Before I go, I'd like to share a few of my takeaways from a year and a half of reporting and opining on the nation's school finance challenges.

1. Policy only takes schools so far

Around the country, reformers have won modest breakthroughs on education policy, especially at the state and local level. Charter schools' access to facilities has improved somewhat, administrators have been given greater spending flexibility, mayors have won control of urban systems and installed reform-minded leadership.

Policy cannot mandate high-quality outcomes.

Policy cannot mandate high-quality outcomes, however. Even with new flexibilities and opportunities, too many schools continue to do the same old, same old. Clearly K-12 education as an industry needs to develop greater leadership capacity in order to use newly-won flexibility to full effect.

Reformers are getting ahead of the curve, however. The emergence of the PIE Network, CEE-Trust, CRPE's portfolio districts, and other efforts illustrate a growing, healthy emphasis on implementation.

2. Teacher pay and benefits are badly broken

The United States is one of the biggest spenders on education in the OECD, yet starting teacher salaries are low. That reflects our primary strategy of the last two decades: When problems crop up, we throw more and more teachers, aides, paraprofessionals, and coaches at the problem. As a result, the enormous K-12 spending pie is divided into many tiny slices, and there's not much left for competitive salaries to attract high-potential new teachers.

The bloated retirement and healthcare benefits typical of most public school systems are even worse aligned to new teachers' needs. Most new educators will not stay in the profession, in the same pension system, long enough to build up meaningful retirement savings. And in states across the country, legislators are saddling newbies with most or all of the cost of unfunded pension liabilities, making the picture even worse.

Major reforms are needed if we want to put a fantastic teacher in every classroom—starting with higher pay, smarter benefits, and leaner staffing loads overall.

3. School finance is not yet "future-proof"

Charter schools educate a significant and growing portion of public-school students in America. Digital learning is a nascent but promising strategy for providing parents with more educational options at lower cost. The lines between secondary school and college are blurring with the increased popularity of early college high schools, community colleges, and online courses. Our system for financing public education is not equal to the task of funding any of these exciting new developments appropriately.

Paul Hill wrote about this issue eloquently in our recent book, Education Reform for the Digital Era. The fact is, education finance actively crowds out promising innovations. Geographically restricted school districts still control most of the education dollar, and the boards that govern them still restrict parent choice and spend public dollars on schools that look more like 1952 than 2012. Until parents have more control over how the education dollar is spent, our students will miss out on the full potential of innovation—those named above, and new ideas no one is even discussing yet.

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Fordham began its formal work on stretching the school dollar back in 2009, when the global financial crisis presaged difficult cuts to K-12 education budgets. I'm cheered by the fact that policymakers and major players in education reform (including Secretary Duncan and Bill Gates) recognize the "new normal" of flat budgets and the need to do more with less.

There's a great deal of work to do. Most of it will take place on the ground, in school board meetings, city council sessions, and the offices of school leaders tasked with providing a fantastic education on a thin dime. There are more resources available now than ever to help schools operate more efficiently—we now need the will to change our schools, reward great teachers, and see good policy through to implementation.

As in many states, school districts in Pennsylvania struggle to balance their budgets. A recent survey found that more than 140 Keystone State school districts anticipate insolvency in coming years and eight districts said they were already unable to pay their bills. In the state capital, the Harrisburg schools narrowly avoided having to cancel Kindergarten altogether.

Pennsylvania lacks the financial rules and policies to ensure we have transparency and fiscal accountability in place in our schools.

Did the difficult economy of the last several years cause these budget woes? Are waste or financial mismanagement to blame? While districts like Harrisburg have received less state money than before the economic downturn due to declining enrollment, the underlying answer to how things got so bad is simple but frustrating: We really don’t know.

Pennsylvania, like many other states, lacks the financial rules and policies to ensure transparency and fiscal accountability in its schools. Without that, the public can’t determine why districts face insolvency or ensure that officials are making wise spending decisions on behalf of schools and children.

Yes, Pennsylvania school districts receive annual financial audits and produce other reports of financial information. Unfortunately, the focus of these reports is limited and they fail to provide clarity on why spending decisions were made or to help parents, school administrators, and others determine which expenditures produced the best results for student achievement. These reports may also come too late: Pennsylvania lacks an early warning system that would allow the state department of education to identify districts headed in the wrong direction and then help them correct problems before they become insolvent.

However, there is cause for optimism. Last Thursday, the Pennsylvania House of Representatives joined the state senate in approving critically important legislation that would address each of these problems directly. Once signed by Governor Tom Corbett, House Bill 1307 will provide the state with new tools to ensure that school districts are financially sound.

The bill would establish an Office of Financial Recovery, made up of experienced school financial officers, to administer an early warning system which could identify looming problems. The measure also would allow the state to collect better data on school districts and their finances and identify, in a timely manner, districts needing technical assistance. For school districts in dire need of help, the secretary of education could appoint a chief recovery officer to develop comprehensive financial turnaround plans.

So what has to happen now? Schools must prioritize programs that enhance student learning and get rid of wasteful spending that doesn’t help kids progress and Governor Corbett should sign House Bill 1307, as he has already indicated he will. These two steps, taken together and immediately, will go a long way toward turning things around in Pennsylvania.

Prices for charter-school bonds have risen this year, according to trading data. Cosmos Foundation Inc., which operates 36 charter-school campuses in Texas, issued $50 million in bonds in 2010, and prices have increased about 12 percent.

IDEA Public Schools, a network of schools that received its charter from the state of Texas in 2000, is gearing up for its biggest bond deal yet. Chief Financial Officer Wyatt Truscheit said IDEA Public is planning a $70 million offering in August.

This is the first chapter in what should turn out to be a long story. Relatively few investment firms and banks are active in lending to charter schools, and not all lenders understand this market. Because of this, charter schools in areas that are not well-served by sophisticated lenders are probably paying more than they should to borrow money.

The more that authorizers and legislatures focus on quality, the easier it will be for promising schools to finance their facilities.

The quality of the charter law, authorizers, and the schools themselves matters a lot, too, however. The article notes that 3.91 percent of bonds issued by charters were in default, compared to less than 0.1 percent of bonds issued by district schools. The more that authorizers and legislatures focus on quality, the easier it will be for promising schools to finance their facilities.

Policymakers should also look for creative ways to incentivize banks to enter the market and learn to underwrite loans to public charters. The Department of Education's Credit Enhancement Program has jump-started this process in a number of states, and the USDA's Community Facilities Program has helped smooth the way for rural schools.

The growth in capital available to schools from private investors is an underrated success story for the charter movement. Money is available to more organizations earlier than ever before. Good policy and smart, forward-thinking finance professionals should continue to play a key role in making money available to high-quality schools that need it.

