A Weekly Bulletin of News and Analysis from the Thomas B. Fordham Institute
March 29, 2006, Volume 1, Number 9
Contents
Editorial
Investigative Analysis
On A Related Note
Recommended Reading
From the Front Lines
Announcements
Editorial
Legacy costs loom as significant problem for schools
Baby boomers are getting old--no news there. And the repercussions for health care and social security, among other things, are well known. What is less well known is how graying flower children affect school districts. As healthcare costs rise (at a rate of more than 10 percent a year according to a survey by the Kaiser Family Foundation and the Health Education and Research Trust), an increasing number of school districts' budgets are being consumed by benefits--or "legacy costs," in economist lingo.
USA Today recently said that legacy costs are a "death spiral" for school districts. Nationally, a stunning two out of every five new dollars spent on education in 2003 went to pay for generous benefit packages for teachers. And the number is rising.
Between 1999 and 2003, 85 percent of states experienced at least a 10 percent growth in the costs of public employee benefits, according to an analysis by Standard and Poor's. This spending crowded-out nearly every other facet of school operations, from purchasing new computers to payroll for current teachers.
The picture in Ohio mirrors the nation.
GM and its parts supplier, Delphi, are familiar with this problem Delphi is struggling mightily to get out of bankruptcy, and GM just announced they are offering buyouts to 113,000 employees.
But school systems cannot file for bankruptcy. Health care for teachers is negotiated through collective bargaining agreements, and unions are doing everything they can to see that the generous health care coverage won in past negotiations is not reduced.
The Legislative Office of Education Oversight examined 583 contracts in effect between 2002 and 2004 and found that 38 percent still paid 100 percent of health insurance premiums for teachers (and of those that covered 100 percent of teachers' health care costs, a fourth of them did the same for the teachers' families). Moreover, most contracts paid the total dental and vision premiums, as well.
That is a package most American workers today would envy.
School districts are stuck. Since they cannot file for bankruptcy, their only options are to make budget cuts or increase revenue by passing tax levies. Taxpayers are tired of paying more in taxes without seeing an increase in school success, so they are unlikely to support still more tax increases. Not surprisingly, the number of operating levies that passed in the Dayton area fell from 70 percent in 2000 to 45 percent in 2006, according to a study by the Miami Valley Regional Planning Commission. If struggling districts are unable to raise the money through local taxes, they will be forced to turn to the state's emergency loan program to bail them out. Either way, unless things change, taxpayers will have to foot the bill for legacy costs. And a hefty bill it will be for no improvement in overall school productivity.
The bottom line is this--legacy costs are real and not going away. Those districts that start grappling with the issue sooner rather than later are more likely to come out ahead. Gadfly would like to hear from district leaders struggling with this issue and willing to share their stories.
"Schools face 'death spiral'," USA Today, February 2006
"School systems face health care squeeze," by Gregg Toppo, USA Today, February 2006
"Buyouts Only a Partial Solution for Dephi: Auto Parts Firm and UAW May Remain at Odds," by Dina ElBoghdady, Washington Post, March 2006
by Dale Patrick Dempsey
Investigative Analysis
The 65 percent solution silver bullet or fool’s gold?
As the race for governor in Ohio heats up, so too has the interest in candidate Ken Blackwell's "65 Cent Solution," which would require every Ohio school district to spend at least 65 cents of each education dollar on "classroom instruction." The proposal clearly has political appeal. In Ohio, current classroom spending is at 57.4 percent. Blackwell claims on his website that the 65 cent solution would add $1.2 billion to the state's classroom budgets.
The "65 percent solution" is the brainchild of Patrick Byrne, founder and president of Overstock.com and the National Advisory chairman of First Class Education, a grassroots organization whose mission is to push state legislatures to require every school district in America to spend at least 65 cents of every education dollar on classroom instruction. The effort is making real progress. Georgia, Kansas, and Louisiana have recently adopted 65 percent proposals, Texas Governor Rick Perry enacted the same proposal by executive order, and at least seven other states are working toward this goal.
The 65 percent solution goes over well with politicians, but is it good policy? According to a recent report by Standard & Poor's, there is no relationship between spending 65 percent or more on instruction and higher student achievement. In fact, according to Standard & Poor's, "some of the highest performing districts spend less than 65 percent, and some of the lowest-performing districts spend more than 65 percent." As people in private business know, organizations need flexibility in how they allocate money. In short, "mandating a specific spending allocation is not likely to provide a 'silver bullet' solution to raising student achievement," says Standard & Poor's.
There are no less than two reasons why. First, a lack of uniform accounting standards in public education makes determining what spending qualifies as "classroom instruction" a capricious and arbitrary exercise. This fact all but guarantees that district officials will find creative ways to define "classroom instruction." Second, as Standard and Poor's notes, "how the money is spent in the classroom is as important as what percentage is being spent on instruction." On this subject, Eric Hanushek, Senior Fellow at the Hoover Institution at Stanford University, observes, "The one thing we know pretty clearly from research is that teacher quality is very, very important, and nothing in the '65 percent solution' would say anything about teacher quality." In fact, as Frederick M. Hess at the American Enterprise Institute notes, "the easiest way to fulfill the mandate is to give teachers an across-the-board raise or go on a teacher hiring binge. Experience offers little reason to believe that such expenditures are an efficient use of funds."
