THE
OHIO EDUCATION GADFLY
A Bi-Weekly Bulletin of News and
Analysis from the Thomas B. Fordham Institute
Volume 4, Number 10. April 28, 2010
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Educating children while living within our means
Educators across Ohio are consumed by two issues -- cuts and levies. School districts face brutal budget decisions as they confront falling revenues. The state's newspapers are awash with headlines that read: "District cuts 164, mostly teachers," "Cleveland issues layoff notices to more than 500 teachers," and "Supporters make final push for school levies."
The bad news is that things are apt to get even worse. The state's current $50.5 billion biennial budget was made whole in 2009 by $5 billion in one-time federal stimulus dollars and $2.4 billion in budget cuts. Funding for K-12 education accounts for 41 percent of state spending. Republicans in the Ohio House of Representatives recently warned that "state education funding may be reduced in next state budget by 22.7 to 30.1 percent."
Other lawmakers and analysts suggest the pain won't be that great. They point optimistically to new federal legislation, the Keep Our Educators Working Act, which seeks $23 billion in additional federal dollars to "provide money to every State for the specific purpose of hiring or retaining school employees."
While there is genuine uncertainty as to how much Ohio will need to cut school spending in coming months, there is no doubt that further spending reductions are in the offing -- if not this year then certainly next. It is also clear that the "easy" cuts and cost-saving strategies have already been implemented by schools and districts. Across the state districts have been shrinking their administrative costs, consolidating services like busing, partnering with other districts where possible, and cutting back on non-essential programs.&
What's left to cut now is the hard stuff. As teacher salaries and benefits are the single largest expense in schools that is the place where cuts will be incurred. Yet, how these cuts are made in the coming months and years will have a profound impact on the future of our state's children. The evidence is overwhelming that quality teachers are the prime driver of student success.
Done poorly, teacher cuts can do irreparable harm to our children.
If teacher quality is job one, what can Ohio's districts do in times of fiscal duress to protect teacher quality and teacher performance? Steven F. Wilson, senior fellow at Education Sector in Washington, DC, believes that districts need to, "dispense with their poorest performing teachers, improve the instructional performance of those who remain, attract the most capable new talent, and retain star teachers." Further, Wilson argues, "for skilled leaders, fiscal austerity does not inhibit reform, it begets urgency."
For superintendents to implement reforms to the way we train, reward, and retain teachers, they will need the help of state lawmakers.
First, superintendents need more flexibility in allocating increasingly scarce dollars and resources (see Roza review below). This can happen by waiving costly state mandates (maximum class sizes, all-day kindergarten requirements, etc.) and freeing up spending decisions. As much as possible, state dollars should arrive to districts as a lump sum to be spent by local school officials as they think best meets the needs of their children.
This doesn't mean anything goes. The state must still hold districts and schools accountable for academic results and general rules of public accounting. But, local administrators should determine how to allocate staff, which staff to cut, and what incentives are necessary for rewarding the best teachers while encouraging them to take on larger classes. The state should report what works and what doesn't.
Second, Ohio needs to commit itself to using student achievement data for a significant portion of teacher evaluations. This is encouraged by the federal Race to the Top competition, and other states and school districts are embracing the reform. Ohio can build on its successful implementation of value-added assessments to come up with a new definition of "highly effective" teachers. This would make it easier for school administrators to determine their top performing teachers, the teachers with talent who need help, and those who can be dismissed.
Third, the state law requiring that when teachers are let go for financial reasons, the dismissals must be based on seniority alone and not on student performance or other factors should be repealed, or at least suspended for the FY 2012-13 biennium. Because of current statute, and local collective bargaining agreements that reinforce it, the newer and less-expensive teachers must depart, and with them goes their energy and the district's future labor force.
Consider how perverse this is. Dayton's 2007 Teacher of the Year was given that award with one hand and his layoff notice with the other because after a local levy failed, the district had no choice but to protect seniority above all else.
Ohio's schools face an economic crisis that will not pass soon. Key to successfully navigating this time is ensuring the state's children have access to the very best teachers available. This means redesigning how funds get to districts and schools, while working to ensure that scarce resources are used to support and develop our very best teachers. This is the only way to ensure a brighter future for our children while living within our means economically.
by Terry Ryan
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State pension fund execs peering through rose-colored glasses
State lawmakers are expected to address the woes of the state's public pension systems later this year. A recent report indicates they have their work cut out for them. According to the report, published in the Journal of Economic Perspectives by Joshua D. Rauh, an associate professor of finance at the Kellogg School of Management at Northwestern, and Robert Novy-Marx at the University of Chicago, Ohio is in the worst shape of any state when state revenues are projected against pension obligations.