The good news is that school boards in Montgomery County, Arlington, and other districts are increasing pay instead of cutting class sizes, despite opposition from parents. The cost in Fairfax County was a one-pupil increase in the student-teacher ratio.

Across-the-board raises help experienced teachers much more than others.

Across-the-board raises help experienced teachers much more than others, however. In absolute dollars, a 4 or 5 percent raise on an $85 or 90 thousand salary dwarfs the equivalent increase a first-year teacher sees on $40K. For districts that are among the nation's front-runners in teacher evaluation and the development of meaningful career paths, across the board raises are a disappointing sop to the status quo.

District leaders who are looking for next-generation models to apply in their own schools could do worse than consider Public Impact's recent recommendations. Its recent whitepaper sketches a variety of career paths that would allow star teachers to expand their impact on students—and increase their take-home pay.

Rewarding teachers who sacrificed pay and job stability during the recession makes sense. But K-12 leaders should focus on improving the competitiveness of pay in early years and tie pay to teachers' contributions and progress along career paths that help kids. Reforming pay for teachers can benefit both educators and their students.

School leaders in cities, school districts, and states across the country continue to grapple with revenue shortfalls that often require teacher layoffs.  Unfortunately, the impact of these layoffs is exacerbated when schools are required to use Last-In, First-Out (LIFO) policies, which require layoffs to be issued in the order of reverse seniority, because such rules mean more teachers, of all skill levels, will lose their jobs.

While the problems of quality-blind layoffs that force good teachers out of the classroom are obvious, the way these policies exacerbate the disruptive impact of teacher layoffs is also important. LIFO not only hurts students by firing newer teachers regardless of their performance, it also harms students and teachers by requiring that districts lay off a greater numbers of teachers than they would need to let go in a system that was based on performance.

A recent study in Education Next showed that only 16 percent of teachers laid-off under LIFO would also be laid-off in a system that uses performance, rather than seniority, as the deciding factor. Good teachers can be found at every level of experience. When districts make quality-based layoffs, we assume that an equal number of veteran and new teachers will be affected. Because teachers are typically paid based on their years of experience, this means that layoffs based on effectiveness will more likely produce savings closer to an average teacher salary, instead of a new teacher salary, which is usually significantly lower. As a result, fewer teachers would need to be laid off to achieve the same level of budget reductions.

Visual depiction reprinted from The New Teacher Project, “The Case Against Quality-Blind Teacher Layoffs” Philanthropy Roundtable 2011.

California’s revised budget, released this week, proposes a state-wide cut of $656.7 million from K-12 education funding above and beyond cuts districts had already planned for should voters not approve a tax increase this November. According to the National Center for Education Statistics (NCES), California teachers in their first five years of teaching make $47,313 compared to the statewide average salary of $69,783, a difference of $22,470. This difference means that 47.5 percent more teachers stand to lose their jobs under California’s LIFO requirements than if a quality-based layoff system was implemented. We estimated that based on the $656.7 million cut, California schools will be required to lay off 8,328 teachers, but if districts were allowed to make layoff decisions on the basis of quality, they could save as many as 2,682 teachers statewide, and avoid disrupting the educations of 80,000 students.

Just as California school districts may have to issue additional lay off notices, Pittsburgh, Pennsylvania needs to take steps to close a budget deficit of $21 million, caused by a rapid loss of state revenue and other compounding costs. However, unlike California, Pennsylvania state law requires LIFO policies unless the local school board and teacher union agree to a different layoff practice. The Pittsburgh School Board voted overwhelmingly in April to attempt to work with their local union to renegotiate the teacher’s contract to consider measures of effectiveness in future dismissals. According to the NCES, new teachers in Pennsylvania earn $43,098 per year compared to the average teacher salary of $57,567, a difference of $14,469. Because of this difference, Pittsburgh will have to lay off at least an estimated 33 percent more teachers if it is forced to retain its current LIFO policy. This would affect 1,417 more students than in a quality-based system.

Layoffs disrupt schools, students, and teachers no matter how they are implemented, but LIFO policies only exacerbate the situation by forcing many great teachers out of the classroom without regard to the quality of their work and disrupting the education of more students than needed.

Public workers deserve a fundamental rethink of their retirement options.

Gov. Pat Quinn has proposed a major reform, one radical enough to gain the approval of the Wall Street Journal editorial board. This plan simply hammers on workers and retirees, however, without improving portability of benefits or ensuring that young teachers get a fair chance at accruing retirement wealth. Illinois should consider 401k-style defined-contribution plans or cash-balance accounts instead of its legacy pension system for teachers.

Special interests predictably claim reforms cannot and will not save money due to transition costs, a fact noted by the University of Arkansas' Robert Costrell in a policy brief released today by the Laura and John Arnold Foundation. The Teachers' Retirement System of the State of Illinois makes just this claim.

Prof. Costrell's brief lays out in helpful detail why this isn't true, but the following graph tells the story succinctly, using California as an example:

It's clear that transitioning away from defined-benefit pensions plans can save money in the long run. The question is whether lawmakers are willing to make short-term adjustments to ensure long-term sustainability.

For systems in crisis, the time for reform is now, not tomorrow. This is especially true for teacher pensions—bad policy today can drive away a generation of high-potential young teachers away from the profession, or at least make packing up and moving to the next state more attractive. Rhode Island has provided an example for its blue-state brethren on how to fix a toxic situation and save money. Illinois lawmakers should resist the urge to kick the can down the road, instead passing radical reform of the pension system and providing teachers with a forward-thinking retirement plan.

After months of the presidential candidates paying minimal attention to education, the interest rates on federal student loans emerged as a hot-button political issue this week. These loans play a crucial role in ensuring meaningful post-secondary opportunities for American students, both at Career and Technical Education (CTE) programs and four-year institutions, which is why it’s disconcerting to see both Barack Obama and Mitt Romney present proposals on this issue that may be good politics but are bad policy.

This week President Obama is heavily promoting his plan to keep the interest rate on one type of student loan in particular—new subsidized federal loans—at 3.4 percent. The rate will revert to 6.8 percent in July if Congress does not extend the temporary rate reduction that was enacted in 2007. Federal loans like these are an important source of financial support for community college students, a group Obama has portrayed as a priority for his administration. In 2007-08, 20 percent of full-time community college students received loans from the federal government, up from 12 percent in 1999-2000. This number has likely increased during the economic downturn of the last few years. At for-profit two-year colleges, 94 percent of students received federal loans in 2007-08.

Obama’s proposal is likely to garner support from college-age voters as well as former college students—both graduates and dropouts—currently paying off their student loans. But the latter group may not know that the interest rate on their federal loans will not be affected by Obama’s proposal because it only applies to new loans.

