Thursday, August 4, 2011

The Challenge of Keeping School Districts Sustainable

I've been thinking a lot in the last couple of months about how we are going to keep our school district financially sustainable.  We who are stewards of public education revenues at the local level need to take a long hard look at what the future is bringing, and how we are going to manage our budgets.  We are living in a time of high unemployment.  Across the country many districts have cut teachers and raised class size significantly.  These teacher cuts have resulted partly from real budget cuts in many states.   But they have also resulted from wage and benefit increases in districts across the country.   In Minnesota during the last two years, many district increased their compensation costs by amounts significantly greater than the state revenues would allow and they made big cuts to do it.   Can this go on year after year?    At the same time, most districts in Minnesota experienced significant growth in their special education deficits, reflecting the failure of the state to cover the growth in special education costs that is happening across the State in most districts. How can we justify cutting our work force, at a time when we have high unemployment and young people are graduating from college prepared to teach in  a brutal market?

In Minnesota, and many other states, there is significant upward pressure on teacher salaries resulting from the step and lane system of compensation. Education Week writes that forthcoming research by Stanford University economist Eric A. Hanushek concludes that, in 2008, 9.5 percent of teachers’ total salaries was devoted to paying them for obtaining advanced degrees, and 27 percent for accumulated experience past the second year of teaching.   At the same time, average teachers salaries have probably not kept pace with the growth in salaries paid to other college educated professionals.  So this posting is not the beginning of an argument that teachers are overpaid!

The question that is panicking those of us responsible for managing school budgets is that we cannot see a way to make the current compensation system work and keep our school districts afloat.  Like the United States Government, we have a revenue problem and we have a cost problem.  If we were making cars or building roads,  or running banks, we'd solve this problem by making productivity gains.  We'd buy labor saving devices and cut our labor force.  Or, we'd outsource our production to some third world country.   But teaching is inherently labor intensive.  But children still seem to need adult contact when they are  learning.   Colleges respond to revenue cuts with a broad variety of options that aren't likely to work in elementary and secondary education.   They grow their class size into the hundreds.  They use graduate students to provide low cost teaching assistants or teachers for introductory courses.   Increasingly, they have taken to covering many courses with poorly paid adjunct teachers who work without tenure, benefits, or pension.   And, they cover revenue shortfalls by increasing tuition.

In the next several years, especially during the coming funding crisis, school districts are going to be forced to decide whether they will continue the current practice of increasing compensation costs faster than revenues and making cuts to make up the difference.  Going down that road is eventually going to destroy public education as we know it.   If we are to survive, we need to step out of the current paradigm of solving our problems with continuing cuts, and work harder to find alternatives.

What are the alternatives?  If we are going to find alternatives, the first thing that we have to do is get off our current treadmill.  We are locked into a negative spiral, addicted to a pattern of cuts and more cuts.  If we don't start considering alternatives, pretty soon, we'll wake up one morning and discover that there's nothing left that is recognizable as a school.  I'll write more on this toic in my next post....

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