Budget Talk: St. Cloud District Emphasizing Classroom Expenditures

This past weeks, I've been writing about what's been happening to our budget over the last seven budget years. In an earlier post, I described some of the trends that have been manifest by our budget on the revenue and expense side. Sometimes it is a bit difficult to drill through the budget, because at times revenues and expenditures hit our budgets in ways that mask trends. For example, our 2008-2009 budget had a major drop in revenues, because we lost our operating referendum for one year. So, when you look at budget trends, that year is sort of an exception. In order to avoid a sudden reduction in services, we used our reserves to carry us through that one bad year until the new operating referendum revenues were restored. At the bottom of each post, I've been listing the budgetary categories specified by the Minnesota Department of Education and I've been discussing the issues and challenges presented by each component of the budget.

In a prior post I showed that expenditures for "regular instruction," that is for classroom teaching primarily, has gone up much faster than other parts of the budget since 2002-2003. The regular instruction category is defined as "Expenditures for elementary and secondary classroom instruction, not including vocational instruction and exceptional instruction. Includes salaries of teachers, classroom aides, coaches, and expenditures for classroom supplies and textbooks." In short, we've been trying to put resources into the classroom. For example, in the six years since 2003-2004, our regular instruction expenditures have risen at a rate of 3.9 percent per year. Over that same period, our total budget has risen at the rate of about 2.6 percent per year. Over the same six years, District and school administration expenditures have risen at the rate of 2.0% per year. In short, spending for the classroom has risen at a rate just about double the rate of spending growth on district and school administration over this time period. District Support Services has risen at the rate of 4/10 of one percent per year in that six years. Special education expenses rose at the rate of 1.4 percent per year, reflecting in part, the decision of the board of education to impose a freeze on special education expenditures during the last several years, driving the average growth down. The primary growth in our budget has been in the regular instruction category over the last seven budget years.

The numbers thus show that in the last six years, the school district has been trying to grow classroom instructional instruction expenditures and emphasize growth where parents and the public have told us they want funds to go, into regular classroom instruction.

Ok. That is the last seven years' budget. What has happened in the last three years. Keep in mind that the state funding formula increased one percent and zero percent, or an average of 1/2 of one percent per year during that period. A review of the this year's budget shows an actual reduction in the budget for district and school administration over the period of the last three budget years. At the same time, it shows a $2 million increase in regular instruction, for an increase of 2.5 percent. It shows virtually no change in district support services and a reduction in special education. In all of these circumstances, I am not making an adjustment for inflation. In other words the reductions that I am describing are actual reductions, not "inflation adjusted" reductions. Pupil support services was held constant, that is no increase. Instructional support services rose about 3 percent per year (about $500,000) likely reflecting some grant funded operations. Site, building and equipment spending was not increased. Our expenditures on regular instruction increased at more than four times the rate of increase in the general funding formula. These are the hard numbers behind the Board of Education's pledge to keep cuts away from the classroom as much as possible and to avoid cutting teaching positions. Regular instruction has been rising as a percentage of our total budget.


Here are the some of the budgetary definitions from the Minnesota Department of Education:

• District Level Administration Expenditures for the school board and for the office of the superintendent, principals, and any other line administrators who supervise staff.
• District Support Services: Expenditures for central office administration and central office operations not included in district and school administration. Includes expenditures for business services, data processing, legal services, personnel office, printing, and the school census.
• School Level Administration Expenditures for the administration of individual schools, including the cost of one licensed principal
• Regular Instruction: Expenditures for elementary and secondary classroom instruction, not including vocational instruction and exceptional instruction. Includes salaries of teachers, classroom aides, coaches, and expenditures for classroom supplies and textbooks.
• Instructional and Student Support Services. Expenditures for activities intended to help teachers provide instruction, not including expenditures for principals or superintendents. Expenditures for instructional support services include expenditures for assistant principals, curriculum development, libraries, media centers, audio visual support, staff development, and computer assisted instruction. Expenditures for pupil support services include noninstructional services provided to students such as counseling, guidance, health services, psychological services, and attendance and social work services
• Facilities, Operations and Maintenance Expenditures for acquisition, operation, maintenance, improvement and repair of the district's buildings, grounds and equipment. Includes expenditures for custodians, fuel for buildings, electricity, telephones, and repairs. Also includes other miscellaneous expenditures such as retirement of long-term obligations, retirement of nonbonded obligations, insurance and nonrecurring items such as judgments.
• Pupil Support Services: Expenditures for all non-instructional services provided to students, not including transportation and food. Includes expenditures for counseling, guidance, health services, psychological services, and attendance and social work services
• Special Education: Expenditures for instruction of students who, because of atypical characteristics or conditions, are provided educational programs that are different from regular instructional programs. Includes expenditures for special instruction of students who are emotionally or psychologically disabled, or developmentally delayed; for students with physical, hearing speech, and visual impairments; and for students with special learning and behavior problems.
• Vocational Instruction: Expenditures in secondary schools for instruction that is related to job skills and career exploration. Includes expenditures for home economics, as well as industrial, business, agriculture, and distributive education.

Using what works may really work...but it requires collaboration and leadership

One of the significant trends in education is the progress that is now being made in understanding how to be more successful with more students. I can't say when the slogan "all children can learn," became a mantra in education, but for for many years, it didn't seem as though a whole lot of thought was given as to how that might happen operationally in the real classroom. We believed that all children can learn, but what did that mean and how could we accomplish it? For some, it meant stick everybody in the same class and if you treat them all as if they are equally capable of learning, by some magic, they will all learn. That's a bit unfair to the most thoughtful of the "all children can learn" movement, but there was a sense in which some proponents of the slogan seemed to believe that somehow if you throw a bunch of kids into a classroom and with the proper dose of self esteem, cooperative learning, and good will, by golly all children will learn. Two decades ago, the research which drove education was often heavily infected by philosophy and ideology.

In the last decade, however, driven partly by No Child Left Behind, partly by the standards movement, and partly by an increasing sophistication in educational research, education appears to be making significant progress in incorporating rigorous research based ideas that have a prospect of making a significant improvement in what teachers and schools can accomplish.

To some extent, the success of the new rigor is being masked by a change in who is coming to school. More students are coming to school who live in poverty. More students are coming to school who cannot speak English, or whose English proficiency is quite limited. More students are coming to school who have not been read to at home. And, we have been focusing most of our measurement on the accomplishments of that subgroup of students. But against that trend appears to be an emerging consensus amongst the best minds in education on "what works." I'm not qualified to put my foot down and assert that I know what the right answers are. But it seems to me, from the outside, that educators are discovering that there are some approaches that work better than others, and that when the approaches that work are implemented systemically it can make a significant difference, especially for the students who historically have not done well in school.

In a previous post, I summarized Alan Odden's an article by Allan Odden, entitled "We Know How to Turn Schools Around." Odden hails from one of the leading centers for educational thought, the University of Wisconsin's Center for Educational Research. One of the centerpieces of the new movement to reach more students effectively is the concept of implementing "to build, over time, a common understanding of effective instruction. Districts that move the student-achievement dial by large amounts have a systemic view of curriculum and focus intensely on instructional practices shown to work—and they require all of their teachers to use them."

Now this idea, of implementing systemic requirements that teachers must follow can really be threatening to the concept of the teacher as professional. It can create a vision of the days when teachers had to put their lesson plan on the board, and their lesson plan had to be identical to the lesson plan delivered to them by a bureaucrat in the State Department of Education or in the central office of the district administration. But that's not the idea of best practices at all, at least as I understand them. Best practices calls for using what works with the students before you, and implementing what works is both an art and a science of the highest degree of complexity.

When my wife came to this community, highly trained in working with students with dyslexia, she discovered that the "D-Word" was not used in public education in many places. Education professionals could simply will away what had been proven to work with these students. Yet, it was already well known that a huge segment of students with high potential were not reaching their potential because of neurological barriers to learning that manifest as dyslexia. It was already well known that certain techniques could unlock the potential of these students, and yet it was deemed permissible to ignore those techniques, simply because they did not fit the current educational fads extant at the time. Millions of students across the country failed because many schools of education did not teach what was already known, and consequently educators refused to implement research best practices. But now the new openness to doing what works has opened the floodgates and throughout Minnesota and elsewhere it is becoming increasingly possible to use what works to teach students with dyslexia. Eventually, if we are to realize the full potential of all students, using what doesn't work cannot be tolerated.