Even presumptive Republican presidential nominee Mitt Romney appears to be confused on this issue, or at least willing to capitalize on this confusion in order to woo young voters. In announcing his support for extending the interest-rate reduction, Romney said “particularly with the number of college graduates that can’t find work or that can only find work well beneath their skill level, I fully support the effort to extend the low interest rate on student loans.” President Obama has also alluded to the short-term needs of students, asking a University of North Carolina audience yesterday “Anybody here can afford to pay an extra $1,000 right now?”

But the type of loans affected by the president’s proposal—new subsidized loans—do not accumulate interest until after students leave college. So a student struggling to afford college would not get any relief now—they would just face somewhat lower loan payments down the road.

There is no doubt that many college students and their families are being squeezed by rising college costs.

There is no doubt that many college students and their families are being squeezed by rising college costs. And there are good reasons for the federal government to provide financial assistance to help low-income students afford college. But charging below-market interest rates on student loans is an inefficient and likely ineffective way to encourage college enrollment and completion because students don’t pay any interest until after they leave college.

Some degree of pandering to various groups of voters is to be expected in any presidential election year. But President Obama could focus his pitch to college students on his other, more significant proposals aimed at reducing college costs. In particular, the president’s proposal to provide prospective college students with much better information about institutions of higher learning—including their graduation rates and the earnings of their graduates—has the potential to force colleges to compete on quality and price rather than on amenities that drive up costs.

Even if this “College Scorecard” proposal can help drive down costs in the long run, it surely does not have the same appeal to voters as promising more money in their pockets right now. But if Obama and Romney want to buy the votes of struggling college students, they should at least propose the more efficient path of increasing the grants that students receive when they attend college, not decreasing the interest they pay after they leave.

The SRC deserves credit for making smart structural changes to the way Philly will operate in the future.

The School Recovery Committee deserves credit for making smart structural changes to the way Philly will operate in the future. Aggressive plans often entail mindless slashing of schools and headcount so that "business as usual" can continue elsewhere. The SRC instead plans to bolster parental choice, prizing the development of "high-performing seats" wherever they can be found over protecting the legacy school district at all costs. According to the Inquirer's Kristen Graham, the district also plans to restructure employee benefits, saving $156 million of the projected $218 million deficit for next fiscal year. A 7 percent reduction in per-pupil payments to charters is counterproductive, however: If the SRC really want high quality seats, it shouldn't cut charter funding.

District leaders around the country have been tempted into believing that the "new normal" of anemic revenue growth (or no growth at all) would be temporary. This has led to short-sighted cuts and quality-blind layoffs that supes and school boards hope will be reversed when the economy improves. In districts experiencing true financial distress, these thoughtless measures will hurt kids for the long haul.

Philadelphia chose real reform—and its staffers now have a very long row to hoe in order to implement the SRC's plan. Budget hearings start next month, and the district will have to convince parents, teachers, and the community that these reforms are the right way forward. The citizens of Philly should try to be receptive to many of these big-picture changes—and help the district get the details right—so that the schools there can provide an excellent education in a financially sustainable way.

Our education system has developed an obsession with remediation.

Our education system has developed an obsession with remediation, both for students and teachers. Youngsters fall behind quickly (or start behind) and start an endless round of pull-out instruction, reading groups, remedial courses, and tutoring early. For educators, districts have now beefed up the payroll with instructional coaches, teacher aides, and other paraprofessionals who bring (costly) support and advice but wield little authority. This addiction to support is unhealthy—every dollar spend on remediation and extraneous personnel could be going to pay front-line teachers more.

We released a policy brief yesterday that goes deeper on these points, How School Districts Can Stretch the School Dollar. Public Impact has also weighed in on the importance of high-quality, well-compensated teaching with a fantastic new website and infographic.

Trimming school budgets must involve some cuts to payrolls; staff costs constitute the majority of education spending. They need not hurt classrooms, however. With a more intense focus on rewarding quality teachers, especially undercompensated early-career stars, schools can become more cost-efficient and more effective.

Down the road from Sciotoville Elementary Academy, which is housed in modulars and packed with students, is a brand-new traditional district school built with public funds and under-enrolled. (Many of the kids it was built to serve go to SEA!) Charters across the country suffer from the same disparities.

Maintaining or replacing aging school facilities presents a challenge to many rural communities  Photo by Joe Portnoy.

It's not only charter school pupils who sit in old, dilapidated buildings, though. Some traditional schools have benefited from a boom in new construction, but others have missed out. The high school my mother attended, which was aging when she graduated decades ago, is still open at the ripe age of 91 today. Small-town superintendents across the country who haven't benefited from tobacco settlements or state largesse can certainly sympathize.

There isn't an easy solution to the financing problem small-town schools and districts face. In shrinking towns and rural areas, consolidation into districts serving large geographic expanses may be the only way to make building new facilities economical, which is unattractive in places where schools are a critical touchstone for the community. Good schools can stem the tide of rural flight in some circumstances, but once the process has reached critical mass, communities may have to dramatically reconfigure.

In some cases, however, obtaining affordable financing alone is a stumbling block. Few folks in education are aware of it, especially in the charter world, but the USDA runs a loan guarantee and direct lending project called the Community Facilities Program. Schools (charter and district alike) can take advantage of the program if they are located in towns or rural areas with fewer than 20,000 people. Banks in a few areas around the country have used the program to support lending to charters. It has not only provided much-needed capital to those schools, but has increased the capacity of those commercial lenders to underwrite loans to charter schools, teaching them about the unique risks (and strengths) of charter schools as borrowers.

Rural and small-town schools face unique challenges. They are charged with educating students in an environment of declining resources, often preparing those youngsters for careers and lives elsewhere in the country. We could use more creative programs like the USDA's Community Facilities lending initiative for easing the burden of inadequate facilities, helping schools develop realistic enrollment projections and obtain affordable space.

Students with special needs certainly deserve additional resources to help them be successful in the classroom. Almost no one questions that nearly forty years after the passage of the Education for All Handicapped Children Act, thanks to that law and the work of advocates. However, ring-fencing the money dedicated to these students puts the majority of students served in the general education program at greater peril as they are exposed to 100 percent of the reductions needed to balance district budgets.

Obsessing about maintenance of effort also hides the reality that money does not guarantee quality.

This makes the decision of whether to identify a child for special education services very high-stakes—on one side of the fence, he or she is protected by a bevy of state and federal laws and cannot legally be exposed to real-world budget pressures; on the other, it is assumed that the youngster is a generic quantity and deserves far fewer protections. With dramatic growth in special-ed identification driving much of the increases in costs for these programs (not increased per-pupil spending), this raises the specter of a growing divide between educational "haves" and "have nots."

