This afternoon, Pennsylvania Governor Tom Corbett is set to announce his budget for the next fiscal year, and the proposal is being described as "dramatic" and "difficult." Flat state aid for K-12 schools is the best situation expected—many observers expect further cuts on top of last year's regressive reductions in state aid.
Districts—especially poorer ones that rely heavily on state funding—are faced with a serious challenge to make ends meet.
Districts—especially poorer ones that rely heavily on state funding—are faced with a serious challenge to make ends meet. Chester Upland School District has shown what not to do: pretend extra money will appear out of thin air. After spending as if last year's state aid reductions never happened, the district is on the brink of bankruptcy. School boards, superintendents, and union leaders in other Pennsylvania districts have a responsibility to make their budgets work without dragging their schools to the brink.
Pennsylvania's lawmakers bear some responsibility—and blame—here as well, however. How they allocate the cuts needed to balance the state's budget have a real impact on kids, especially those in disadvantaged communities. The Keystone State's legislators ought to ensure that wealthier communities bear the brunt of any cuts in state aid, since they have a more robust local tax base and rely less on dollars from Harrisburg.
What's most striking about the discussion in Pennsylvania over the past couple of budget cycles is how little anyone is talking about long-term changes to how schools there operate. The pension system is underfunded, and likely to get worse in coming years—where is
MBAs are taking on an increasingly visible role in traditional school districts around the country. Large districts are multi-billion dollar enterprises, the argument goes, and business-minded people bring critical skills for managing those organizations efficiently. Many passionate ed-reformer MBAs believe the b-school set can help combat the bureaucracy and mismanagement that hurt districts' effectiveness. As a fellow business school graduate, I'm not so sure.
My first, perhaps obvious, objection is that big organizations with distinctive professional cultures are incredibly hard to turn around. This is especially true if you're trying to effect change from the middle management and special-projects role where many new MBAs find themselves. Traditional school districts need major changes to their business models to be on financially sustainable ground and poised to deliver services in a coming era of increased parental choice and (I hope!) decoupled services. That's primarily a job for school boards and superintendents.
The problem with the "MBAs to the rescue" strategy is the conceit that business-school types are somehow inherently efficiency-minded.
The fundamental problem with the "MBAs to the rescue" strategy, however, is the conceit that business-school types are somehow inherently efficiency-minded. Ludwig von Mises pointed out that what he called "commercial-mindedness" comes from the incentives inherent in running a business--if you fail, it will fail, and with it will go your livelihood. It's a response to incentives, and it goes away if you join a government agency that will continue to exist, and pay you a salary, whether you succeed at your mission (teaching kids, in the case of school districts) or not.
The "commercial-minded" incentives of entrepreneurs are
Maryland is not a hot-bed of education reform (though the newly-formed MarylandCAN no doubt hopes to change that) and Martin O'Malley is not usually seen as vying for the crown of public-sector reformer as Chris Christie, Andrew Cuomo, et al. are. Nevertheless, O'Malley is stepping out in favor of a much-needed—and relatively unpopular—reform to Maryland's teacher pension system.
Under current law, the state shoulders most of the burden for teacher pensions, not districts. It's a sweet deal for the state's wealthier school districts, which can max out teacher salaries without bearing much in the way of pension costs. The state, in turn, must divert resources from other uses to pay the bill for retirement benefits.
The state will only pick up half the tab, leaving local school boards with significant skin in the game.
O'Malley's plan is modest. The state will only pick up half the tab, leaving local school boards with significant skin in the game. In return, the state will pay half of the employer contribution to Social Security, an expense that is capped by statute and, unlike pension costs, is not subject to investment losses. Nevertheless, many county officials, especially in wealthy counties, predict fiscal Armageddon will result.
The governor and his allies in the legislature on this issue need to make the case for getting this bad arrangement off the books in Maryland. (A similar law is in effect in Connecticut—Nutmeg State chief exec Dannel P. Malloy could borrow a page from O'Malley's playbook.) Given Maryland's $11 billion pension shortfall and enormous underfunded liabilities for retiree healthcare, it
Apple's announcement last week that it is entering the textbook market in a big way, with a free product allowing content creators to build engaging digital textbooks more easily, has already gotten lots of reaction—positive and negative—from around the K-12 blogosphere (including from Fordham's own Kathleen Porter-Magee). Put me in the column of believers, though I don't think the iPad's impact on the classroom will be limited to digital textbooks.
Soon after its release in 2010, accessibility advocates touted the iPad's potential to displace much more expensive assistive devices
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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.