Similarly, for a long time, it was permissible to teach non-English speaking students with techniques that were not researched based, and in many districts ESL was taught in ways that delayed the progress of these students. Once again, an emerging consensus on "what works" has begun to infiltrate school districts across the country, driving out ineffective techniques and leading to more rapid success with English language learners. Similarly, for a long time as well, it was permissible in public education to use techniques that were proven ineffective with advanced learners, especially in the K-8 grades, simply because those techniques fit preconceived philosophical beliefs. But more and more, in this area too, what works is what counts. Increasingly, school districts are becoming intolerant of the use of techniques that have been proven not to work.

Does this mean that every teacher must teach every student in an identical way? Absolutely not. Teachers have different strengths and different "comparative advantages." It would be silly to force a teacher to teach in a way that is ineffective for that teacher or ineffective for particular student. Doing what works doesn't mean using a practice that isn't working for that teacher or for the students who are actually in the particular classroom. Does this mean that some of the techniques that are being pushed forward will prove as effective as they are claimed to be? Sadly, there is a history of fastening on to new techniques don't work as well, or for as many students, as originally claimed. It is this history, of bringing forward new systemic reforms and requiring teachers to turn their teaching practices upside down that causes many of the most experienced teachers to be skeptical when they are asked to engage in intensive, time consuming reform. They wonder how long these new reforms will last, before someone comes along and tells them that, no, the last new reform didn't really work, and now something new must be tried.

And yet, we know that there are effective and ineffective ways of doing open heart surgery. We know that there are effective ways and ineffective ways of treating diabetes. In the medical profession there is a raging debate over whether doctors should be organized in ways that implement the best practices research in medicine. (see Gawande, The Checklist). Much of the resistance to implementation of more highly effective techniques in medicine has come from older physicians who believe that it demeans their professionalism to require that they implement the new ways of progress that use "what really works." But in medicine this is an alibi designed to avoid making change. Working collaboratively to implement what works is the new wave of professionalism, and the professional of the future will regard it as unprofessional to refuse to adopt methods that are proven to work. From lawyers to accountants, to doctors to firefighters to anti-terror teams, we are learning that professionals working together rigorously to implement what works can dramatically improve the effectiveness of that team of professionals.

So here we are again. At the center of reform is collaborative teacher teams. This is the DuFour approach that I've written about before, but packaged in somewhat different language. Over and over again, we keep hearing the same story from leading researchers. But teacher driven team based collaboration does not occur in isolation, and this is important. The teacher driven teams are part of a complete district wide team, led by principals and executive leadership whose focus is on educational excellence. Teaching is a profession where the result depends heavily on the work that many others do. The second grade teacher cannot be completely successful unless the first grade teacher is successful, and neither can be as successful as they should be, without the cooperation of parents and of course the student. Successful schools require collaboration and collaboration requires leadership. As Odden says:

Leadership in successful turnaround systems is “dense.” Teachers lead grade- and subject-based professional learning communities. Most of the instructional coaches are the school’s best teachers, and they orchestrate the overall professional-development system. And principals provide real instructional leadership. Moreover, these districts also have instructional leaders in the central office who know how to support schools and teachers and can help create the systemic approach to curriculum and instructional practice needed.

As Odden points out: "In order for public schools to transform themselves to meet new challenges, we need a new vision of professionalism, based on teamwork, on leadership, and on collaboration and on accountability:

Turnaround schools and districts are professional in the best sense of the word. Their staff members read the most recent research, reach out to experts in the field, look for and use best practices, and take responsibility for assessing the impact on student learning of what they do, improving instructional practices when student results are not what’s desired."

Professionals who work in teams using best practices under the leadership of the most experienced can transform education and if public education is to meet the challenge of the 21st Century we must find effective ways of accomplishing that transformation.

Urge legislators to repeal bargaining penalty retroactively

In today's Times both the SCEA President and our Suprintendent of Schools (along with a number of other superintendents) criticize the imposition of a bargaining penalty during a time of extraordinary financial difficulties. It is time for each of our local legislators to sponsor a retroactive penalty repeal bill to get rid of this foolish law. The inexcusable impact of this penalty law is to force boards into paying settlements that they cannot afford or to pay a penalty. When I talk to local legislators they regularly tell me that these are "local issues." If they are local issues, why then does the legislature impose a penalty on one of the two parties to the settlement process? The bargaining penalty is just another way for the governor and legislature to wash their hands of the trainwreck that is public school finance. Its another example of statewide systemic problems that are placing school boards and school districts in an untenable situation.

Retroactive penalty repeal in St. Cloud would allow the district to put the penalty money back on the table. So, it would directly benefit teachers. This is the perfect opportunity for each of our legislators to stand up and be counted in favor of keeping public education sustainable.

When I complain about the bargaining penalty, I'm not disparaging the need to compensate teachers appropriately. Public education is the business of teaching, and the business of teaching requires attracting and retaining, and properly rewarding professional teachers. This issue, of the deadlock between the representatives of teachers and school boards arises from something much deeper--the long-term systemic statewide failure of the current system to bring compensation costs -- and the structure of compensation costs -- into balance with revenues provided by the State. When a legislator tells you that this is a "local problem," that's an evasion of the Constitutional responsibility to prove an effective system of public education. The bargaining penalty is an insult to the school boards, and above all to the children, who pay these penalties because the legislator and governor have failed in their fundamental constitutional duty. Its time for the penalty to be repealed, retroactively. But that is just the beginning point of what needs to get done. We need our politicians in the legislature and governor's office to face up to their constitutional duty to provide an efficient system of public education. If the governor and legislature believe that teacher compensation needs to go up in this time of budgetary crisis, then it should provide adequate funding to do so. But if the Governor and legislature believe that its time to freeze compensation, then the penalty should be repealed.

In previous posts, I have been writing about Judge Gearin's decision that Governor Pawlenty could not unilaterally unallot funding that he had approved and signed into law to address a deficit caused by his subsequent veto of legislation which would otherwise have eliminated that deficit. As I explained, the effect of this decision, if upheld is to require democrats and republicans, the House, Senate and Governor, to work together to arrive at a common solution. I have been arguing in a number of my posts that a lasting solution that serves the public interest is going to require courageous action from all parties. By courageous, I don't just mean raising taxes. Courageous action requires that the political parties, both of them, must compromise and must offend their own respective power bases. For public education, that means that they need to provide sufficient revenues and sufficient control over costs to local school districts, so that we can get out of the vicious downward financial spiral that has characterized public education in the last decade plus.

Its true, we have a short term crisis, but the crisis in public education finance has not been temporary. As the Minnesota Association of School Business Officers points out: "The percentage of the State’s budget spent for K-12 Education, while significant, has decreased in recent years. Only a few years ago, K-12 Education represented 45% of the State budget. For the current biennium it is 40% of the budget, and is forecast to shrink to 38% of the budget in the next biennium, even though enrollment is projected to increase. At the same time, there are other areas of the state budget growing at a faster rate than K-12. The governor and the legislature are not prioritizing education, despite their protestations to the contrary, they are prioritizing medicaid, general assistance medical care and chemical dependency treatment entitlement grants. Over the last decade, the State of Minnesota has been increasing the health budget at the rate of 8 percent per year. As the recent bipartisan State Budget Commission Report states:

Growing at an average annual rate of 8.5 percent, state payments for direct health care services are the fastest growing segment of the state’s budget and consume a greater share of available resources each year. State health care programs face many of the same cost pressures that exist in the private health care market, including medical inflation and increased utilization of services spurred in large part by the development of new medical technologies, services, and pharmaceuticals to treat illnesses.

The Commission report notes that this trend is fundamentally unsustainable, and yet leadership at the State level seems to face that reality. The Budget Commission Report continues:

In FY 2007, about one out of every five state general fund dollars were spent on public health care programs—including Medical Assistance (the state’s Medicaid program), General Assistance Medical Care, and chemical dependency treatment entitlement grants. If current growth rates continue unchecked over the next 25 years, two out of every three state general fund dollars will go toward health care. .....To illustrate the crux of the problem the state will face over the next 25 years, consider a scenario in which revenue grows 3.9 percent per year (as described above) and health care continues to grow at a rate of 8.5 percent per year. In order to achieve balanced budgets over the 25 year time horizon, expenditures on all other segments of the budget, including K-12 education, would have to remain essentially flat, as shown in the graph below. If instead, we make the assumption that health care continues to grow at 8.5 percent and spending on K-12 education grows by 2 percent per year (CPI inflation) for the next 25 years, all other segments of the budget beyond health care and K-12 will have to be reduced by 3.9 percent each year to avoid budget deficits. This would nearly eliminate all other areas of spending by 2035.