"Ohio faces the largest burden. It would need to devote over eight years of tax revenue solely to retirement funding to cover already-acquired pension liabilities," the authors report.
An investigation by Ohio's major daily newspapers in January indicated that the taxpayer bill to cover pension expenses for government retirees could top $5 billion annually in five years. But the Rauh and Novy-Marx's report says it's worse than that.
The authors estimate that if proper accounting techniques were used, Ohio's real pension fund obligation would have been $332.5 billion in December 2008 (at the start of the national economic meltdown), compared with the officially stated liability of $190.9 billion.
The pension systems' forecasts are based on an "eight percent solution." Fund executives argue that eight percent is the average return on investment that pension funds should "expect" to see in the future.
Economists claim such a rate is optimistic at best. Jay Greene, chairman of the University of Arkansas's Department of Education Reform, says relying on eight percent is gambling with taxpayers' money.
"The issue is that no one can hope to earn more than the risk-free rate of return -- the Treasury rate [about 4.625 percent] -- without assuming additional risk. Longer time horizons do not eliminate risk," Greene told the Gadfly. "There is no guarantee that the market return over 30 years will be eight percent annually. And if the actual return falls short it is the taxpayer who is left holding the bag."
By comparison, the S&P 500 stock index averaged 16.7 percent annual returns in the 1950s, but just 5.2 percent in the 1960s. It declined an average of 1.4 percent a year in the 1970s. For the whole period from 1950 to 2008, the index averaged a 6.8 percent annual return. Accounting procedures for private funds base investment expectations on returns of six percent or less.
Defenders of the pensions' accounting techniques argue that government is special. Unlike corporations, governments have the power to tax to raise pension revenues. That's cold comfort to Ohio's taxpayers who may very well be asked to foot the bill. After all, the Buckeye State's tax rates would have to increase significantly just to pay for the current pension obligations.
The State Teachers Retirement System of Ohio, which, by law, all of the state's public school teachers belong to, lost 29 percent of its value during the dark days of 2008-09. Rocked by those losses and with its portfolio nowhere near being in compliance with state law, STRS has recommended that lawmakers mandate higher retirement ages for teachers, lower retirement benefits for participants, and higher employee and employer contribution rates.
"If no changes are made we will eventually be unable to pay benefits," STRS Executive Director Michael Nehf told the Ohio Retirement Study Council last September.
Specifically, STRS wants school districts to increase their contribution rates from 14 percent of a teacher's salary to 16.5 percent over five years, starting in 2016. Under the STRS recommendations, teachers' contributions to their retirement fund would go up from 10 percent of their paycheck to 12.5 percent.
Local school boards say they can't shoulder the increase (see editorial above). "School districts are struggling every day for high-quality student achievement. To do what the retirement system suggests, districts have to dig deeper into finances," said Rob Delane, deputy executive director of the Ohio School Boards Association. And for their part, lawmakers realize that Ohio can't afford to spend any more on pensions.
Rep. Lynn Wachtmann (R-Napoleon) says it isn't fair for STRS and other pension funds to be asking for more money from employers, adding, "There is no additional money in any foreseeable [state] budget for years to come."
Rep. Vernon Sykes, an Akron Democrat and chair of the House finance committee, agrees. "We know we don't have enough money to continue benefits at the level they are now," he said.
New education model proposed for school-age offenders
Incarcerated young adults who are still legally eligible to a free public education would be able to attend classes inside prison walls, and continue coursework after release, if legislation currently under consideration is adopted. House Bill 479 (and companion legislation SB 246) seeks to create the Win-Win Academy, a charter school aimed at increasing graduation rates, and reducing recidivism rates, of young offenders.
Under the bills, state-licensed teachers would teach classes to incarcerated 18-21 year olds inside state prisons and at a companion Win-Win Academy facility, which offenders could attend once released without changing schools or potentially even teachers. According to proponents, young offenders often serve short terms, which do not allow them the time to complete their studies while in prison. This innovative program would also use "thinking aides" -- rehabilitated offenders who would work with the Win-Win Academy in the prisons to provide social and moral support to students enrolled in the program.