Obsessing about maintenance of effort also hides the reality that money does not guarantee quality. As we noted last year in our brief on special education, identification rates and staffing ratios vary significantly from state to state in special education programs. Mindlessly requiring that states spend the same as they did in the previous year, regardless of how well those efforts panned out for kids, is a terrible way to ensure quality.

Although the guidance issued by the Education Department last year was not legally binding, states and districts would presumably like to be able rely on the Department's advice. Further, Maryland Ave's abrupt volte-face on this issue seems to be motivated by political pressure, not on a sober reconsideration of the facts. District leaders are not served by regulators dancing on strings; the Department should endeavor in the future to give reliable advice and provide needed relief from mandates so schools can weather tough times with as light an impact as possible on their entire student populations.

I am pretty good at math. Unsurprisingly, the story about why I am good at math has a lot to do with a few exceptional teachers I had growing up in a small coal-mining town in Illinois.

One in particular was Mr. Nagrodski, my high-school math team coach, who seemed to conjure talented mathematicians out of thin air. In the late 80s, he pushed for a major acceleration in the junior-high math curriculum in our district so that more kids were ready for tough math classes in high school. He convinced the district to let him teach those tough math classes, which hadn't been offered before he arrived. As a result, his teams won state math competitions year after year after year—and not incidentally, turned out far more talented students of mathematics than anyone would have guessed could come from a little town of four thousand. (Among many other accolades, Mr. Nagrodski, was profiled in Fortune magazine back in 1991 as one of “25 Who Help the U.S. Win.")

By the time I was a middle schooler gearing up for Mr. Nagrodski's infamously difficult math team practices, roughly half of my class of 75 or so kids had been identified as gifted and was placed in advanced math courses. I doubt there was much red tape to cut through to get to this point--just a superintendent and a couple of principals to convince. 

Not all rural schools work well, but when they do, they can be truly transformational. Most schools in small, rural districts operate on a thin dime and without the huge talent pool a well-funded suburban district can draw on. Yet students from rural districts outperform kids from cities and larger towns on NAEP in both reading and math at all grade levels, and rivaled the results of suburban schools on the 2009 test at the 4th and 8th grade levels. These schools leverage the human capital available to them, engage parents deeply in their children's learning, set high expectations, and empower teachers to play outsized roles not only in the school district, but in the wider community. 

Tomorrow, we are releasing a documentary by our own Joe Portnoy, profiling a pair of Fordham-sponsored community schools in Sciotoville, Ohio, a small town similar to the one I grew up in. Schools like these get less attention than they deserve from education reformers. It may not be trivial to translate the practices they use to deliver a great education in rural America directly to the classrooms of our cities and suburbs. Their stories point the way to important components of all great schools, however: community engagement, high expectations, and high-performing, empowered teachers.

Weighted student funding is needed for parental choice to thrive.

Choice is no longer simply about charter schools for a small number of children. A few cities like Washington, D.C., and New Orleans are close to majority-charter or beyond. As Paul Hill noted in a recent paper for us on digital learning, our antiquated school finance system can barely keep up with the growth of online schooling, much less provide parents with robust options to piece together an education for their kids from a variety of providers—online, brick-and-mortar, after-school, and even community colleges and four-year universities.

It better aligns resources with needs.

There are certainly challenges to getting every dollar under the control of parents. Hanushek is right that local funds would not follow a weighted formula established at the state level. State formulas could adjust for those local dollars as a temporary measure, however, and more muscular state reform of school finances would not necessarily impinge on local autonomy. (See the case studies in Bryan Shelly's book, Money, Mandates, and Local Control in American Public Education for more on this front.)

It has the potential to simplify budgeting and compliance, providing schools with greater flexibility.

It's true that some school funding is already "weighted" for need; Hanushek uses the example of Title I funds. These dollars come with numerous strings attached, however, and flow through a dizzying array of categorical programs in some cases. (Just look at California's absurd set of entitlements and categoricals.) Part of the idea of weighted student funding is to shift a portion of the oversight for how education dollars are spent to concerned parents, letting school leaders spend their budgets to full effect without (as many) auditors breathing down their necks.

The theory behind weighted student funding is not that such reforms would "inescapably set in motion" a process whereby schools are magically transformed. Having money follow students is one tool among many desperately needed reforms.

For it to be successful, we need more and better schools of choice. We must develop principal capacity to budget and hire (as well as giving them the rights and responsibilities to do so). Some social service work is probably needed to boost parents' abilities to be discerning consumers of educational choice. Reforming our antiquated system of financing education is a must to improve our schools, with all the heavy lifting that entails.

It's not clear that young workers value a benefit that many of them will never receive.

The cost of providing teacher pensions is on the rise in many states, New York included. It's also not clear that young workers value a benefit that many of them will never receive. Only a minority of educators teaches for a full career in the same pension system and receives the full retirement benefit offered.

The Empire Center poll asked teachers about one possible alternative, a hybrid plan that would provide a basic level of financial security through a small traditional pension, with a 401k-style individual account on top. Raegen Miller at the Center for American Progress has argued for cash balance plans, which are similar to traditional pensions but provide more portability and do not implicitly rob younger teachers by giving them poorer benefits relative to more experienced teachers.

The retirement "time bomb"is not going away, meaning policymakers in many states need to enact meaningful reforms to save teachers' benefits. It should strengthen their resolve to know that teachers are themselves open to change.

There's nothing "un-American" about choosing an affordable college over an a elite school. Photo by Chris Barry.

Paul Krugman sees something sinister, even un-American, in all this talk of value for money, however. He quotes Republican Presidential candidate Mitt Romney on this point as proof that the GOP doesn't care about education:

Here’s what the candidate told [a student worried about college costs]: “Don’t just go to one that has the highest price. Go to one that has a little lower price where you can get a good education. And, hopefully, you’ll find that. And don’t expect the government to forgive the debt that you take on.

My parents are both what Krugman calls "ordinary workers" (a term that rankles me), and I grew up lower middle class, spending most of my K-12 years on free or reduced lunches. My folks nevertheless had high aspirations for me, and they scrimped for twenty years to send me to an expensive private college, with help from private grants and a thankfully modest amount of loans.

Looking back, I wish someone had given me the same "un-American," elitist advice Krugman deplores coming from Mitt Romney. Many of my classmates in business school sought value, rather than a gold-plated diploma, for their undergrad education and did well. The research shows that the earnings of students who are accepted at elite colleges do not suffer if they then choose to attend a less selective (and presumably less expensive) university.