The funding formula for public education increased 2 percent in 2007. It increased 1 percent in 2008. For this year, 2009, it is frozen, and in 2010 it is frozen again. While the 2007-2009 budget restored some of the massive special education deficit that was allowed to grow in the first four years of the Pawlenty administration, the budget for this biennium begins to grow that deficit again, and it is projected to grow even faster in the following years.

MASBO continues:

• Up to 85% of K-12 resources in school districts are used to pay salaries and benefits of staff who provide direct instructional services to students, or to support the students or instructional staff. If K-12 funding is cut, districts will have little choice but to cut the services they provide to students. Additionally, about 20% of district expenses are to provide special education services which are mandated by federal and state law. Because of these mandates, special education programs would be exempt from most cuts.
  

• Minnesota school districts are constrained by PELRA laws that set the parameters for collective bargaining and permit public employees to strike. These laws hamper the ability of school districts to limit salary increases, regardless of economic circumstances of the state or the district.

At a time when government needs to be freezing its expenditures, the legislature is penalizing school districts at the rate of $25 per student for refusing to provide unaffordable compensation increases to employees.. If our state legislators believe that teachers should receive an increase in compensation, then they should put some money behind that position. But to penalize school districts for engaging in fiscal responsibility, is unconscionable. The Governor has complained, but the Governor too has not offered solutions. Too many politicians are looking to promote themselves to higher office, when the work that they were hired to do for their current office is not done.

Our governor and legislators are not meeting their Constitutional responsibility. The Minnesota Constitution does not place health care in a favored position. As important as health care may be, and it is important, the Minnesota Constitution puts education first. Nonetheless, we are beginning to hear politicians beginning to try to try out rationalizations for walking away from the pre-eminent state responsibility for public education

The education clause of the Minnesota Constitution states:

“Uniform system of public schools. The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.”

To maintain a thorough and efficient public system of public schools throughout the state we need three things:

• Adequate revenues, raised through taxation at the state level, to achieve our objective; without adequate revenues we cannot maintain programs and recruit and retain the very best professionals.
• Cost controls so that our labor costs do not rise faster than the rate of growth of revenues. Without cost controls, the adequate revenues can never maintain a stable thorough and efficient system of public schools
• A long term strategic plan for continuous improvement implemented in all school districts founded on visionary best practices

In prior posts, I have argued that our state leadership, in both parties, have abysmally failed us in the first two respects, and the tragedy is that neither democrats nor republicans even want to acknowledge the nature and scope of the problem. Its time for them to do their constitutional duty, even if it is painful. Minnesota's constitutional provision requiring the legislature to establish a “general and uniform system of public schools” means that education is a fundamental right in Minnesota. Skeen v. State, 505 N.W.2d 299 (Minn. 1993). This Constitutional provision places public education in a unique position in Minnesota. In my view, all of us in the public service must adhere to this constitutional requirement, by putting the requirement to provide a thorough and efficient education first and foremost in our actions.

In a prior post, I wrote: One of the common methods for leadership at the State to evade constitutional responsibility is to repeat the canard that in Minnesota, quality public education is a local responsibility. We hear this in various forms. State elected officials will assert that if school districts don't buy enough textbooks, or don't keep class sizes at reasonable levels, or don't obtain sufficient funding via operating referenda, that this is a local problem. But that is a complete misstatement of the law in Minnesota. It is the fundamental obligation of the State legislature under our Constitution to provide for an efficient general and thorough system of public education. It is our job on the local level to implement. So I think that the education clause places public education in a similar position for all of us in public service, from the Governor, to legislators, to school boards, to teachers, administrators and staff. We are all called upon, by the Minnesota Constitution, to put the provision of a thorough and efficient public education system first and foremost. Ask your local legislator to stand up and be counted. Will you support penalty repeal?

Special Education Costs Distort Education Cost Comparisons

Yesterday, I provided some detail on our special education budget and presented a chart that shows that the state is planning on continuing to grow the special education mandate deficit--that is the difference between mandatory spending on special education programs and the revenues provided for that purpose.

Today, I want to use that information to explain a common flaw in the approach commonly taken by so-called education pundits at the state and national level, when they try to compare the cost of private or charter education to the cost of a public education. Frequently, I see people taking the total cost of our a district's general fund budget and dividing it by the number of students. Then, they do the same thing for a private school, and compare the two results. Doing that contains a number of fundamental distortions, but the biggest distortion is in failing to account for special education dollars.

In our case the typical approach would be to take our general fund budget, about $88 million, and dividing our number of students into that number and comparing that to the cost of education in private schools or the cost several decades ago. If you just divide the number of students into the total general fund budget, you get a cost of about $9,000 per student. But $18 million of that revenue goes to special education, which the private schools do not have to provide. In addition to that, the $18 million comes with a federal mandate that requires the district to spend $25 million. If you take the $18 million off of the $88 million, you are left with $70 million, leaving you still with an inflated number for purposes of comparison. Why: because you have to take the additional $7 million off of the $70 million, That $7 million must be taken out of the regular education budget and transferred to cover the special education mandate deficit. You can't count that money, because it is being removed from the regular education budget to cover a service that private schools do not provide.

Now you are down to $63 million, which is closer to being an apple to oranges number--about $6300 per student. Now even that number is too high, because it doesn't include a variety of special funds providing services required by law.

School Budgeting: Special Education Deficit Back on the Rise, leading to local school district financial problems

Yesterday, I started a discussion of the District 742, St. Cloud area school district budget. I said that during this year of financial crisis for public education, as we confront union difficulties and difficulties at the State, I hear from a number of people who assert that its simple to make cuts. "Just do it," they say. So I thought it might be useful to take a look at some of the options that people will suggest from time to time. I think it might be useful to scrutinize it with a heavy dose of reality. In the next few days, I want to post some information about our budget and what we do to try to analyze whether it is at appropriate levels. Yesterday, I talked about the components of the general fund budget and placed each component of the budget in historical perspective. I showed that in the last 8 years, the regular instruction component of the that budget has grown faster than the growth of the general fund formula and that the district and school administration component has grown only slightly, far less than the formula, or of course the rate of inflation.

Today, I want to talk about special education in more detail. Several years ago, the Board of Education asked that our annual budget contain a special report on our special education revenues and expenses. This report is place in summary portion of the budget, so that the Board, the public, the staff, and our legislators can track what is happening in this important budget area. We decided to do that, because Special education is more than 25% of our total general fund budget, but also because it consistently operates at a deficit. When I first joined the Board of Education, I got a pit in my stomach every time I looked at the special education budget. Your natural instinct, when you are budgeting responsibly is to cut expenses so that they equal revenues, or to obtain new revenues to cover the deficit. Since 2004-2005 our special education deficit, the difference between our expenditures and revenues has fluctuated between $5.9 million and $6.5 million. I'm just not used to being associated with a business enterprise, or any enterprise that operates a major component of its operations at a deficit, and here, the deficit is over 25% of the special education budget, and about 7.5 percent of our general fund. We have to do something about this, I thought.

Now nothing in my discussion of special education today deals with the merits of the program itself. Special education is an important weapon in our arsenal of services to education all children. There are many many children who grow to be productive adults precisely because they have received the special services that special education provides. On balance, like all of our educational services, dollar for dollar, the expenditures pay dividends in the long run. The problem is that the state and federal government have created a program that costs more than either the state or federal government are willing to pay for, and so they pay for it with the financial crippling of regular education services for children.

The awful truth is that the law places us in a straightjacket that radically limits our options. It is against the law, in most circumstances, to reduce our total expenditures on special education. This is the so-called "maintenance of effort" law. The only practical way that we can reduce is to keep total expenditures from increasing. As compensation rates increase, we can reduce teaching and non-teaching staff, holding expenditures constant. We've been doing his over the last three years, eliminating a large number of teaching and non-teaching positions. Our total special education budgeted expenditures was $21.8 million in 2002-2003, $24.5 million in 2005-2006 and the budget for 2009-2010 is $23.2 million. Several years ago, the Board of Education conducted a two year comprehensive study of our special education finances. With outside help, we determined that our special education caseloads for both teachers and non-teachers were lower than other comparable districts. The administration recommended, and we agreed, to make staffing cuts to bring those ratios more in line with comparable school districts. Through the processes of keeping expenditures relatively constant, even though rates of compensation increased, as described above, we began reducing positions. .