This proposal represents a creative solution for the state to expand education to a sector of young people in need of such opportunities. Currently, more than 5,000 offenders between the ages of 16 and 22 could potentially receive a high school diploma through this program. Presumably, the establishment of Win-Win Academy could mitigate Ohio offenders' low educational attainment and rates of recidivism. Eighty percent of Ohio's prison population lacks a high school diploma or equivalency, and more than 40 percent of first-time offenders return to prison.
Two other states, California and New Mexico, have enacted legislation and used charter schools to help incarcerated high school students earn their high school diploma. Such programs have helped to reduce recidivism in those states.
Due to the supervision of security guards and the voluntary nature of the program, school proponents believe there is little threat to teacher or student safety. Also, school districts' fears that they might be on the hook for the transportation costs of students have been assuaged in the legislation. Some don't like the fact that district dollars would flow from the district to the Win-Win program as happens when a student leaves a district school for a charter school.
Others have expressed concern at the overall cost of the program. Lauren McGarity, who would serve as CEO of Win-Win Academy, said the school would run on a budget of $1.2 million per year during the first three years. In the first year, McGarity expects to serve 100 students, with that number increasing by 100 more students each of the next two years. McGarity said those expenses reflect the start-up costs, such as purchasing technology, in addition to the costs of operating a school and hiring teachers.
Win-Win would serve as a pilot project, restricted to only one initial program, giving the public and lawmakers the opportunity to see how well the model works before deciding whether or not to expand it.
by Tim Hoffine and Theda Sampson
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Needle in a Haystack: Louisa May Alcott Elementary
Louisa May Alcott Elementary in Cleveland may have caught our eye for delivering a quality education to disadvantaged youngsters, but it was the school's results with special needs students that truly impressed us. Given the state's recent chastisement over its lackluster supervision of district special education programs, Alcott's success is all the more impressive. Check out our video to learn what the school's teachers and leaders believe are the keys to the school's extraordinary success.
Louisa May Alcott and seven other Ohio schools will be featured in Needles in a Haystack: Lessons from Ohio's high-performing, high-need urban schools, due May 2010 from the Thomas B. Fordham Institute.
by Eric Ulas
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Charter School Autonomy: A Half-Broken Promise
Dana Brinson, Jacob Rosch
Thomas B. Fordham Institute and Public Impact
April 2010
A primary justification for charter schools is the need for freedom from bureaucracy and regulation. In return, charters agree to be held accountable for their academic, fiscal, and operational performance. But on the whole, charter schools across the country have not been granted the autonomy necessary to do what's best for their students. That's the main finding from a study released today by the Thomas B. Fordham Institute, Charter School Autonomy: A Half-Broken Promise.
Researchers from Public Impact analyzed and scored schools in 26 states based on the level of autonomy they are granted by the charter contracts they have with their authorizer and the state and federal policies that impact them (for example, federal "highly qualified teacher" provisions add red tape). Giving charter schools grades for how well authorizers (aka, sponsors) and states do in holding up their end of the bargain (granting autonomy) is akin to grading students on how well their teachers equip them to succeed.
Academic performance of charters is a separate matter and is not taken up in the report. The reason to measure autonomy is simple -- it's a necessary condition if we expect charters to deliver solid academic results. As the report sums up brilliantly, "To deny charters that freedom is akin to tying one arm behind the back of a prize fighter. Or forcing Monet to paint in mittens."
Charter schools nationally received an average score of C+, with scores ranging from A to F in various states. In the Buckeye State, scores among charters averaged to a B. Ohio's lowest scoring areas, in terms of the autonomy extended to charters via state law, fell under "staffing." Ohio's charters are subject to the same certification regulations as their district counterparts, and some components of the salary schedule or retirement plan are dictated to the schools. In managing their own curriculum, schedules, calendar, school boards, and budgets, Ohio's charters received top points for autonomy.
Despite Ohio receiving a B overall, one particular finding from the report should raise caution. The researchers found that school district authorizers placed the most burdens on charter schools -- more than any other type of authorizer.
One-fifth of Ohio's charter schools are sponsored by local school districts, and we've already seen districts act reluctant in granting maximum freedoms to their sponsored schools. Case in point is the recent announcement that two of the top district-run charters in the state are closing, in large part due to pressure exerted by the Ohio Department of Education on the Upper Arlington Board of Education to keep the charters and the district operating as distinct and separate entities. The district prefers to fold the two charter schools into existing programming rather than let them operate independently, a perfect illustration of how districts are more comfortable putting "mittens" on schools than in granting full autonomy.
