classroom.

The whole thing reveals one of the thorniest problems of traditional "marble cake" school governance. Both the council and the school board are agents of the taxpayers of Montgomery County. They are each serving others sets of interests as well, however: students, parents, teachers, public workers other than teachers, business owners, etc. The present system of governance in Montgomery County doesn't seem to be succeeding at working out the conflicts among those groups in an orderly and transparent way.



Our recent study on trends in the special education population was only able to get at the costs of special ed obliquely. But with some states spending two or three times as much per student as others, it seems clear that districts and states could find savings in this $110 billion-plus slice of overall school spending without negatively impacting kids. Some districts are now turning to private companies to provide services at a lower cost.

The role these businesses can play seems to be twofold. First, they are more flexible than districts at providing services where and when they're needed, reducing the amount of time kids are pulled out from their normal classrooms and getting past rigid staffing formulas. Second, because they are a level removed from the difficult politics of special ed, they may have more power to say no to services that are not effective.

Outsourcing these services is no walk in the park, of course. Shady operators will have every incentive to overcharge and underdeliver. Districts must consider which services they're outsourcing, and to whom. The need for careful oversight is a given.

However, serving a population of students with very diverse...


The US Department of Education has hired a new director of its Federal Charter Schools Program, which oversees a variety of grant programs for starting and replicating public charter schools, as well as credit enhancements to help them afford high-quality facilities. Stefan Huh, the new director, is leaving DC's Office the State Superintendent of Education (OSSE) after four years running the Office of Public Charter School Financing and Support there. (Full disclosure: I worked for Stefan at OSSE last summer and consider him a mentor and an important influence on my decision to work full-time in education after business school.)

Stefan's tenure in DC provides some hopeful signs that ED will continue to step up its game on charters. First, while he's a strong advocate for public charter schools, he focused strongly on school quality while running the program at OSSE. For instance, the office added a competitive grant component to its teacher compensation program last summer, developed by my colleague Jessica Sutter.

Second, Huh is not a natural-born bureaucrat ? he understands that building more quality schools means taking calculated risks. For example, most of ED's grantees in the Credit Enhancement Program for charter school facilities...


New Jersey's Supreme Court ordered Chris Christie to cough up another $500 million in funding for the state's schools in a 3-2 ruling today. Very few people (aside from the three justices in the majority and Mark Zuckerberg) would argue that NJ's worst-performing schools can be fixed with more money, however.

So-called "Abbott districts," which get more money under another NJ Supreme Court ruling that deemed education in those locales inadequate, are among the highest-spending districts in the country. Newark, which is one of them, tops out at $23,000 per student using the state's new accounting method. Education in these districts is indeed inadequate and horribly shortchanges the youngsters who live there, but after 25 years of receiving extra resources, it seems clear that the problem goes deeper than money. Unfortunately, the question of what constitutes an "adequate" education in New Jersey has largely revolved around funding issues rather than processes and outcomes for children.

Nevertheless, I agree with Bruce Baker that the court's rather narrow decision was the correct one. (This may be one for the record books.) Bruce found in a recent analysis that while New Jersey's funding system is fairly progressive,...


This week, I made my first trip to visit our Ohio team since joining Fordham last year. I found a lot to make me very hopeful about the Buckeye State, as well as seeing things that made clear to me just how difficult the challenges are there.

On Tuesday, Drs. David Driscoll (former Commissioner of Education in MA and a Fordham Board member) and Tony Bennett (State Superintendent of Instruction in IN) testified before the Ohio State Senate finance committee. Both men articulated the challenges facing state departments of education and the smart solutions proposed by the education reform movement. Many of us were impressed by the respectful back-and-forth between the two of them and senators from both sides of the aisle. Given the riotous protests over SB5 just a few short weeks ago, it was heartening to see lawmakers remaining open-minded in their search for solutions to improve public education in Ohio.

I spent the afternoon visiting KIPP Journey and Columbus Collegiate Academy. The students at KIPP, when asked to describe what the school meant to them, deftly turned arguments about poor home life limiting education on their heads. They all said KIPP was...