Our total special education revenues are almost completely beyond our control. The federal government and the State government each allocate funds to us, based on formulas that intentionally under pay us for special education services that the state and federal government both mandate. Minnesota provides special education revenues based on the number of students (all students) attending public schools. They don't count the number of private school students in the district. This is a huge problem for school districts that have high private school populations--and we have one of the highest in the State. The reason is that private school families send their regularly abled children to private school, but their disabled children are provided special education at public expense. That means that the funding formula pretends that the students with private school families don't exist for purposes of calculating the revenues provided to the district, but still the district must provide those services without the revenues.

Now the state provides some excess funding to take care of this problem called "excess cost aid." The problem is that the State caps the amount of cost aid, and "pro-rates" it across school districts, so that as more and more districts need the aid, a smaller and smaller amount of aid is provided. Figure 1 below is a chart taken from the February 2009 Report to the Legislature. It shows the historical difference between total state expenditures on special education and the total of state and federal revenues to fund these programs. The cost of special education is going up, but the revenues from state and federal government are not going up as fast. Our expenditures are driven by federal special education requirements, but as I have said, the State of Minnesota is not content with the federal mandates. The legislature and Department of Education have heaped additional mandates in special education on top of the federal mandates, and in St. Cloud, that results in about $1 million in extra costs per year. The image below doesn't fit perfectly. So just click on the image to view it in a separate, enlarged window. The numbers are in millions of dollars, so 1,068 means one billion and 68 million dollars:

If you are dissatisfied with the fact that this huge deficit exists statewide or in your local school district, don't beat up on your school board or your Superintendent. The primary driver is the failure of the State fully to fund its obligation to local districts, and the addition of further mandates by the State.

If you have read this post and you are still saying we should "fix" special education by just making cuts, then you haven't been paying attention. Minnesota and federal law won't let us "make the cuts," and doesn't provide us with the revenues. The State legislature won't remove even the extra state mandate that is placed on top of the federal mandate, and so far, we haven't been able to find any state legislators willing to remove that mandate (or close the deficit).

Let's Look at Our School District Budget (Warning: its a lot of work)

During this year of financial crisis for public education, as we confront union difficulties and difficulties at the State, I hear from a number of people who assert that its simple to make cuts. "Just do it," they say. So I thought it might be useful to take a look at some of the options that people will suggest from time to time. I think it might be useful to scrutinize it with a heavy dose of reality. In the next few days, I want to post some information about our budget and what we do to try to analyze whether it is at appropriate levels. But we need some background to do that.

Our general fund budget consists of District and School Administration ($3.7 million), District Support Services ($1.8 million), Regular Instruction ($42.9 million), Vocational Instruction ($0.9 million, that is, 900 thousand), Special Education ($23.2 million), Instructional Support Services ($6.6 million), Pupil Support Services ($5.9 million) and Site Buildings and Equipment ($5.9 million), for a total of about $88 million. Another important figure is that about $51 million is devoted to teacher compensation (base salary, steps, lane pay, longevity, health insurance, TRA contributions). Now I can't talk about all of these budget components in one post. There is a lot to learn when you look at school budgets. You think you understand it, and then you discover that there is more, much more, to learn. But I can give it a start today. At the bottom of this post, I've included some definitions that you can keep in mind as you try to understand school budgeting.

Notice that classroom instruction, including the cost of teachers and others providing services to the classroom, is allocated in various points in the budget based on their function. So, it is hard when looking at the budget--which must follow standard state codes--to determine how much of the budget is going to classrooms. It takes a whole lot of work to do that.

District and School Administration includes the budget for the Board of Education, Office of the Superintendent, and School Administration -- that is administration at the schools (principals). In 2002-2003, the year before I joined the Board of Education total District and School Administration was $3.6 million. The 2009-10 budget for the same category is $3.8 million. That's an increase of about seven-tenths of one percent per year. Next year, we plan on making some reductions in this budget as we eliminate an assistant principal's position.

Regular Instruction includes kindergarten, Elementary and Secondary Education and a number of smaller categories that are coded according to State budgeting requirements. But this is the core of our regular instruction program--the part of the budget that pays for most of our teachers. In 2002-2003, the year before I joined the Board of Education, the Regular Instruction Budget was $36.9 million. The 2009-2010 budget for Regular Instruction is $42.9 million. During that time period, the regular instruction budget has increased 16.3 percent, or about 2.3 percent per year. During the same time period, the general funding formula has increased 12 percent, or about 1.7 percent per year.

Now I said that you will find most of our classroom teachers in regular instruction. But our total budget for all teacher compensation is closer to $51 million, and not every dollar in the regular instruction budget is teachers. So obviously, there must be teachers in other locations of our budget, and that is certainly true. Our budget for "teachers," includes a number of licensed professionals who are not classroom teachers. Many of them are codified to instructional support services. Counselors are classified as teachers for budget and bargaining purposes, and so are school psychologists and school nurses. Now before you jump up and say, cut some of those non-classroom teachers, let me tell you that the legislature passed a new "unfunded mandate" last year which prohibits us from cutting our budget for many of these professionals. The law, called "maintenance of effort" protects many of these positions from cuts, so don't bother even discussing it; it's against the law.

Our operating referendum includes funds dedicated to classroom teachers. When the Board of Education proposed an operating referendum in 2003, it committed to adding teachers and maintaining the instructional ratio--the ratio of students as compared to classroom teachers. We don't count counselors, nurses, psychologists, special education teachers or teachers on special assignment in this ratio. Just teachers in the classroom. When the Board proposed a renewal of our operating referendum in 2008, we renewed our pledge to maintain the instructional ratio pledge--in other words, to refrain from cutting classroom teachers (unless to account for enrollment reductions). We have worked very hard over the years to keep this pledge, not just because its a pledge, but because we believe that keeping the number of students in a classroom down is important for quality instruction.

The other large group of teachers are found in our special education budget, and these are mostly non-classroom teachers and other employees, such as paraprofessionals who provide special education pursuant to a individual educational plan (IEP). We watch two important components of this budget. One component is total expenditures, and the other component is the unfunded mandate deficit, which is the difference between what we spend and what the state and federal government provides in funding. This deficit is important, because we must fund it out of the so-called "cross subsidy," money we take out of regular education programs to cover the deficit.

Our total special education budget was $21.8 million in 2002-2003, $24.5 million in 2005-2006 and the budget for 2009-2010 is $23.2 million. Several years ago, the Board of Education conducted a two year comprehensive study of our special education finances. With outside help, we determined that our special education caseloads for both teachers and non-teachers were lower than other comparable districts. The administration recommended, and we agreed, to make staffing cuts to bring those ratios more in line with comparable school districts.

But there are two primary constraints on our ability to cut the special education budget. One is the federal "maintenance of effort" law, which makes it very difficult actually to reduce the total spending level for special education. The second is a state law which requires Minnesota school districts to provide more special education services than required even by the federal special education laws. Thus, while our governor and State legislators frequently decry unfunded mandates which they blame on the federal government, the truth of the matter is that we could cut about $1 million a year from our special education budget if State legislators would pass legislation dropping the extra unfunded state mandate. We have frequently asked our local legislators to propose such legislation, but frankly, there hasn't been much interest. Lots of talk about the evils of unfunded mandates, but not a whole lot of action.

So for those of you who write from time to time and claim that you have an easy solution to our budgetary problems--just cut special education, I have to tell you that you are wrong. For the past three years we have frozen special education. We are not allowed by state and federal law to cut it further. We could cut it probably by another million dollars if the legislature would remove the additional state unfunded mandate that requires school districts to spend more than the federal law requires.

Now that doesn't mean that we shouldn't scrutinize special education, or any other aspect of our programs to make sure that every last dollar of our programs are being used efficiently and effectively. Of course we should be doing that. But the special education budget is simply not a place that we can go to to create actual cuts in our budget to free up money for the classroom. I haven't discussed the rest of our budget, but I'm running out of time and space. I'll talk some more about our budget in future posts.