The issue of charter school autonomy is especially relevant in Cleveland, where district CEO Eugene Sanders has proposed turning some failing schools over to charter operators as part of his district transformation plan. The schools would be maintained within in a district-overseen portfolio of schools, and therefore could face constraints from the district that inhibit their ability to operate with a level of freedom necessary to achieve at high levels. Handicapping charter schools through regulation or giving them faux autonomy undermines their purpose and diminishes their capacity to innovate and raise student achievement, and this report sheds great light on this important issue.
Educational Economics: Where Do School Funds Go?
Marguerite Roza
Urban Institute Press, 2010
This book is an excellent synopsis of the work on school funding that Marguerite Roza and her colleagues at the University of Washington's Center on Reinventing Public Education have done over the past decade. In short, accessible fashion (just 99 pages), the book lays out the fundamental and systemic problems with school funding. It also explains how the complexities of and multiple actors in schooling cause $500 billion spent annually on K-12 education in this country to flow in perverse and sometimes surprising ways. For example, those with the most resources tend to be "[m]iddle- and upper-class students, not poor students. Electives and athletics, not core subjects. Gifted and high-achieving students, not struggling students."
Mandates and strings attached to state and federal funding surely tie local school leaders' hands when it comes to how they spend the money, and as such those at the local level might be tempted to wash their hands of blame for funding and spending peculiarities. However, Roza does a great job of illustrating how local policies, practices, and personalities adversely impact school funding and spending.
For example, CRPE found school-to-school spending differences, in the same district, of $14,000 per student. In one school, the principal had control over just $4,000 of her school's entire budget. Fordham found similar examples in our 2008 look at Ohio's school funding system. In the Columbus City School District, the per-pupil funding gap between elementary schools was as large as $5,600, despite the schools serving similar populations of students and reaching similar levels of academic performance.
Locally negotiated teacher contracts add to the funding perversions. Though the mission of all school districts is to increase student learning, CRPE calculates that 19 percent of every district's budget is spent on "eight common collective bargaining provisions with a weak or inconsistent relationship with student learning" (e.g., teacher salary increases based on experience and credentials, school days set aside for professional development, and class size limitations).
The book is chockfull of additional examples at local, state, and federal levels, the sum of which are termed a "wicked problem," a phrase drawn from social planning literature. These "messy, circular problems" with "so many factors and conditions, all embedded in a dynamic context," act like a "house of cards, and any effort to dismantle or overhaul one piece will always require a new prop."
Roza dismantles a few of the worst reform ideas, including the 65 percent solution, "adequacy" campaigns, and funding schemes based on minimum staffing models and education inputs. Ohio adopted the lattermost of these last summer when the Evidence-Based Model was put into law (see Roza's colleague, and CRPE director, Paul Hill's excellent critique of Ohio's new funding scheme here).
In the end, Roza rests some home on decentralized decision-making and weighted student funding, and proposes seven core elements of a better funding system:
She also acknowledges there's no clear roadmap toward this new system. Hence a central contradiction of education reform--while these "wicked" problems might call for incremental, cautious solutions, to hedge against their unintended consequences, the depth and tragedy of the flaws in school funding cry for a more radical approach, even for a starting over. School funding reform, as Roza sees it, is not for the timid!
You can buy the book here.
by Emmy Partin and Eric Osberg
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Short Reviews
Education Transformation: Doing What Works in Education Reform
Center for American Progress
Glenda L. Partee
April 2010
This report, a product of the Center for American Progress's Doing What Works project, takes a critical look at the implementation and funding of federal education policies and identifies programs that can be eliminated, consolidated, or restructured.
Partee credits the Obama administration for adopting a more targeted use of funding and offers a similar framework that puts heavy emphasis on flexibility, innovation, accountability, increased teacher quality, and common standards. She goes on to offer seven recommendations that can be used to make federal education programs more cost-effective and successful:
Utilizing this lens, the report identifies many education initiatives that have become too scattered or duplicative of other programs. A prime example is the Even Start early childhood and family literacy program, which has yielded little measurable results and is redundant with several dozen other federal programs.
