Saturday, December 26, 2009

You can't fix the public education finance mess with deceptive evasions

Before Christmas I wrote that it has become reasonably clear that St. Cloud school district and its teachers union will not arrive at a settlement before January first of this year. We find ourselves millions of dollars apart, many millions of dollars apart, I wrote. I received a number of comments, both negative and positive. If we are going to figure out a solution to education finance, we'll need to think clearly. When we are struggling with complex issues, at times the dialogue deteriorates into a series of deceptive evasions, designed to keep us from thinking about the real issues. Wouldn't it be easier if we could solve the problem by attacking personalities? Or putting the problem off until another day.

Much of the discussion that takes place here and elsewhere in the community represents a complete evasion of the central financial issue facing public education today. The central problem is how we will come to grips with the long term, nearly intractable imbalance between the rate of growth in teacher compensation and the rate of growth in state funding per student. Some people prefer to assert that this is a temporary problem and point to the fact that the growth in the funding formula in the last four years has been 2 percent, 1 percent, 0 percent and 0 percent respectively, or 3/4 percent per year. But the problem is not temporary; it is permanent and structural and requires a permanent structural solution. Anyone who says the solution is simply to keep proceeding along the same course is simply engaged in another form of evasion.

The solution will require significantly more revenue from the state, some form of cost controls and cost discipline, a major rethinking in the structure of the way in which we organize the discipline of teaching itself, or some combination of all of these. We cannot permanently and regularly solve the imbalance between revenues and teacher compensation cost by permantly raising pay faster than revenues, permanently reducing programs and raising class size. At some point there will be a day of reckoning, and really, the day of reckoning is close at hand.

One of the deceptive evasions that is commonly advanced, and the one that I would like to discuss today, is the attempt to confuse the issues by attacking alleged overspending on administration. The use of this deceptive evasion plays into people's prejudices. We are in the teaching business. Everyone wants to keep class sizes down. Wow: wouldn't it be wonderful if we could somehow solve this problem by cutting administration and putting that money into teachers salary! The fact is that if you completely eliminated all of our school and district administrators, every last one of them, that wouldn't give you enough money to pay for the increased compensation sought by the SCEA for teachers in this contract period alone.

Let's have a look at the real numbers. The school District's operating fund budget is the part of our budget that pays for teachers, paraprofessionals, administrators and other staff. It pays for operating our school buildings (heating, lighting, and so on). It pays for regular education (primarily classroom instruction) and it pays for special education (funding in addition to the regular education component of students with disabilities). In the school year 2000-2001, the general fund budget for expenditures of all kind was $79.9 million. By the 2008-2009 budget, the general fund operating budget had risen to $82.6 million, a 3.3% increase total, an increase of about 1/2 percent per year. Remember that during this time period grant funding changed, and our enrollment changed, so we can't say that the rate of increase of just over 1/2 percent per year is all that helpful. I'm providing these numbers to provide some perspective on school budgeting.

When we budget, we catagorize administrative expenditures as School Administration and District Administration. School administrators include principals and assistant principals. Earlier, I talked about the amount of revenues that you could raise by eliminating all administration, and of course that would be both ridiculous and illegal. School administration answers parents phone calls to deal with various issues. School administrations selects and supervises teachers. School administration is in charge of educational leadership in the school. Educational research is persistently reporting that school administration is a critical component in quality schools.

District Administration is also required by law, so talking about eliminating that is also ridiculous and illegal. These are the people who issue paychecks to employees, and who make sure that the correct number is on that check. They supervise transportation, school safety, implement state curriculum and testing requirements. They monitor request for acquisitions and make sure that the payments are authorized and within budget. They monitor school effectiveness and supervise principals. All the time, we wrangle with whether our expenditures are too high or too low, but the amount of money that we are talking about here is in a completely different order of magnitude as compared to the size of the teaching compensation budget.