Here are the some of the budgetary definitions from the Minnesota Department of Education. The definitions are taken word for word from the MDE:

• District Level Administration Expenditures for the school board and for the office of the superintendent, principals, and any other line administrators who supervise staff.
• District Support Services: Expenditures for central office administration and central office operations not included in district and school administration. Includes expenditures for business services, data processing, legal services, personnel office, printing, and the school census.
• School Level Administration Expenditures for the administration of individual schools, including the cost of one licensed principal
• Regular Instruction: Expenditures for elementary and secondary classroom instruction, not including vocational instruction and exceptional instruction. Includes salaries of teachers, classroom aides, coaches, and expenditures for classroom supplies and textbooks.
• Instructional and Student Support Services. Expenditures for activities intended to help teachers provide instruction, not including expenditures for principals or superintendents. Expenditures for instructional support services include expenditures for assistant principals, curriculum development, libraries, media centers, audio visual support, staff development, and computer assisted instruction. Expenditures for pupil support services include non-instructional services provided to students such as counseling, guidance, health services, psychological services, and attendance and social work services
• Facilities, Operations and Maintenance Expenditures for acquisition, operation, maintenance, improvement and repair of the district's buildings, grounds and equipment. Includes expenditures for custodians, fuel for buildings, electricity, telephones, and repairs. Also includes other miscellaneous expenditures such as retirement of long-term obligations, retirement of nonbonded obligations, insurance and nonrecurring items such as judgments.
• Pupil Support Services: Expenditures for all non-instructional services provided to students, not including transportation and food. Includes expenditures for counseling, guidance, health services, psychological services, and attendance and social work services
• Special Education: Expenditures for instruction of students who, because of atypical characteristics or conditions, are provided educational programs that are different from regular instructional programs. Includes expenditures for special instruction of students who are emotionally or psychologically disabled, or mentally retarded; for students with physical, hearing speech, and visual
  impairments; and for students with special learning and behavior problems.
• Vocational Instruction: Expenditures in secondary schools for instruction that is related to job skills and career exploration. Includes expenditures for home economics, as well as industrial, business, agriculture, and distributive education.

State Senate Democrats Pursue a losing strategy for Public Education

In the last legislative session, the Senate Democrats proposed to cut public education by 7 percent. Minnesota Public Radio quoted the Senate Education Committee Chair, defending the proposed cuts as follows:

Sen. Leroy Stumpf, DFL-Plummer, the chair of the Senate E-12 Education Budget and Policy Division, said he's not happy with the cuts, but they're necessary given the financial circumstances.

The Senate education committee would have reduced school funding by $972 million, but would have used federal stimulus funding to cushion the blow, temporarily. After allocating stimulus, the Senate proposal, if adopted, would have cut public education funding by $273 per student. Many Democrats thought this was a political ploy, but actually it appears that Senate DFL leadership favors cutting public education in order to fund increases in the State's ballooning health care budget. Last budget year, the Governor and the House DFL leadership, spearheaded by Representative Greiling, blocked the Senate's attempt to slash public education. Recently, Representative Greiling warned that possibly this year, the Governor would realign himself with Senate Democrats I predict, however, that Governor and House will hold firm. If the Senate continues to adhere to its position, Senate Democrats will pay a heavy price at the polls. Democrats, most of them, are not going to look kindly on elected officials who put their name to legislation that slashes public education funding. They will be handing a powerful weapon at the ballot box to Republicans next November.

When I came to this community, the area was represented by Democrats, mostly. Over a decade, one by one, Democrats were defeated and replaced by Republicans, as Democrats were perceived as having lost touch with the values and priorities that most people in this community held. Then, in the past five years, the Democratic party has become competitive in Central Minnesota once again, and one of the key reasons has been that the Democrats have been perceived as supportive of public education. But its easy to lose touch in St. Paul, and some have concluded that the Democratic base will tolerate the financial destruction of public education and vote DFL no matter what. I think that they are making a huge mistake. There are a lot of core democrats, and a whole bunch of independents in Central Minnesota, who will not agree with the financial evisceration of public education. They know that the future of this State depends upon a strong public education system.

By proposing to cannibalize public education funding, the Senate Democratic leadership was seeking to protect the ballooning growth in the portion of the State's budget that goes to health. In recent years, the percentage of the State’s budget spent for K-12 Education has been shrinking, even though enrollment has been increasing. Only a few years ago, K-12 Education represented 45% of the State budget. For the current biennium it is 40% of the budget, and is forecast to shrink further At the same time, the State's Health Care budget increasing at 8.5% per year. The State Budget Commission's report warns that “...state payments for direct health care services are the fastest growing segment of the state’s budget and consume a greater share of available resources each year.” It goes on to say:

In FY 2007, about one out of every five state general fund dollars were spent on public health care programs—including Medical Assistance (the state’s Medicaid program), General Assistance Medical Care, and chemical dependency treatment entitlement grants. If current growth rates in state health care spending continue unchecked over the next 25 years, two out of every three state general fund dollars will go toward healthcare.

The plan to keep increasing the state health budget by reducing public education is a losing idea. At the rate that the health budget is increasing, it will consume all of the rest of the State budget, eventually. Soon, as the state health budget surpasses public education as a share of the budget, the increases in state health spending will force all other aspects of the budget to freeze, and then begin to fall. Its time for political leaders to take out their calculators and do some simple arithmetic.

This idea, concocted by Senate leadership is all the more troublesome, because evidently the State Senate leadership believes that the State can slash public education funding, but at the same time local school districts should continue to increase teacher compensation. Evidently, they believe that they can have their cake and eat it too: cut public education while convincing teachers that Democrats are their friends. But this cut-education-and raise-compensation position will lead to massive cuts in teaching position, increases in class size, and gradual destruction of public education. Cutting public education is a bad idea, but cutting public education while increasing compensation is an even worse idea. Its a bad idea for children, and a bad idea for the educational professionals who work in public schools. And its a losing idea for Minnesota and in the next campaign season.

Continuous Progress; continuous improvement; using the NSBA model

I've been talking about the continuous progress idea embodied in the National School Boards Association Key Work of School Boards. This is a Baldridge-based excellence model designed to serve as a framework for school boards to focus their attention on their primary mission, which is to improve student achievement and to deliver high quality education to all students. If you are interested in how the model works, follow the link above.

The Key Work of School Boards model focus on continuous progress, and you cannot effectively operate on a continuous progress basis unless you have standards against which to measure your progress. The model calls upon us to:

• Establish clear standards for student performance and communicate them continually
• Base standards on an external source that has credibility in the community
• Disseminate standards clearly and widely to students, staff and community
  

This year, the Board of Education adopted a new comprehensive scorecard, sometimes called a "vision card" with which we are going to measure our performance as a School District. It sets objective measurable goals for improvement in a wide variety of areas at the district level and at the school level. Examples of performance objectives in the scorecard are the number of students taking Advanced Placement Courses and the number of courses taken. We will be measuring, for example, the number of first-generation students (students who will be the first in their family history to attend college) who are taking AP courses--an important measure of a school district's ability to promote upward educational mobility. We will be using world-class progress based testing instruments to measure how much each student progresses. The idea is that a good school takes proficient students and takes them beyond proficiency, and takes students who are far behind and catches them up a bit each year. We'll be reporting the number of students who score proficient, as always, but we'll be reporting also the amount of progress students are making from year to year, as compared to national standards.

When I first joined the Board of Education, it seemed as though the idea was that we should report our "test score successes," as if the goal of the Board of education was to celebrate any good news that we could find. If the mathematics test scores of the 8th grade students were 1/10 of a point higher this year than they were last year in mathematics, that would be a cause for celebration. The problem with this approach to reporting test scores is that it allows you to present performance information in a way that really doesn't measure the progress that you are making. Maybe a 1/10 point increase is a meaningless improvement. Maybe its actually a large increase. Maybe the class of students who performed marginally better this year were actually far far behind last year's class at the same grade level, and so their marginal improvement is actually a tremendous success. Or perhaps the reverse is true. Maybe this year's class is way more talented, or way more accomplished, than last year's class, and the marginal improvement is actually a great failure.

The point is that if a school district is going to use testing results, it needs to be a whole lot more sophisticated. And that's where the continuous progress idea comes into play. When a school district only reports and discusses its test score successes, that is a sure sign that the school district is not committed to continuous progress. Whether it is a school district where almost all students in the community are coming to school ready to learn, or a school where many students are coming to school not ready to learn, the answer is the same. The Continuous Progress model demands that we use test scores not simply to showcase our successes, but also to drive the organization to improve. And you cannot do that, unless you drill into data, and discuss openly and honestly the places where your organization needs to improve. In the coming year, we are going to publish our successes, but we are going to scrutinize in great depth the areas where we need to improve. Our commitment to the Baldridge-based excellence model is just that deep. You cannot improve unless you identify where you need to improve.

I get a kick out of school districts who claim that they are successful because a certain percentage of their students scored proficient on a given test. God bless you for that, I say. But what are you doing about the students who come to you with disadvantages? The measure of a great school district is not whether the students who live there have parents who read to them. The measure of a great school district is that it takes every child, rich or poor, advantaged or disadvantaged, talented or with more limited talents, and challenges each and every one of those students to excel. And to find out if your school district is excelling in this way, you need to drill down much more deeply into data. Every school, every teacher, every school district, can improve, and when you only discuss the data that makes you look good, you are on the road to mediocrity and failure.

