Why the GOP budget plan might be good for education

yes Michael J. Petrilli / April 4, 2011

[caption id="attachment_15630" align="alignright" width="145" caption="Photo courtesy of Vox EFX"][/caption]

We're starting to seethe broad outlines of a budget plan that Republican lawmakers will present this week to slash $4 billion trillion in spending over the next decade. At first blush this sounds bad, bad, bad for education revenue?we don't yet know what the plan entails in terms of federal K-12 spending?but maybe not. As the Wall Street Journal reports, the plan would "essentially end Medicare" (and replace it with private insurance plans, subsidized by the government), plus:

The proposal would also convert Medicaid, the health program for the poor, into a series of block grants to give states more flexibility. And it is expected to suggest significant cuts in Social Security, while proposing fewer details on how to achieve them.

No doubt this will enrage the senior lobby?who will declare all of this dead on arrival. But to my eye, it puts Republicans firmly on the side of the young. If we don't address these entitlements, we'll have no choice but to devastate K-12 education budgets (and other social spending for children) for decades to come. Even huge tax increases won't be enough to address the long-term fiscal challenges (and most economists would tell you that those would be counterproductive anyway, as they would cripple the economy).

As for Medicaid, as we know from our

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Why the GOP budget plan might be good for education

Cutting off the hand to spite the foot

yes Daniela Fairchild / March 29, 2011

As state and district education budgets shrink, it becomes doubly important to scrutinize line items, to think through cuts, and to trim fat in ways that won't negatively affect schoolchildren. Moore County, North Carolina seems to have missed that memo. ?The district is set to close one of its smaller elementary schools, Academy Heights.

From today's Wall Street Journal:

Academy Heights Elementary boasts a 98% pass rate on state exams, has an award-winning math program, and is ranked the second-best kindergarten-to-fifth-grade school in North Carolina. Yet it is slated to close at the end of the school year. Moore County Schools Superintendent Susan Purser said shutting down the school and sending its 265 children to nearby campuses was a ?painful last resort? to close an $8.2 million budget gap.

Closing high-achieving Academy Heights?the district's only year-round school?will save Moore County $500,000. Surely not chump change, but far off the $8.2 million in excess spending that needs to be leeched out of the budget lines. And surely not enough to justify shuttering the district's most successful school, possibly losing some of the district's most successful teachers, and almost guaranteeing 265 students an inferior education.

Scaling back budgets is an unenviable task. But before we open up the throttle on the budget-cuts train, let's make sure it's railed on the correct track. Take off the blinders, and actually look at how cuts will affect the kids. There are some smart ideas and how-tos out

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Cutting off the hand to spite the foot

Re: Losing their bargaining rights won't send teachers to the poorhouse

yes Michael J. Petrilli / March 21, 2011

Last week I showed that, by one measure at least, teachers in non-collective bargaining districts actually earn more than their union-protected peers?$64,500 on average versus $57,500. These numbers are for teachers with just bachelor's degrees who have reached the last step on the salary schedule.

Matt Di Carlo of the Shanker Institute responded in the comments section with an important analysis of his own:

Mike,

Why are you using the maximum BA salary as a measure of what teachers ?actually earn?? ?It would seem to me that this is the least appropriate choice for two reasons. First, unlike the starting and fifth year salaries available in the TQ3 database, the maximum salary doesn't ?control? for experience?the schedules vary as to how many years it takes to get to the top. Second, and more importantly, most career teachers (i.e., those who might get to the top of their schedules) get a master's degree (and are required to do so in some states), so very few teachers are actually located at the top BA step. It's probably the least appropriate choice as a measure of what the typical teacher earns.

I quickly replicated your analysis. My figures for the maximum BA salary are slightly different from yours, but close enough for the purposes of a comment.

Starting BA -- Non-CB: $41,314; CB: $38,696

BA 5th year -- ?Non-CB: $43,630; CB: $43,640

Maximum BA -- Non-CB: $63,731; CB: 57,628

Starting MA -- Non-CB: $43,960; CB: $41,771

MA 5th year --

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Re: Losing their bargaining rights won't send teachers to the poorhouse

Opinion: A modest proposal for pension reform

The Education Gadfly / March 18, 2011

Educator pension systems are becoming increasingly expensive and, in a number of states, plagued by severe problems of underfunding. Given concerns about cost and long-term sustainability, several states have cut benefits, usually for new teachers, and many more are considering doing so. However, in making these changes, policymakers should carefully consider their labor-market effects. Some of the proposed cuts reproduce?and even exacerbate?undesirable features of current systems.

That's because they violate the paramount principle upon which pension systems should be built: Benefits should be tied to contributions. In other words, benefits paid to any teacher should be tied to the lifetime contributions made by or for that teacher. If $300,000 has been contributed on behalf of a teacher (including accumulated returns) then the cash value of an annuity provided to this teacher should also be $300,000.

This principle is routinely violated in current defined-benefit pension systems. Our analysis, Reforming K-12 Educator Pensions: A Labor Market Perspective, shows that the current systems result in very large implicit transfers from young teachers working short teaching spells to ?long termers? who spend entire careers in the same system. In our view, a teacher who works ten years or thirty years should accrue pension wealth roughly equivalent to total pension contributions (with accumulated returns). [quote]

Illinois is a cautionary example of how not to reform teacher pensions. The Land of Lincoln recently implemented a two-tiered plan, with teachers hired after January 1, 2011 in the second tier.

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Opinion: A modest proposal for pension reform