In the 2000-2001 school year the combination of District and School Administration was just over $3.6 million, less than the two year increase in spending sought by the teachers union for increased compensation. $3.6 million represents the cost of all of the principals, assistant principals, most of the folks at the District Administration Office, in other words, the folks who administer at schools and the folks who administer at the main administration office. The total cost of District and School Administration budgeted for 2008-2009 was just a bit smaller, but in round numbers, it was just under $3.6 million. By way of comparison, Site Building and Equipment operations, another part of our general fund budget, run about $6 million.

The point I want to make is that as folks jump on the cost of administration in the district as if cutting it could somehow produce great revenues for the district, the facts show otherwise. Look at it this way. The total compensation costs for teachers was $51 million last year. This number should be way higher than other components of the budget, because we are in the teaching business. That $51 million number includes about $40 million for regular compensation (primarily base pay plus steps plus lanes) and about $6.3 million in health and dental insurance costs. For every salary dollar we pay teachers in compensation, you then have to add about 13 cents (13%) for TRA (Teachers Retirement) and FICA costs. That, and a variety of smaller costs, for summer school and the like, bring the total to last year's base of $51 million. In their last specific bargaining proposal to us, the teachers union, SCEA sought about $1.7 million in increased compensation costs (salary, benefits, etc) for the current budget year, and another $2.4 million in increased compensation costs for the next budget year (2010-2011). That's a compensation cost increase of $4.1 million. As I have said, you could get rid of the entire administration at the DAO, and all of the principals, assistant principals and all of the other district and school administration, and you still couldn't come up with that increase.

People who claim that the teacher compensation cost issue can be resolved by getting rid of an administrator or two are thus buying into a convenient evasive deception. Its a way of changing the subject. Suppose you got rid of all administrators and used the money for compensation increases for teachers. Putting aside the fact that there would be nobody to collect the money from the state and nobody to issue the checks, and nobody even to calculate the increased amount to put on the checks, what would we cut the next time we came to the bargaining table to fund the next round of increases?

We spend a lot of time monitoring the size of our administrative staff and the budgetary trends. We need to do this, because we are spending public money. We compare our costs from one year to the next, as I've said, and we scrutinize the comparative costs from district to district. Reasonable people can quibble with staffing decisions here or there. But there is no credible argument that our administrative budget is out of line for a district our size and responsibilities. When people say, oh, oh, I think you should cut your administrative costs and everything will be just fine, they are engaging in an act of financial evasion and double talk.

Always, we need to monitor costs and keep them under control. Always we need to monitor efficiency. But the issue of administrative efficiency is completely irrelevant to the question whether we can increase teacher compensation by $4.1 million in two years. When somebody brings up a complaint about administration as a reason why we should increase teacher compensation by millions of dollars, they are trying to hoodwink you. You can't by a new Lexis with the savings that you get by eating less ice cream.

Attacking administrative expenses is just one form of deceptive evasion. People want to ignore the facts and sort of change the subject with personal attacks and non sequiturs. Another form of deceptive evasion is to attack personalities. Its an evasion to attack board members, the superintendent or his cabinet. Its an evasion to attack or disparage teachers or their representatives. Notice how this kind of attack cleverly avoids confronting financial facts of life. If every school board member was an evil money grubbing insensitive teacher-hater, the budgetary facts would still be the budgetary facts. Board members, administrators, teachers and their representatives are mired in a dysfunctional system.

We've been asked to cut a huge block of teachers and increase class size to pay for this year's settlement. Our refusal to do that cannot be explained by asserting that we don't care about teachers. Raising class size increases the workload of teachers. Cutting 50, 60 or 100 teachers isn't a favor to those teachers, and its not a favor to the teachers who will be left to carry the larger load. And even if we do that, what are we going to do at the table in two years when we are asked again to increase compensation at a rate faster than the state increases revenues. And what are we going to do the time after that?

If we really care about education, if we care about teachers and students, we need to start addressing the financial crisis in a more thoughtful, visionary way. Pretending that you can increase a $50 million budget item by 8% by making cuts in a $3.6 million budget item isn't thoughtful and it isn't visionary, its a deceptive evasion.

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