But wait a minute. That's a really bad idea for elected officials, isn't it. Your handing ammunition to your political opponents on a silver platter, aren't you Jerry. Absolutely. Because in a continuous progress organization, you are constantly identifying where you need to improve. We don't serve on the school board simply to celebrate successes. Our job is to set high standards and to marshall resources so that we make continuous progress.

In the coming year, every school in our district is going to be measuring itself against district measurable objective goals. Classroom teachers are going to be getting data on the progress of their classes. Not so we can figure out who is a "good teacher" and who is a "bad teacher". This is formative data: used to help everyone improve. The goal is to marshal resources to identify how each teacher, each student, and each school can improve. The continuous progress idea is not about humiliating teachers or humiliating schools, or serving as a vehicle for self flagellation. If the continuous progress philosophy is going to work, it must be based on the concept that we are finding are strengths and our weaknesses primarily for self-improvement and strengthening the quality of our product, which is educating children.

Adopting the Continuous Progress Philosophy

I wanted to say a few words about the continuous progress philosophy, because it is fundamental to the direction that the School Board and District administration has been taking. In every organization, we can find inefficiencies. If we find a bunch of them this year, and get rid of them, we will find some next year, and the next year after that. An organization that is not finding inefficiencies and solving them is not being honest with itself.

Each year, with the cooperation of the executive team, the Board of Education concentrates on an area of operations to see if we can find improvements and efficiencies. Sometimes, we find major savings. Sometimes, the savings we find are not so large. When we identify problems or improvements, then someone will say "what is the matter with you, why did you allow this to happen" To that, I say, in a continuous progress organization, you are constantly trying to make things better. This year, we asked our auditor to focus on finding issues in the administration of personnel. We even suggested some issues that we knew about that we wanted to improve, so that we could get advice on how best to improve. With the assistance of our auditor, we identified issues, and we found some issues that we hadn't identified ourselves. My former Board colleague, Jerry Plachecki said about this: "If your auditor doesn't identify problems, that's when you know you are in trouble." And by that, of course, he meant that only in an organization that covers up its problems, does an auditor find absolutely no room for improvement.

Continuous progress is a philosophy that must permeate an organization. And making that happen takes a tremendous effort at the top, and throughout the organization. Creating a continuous progress philosophy is difficult, because of course, nobody likes to hear that there is a better way of doing things. The key is to welcome suggestions for improvement, rather than responding defensively.

I have this problem, just like you. When someone tells me that they are disappointed with something I did or said, be it on the School Board or at work (or even with my wife at home) my instinct right away is to explain that what I did was completely defensible or misunderstood. The continuous progress idea says that you cherish the people who care enough to give you ideas about how to improve. And that is really hard to do. But the continuous progress philosophy is one of the great keys to organizational improvement.

How does an organization adopt and implement the continuous philosophy? It begins with consciously adopting that philosophy as part of its central core values. In District 742, the Board of Education adopted the National School Board's Baldridge-based excellence model, called the Key Work of School Boards. One of the key components of that model is continuous progress: everyone can improve; everyone must invite proposals for change and improvement; an organization that fails to seek to improve itself is doomed to failure.

The continuous progress philosophy cannot sustain itself on talk alone, however. Every component of the organization needs to work on progressing. One of the keys to the continuous progress philosophy is really based on the Biblical idea of looking to change yourself first. In a continuous progress organization, we start by looking at what we ourselves can do better, instead of trying to focus on how you can improve everyone else. So often in an organization, we hear that we could just be better if everyone else can improve. In a continuous progress organization, everyone starts by focusing on how to make their own contribution to the organization better. Why does that work? Because it is way easier to change your own behavior than it is to change everyone else's, and when you improve your own behavior, it makes your proposals for change all the more credible.

This year, our Superintendent implemented a new system of evaluation, in which people he works with provide suggestions for his improvement. That system is now being replicated for other educational leaders in the District. But instead of making everyone do this first, he started by implementing the new system for himself. That's the continuous progress idea. We can all make change, and change begins with ourselves. Proposals for change are not threats---they are to be cherished.

Well, now you say, I don't think you are doing enough to improve, Jerry. Thank you for that, I say, (well at least I hope I do) I accept that as a challenge to further progress.

Board Members to Legislators: Give us the Tools to Keep Class Sizes Down

For the next few days, I'm going to be writing about our board member meetings with area state legislators. Several school board members have begun meeting in the St. Cloud area to discuss common issues. We share information about better ways to conduct school board meetings. We discuss financial and educational issues facing our respective districts. In short, we are learning from each other. St. Cloud board Treasurer and finance chair Hentges has been working with other board members in Rocori, Sauk Rapids, Sartell, and Foley to schedule the meetings and to help set the agenda. We in St. Cloud, as big as we are, have found that we have learned a whole lot from the board members of these other districts. This last month, board members decided that we would like to meet with area legislators to discuss our common financial problems, and we held the first such meeting last night.

Several of our legislators got stuck in the storm that racked the Twin Cities yesterday evening and could not make the meeting. But we were favored with the presence of Senator Fischbach, Representative Haws and Representative Hosch. We are so grateful that they took time out of their busy schedule to listen. The legislators took lots of notes, asked lots of good questions, and we had a great dialog. Thanks to them for coming. Board members intend to meet with other area legislators in the near future.

We hear that other board members across the state are doing the same thing, because boards across the state are concerned that the future of public education in Minnesota is in jeopardy. We know that there is a temporary financial crisis in Minnesota. We understand that these times require special measures. But we want to make sure that when we come out of this crisis, that we haven't done permanent damage to our public education system, upon which Minnesota's economic future depends.

Today, I want to write about Point One of our presentation. We told legislators that across the state, school districts are struggling to avoid making cuts in the number of teaching positions in their district. More accurately, we are struggling to keep our class sizes down, and to make sure that the number of students taught by each classroom teacher does not begin to rise. We believe that we cannot educate the children of the 21st century if we are forced to cut programs and raise class size. We told area legislators that we cannot maintain manageable class sizes unless school boards have the ability to control their costs, especially during tough economic times, and unless over the long run the legislature provides adequate revenues. We said that we understand that their is a crisis now, but over the long haul the solution lies in those two things. Adequate revenues and systemic reforms that promote our ability to keep our budgets in balance.

This goal, of keeping our core of classroom teachers in tact, in numbers and in quality, is at the center of the budgetary crisis that faces school districts across the state.

We said that the vast majority of school board members in the State believe that the State would be better off if we could pay our teachers more. Most people come to school boards because they believe in public education, and the business of public education is putting professional educators in classrooms. We said that adequate pay is critical to attracting and retaining quality professional educators. But, we said, have to have the ability to keep revenues and costs in balance. These twin ideas---that the legislature must face reality as to the cost of a quality educational program in Minnesota--and that there must be systemic reforms that keeps revenues and costs in balance--dominated much of our discussion.

But the key to all of this is that never before has it been so important that we keep class sizes down. Why is that. Well, first of all, parents and children expect reasonable class sizes. When we talk to parents, they persistently tell us that keeping class sizes manageable is at, or near, the top of their list when they consider choosing a public school and a public school system. And parents are right to care about class size. One of the most significant trends in education is the tremendous difference in the level of preparation and school readiness of the children who are arriving at school these days. Throughout public education educators are telling us that the students in the upper quartile are smarter, more accomplished, and are learning more than the kids at the top did a generation ago. That may be painful for many of us old folks to hear, but it is a fact. Today, our top students at Tech and Apollo are graduating with more economics, more mathematics, more biology, more chemistry, more literature, more history, by far, than we got in my high school, or you got in your high school. That's a fact that is irrefutable.

At the same time the kids coming to school from the bottom quartile of students are coming to us far less ready for school. Maybe in the old days there would be a difference in any given class of a few grade levels in reading and math. But now that gap, between the kids at the top and the kids at the bottom is growing dramatically. At the same time, we expect and insist that we will challenge the kids at the top, and that our teachers must also give the kids at the bottom the challenge that they need to catch up and realize their full potential.

In our district, and in many others, we have implemented testing systems designed to catch children who are falling behind right at the beginning of the year. We are asking teachers to intervene at once, and make sure that these students are making progress. We are saying, we don't want to wait until the end of the year to discover that a student isn't progressing. We expect that interventions will be implemented to make sure that students are progressing. We believe that we know how to accomplish this objective, and one of the fundamental components of implementing a regimen of high expectations for all students is manageable class size.

