It turns out Wisconsin's controversial labor law reforms have indeed helped districts cope with their budgets without resorting to layoffs:
With ?collective bargaining rights? limited to wages, [Brown Deer district finance director Emily] Koczela was able to change the teachers' benefits package to fill the budget gap. Requiring teachers to contribute 5.8 percent of their salary toward pensions saved $600,000. Changes to their health care plan???such as a $10 office visit co-pay (up from nothing)???saved $200,000. Upping the workload from five classes, a study hall, and two prep periods to six classes and two prep periods saved another $200,000. The budget was balanced.
?Everything we changed didn't touch the children,? Koczela said. Under a collective bargaining agreement, she continued, ?We could never have negotiated that???never ever.?
With these savings in hand, the Brown Deer school district was able to avoid firing 27 teachers who had been pink slipped. Contrast that with Milwaukee, still under a legacy collective bargaining agreement, where the union refused to compromise on benefits, leading to 354 teacher layoffs. Districts that have flexibility under the new law seem to be using it effectively, saving jobs and programs without having to endure a protracted fight with unions.
It will be interesting to see how district managers and school boards use their new flexibility going forward. These initial results are heartening, suggesting the leadership limbo may be coming to an end in Wisconsin.
? Chris Tessone
Dan Ariely has a provocative but mostly wrong-headed article in today's Washington Post roundtable on the Atlanta testing scandal. He claims that it's inevitable that teachers will respond to high-stakes tests by cheating just as corporate executives act in ethically challenged ways to please their bosses and investors.?But business people all behave differently, some ethically and some not. What drives the difference?
Take Johnson & Johnson during the 1980s Tylenol scare as an example. For decades, J&J has operated based on a credo that permeates the organization. These values have real relevance in the company, and personnel are promoted and developed based on their adherence to the credo. Business school students read cases on Johnson & Johnson's success at developing this corporate culture. When tragedy struck with the Tylenol murders, J&J acted responsibly, even though they weren't responsible for the deaths. Given the culture there at the time, it's hard to imagine them doing otherwise. Yet J&J also measures its profitability and expects employees to contribute to that bottom line.
Ariely glides over this in his "history lesson," suggesting that measuring and evaluating using a specific criterion necessarily causes people to focus only on what's being measured. That's nonsense, and the proof is in the innovative products and services American corporations have developed on the way to creating trillions of dollars of wealth. There are undoubtedly bad actors in the business world, but there are also a lot of
New York City is closing down its ineffective and poorly designed merit pay system in light of a RAND report published yesterday. Mayor Bloomberg and Joel Klein made a terrible deal to get the pilot program into the city's contract with the teacher unions, giving teachers an option to retire at 55 years of age with 25 years of service instead of age 62. Gotham Schools points out that these pension costs will likely leave a much more lasting mark on NYC than the short-term program they enabled.
There's a basic lesson in financial management here for district leaders: match the time period of your liabilities to the assets or services they pay for. Don't put yourself on the hook for decades of payments in exchange for a five-year pilot.
? Chris Tessone
It's funny that Nicholas Kristof compares the education system to an escalator in his column in this weekend's New York Times. We know a great deal about broken escalators here in DC ? our subway system is full of them ? and the reason they're so often out of order has as much to do with bad management and absurd union rules as it does with resources. (Unsuck DC Metro had an illuminating post about this late last year.) As in public transit, so in public education: how we spend our education dollars is an important and widely ignored problem. Instead, we've mostly preferred in years past to hike tax rates and throw more money at the problem, to little effect.
Kristof tries to shame budget-cutting governors by comparing our education spending here to our commitment to education in Afghanistan. It's hard to imagine a worse comparison, given that Afghanistan spends about four percent of its meager budget on education, down precipitously from the level of spending in 1980. The US spends about 14 percent of every public dollar on education, and the level of spending has increased steadily for decades, even accounting for inflation. Kristof complains that we "scrimp at home" and "don't invest in our kids' futures," yet we spend more than half a trillion dollars annually on K-12, nearly a full trillion if you count higher ed. Accountability for how these dollars are spent
- Stretching the School Dollar
- Common Core Watch
- Ohio Gadfly Daily
- Board's Eye View
- Choice Words
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.