Partee also pushes programs to be funded based on student need, rather than distributed by formula, which spreads money too thin to make an impact.
The recommendations offered up could certainly be translated to the state level, and should be of particular interest to Ohio policymakers, as the Buckeye State will need to re-examine the efficacy of all of its public programs when addressing an unprecedented budget crisis in the next biennium. You can find the report here.
by Eric Ulas
Ohio Teacher Contracts and High Labor Costs
Education Action Group Foundation
Spring 2010
This report, sponsored by the Foundation for Educational Choice, looks at the cost of “labor” in school districts in Southwest Ohio. In reviewing teacher contracts for more than a dozen local districts the authors report, “we do not have to raise taxes, lay off thousands of teachers or cut student programs to help our public schools survive the current financial crisis.” Read the study here.
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Flypaper's Finest
A selection of the best offerings from Flypaper, Fordham's blog.
No, send Obama to the Queen City, by Fordham-Ohio
We appreciate Mike's enthusiasm for Denver's School of Science and Technology but would rather see President Obama give the commencement speech at Cincinnati's Clark Montessori Junior and Senior High School. And not just because we're typing this post in the Buckeye State. Clark is the first public Montessori high school in the country, and has been identified by the Bill & Melinda Gates Foundation as a national model high school. Read the rest of this post here.
Becoming charters could save Cleveland's most promising schools, by Emmy Partin
The school board of the Cleveland Metropolitan School District voted this week to lay off 10 percent of its 8,000 employees, including 545 teachers. Particularly hard hit will be the district's ten "innovation schools".... CMSD already authorizes several charter schools and the board approved the superintendent's ambitious transformation plan, which includes plans to develop a portfolio of schools and turn some district schools over to charter operators. Could Cleveland use the charter mechanism to save its most promising schools? Read the full post here.
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Bill Clinton hopes to raise profile of universities, whose students are tech-addicted, English-fluent, and have already been put on the path to college
by Tim Hoffine
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Two well-deserved pats on the back
Fordham's Director of Charter School Sponsorship, Kathryn Mullen Upton, has been invited to join top practitioners and authorizing experts on the National Association of Charter School Authorizers' national Advisory Panel that will recommend revisions to NACSA's Principles & Standards for Quality Charter School Authorizing. The revised Principles & Standards will be released at NACSA's Annual Leadership Conference in October.
And Jamie Davies O'Leary's Gadfly article about Teach For America's new book, Teaching as Leadership, was the feature story in the April issue of Education Matters, the newsletter of the American Association of Educators.
The American Enterprise Institute's Frederick (Rick) Hess is coming (back) to the Buckeye State to set Ohioans straight. His most recent book, Education Unbound: The Promise and Practice of Greenfield Schooling, argues for a radical rethinking of our educational establishment, and his forthcoming (and Fordham co-produced) book, A Penny Saved: How Schools and Districts Can Tighten Their Belts While Serving Students Better, chronicles how states and school districts might cut education spending while improving student performance. Hess will discuss the important lessons from both books and provide cautionary tales for Ohio and its leaders at The City Club of Cleveland on Friday, May 7. For tickets or more information, call toll free at 888-223-6786 or locally at 216-621-0082.
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The Ohio Education Gadfly is published bi-weekly (ordinarily on Wednesdays, with occasional breaks, and in special editions) by the Thomas B. Fordham Institute. Have something to say? Email the editor at [email protected]. Would you like to be spared from the Gadfly? Email [email protected] with "unsubscribe gadfly" in the text of your message. You are welcome to forward the Gadfly to others, and from our website you can even email individual articles. If you have been forwarded a copy of Gadfly and would like to subscribe, you may email [email protected] with "subscribe gadfly" in the text of the message. To read archived issues, go to our website and click on the Ohio Education Gadfly link. Aching for still more education news and analysis? Check out the original Education Gadfly.
Nationally and in Ohio, the Thomas
B. Fordham Institute, along with its sister organization the Thomas
B. Fordham Foundation, strives to close America's vexing achievement gaps
by raising standards, strengthening accountability, and expanding high-quality
education options for parents and families. As a charter-school sponsor in Ohio,
the Foundation joins with schools to affirm a relentless commitment to high
expectations for all children, accountability for academic results, and transparency
and organizational integrity, while freeing the schools to operate with minimal
red tape. The Foundation and Institute are neither connected with nor sponsored
by Fordham University.