Also it is clear that more students are coming to us, in all school districts, who are in need of adult guidance, adult mentorship, and adult role models, than ever before. More children are not getting the adult guidance that they need at home, and more are coming to us needing that extra boost that an adult role model--an adult who can listen and inspire--can bring. We can complain about why this is happening, but the fact is that Minnesota's future depends upon young people gaining inspiration, mentorship, and guidance from adult role models and when we load up our teachers with large class sizes, it is harder and harder for them to serve this function.

We know that class size alone does not make a quality program. We know that if a teacher doesn't use quality teaching techniques, then keeping class size down doesn't return great dividends. But if we want to assure that this generation of students achieves to high levels, we must raise our standards for all students, and keeping class size down is a critical component of that strategy. That is what is behind the cry of school boards across the state: give us the tools to keep class sizes manageable. We need the financial support to employ enough teachers, and to properly compensate them. We need the tools necessary to control our costs, so that we are not constantly forced to cut teaching staff to balance our budget.

I'll have some more to say about what we told our area legislators in my next posting....

Area Board Members Speak To Area Legislators

This afternoon, a group of school board members from the area will be meeting with area legislators to discuss the financial trainwreck that is Minnesota public education. In a time of financial crisis, it is easy for we locally elected officials to get upset at public servants at the state level, as if somehow they created this national financial crisis. We tremendously appreciate the service of our legislators, and especially we appreciate that they are coming together to give us some of their time. Here are some of the things that I'd like to be saying to our St. Paul elected officials.

We school board members, most of us, believe that teachers deserve to be paid well. At last count, well over half of the school districts in Minnesota do not have a settlement yet, despite the fact that we are facing a penalty if we fail to settle. Those of us who are holding back wish that we could pay teachers more. I personally think that public education would benefit from having more money so that we could pay teachers more. I believe that teaching is hard work, just about the hardest work that there is. My five years of teaching proved that to me. We need to attract smart, dedicated, creative, well educated people into public education, and if we want to do that, we have to make pay and benefits competitive. Especially in science, mathematics, and technology, the financial rewards available in competing professions make it tremendously hard to attract well educated graduates into teaching. Increasing teacher pay would accomplish that objective.

When the economy improves, I think that the absolute first priority of the legislature should be to substantially increase its appropriations for education, and that some of that new funding should be dedicated to improved teacher pay. I'm not alone in that belief. I think that everyone on our board of education is of the same mind.

The issue that is dividing us here in St. Cloud, and in many other school districts, has nothing to do with valuing teachers. Our difference is whether it makes sense to increase teacher compensation by cutting the number of teachers that we have, or whether increases in compensation must come from increases in funding at the state level. We know that the State of Minnesota has frozen public school funding for regular students for two years and has cut funding for special education. Anybody who thinks that you can increase compensation by millions of dollars without cutting teachers is engaging in self-deception. Cutting young teachers and increasing class size to pay older teachers more is not my idea of valuing teachers. That is the road, ultimately, to destroying the profession of teaching, and to destroying public education, in my opinion. The future of public education requires that we stop the process of cutting. It requires that we confront the funding problem head-on at the legislature. We have to stop pretending that we can increase teacher compensation without increasing state funding accordingly. But we are going to need help from State government to do that, and that help must involve a balance between increased revenues and cost controls.

The future of public education also requires that as the State digs itself out of the current financial disaster, that the State recognize that over the last decade, the State has been shifting its funding priorities away from public education. Here are some basic facts about the current trainwreck in public education finance:

A. K-12 a falling percentage of the State Budget. The percentage of the State’s budget spent for K-12 Education, while significant, has decreased in recent years. Only a few years ago, K-12 Education represented 45% of the State budget. For the current biennium it is 40% of the budget, and is forecast to shrink further ....., even though enrollment is projected to increase. At the same time, there are other areas of the state budget growing at a faster rate than K-12. Minnesota Association of School Business Officials, (MASBO) 2009

B. Funding Formula Falling behind Inflation. The revenue that school districts receive through the general education formula has decreased by $1,087 per pupil unit between 1991 and 2008, when adjusted for inflation. (MASBO)

C. Operating Referendums Increasing to Cover the Shortfalls. According to MDE, the average referendum revenue per pupil has increased from $231 to $919 (not adjusted for inflation) over the same period in attempts to offset real revenue losses. To deal with the public school finance trainwreck, school districts are increasingly forced to rely on local referenda.

D. In the last four years, however the funding formula increased at a total of 3% or 3/4% per year, leaving school districts in a perilous condition. The formula was frozen completely for this biennium. That’s not enough to cover the step increases for teachers in most districts, let alone the other cost increases typically paid by Districts. (Teacher compensation increase =steps + lanes + health insurance increases + TRA +FICA+longevity+Salary schedule improvement.)

E. Special Education Deficit Increasing Again. The State leaves local school districts with hundreds of millions of dollars in special education shortfalls, and the magnitude of the shortfall is rising again. School District special education deficits are reaching unprecedented levels, and the cost is being born by regular students through increased class size and program cuts. Throughout Minnesota, the amount of money that is being transferred out of regular education and into special education is increasing at an alarming rate. In our school district, we have frozen the amount of total dollars we spend on special education, but still our special education is rising.

At the same time, the State's Health Care budget increasing at 8.5% per year. The State Budget Commission's report warns that “...state payments for direct health care services are the fastest growing segment of the state’s budget and consume a greater share of available resources each year.” It goes on to say:

In FY 2007, about one out of every five state general fund dollars were spent on public health care programs—including Medical Assistance (the state’s Medicaid program), General Assistance Medical Care, and chemical dependency treatment entitlement grants. If current growth rates in state health care spending continue unchecked over the next 25 years, two out of every three state general fund dollars will go toward healthcare.

The Constitution says that “is the duty of the legislature to establish a general and uniform system of public schools.” It continues: “ The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.” School board members want to do their part in making revenues and expenditures balance. In St. Cloud, we are doing that by refusing to cut teaching positions to pay salary increases for the teachers who remain. We are not motivated by a belief that teachers are overpaid. We just feel very strongly that as fiscal trustees of public education, we cannot keep making cuts in order to fund compensation increases, when the legislature is not providing funding increases.

But the legislature needs to do its job too. Instead of penalizing districts who keep their budgets in balance, its time for the legislature to reward fiscal prudence And then, as the state pulls out of the economic ditch, the legislature and governor need to recognize that local school districts are going to need increased funding so, yes, we can pay our education professionals more. The solution the trainwreck that is public education is a combination of cost controls and sufficient revenues to provide regular and affordable compensation increases to our teachers.

Repeal the Bargaining Penalty

I've been writing about the difficult choice faced by school districts all across the state--whether to agree to settlements that require substantial further cuts in programs and teaching staff, or to absorb the legislatively imposed penalty. The districts that have avoided the penalty to date, have only done so at great cost. The Anoka school district announced a tentative settlement that it funded by making massive cuts, including school closings. A minority of school districts across the state, so far, have taken this route. They have avoided a $25 per student penalty by making deep cuts to fund settlements despite the fact that the State government has provided no money to fund those settlements. They have dodged the penalty bullet, but what are they going to do next time? And the time after that?

The inexcusable purpose of the penalty is to badger school boards into paying settlements that they cannot afford. When I talk to local legislators they regularly tell me that these are "local issues." If they are local issues, why then does the legislature impose a penalty on one of the two parties to the settlement process? The bargaining penalty is just another way for the governor and legislature to wash their hands of the trainwreck that is public school finance. Its another example of statewide systemic problems that are placing school boards and school districts in an untenable situation.

When I complain about the bargaining penalty, I'm not disparaging the need to compensate teachers appropriately. Public education is the business of teaching, and the business of teaching requires attracting and retaining, and properly rewarding professional teachers. This issue, of the deadlock between the representatives of teachers and school boards arises from something much deeper--the long-term systemic statewide failure of the current system to bring compensation costs -- and the structure of compensation costs -- into balance with revenues provided by the State. When a legislator tells you that this is a "local problem," that's an evasion of the Constitutional responsibility to prove an effective system of public education. The bargaining penalty is an insult to the school boards, and above all to the children, who pay these penalties because the legislator and governor have failed in their fundamental constitutional duty. Its time for the penalty to be repealed, retroactively. But that is just the beginning point of what needs to get done. We need our politicians in the legislature and governor's office to face up to their constitutional duty to provide an efficient system of public education. If the governor and legislature believe that teacher compensation needs to go up in this time of budgetary crisis, then it should provide adequate funding to do so. But if the Governor and legislature believe that its time to freeze compensation, then the penalty should be repealed.