It also isn't true that state support of higher education has plummeted. According to a 2010 report on higher ed finance by the State Higher Education Executive Officers, state aid per student is down about $1,028 (or 14 percent) in inflation-adjusted dollars since 1985, while net tuition has gone up $2,047 in constant dollars, a 90 percent increase. In other words, at least half of the story is cost increases, not government aid. At the same time, attainment of a bachelor's degree has actually fallen.

Equality of opportunity is an important American value, no doubt. But knowing the value of a dollar is important as well. Families want to place their kids at the very best schools—a game rich families win more often than poor families do these days, thanks to thirty years of runaway inflation in higher education. If we prize social mobility fostered by accessible higher education, we need good options that are affordable, not a race to spend more dollars without regard to quality of outcomes.

Cities like Newark, New Jersey are experimenting with creative uses of space to improve education options. Photo by William F. Yurasko.

To make the problem even more difficult, city centers are redeveloping, with entire neighborhoods gentrifying, building mixed-use housing and innovative commercial spaces. Young professionals who a generation ago might have fled for the ‘burbs as they settled into careers and started having children are now staying. This has resulted in vibrant, revitalized neighborhoods—but the pressure continues to build on large urban school districts to provide high-quality seats to meet the needs created by this cultural shift. 

Increased density and the creative reuse of space can help ease the space crunch. Public charter schools have led the way on the latter front, motivated more by their scanty facilities budgets than by far-sighted views on urban planning. District schools have followed in a few cities (though redevelopments from school to commercial space is more common).

Charters in a few places are now taking this trend further. An office building in Wilmington, DE, is being converted to house several charter schools on nine floors. In Newark, a developer is building a mixed-use community centered on three public charter schools, providing classrooms as well as housing for teachers near NJIT and the New Jersey Performing Arts Center. Projects like these can bring commerce, housing, and schooling together in a way that is incredibly attractive to young urban families.

Merely being creative is not enough in many cities, however. Real estate is still very expensive, due in part to bad development policies that artificially limit the density of American cities. A new book by Slate blogger Matthew Yglesias (with the colorful title The Rent Is Too Damn High) argues that deregulation would lead to increases in the number of housing units available in attractive neighborhoods, reducing rents and making them naturally more diverse and livable—at least for people who enjoy city life.

It's easy to see how denser neighborhoods combined with creative development of mixed-use spaces could improve K-12 education.

Yglesias only touches on schooling briefly, but it's easy to see how denser neighborhoods combined with creative development of mixed-use spaces like Newark's Teachers Village could improve K-12 education. Increasing the economic diversity of schools is good for the educational outcomes of poor kids. Higher density also means more kinds of schools can open in a given neighborhood, each serving their own market: arts-intensive schools, STEM-focused schools, schools with values-based programs, and so forth.

Charter leaders would no doubt agree with Yglesias that the rent is "too damn high." In the neighborhoods that are urban renewal's success stories—vibrant, economically diverse—the opportunities to also improve primary and secondary education are significant. School leaders need help from policymakers here to improve the availability of affordable space for teaching and learning, and to plug schools into revitalized neighborhoods.

Simply relying on IBM wasn't a recipe for business success. Schools need to have the flexibility to experiment with new innovations. Photo by Adam Jenkins.

Once upon a time, corporate IT departments lived by the slogan "no one ever got fired for buying IBM." Big Blue's products were a safe bet in a rapidly evolving industry. The over-reliance of the Fortune 500 on that safe bet proved to be a problem for those companies, which missed out on innovations adopted by more nimble rivals, and for IBM itself, which stagnated in the absence of pressure from customers to push the envelope. District schools suffer from the same "buy IBM" problem, with state policies and district budget decisions making it difficult for principals and teachers to adopt promising new options for delivering instruction.

An EdWeek piece today documents the struggle ed-tech startups wage to get their products adopted, and catalogues a number of promising companies that are gaining headway despite those challenges. One of the greatest barriers is the fragmented but highly regulated market that results from the "buy IBM" mindset of thousands of risk-averse districts:

In addition, big companies have clung to their monopolies because investors were reluctant to dive into the education sector.

"The timeline is slower," [UPenn's Douglas] Lynch said of the education market. "If classic venture capital is 36 months for 118 percent growth, in education it might be seven years."

On top of that, while the American K-12 marketplace may seem large, with roughly 15,000 school districts, he said, "there's no real market. There's 99,000 teeny tiny markets. It's hard to go viral quickly."

Most companies sell in fragmented markets, however. Ford or Toyota convinced you and millions of others independently to buy the car you drive, which is loaded with innovative features for improving ride, handling, and safety. The makers of Angry Birds have convinced millions of us to spend a couple of hard-earned bucks for a time-wasting smartphone app. Though Sen. Michael Bennett and the Administration's Jim Shelton were right to note at a recent AEI event that the federal government spends far too little of its K-12 dollar on R&D, districts need not wait for more federal funding for innovation.

The simplest concrete step district leaders can take to foster innovation is to give principals and teachers more control over the instructional materials budget. Using district buying power to buy in bulk makes sense—if and only if educators really want the solutions the district plans to buy. Central office can and should place much more buying power in teachers' hands, holding them responsible for their students' growth but not dictating which software packages and other materials can be used for core instruction. This would allow promising startups to grow by convincing teachers, not bureaucrats, of the usefulness of their products.

Even in companies and industries that consistently turn in outstanding results, putting barriers in the way of innovation can quickly erode performance. In K-12, where so many students are not even up to basic proficiency, we truly cannot afford the red tape that holds our teachers back.

Is the number of free and reduced-price lunch participants an accurate proxy for the number of poor kids in America’s schools? New Jersey’s acting education commissioner, Chris Cerf, isn’t so sure. A recent article in The Star-Ledger highlights Cerf’s two concerns: first, that the self-reported basis of Free and Reduced Lunch Program (FRLP) participation makes the count prone to errors and—potentially—fraud, and second, that this number alone might not be a reliable proxy for the number of students living in poverty.

Mr. Cerf, I wouldn’t throw out school lunches quite yet—maybe just add a few other ingredients into the mix. Photo by U.S. Department of Agriculture.

The issue of fraud in the lunch room pops up every couple of years. Detailed audits have shown that some students who should receive benefits do not, some parents or schools make honest mistakes on the application, and yes, there are some instances of fraud. Given our current situation of squeezed budgets and a National School Lunch Program that cost $9.7 billion in FY 10 and relies on self-reported income, those small instances of fraud can really add up (A 2009 2007 Mathematica study estimated the cost of errors close to $1 billion). It would be impractical, very time-consuming, and costly to audit every applicant in every district, but per USDA guidance, state chiefs can request that each district audit three percent of its participants whose incomes border the FRLP qualification level.

