Tuesday, January 5, 2010

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 Its time for the penalty to be repealed, retroactively.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.

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