In the last two posts, I have been writing about Judge Gearin's decision that Governor Pawlenty could not unilaterally unallot funding that he had approved and signed into law to address a deficit caused by his subsequent veto of legislation which would otherwise have eliminated that deficit. As I explained, the effect of this decision, if upheld is to require democrats and republicans, the House, Senate and Governor, to work together to arrive at a common solution. I have been arguing in a number of my posts that a lasting solution that serves the public interest is going to require courageous action from all parties. By courageous, I don't just mean raising taxes. Courageous action requires that the political parties, both of them, must compromise and must offend their own respective power bases. For public education, that means that they need to provide sufficient revenues and sufficient control over costs to local school districts, so that we can get out of the vicious downward financial spiral that has characterized public education in the last decade plus.

Its true, we have a short term crisis, but the crisis in public education finance has not been temporary. As the Minnesota Association of School Business Officers points out: "The percentage of the State’s budget spent for K-12 Education, while significant, has decreased in recent years. Only a few years ago, K-12 Education represented 45% of the State budget. For the current biennium it is 40% of the budget, and is forecast to shrink to 38% of the budget in the next biennium, even though enrollment is projected to increase. At the same time, there are other areas of the state budget growing at a faster rate than K-12. The governor and the legislature are not prioritizing education, despite their protestations to the contrary, they are prioritizing medicaid, general assistance medical care and chemical dependency treatment entitlement grants. Over the last decade, the State of Minnesota has been increasing the health budget at the rate of 8 percent per year. As the recent bipartisan State Budget Commission Report states:

Growing at an average annual rate of 8.5 percent, state payments for direct health care services are the fastest growing segment of the state’s budget and consume a greater share of available resources each year. State health care programs face many of the same cost pressures that exist in the private health care market, including medical inflation and increased utilization of services spurred in large part by the development of new medical technologies, services, and pharmaceuticals to treat illnesses.

The Commission report notes that this trend is fundamentally unsustainable, and yet leadership at the State level seems to face that reality. The Budget Commission Report continues:

In FY 2007, about one out of every five state general fund dollars were spent on public health care programs—including Medical Assistance (the state’s Medicaid program), General Assistance Medical Care, and chemical dependency treatment entitlement grants. If current growth rates continue unchecked over the next 25 years, two out of every three state general fund dollars will go toward health care. .....To illustrate the crux of the problem the state will face over the next 25 years, consider a scenario in which revenue grows 3.9 percent per year (as described above) and health care continues to grow at a rate of 8.5 percent per year. In order to achieve balanced budgets over the 25 year time horizon, expenditures on all other segments of the budget, including K-12 education, would have to remain essentially flat, as shown in the graph below. If instead, we make the assumption that health care continues to grow at 8.5 percent and spending on K-12 education grows by 2 percent per year (CPI inflation) for the next 25 years, all other segments of the budget beyond health care and K-12 will have to be reduced by 3.9 percent each year to avoid budget deficits. This would nearly eliminate all other areas of spending by 2035.

The funding formula for public education increased 2 percent in 2007. It increased 1 percent in 2008. For this year, 2009, it is frozen, and in 2010 it is frozen again. While the 2007-2009 budget restored some of the massive special education deficit that was allowed to grow in the first four years of the Pawlenty administration, the budget for this biennium begins to grow that deficit again, and it is projected to grow even faster in the following years.

MASBO continues:

• Up to 85% of K-12 resources in school districts are used to pay salaries and benefits of staff who provide direct instructional services to students, or to support the students or instructional staff. If K-12 funding is cut, districts will have little choice but to cut the services they provide to students. Additionally, about 20% of district expenses are to provide special education services which are mandated by federal and state law. Because of these mandates, special education programs would be exempt from most cuts.
  

• Minnesota school districts are constrained by PELRA laws that set the parameters for collective bargaining and permit public employees to strike. These laws hamper the ability of school districts to limit salary increases, regardless of economic circumstances of the state or the district.

At a time when government needs to be freezing its expenditures, the legislature is penalizing school districts at the rate of $25 per student for refusing to provide unaffordable compensation increases to employees. At a time when funding is scarce, not a single legislator, not one, has lifted a finger to redress the imbalance in public bargaining law that impels many school districts to feel compelled to raise their compensation costs when the legislature had provided no increase in funds. If our state legislators believe that teachers should receive an increase in compensation, then they should put some money behind that position. But to penalize school districts for engaging in fiscal responsibility, is unconscionable. The Governor has complained, but the Governor too has not offered solutions. Too many politicians are looking to promote themselves to higher office, when the work that they were hired to do for their current office is not done.

Our governor and legislators are not meeting their Constitutional responsibility. The Minnesota Constitution does not place health care in a favored position. As important as health care may be, and it is important, the Minnesota Constitution puts education first. Nonetheless, we are beginning to hear politicians beginning to try to try out rationalizations for walking away from the pre-eminent state responsibility for public education

The education clause of the Minnesota Constitution states:

“Uniform system of public schools. The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.”

To maintain a thorough and efficient public system of public schools throughout the state we need three things:

• Adequate revenues, raised through taxation at the state level, to achieve our objective; without adequate revenues we cannot maintain programs and recruit and retain the very best professionals.
• Cost controls so that our labor costs do not rise faster than the rate of growth of revenues. Without cost controls, the adequate revenues can never maintain a stable thorough and efficient system of public schools
• A long term strategic plan for continuous improvement implemented in all school districts founded on visionary best practices

In prior posts, I have argued that our state leadership, in both parties, have abysmally failed us in the first two respects, and the tragedy is that neither democrats nor republicans even want to acknowledge the nature and scope of the problem. Its time for them to do their constitutional duty, even if it is painful. Minnesota's constitutional provision requiring the legislature to establish a “general and uniform system of public schools” means that education is a fundamental right in Minnesota. Skeen v. State, 505 N.W.2d 299 (Minn. 1993). This Constitutional provision places public education in a unique position in Minnesota. In my view, all of us in the public service must adhere to this constitutional requirement, by putting the requirement to provide a thorough and efficient education first and foremost in our actions.

In a prior post, I wrote: One of the common methods for leadership at the State to evade constitutional responsibility is to repeat the canard that in Minnesota, quality public education is a local responsibility. We hear this in various forms. State elected officials will assert that if school districts don't buy enough textbooks, or don't keep class sizes at reasonable levels, or don't obtain sufficient funding via operating referenda, that this is a local problem. But that is a complete misstatement of the law in Minnesota. It is the fundamental obligation of the State legislature under our Constitution to provide for an efficient general and thorough system of public education. It is our job on the local level to implement

If I am in the military, I put the nation's defense first before everything. My duty to uphold the constitution in service to the nation requires me to prepare to make the ultimate sacrifice. Soldiers make family sacrifices, financial sacrifices, and risk life and limb, all because they are in the service of the nation's effort, sanctified under the Federal Constitution, to put the nation's safety first. If I am a Congressman, Senator, President, or cabinet member, I have been sworn to defend the Constitution and no excuse justifies failing to provide the necessary resources. National defense is a national obligation which admits of no evasion.

So I think that the education clause places public education in a similar position for all of us in public service, from the Governor, to legislators, to school boards, to teachers, administrators and staff. We are all called upon, by the Minnesota Constitution, to put the provision of a thorough and efficient public education system first and foremost. But frankly, public servants in Minnesota are behaving as if they are somehow exempt from the Constitution. When soldiers ignore their constitutional responsibility, they get court martialed and dishonorably discharged. But when Minnesota's public servants ignore their constitutional responsibility, all we do is give out an alibi.

In the legislature, Republicans and Democrats alike behave as if this constitutional provision simply doesn't apply to them. There is not a democrat in the legislature, not one, who regards the constitutional requirement to provide a uniform system of public schools as superior to their obligation to Education Minnesota and public employees unions. In Minnesota, the democratic party regards labor rights as superior to childrens' rights, and as a democrat its painful for me to admit it. In the legislature, the vast majority, if not all, republicans place the no-new taxes pledge as superior to their constitutional obligation. When they all get sworn in, republicans and democrats, they swear to uphold the Constitution, but its as if they have their fingers crossed. If they were soldiers, and regarded their oath with they same fidelity, when the enemy attacked, they'd all be running away backwards.

Perhaps I've been too harsh and unfair. These are all good people who ran for office to make a difference. They are placed in a tremendously difficult situation by this economy and by the existing structure of public education. Who am I to complain? I wouldn't take their job for a million dollars. But they accepted this responsibility and its time to do their duty. They should stop by repealing the bargaining penalty.