Requiring income verification from each participant would clamp down on fraud. This is already a requirement for SNAP recipients (whose children are auto-enrolled in the FRLP), but would increase the burden of the program for school districts—both in terms of time and money. Instead, the most promising solutions for improving accuracy seem to be quite simple: a streamlined application, additional training for those who process applications, clear consequences for fraud, and actual enforcement of those consequences. The optics of prosecuting parents for seeking help feeding their kids are as troubling as recent cases of mothers being arrested for “stealing” educational services, of course, and there is real danger that parents could be punished for an honest mistake such as not understanding the form or being bad at arithmetic.

The fraught nature of using FRLP participation as a measure of poverty is also a recurring issue in the news. David N. Bass’ piece in Education Next makes the point that using FRLP to drive education funding leads to over-reporting by schools to ensure additional funding from the district, state, and federal levels. The Shanker Institute’s Matt Di Carlo and others argue that the measure is too limiting, fails to shows degrees of poverty on either side of the qualification line, and should include other out-of-school factors.

In fact, while the Garden State’s funding system uses the FRLP count as its only measure of poverty, many other states either use it along with a combination of other factors or do not use it at all, relying instead on U.S. census data or enrollment in the Temporary Assistance for Needy Families (TANF) program. Using TANF or census data alone is problematic; TANF’s income requirement is much lower than FRLP and would identify a lower number of people in poverty than the free lunch program, while census bureau data is updated infrequently.

A compromise might be for New Jersey to look into a using a poverty formula (see the ‘Highly Impacted Schools Program’ in Utah) that gives weight to a number of factors, such as the number of ELL, special education, and FRLP participants, to give an overall measure of how much money should reach a given school for its entire student population. Respectfully, Mr. Cerf, I wouldn’t throw out school lunches quite yet—maybe just add a few other ingredients into the mix

There's a lot to be said for the Granite State's typically libertarian approach.

There's a lot to be said for the Granite State's typically libertarian approach. As the Hoover Institution's Rick Hanushek said to Ed Week after the Colorado ruling, the courts are not a good place to adjudicate the ongoing academic research on the role of school spending in driving achievement. In particular, the record of New Jersey's Abbott districts, the recipients of billions of dollars in additional court-mandated state support since the mid-1980s, is abysmal.

This highlights one of the most fundamental criticisms of activist meddling in school finance systems by courts: quality rarely, if ever, enters the picture. Judges simply assume that poor performance implies inadequate funding, and that layering more money on top of failing systems will improve student outcomes. Anyone in the corporate world who has been through a tough restructuring will tell you that more money serves to hide problems (even fraud and embezzlement) as often as it solves them. Failing school districts have proven this over and over again as they've frittered away funding increases without moving the needle on performance.

States already have an incentive to spend plenty on education.

States already have an incentive to spend plenty on education. Strong, well-funded schools attract workers and businesses. The key question is whether the state pot is divided equitably, not just between rich and poor, but among students in a variety of school settings: district and charter, virtual, voucher, urban, suburban, and rural. On that score, even very high-spending states have not done much to provide robust, demanding education programs across the full spectrum of choices.

If instead funding truly followed every child—without holding traditional providers like school districts harmless or endlessly protecting wealthy suburbs from changes to state formulas—we could move from vague discussions about adequacy to ensuring a variety of high-quality choices for every child.

Chris Cerf & Co. deserve praise for trying something new in a touchy, costly program area.

New Jersey is trying something new, and promising, to improve the quality of special education in the state. Education commissioner Chris Cerf recently awarded $1M in grants to districts that had the highest absolute performance and highest growth for their special ed students.

The Garden State's implementation of performance-based funding has serious strong points. In a program area that focuses largely on inputs (i.e., the level of funding and staff dedicated to special ed students), these grants shift the spotlight to quality. The initiative also shows how much good a robust data system can do.

The long-term incentives performance-based funding could provide in this area are a little more worrying, however. A variety of children are lumped under the "special education" umbrella, and measuring performance and growth looks very different in each locale depending on the mix of conditions a district's students face. Will school systems with a high proportion of severely disabled students be left behind, even if they're achieving modest gains in a cost-effective way? What about the dangers of over-identifying high-achieving (or high-growth-potential) students to improve the numbers?

The state-level team in New Jersey deserves praise for trying something new in a touchy, costly program area. Stressing quality over increased inputs in the form of money, aides, and other resources is sorely needed in special education. The crucial next step for Cerf & Co. is to keep refining this policy to find the right set of incentives—and keep districts on their toes so that special education students get the best possible instruction.

The Beehive State is setting a great example with creative approaches to stretching the school dollar. Photo by Brian Swan.

The Utah legislature is considering a big move toward student-based state funding of secondary education, allowing students to apply public dollars not only to a variety of public secondary options, but to college courses as well.

Students could choose to spend that money to attend public schools, including charter schools; take public school online classes; and/or pay for courses offered by public and certain private, nonprofit Utah colleges. School districts and other providers would determine how much to charge for classes and that amount would be deducted from student accounts. Students could use any money left in their accounts after high school to continue their educations.

Providing secondary education services is becoming an increasingly complex proposition, as students add community college courses to their workload, explore virtual education options for foreign languages and advanced math and science content, and often try to take advantage of work or vocational ed opportunities.

The bill is currently in committee, and lawmakers may scale the program back to a pilot. Utah has quietly done some very bold things to stretch the education dollar in recent years. Sen. Dan Liljenquist's 2010 pension reform plan set the stage for proposals in a number of other states. We here at Fordham think Utah should keep going big: Give parents statewide the opportunity to spend their high-school dollars effectively to prepare their kids for work or college.

Given more flexibility, principals still mostly don't fire anybody.

Jacob found that, despite the new policy allowing principals to dismiss probationary teachers at will, a rather high proportion of them didn’t do so. During each year between 2004-05 and 2006-07, principals in around 30-40 percent of Chicago schools chose not to dismiss a single probationary teacher. Further, this phenomenon was not at all limited to “high-performing” and/or low-poverty schools, where one might expect to find a stable, well-trained teaching force. For instance, in 2005, 35 percent of the “lowest-performing” schools (the bottom 25 percent) chose not to dismiss any probationary teachers, as compared with 54 percent of the school with the highest absolute achievement levels (the proportions were similar when school performance was measured in terms of value-added).

In other words, when principals were given free rein to fire for any reason, with virtually no documentation or effort, a significant proportion chose not to use this power even once.

This is quite a challenge to those who believe union obstructionism or onerous due process are the primary obstacles to moving poor teachers out of the profession. Those are worthwhile things to fight, where they are truly an impediment to improving the work force, but given the chance, principals still seem to prefer retaining ineffective staff.