Yet more proof that to some anti-reformers, adults inside the education system are more important than everyone else ? a guest blogger at Valerie Strauss's place says reformers lack empathy:

?When you are basing the effectiveness of teachers on lots of softer things, whether the kids feel good, whether the classroom is happy, whether we're creative (don't get me wrong, those things are important), but if the kids can't read?that's not acceptable,? former Washington D.C. Schools Chancellor Michelle Rhee asserted indignantly in a recent interview with Charlie Rose, defending the standardized test-based reform movement that she has touted to an applauding media. [...]

From the perspective of corporate reformers and complicit Democrats, who employ the language and ideology of corporate America, public schools are factories designed to manufacture potential employees, human products who can compete effectively on the global market, and help the United States ?Win the Future.? This is a striking departure from the original mission of public schools, which conceived of our schools as not just skills centers, but civil institutions which cultivate democratic values ? empathy, compassion, citizenship, creativity, and other ?softer things.?

Given yesterday's news that half of...


Unions are not to blame for the severity of public pension shortfalls, but that doesn't mean that taking a hard look at collective bargaining is a bad idea. Matthew Di Carlo at Shanker Blog called yesterday for pols and commentators to stop blaming the nation's public pension issues on collective bargaining. He has a point, but I can't run with his conclusions here:

I find little evidence that the unionization of public employees has any effect ? whether positive or negative ? on the fiscal soundness of state pension plans. This, along with the fact that we already know why pensions are in trouble, and it has little to do with unions, once again represents strong tentative evidence that the push to eliminate collective bargaining is misguided, and the blame on unions is misplaced. States with little or no union presence are, on average, in no better shape.

Pensions are far from the only issue at hand. The Pew report cited by Matthew shows that, in addition to the $660 billion gap in pension systems, there is a $604 billion shortfall to pay for generous health benefits for public-sector retirees. This gap has little to do with...


Markets are a tool with many uses, and we employ them broadly in our society because on balance they create a lot of good. Kevin Welner doesn't see it that way, however, especially in education (PDF):

This points to what should be the fundamental progressive response?the critique that many progressives seem hesitant to seize: that educational opportunities should be among the most precious public goods. While public education does provide an important private benefit to children and their families, it also lies at the center of our societal well-being. Educational opportunities should therefore never be distributed by market forces, because markets exist to create inequalities?they thrive by creating ?winners? and? ?losers.?

Progressives may be hesitant to seize this critique because it's wrong and misunderstands markets. First, Welner ignores consumers. If Wal-Mart and another retailer compete, in a well-functioning market the consumer wins by paying lower prices, enjoying higher quality, or both, regardless of whether Wal-Mart or its competitor wins a given customer's business. Markets don't exist for the sake of competition, or to provide wealth for "winning" competitors. Competition is intended to serve end users.

Second, education markets, unlike the ones in business, are not usually tasked...


Montgomery County, Maryland, one of the wealthiest and highest-performing large school districts in the country, is likely to reduce its level of per-pupil spending, in violation of a state maintenance of effort requirement. This means giving up an estimated $29 million in state aid in 2013:

The county's elected leaders have rescinded a request made last month seeking to be excused from a state formula for funding education.

The decision would allow the county to reduce the amount of money it gives to Montgomery County Public Schools in the next fiscal year ? and potentially every year thereafter.

In a letter Thursday to the Maryland State Board of Education, County Council President Valerie Ervin (D-Dist. 5) of Silver Spring and County Executive Isiah Leggett (D) said they do not plan to seek a waiver from Maryland's maintenance-of-effort law.

The county spends roughly $15,000 per pupil, according to the Maryland Report Card, and found itself unable to cover the increased cost from enrollment gains in recent years.

The most interesting part of the story to me is the battle between the County Council, which sees an unsustainable budget, and the school board, which has been...


We don't often talk about the political risk borne by public-sector workers in traditional pension systems, but that risk is now very real for cops and firefighters in Detroit. The city has twice as many retirees as workers on the job, and that coupled with a decline in population is making it tough for them to pay modest pensions ($28,501 a year for the average retired police officer). The city is looking for ways to reduce those already meager benefits.

Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit ? made possible, lawyers said, because Michigan's constitutional protections are weaker ? could spur other places to try to follow suit.

?These things do tend to be herd-oriented,?