Last night, Rhode Island’s legislature passed a sweeping reform of its public-sector retirement system. It cuts retiree benefits, mostly by suspending cost of living adjustments, and institutes a cheaper hybrid plan with a 401(k)-like private account component, and it should save taxpayers billions of dollars in coming years.
Far-reaching as the bill is, however, this outcome is something of a failure, good only by comparison to the tragedy that would have ensued had lawmakers done nothing. Rhode Island waited until it was on the cusp of disaster to make desperately needed changes. By comparison, Utah’s reform, described in our recent series of case studies, came about because lawmakers were thinking years into the future about the risk pension shortfalls presented. They gathered support for changes to the retirement system to head off a crisis before it became inevitable.
The short-sightedness of the Ocean State shouldn’t be called “courageous” simply because Rhode Island changed course at the last possible moment to avert disaster. The state may provide a model for other profligate jurisdictions like Illinois, showing them that change is possible and following the old path over a cliff isn’t their only option. But the country should look to more proactive reform-minded states for an example of how best to structure teacher retirement systems for the 21st century.
Guest blogger Paul T. Hill is the director of the Center on Reinventing Public Education and the author of a recent paper in Fordham’s Creating Sound Policy for Digital Learning series, “School Finance in the Digital-Learning Era.”
Futurists have long regaled us with predictions about technology dramatically improving education by giving millions more students access to the very best teachers and deploying computer-based systems that allow them to learn at their own pace at whatever time and place works best for them. This vision is now becoming a reality, partly because tight budgets are forcing K-12 schools to employ fewer teachers and boost the productivity of those who remain.
Saving money is only part of technology’s educational potential, however. More important is individualization and rapid adaptation to what a student is learning, leading to the possibility of greater and more consistent growth. Managing equipment, web links and vendor contracts is also far nimbler than re-organizing people.
All this potential notwithstanding, however, plenty of policy and structural barriers stand in the way of widespread adoption of technology in K-12 education. Perhaps the toughest of these is our traditional approach to school funding.
Simply put: Our current education finance system doesn’t actually fund schools and certainly doesn’t fund students. Rather, it pays for district-wide programs and staff positions. Much of it is locked into personnel contracts and salary schedules—and most of
Education technology is a hot sector for innovative entrepreneurs and ambitious investors. While interest and investment in digital education skyrocket, though, the inflexibility of the existing school funding system may stifle its potential—at least according to Paul T. Hill in “School Finance in the Digital-Learning Era,” the latest installment in Fordham’s Creating Sound Policy for Digital Learning series. As Hill writes,
Our system doesn’t fund schools, and certainly doesn’t fund students. Yet to encourage development and improvement of technology-based methods, we must find ways for public dollars to do just that—and to follow kids to online providers chosen by their parents, teachers, or themselves.
The paper, released Wednesday, argues that unlocking the vast potential of digital learning requires streamlining funding into a “backpack” model where dollars follow individual students, allowing families to select from a robust and diverse range of digital and traditional educational options. Download the paper to find out more, and explore experts’ reactions on Flypaper.
We are going to see increasing in-fighting among big government types as big-spending school districts compete for resources with the rest of the agenda supported by the public fisc. Schools are increasingly going to lose those battles, which they’re not used to. Today’s example comes from Montgomery County, Maryland, where I live.
Democrats on the county council have been butting heads with the school board for months over skyrocketing education budgets, culminating in a battle to repeal Maryland’s maintenance of effort requirement:
But the details of Maryland’s maintenance of effort law have proved unwieldy in tough budget times. Its authors never anticipated a housing bubble nor articulated a logical process for working through it.
The debate has largely played out in Montgomery County. The county’s nationally recognized schools have long been a generously protected fiscal priority, and the county council exceeded minimum spending levels by hundreds of millions of dollars over the past decade. When the budget outlook worsened, though, the county council said it couldn’t maintain the same level of investment.
“The county government was hurt by the fact that we were doing over and above what we were required to do,” said council president Valerie Ervin (D-Silver Spring), a former school board member.
Montgomery County provides a cautionary tale to those who see resources as the primary lever for improving K-12 education. MCPS is a very expensive district but not particularly wasteful on
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About the Editor
Bernard Lee Schwartz Policy Fellow
Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.