Why? As Matt notes, there are a lot of plausible explanations. If I had to guess, I'd say the professional culture in most public schools still sees firing as an extreme response to bad performance, instead preferring endless remediation. The supply of decent job candidates is probably not up to demand in CPS, either, meaning the labor market is a barrier to implementing better policies around teacher performance.

The study's results also suggest to me that there's a leadership gap at the building level. Urban superintendents answer for poor performance with their jobs. Average tenure is low and has trended downward in recent decades. But how far down does the accountability (and leadership development) go? How many principals get meaningful training in management, and how many of them lose their own jobs if they keep hiring the same cohort of underperforming teachers?

As always, good policy only sets districts up for the next step: implementation. The natural experiment in Chicago shows how much further we have to go to improve teacher quality—and illustrates that (very) local leadership is key to success.

More money means better outcomes for kids: It's an argument heard over and over in state capitals during budget season and in local newspapers leading up to votes on tax levies. At a recent event on Capitol Hill, Thomas Gais, the director of the Rockefeller Institute of Government, made a similar case, claiming that more state education funding reliably leads to better well-being for children. If only it were actually that easy to improve America's schools!

The main problem with this argument is that we as a country tend to invest the most in kids who are already on track to do well—middle-class and wealthy kids, mostly white, largely found in the suburbs. Many are educated in the "public private" schools we profiled a couple of years ago. I believe that these kids have high "well-being," whatever that term means to the Rockefeller Institute, but it's hard to argue that spending state money on these kids' educations got them to where they are.

America's high-spending, high-poverty districts are the exceptions that prove this rule. Washington, D.C., New Jersey's Abbott districts, and a few others spend breathtaking amounts of money per student, much more than affluent nearby suburbs. Yet their students' performance as measured by standardized tests, graduation rates, and college attainment is dismal. All the money in the world won't buy a great education if it isn't spent well.

Marguerite Roza and Paul Hill argued yesterday that improving the way we spend the school dollar would provide the strongest possible argument for more money. After decades of funding increases with very meager outcomes, that's the right sequence: better results with current resources, then more money if warranted. Schools need (and have) significant financial support to operate, but money alone does not ensure quality—and never will.

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 the talk of retirement reform for public-sector workers? How about collective bargaining, either through state-level reforms or greater pressure applied by school boards in negotiating the contracts governing workers in their districts?

The short-term pain is very real across Pennsylvania, and everyone with a stake in public education in the state shares responsibility for getting kids through that unscathed. Pretending that the pain is only short-term—and avoiding lasting change in how school dollars are spent—is looking like the real crisis.

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 very much present in schools of choice, however, especially in jurisdictions where bad charter schools are closed regularly. The incentives of school leaders are more closely aligned with those of parents and students in the charter sector. Here MBAs and other entrepreneurs have a fighting chance of eschewing bureaucracy and sticking to best practices; mission trumps red tape in these organizations because red tape will eventually kill the business.

Last week, Neerav Kingsland, New Schools for New Orleans' chief strategy officer, floated a great idea for creating more such opportunities for education entrepreneurs. He suggested that superintendents of large districts become "Relinquishers," giving up the bottom 5% of their portfolios a year to the charter sector.

MBAs will no doubt continue to play valuable roles in traditional school districts. As even von Mises acknowledged, we do take away certain enterprise-control skills from our experiences in the private sector. We're good at managing large projects and getting buses running on time. But it's hard to believe MBAs-turned-bureaucrats will transform district schools from within. Instead, we should be laboring to strengthen charter schools, parochial schools, and other options outside the legacy K-12 sector to serve the needs of parents and kids.

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 wouldn't hurt to go even further, considering reforms along the lines of Rhode Island and Utah's move toward hybrid retirement systems. But every little bit helps to close the state's structural budget deficit of $1.1 billion and make the allocation of education aid to local governments smarter.

The democratization of the tablet computer means developers have huge incentives to develop great products for K-12 students at low prices.

The democratization of the tablet computer (15 million iPads were sold last quarter, and another 11 million the quarter before that) means developers have huge incentives to develop great products for K-12 students at low prices. The fact that the iPad shares a basic platform with the iPhone (over 100 million devices sold to date) means the audience is even larger. To me, textbooks are just the thin end of the wedge: a minority of schools will start using iPads to replace textbooks but will get a bigger bang from tapping into the growing universe of educational apps—many of which target  parents but would be effective in the schoolhouse, too. If use of the devices can spread outside special education classrooms to find innovative and effective uses in the general education program, Steve Jobs may wind up transforming another area of American society even after his untimely death.

My colleague Kathleen is right to be skeptical, of course. (Although the Gorilla Glass used on iPads is more durable than one might think!) Education technology has mostly failed to shake up traditional classrooms. Laptops and smartboards have been more disappointing than transformational in the hands of K-12 educators. 

The source of my hope for the iPad is that it represents a much greater paradigm shift in personal computers than did the laptop computer. It changes how people interact with computers, making the experience more personal and enabling entire categories of apps that are only possible with small, portable touchscreens.

Parents will likely have to drive change here, however, not district technology folks or savvy teachers. If parents demand that classrooms tap into the universe of content now available, much of which they're starting to use at home, and if teachers avoid the uncreative niche uses Kathleen fears (a tall order, admittedly), the iPad could help schools deliver better instruction for less.

Ohio’s newspapers ran headlines today warning, “Money crunch pushes Downtown roadwork way back,” “Local highway projects face delays,” and “Last phase of I-75/I-475 project stalls.” The financial problems facing Ohio is scaling back big time infrastructure projects that have been in planning for years. According to the Columbus Dispatch the Ohio Department of Transportation “proposes pushing back 34 projects that had been planned to start by 2017 to dates as far off as 2036.

Jerry Wray, director of the Ohio Department of Transportation, captured the problem when he told the Cincinnati Enquirer:

"Unfortunately, this is Ohio’s new reality. For too long, previous administrations have added more and more to the list of projects knowing that there were more projects than funds available. Their poor planning has put us in the position of making the tough decisions and delivering the bad news to many communities throughout the state that there is simply not enough money to fund their projects."

In reading about the woes facing Ohio’s highway improvement efforts I couldn’t help but wonder if education in Ohio doesn’t face problems of similar scale.

It's worth a read.

Teachers do not speak with one voice on political issues, even when it comes to K-12 policy. The “new normal” of tough budgets exposes how the incentives of newer teachers differ from more experienced ones, and new organizations like Educators 4 Excellence (which just opened an LA chapter) fight for a political voice for them that is independent of the union establishment. Last election, the Ohio Education Association actually attacked the husband of one its members in vicious television ads, using the teacher’s own dues to finance them.