Candidate Blackwell is to be commended for seeking innovative policies to improve education in Ohio, but his 65 cent solution may prove to be a blunt instrument poorly suited for improving how education is delivered in the Buckeye State.
http://www.kenblackwell.com/OnTheIssues/Default.aspx?Section=21
by Terry Ryan
On A Related Note
Teaching kids to cheat
Educators in some districts throughout Ohio may be teaching more than reading, writing, and arithmetic to prepare students for state achievement tests. Some kids may also be getting a crash course in Cheating 101. As reported in several newspapers, teachers in eleven districts are under investigation by the Ohio Department of Education for providing students with test questions or other materials before administering this year's achievement tests. If these allegations are true, it could lead to the invalidation of test scores in some classrooms.
At best, students would have to retake the test; at worst, they could possibly be denied a chance at higher education.
Who is cheating whom? Rather than embracing accountability, educators who willingly participate in cheating are leading the race to the bottom. Thankfully, they remain the exception, not the rule. Let's hope these allegations are unfounded.
"Cheating on tests alleged: Cincinnati Schools among 11 accused," by Jennifer Mrozowski, The Cincinnati Enquirer, March 16, 2006
"Test violation cheat Ohio students," The Cincinnati Enquirer, March 17, 2006
"Teacher Accused of Cheating," Ohio News Network, March 29, 2006
Recommended Reading
A scandal a day keeps good policy at bay
A three-day series in the Cleveland Plain Dealer argues that charter schools across Ohio, "despite notable exceptions," are sinking fast.
We'll admit that there are more than a few rotten apples among the Ohio charter crop, but the regulatory "fixes" the article celebrates as effective in Massachusetts will do little to rectify the situation. Thankfully, Ohio legislators are ahead of the curve and have already taken constructive action, as indicated by last year's House Bill 66 which sets new standards and makes it much more likely that bad schools will be shuttered. Also, the charter school community held a November summit on Excellence in Charter Schools that produced more good ideas, such as giving incentives for great charter schools to replicate.
The Plain Dealer failed to mention any of these healthy moves, save for two measly paragraphs at the end of the very last story (though its editorial board mostly got it right). Alas, scandals sell newspapers, and policy wonkery puts most readers to sleep--Gadfly enthusiasts excluded.
by Jennifer Leischer
From the Front Lines
Helping schools get better
When Robert Pohl visits a school, his aim is to look at all aspects of its operation, from finances to academics. But the first thing he looks for is a sense of urgency.
"It should permeate the entire school, from the principal to the secretary to the custodian," Pohl said.
Pohl is director of Keys to Improving Dayton Schools, or k.i.d.s., for short. The organization was established in 2003 to see if a dedicated group of professionals could help improve the educational options offered to children in Dayton and southwest Ohio by providing high quality technical assistance in business management, organizational leadership and academics. Since its inception, k.i.d.s. has formed partnerships with charter schools in Cincinnati, Columbus, and Springfield. Pohl would like to develop partnerships with district schools and private schools.
The primary mission of k.i.d.s. is to ensure that students from tough urban neighborhoods do as well, or better, academically then their middle class peers. It is a mission to which Pohl has given much of his life, working with children of color as a teacher and school leader in Santa Barbara, rural Mississippi, East Los Angeles, and the Haight Asbury district of San Francisco.
"We have not delivered high quality education to these children," he said. "At k.i.d.s. we want to prove it can be done across multiple schools."
To that end, k.i.d.s. receives generous financial support from people and organizations dedicated to improving primary and secondary education: the Thomas B. Fordham Foundation, the Bill and Melinda Gates Foundation, and Dayton-area philanthropists.
A graduate of The University of Notre Dame and Boston University, Pohl has specific ideas of what works in urban schools including high expectations for all students and teachers and a language-rich curriculum. "I'm a huge fan of E.D. Hirsch's Core Knowledge," Pohl reported. "And I'm a firm believer in a disciplined environment in which all stakeholders take responsibility for student achievement."
School leaders in charter, district and private schools exist in a complex environment, needing to provide data on student achievement, financial reports, facility management, food services and transportation of students. At k.i.d.s., by providing high quality technical assistance in business management, organizational leadership and academics, they aim to give schools the support needed to be successful.
To learn more about k.i.d.s., surf to http://www.kids-ohio.com/.
by Dale Patrick Dempsey
Announcements
Looking for leaders
K.i.d.s. is looking for a few leaders who believe that all children can learn and be successful. The Dayton-based school reform organization wants educators who can set ambitious, quantifiable goals for students, and use the best data available to measure the results. To learn more go to http://www.kids-ohio.com/ or send resume to k.i.d.s., 400 East Fifth Street, Suite 250, Dayton, Ohio 45402