School Finance

At last night's school board budget ?workshop? I felt the sinking sensation that passengers on the Titanic must have felt:??it's too late for life boats. The trouble is, I felt that way last year as well.??The big difference between the Titanic and my school district is this: our ship doesn't really sink and we don't change directions.? What happened between last year's iceberg strike and this year's?? Nothing.? We threw a bunch of people overboard and kept on sailing ? and we'll do the same this year.?? No offense to Mike and my Stretching the School Dollar colleagues at Fordham, but out here in the trenches, it's budgeting as usual, which means politics as usual, which means balancing layoffs and tax increases, which means: the education equivalent of fighting over the deck chairs.

Last night, for instance,?with the administration suggesting that we lay off 10% of our teaching staff (but only 3% of the aides and no one from Central Administration), we heard impassioned speeches from two nurses, who knew their positions are not ?mandated? and thus vulnerable.? Individual teachers have lobbied me to save their jobs or their program, but no teachers spoke last night because we...

Last week I showed that, by one measure at least, teachers in non-collective bargaining districts actually earn more than their union-protected peers?$64,500 on average versus $57,500. These numbers are for teachers with just bachelor's degrees who have reached the last step on the salary schedule.

Matt Di Carlo of the Shanker Institute responded in the comments section with an important analysis of his own:


Why are you using the maximum BA salary as a measure of what teachers ?actually earn?? ?It would seem to me that this is the least appropriate choice for two reasons. First, unlike the starting and fifth year salaries available in the TQ3 database, the maximum salary doesn't ?control? for experience?the schedules vary as to how many years it takes to get to the top. Second, and more importantly, most career teachers (i.e., those who might get to the top of their schedules) get a master's degree (and are required to do so in some states), so very few teachers are actually located at the top BA step. It's probably the least appropriate choice as a measure of what the typical teacher earns.

I quickly replicated your analysis. My figures

The Education Gadfly

Educator pension systems are becoming increasingly expensive and, in a number of states, plagued by severe problems of underfunding. Given concerns about cost and long-term sustainability, several states have cut benefits, usually for new teachers, and many more are considering doing so. However, in making these changes, policymakers should carefully consider their labor-market effects. Some of the proposed cuts reproduce?and even exacerbate?undesirable features of current systems.

That's because they violate the paramount principle upon which pension systems should be built: Benefits should be tied to contributions. In other words, benefits paid to any teacher should be tied to the lifetime contributions made by or for that teacher. If $300,000 has been contributed on behalf of a teacher (including accumulated returns) then the cash value of an annuity provided to this teacher should also be $300,000.

This principle is routinely violated in current defined-benefit pension systems. Our analysis, Reforming K-12 Educator Pensions: A Labor Market Perspective, shows that the current systems result in very large implicit transfers from young teachers working short teaching spells to ?long termers? who spend entire careers in the same system. In our view, a teacher who works ten years or thirty years should...

Young teachers turned around a poorly-performing elementary school in Oakland, and now they're all at risk of being fired in a LIFO (seniority-based) layoff mandated by state law:

Futures, previously known as Lockwood Elementary, was redesigned in 2007 and a particularly young staff was hired to change the school's old reputation as a place that held low expectations for its low-income and minority students.

The state education code holds no provisions for performance, though. Instead, it dictates that layoffs must be made in order of seniority. Most Futures teachers have been in the classroom for fewer than five years.

?What did we do the redesign for?? asked the school's principal, Steven Daubenspeck.

The union president blames the school's principal. She implies that all teachers are interchangeable widgets, so he should have kept the school's low-performing senior teachers instead of trying to turn the school around using new blood:

The president of the Oakland teachers' union, Betty Olson-Jones, said she feels for the teachers of Futures Elementary and that she plans to visit the school. However, she said, small school leaders ? like those at Futures ? that hired young teachers over older ones when they were


One of the most striking arguments made against Republican governors' efforts to curtail the bargaining rights of teachers is that it's an "attack on the middle class." I'm more sympathetic to that line of reasoning than you might think; for all their evils, unions have been successful in giving millions of people a path to prosperity. And, as I was reminded at my grandmother's (a.k.a. "Nonnie's") funeral this past weekend, many of my second and third-generation Italian-American family members benefited from employment in public-sector, union-protected jobs. [quote]

But is it true, for teachers at least, that unions are necessary to ensure good wages? That when collective bargaining is disallowed, teacher pay plummets? I was curious, so I dug into data collected by the National Council on Teacher Quality. The group collects information on teacher pay, benefits, and much more in its tr3 database for more than 100 of the largest districts from each of the 50 states. I broke out the districts in non-collective bargaining states (those where the practice is illegal--namely, Georgia, North Carolina, South Carolina, Texas, and Virginia)--and compared them to the rest. And I looked at the maximum salary a teacher with a bachelor's degree...

Much ink has been spilled in the past week over what the pay for performance experiment in New York City's public school system means. Roland Fryer's finding that the NYC pay scheme didn't improve student achievement does not imply that differentiated pay for teachers doesn't work, however. In fact, I'm inclined to borrow a phrase from Chesterton: merit pay has not been tried and found wanting; it has been found difficult and not tried at all.

Merit pay trials in the US have mostly followed a familiar pattern: they're structured as one-time bonuses and are tied to some kind of objective measure like test scores or teacher value-added. This may look superficially similar to professionals' compensation on Wall Street and in the nation's top law firms, but crucial components are missing that make up true merit pay in the professional working world.

Permanent raises based on merit provide a more meaningful incentive than annual bonuses, though the latter are a helpful supplement. Performance-based raises tell professionals that they're hitting milestones on the way to full professional effectiveness (or not), and they communicate the worker's long-term value to an organization. One-time bonuses that sit on top of a...

In a provocative new school funding case, a federal court judge in Kansas City ruled against parents from the suburban Shawnee Mission school district who had wanted to increase property taxes above the state mandated limit. This is a local control debate that is sure to heat up as we stumble through the current financial crisis, with more and more proposals to increase the centralization of school governance and financing.? (See Lou Gerstner's 70 super districts proposal.)

According to an Associated Press report?on the Kansas?decision,? allowing individual jurisdictions to set their own tax ?could bring down the state's entire school financing system.? The parents in Shawnee Mission wanted just the right to ask local voters if they wanted to pay more. The court said No. (Read the 21-page?order here.)

As the pressure to hold down school costs mounts, property tax caps have become a favored option because they remain a favorite form of funding local government agencies, including school districts.??But the objections from wealthier communities, which can afford to pay more, are also mounting. ?Twelve towns in New Jersey have announced plans to have votes on exceeding the Garden State's new property tax...

This morning, economist and education policy expert Eric Hanushek testified in a joint meeting of the Ohio House and Senate education committees. His testimony ? which focused on the importance of ensuring that all education policies, including school finance policy, create incentives for achievement ? comes less than one week before Gov. Kasich's budget will be introduced.

The most debated education-related policy changes here in Ohio over the last month have been about Senate Bill 5, the Buckeye State's controversial attempt to weaken public sector collective bargaining in the state. (Terry testified in support of the aims of the teacher personnel provisions in the bill, not expressly on rolling back collective bargaining rights.)

Hanushek's presentation today helped reframe the debate in a necessary way: undoing LIFO, or changing teacher salary schedules, or including value-added data in teachers' and principals' evaluations is not about weakening unions but about incentivizing performance, driving student achievement, and ultimately improving the quality of Ohio's future labor force.

Given the highly politicized environment surrounding the capitol lately, it was good to hear an outside expert explain the research and remind lawmakers that the need to move toward achievement-focused policies predates the Midwest's turmoil...