Teacher unions are among the most powerful political actors in America on a wide range of issues (just ask Terry Moe, Paul Peterson, or Mike Antonucci). It’s not a given that that should be so, however, or that union intervention in partisan elections is always (or even often) good for teachers as a whole. Rhee and other education reformers would do well to add paycheck protection to their toolkit of reforms to increase parent power over education policy – and protect the rights of teachers to spend their paychecks on political issues they believe in, not on the agenda of labor leaders.

In a 2001 interview, a little-known state senator and law school professor from Illinois cautioned that courts are “poorly equipped” for making public policy. Pointing to problems with the legitimacy and ability of courts, particularly in the field of education, he advised seeking change through politics rather than through litigation. Sadly, both of Barack Obama’s concerns were exemplified in a Colorado state court decision last December.

In the long-running Lobato v. Colorado school finance case, Denver District Court Judge Sheila Rappaport declared that Colorado is underfunding education by more than $2 billion per year. She said that the seventeen-year-old Public School Finance Act violates the education clause of the state Constitution, which says that the state legislature shall provide a “thorough and uniform” system of public schools. She instructed the state legislature to design a school funding system that complies with her order. Although she did not specify a precise sum, her order indicated that billions of dollars of additional spending would be required every year.

Unfortunately for Rappaport, the Colorado Constitution consists of more than just the education clause. The Taxpayer’s Bill of Rights requires voter approval for tax increase. Voters must also approve spending increases which exceed the rate of inflation plus population growth. Another provision in the constitution, the Gallagher Amendment, limits residential property taxes.

As with any legal document, any interpretation of one part (such as the education clause) has to be consistent with other parts (such as the constitutional tax limitations).

Shockingly, Judge Rappaport claimed that “the interpretation of the Education Clause does not need to be harmonized with either TABOR or the Gallagher Amendment.” In other words, the judge believes she is free to ignore those inconvenient amendments.

To illustrate what a preposterous, and dangerous, position that is, imagine the U.S. Supreme Court saying that the President’s commander-in-chief powers did not have to be harmonized with the First Amendment’s guarantee of freedom of the press. Outrage would be the appropriate response.

Both TABOR and Gallagher were added to the constitution by the people of Colorado after the education clause. The people of Colorado thus have decided that the education clause must conform to the restrictions laid out in those amendments. The normal rule of interpretation is that if two provisions conflict, the latter-enacted one controls.

In other words, the judge believes she is free to ignore those inconvenient amendments.

Simply put, the education clause cannot require what TABOR and Gallagher forbid. If the people of Colorado decide they do not like the limits, they are free to amend the constitution. But by saying that she can ignore the provisions by not “harmonizing” them with the education clause, Judge Rappaport has shown contempt both for the constitution and for the people of Colorado. Since she chose to ignore the constitution, this is not a disagreement over interpretation. Instead, she blatantly breached her constitutional duty. If the governor or any other constitutional officers sworn to uphold the state constitution had so scornfully and flagrantly violated their oath, the legislature could quite properly consider impeachment.

Her contempt, however, also points to the practical question of which institution should bear responsibility for making government funding decisions. Judge Rappaport unwittingly showed why God gave us legislatures.

In her Lobato opinion she said she could not consider the fact that “public education is not the only required or important state service.” In short, she was only going to consider education in isolation.

That is a luxury the state legislature does not have. In a world of limited resources, legislators must decide whether a dollar that could be spent on K-12 education would be better spent on roads, or Medicaid, or higher education, or prisons. Sane people do this everyday in their own lives when they consider whether their limited resources should be spent on their car, or house, or food. Ignoring this economic reality is the path to both personal and public insolvency.

Without voter approval for a tax increase, the only way for the legislature to comply with Judge Rappaport’s edict would be to eliminate almost every discretionary item in the state budget: to literally close every state prison, terminate all enforcement of environmental laws and all other laws, end all maintenance and construction of roads, and get rid of almost all the rest of the state government.

Alternatively, Colorado could withdraw from the joint state-federal Medicaid program, and leave poor people in Colorado with zero medical care.

None of these alternatives is a good idea, and none is really required by the constitution.

Sheila Rappaport’s anti-constitutional decision is politics, not law.

The state legislature has every right to treat her illegal edict with the same contempt with which she treats the constitution.

As we described in our 2008 report, Who Will Save America’s Urban Catholic Schools?, Catholic schools face major challenges in the form of declining enrollments, fewer vowed religious sisters and brothers available to teach students, and shifting population and demographic patterns. These pressures don’t only impact Catholic Americans, however. Anything that weakens the nation’s parochial schools means bad news for education generally, for three reasons:

• Catholic schools are relatively cheap. According to data from the National Catholic Educational Association, the average per pupil cost for Catholic elementary schools is just under $5,500, and the cost for high schools is less than $11,000 per student. The average for K-12 public schools is more than $10K per student, making Catholic schools a serious bargain, especially since private contributions further reduce the actual tuition charged to parents.
• Catholic schools are effective. Achievement results on NAEP suggest performance in parochial schools compares very favorably to public schools. (Parents are pretty satisfied, too!) This is a bargain for the country, with about two million students getting a solid education for very few dollars (and almost no public money) every year.
• Catholic schools strengthen civic life. Charles Glenn presents a vigorous argument in this month’s First Things that sectarian schools are critically important for advancing religious liberty in a multicultural society. The notion that respect for differences requires the creation of a bland, secularized public square has proven rather weak. Giving parents the option to raise their children in a vibrant educational community that imparts a positive moral upbringing – with options for children of each religious tradition, and none – is an important priority after decades of retreat by public schools on questions of ethics and moral formation.

There’s no easy fix to the problems faced by Philadelphia’s Catholic schools or other troubled religious schools around the country, as our report on urban Catholic schools acknowledged. Expanding the reach of vouchers and easing other restrictions on private schools are both good steps to take, but neither is a panacea. It is clear, however, that the issues these schools face should be taken seriously by education reformers more generally. The more seats that are available in Catholic schools—and other religious schools like them—at a competitive cost, the better off parents and students will be.

DCPS said the extra $21.4 million budgeted by Gray is needed to address several issues: Congressional cuts in federal payments ($4.5 million); overruns in food service caused by higher labor and food costs and lower federal reimbursements ($10.7 million); mandated merit-based salary increases for teachers ($2.8 million); and the rising cost of excessed non-instructional employees who were removed from school budgets but are being carried on the central office books.

Privately, senior Gray administration officials said DCPS finances have historically been plagued by cost overruns, attributable to persistent overspending by school system leadership and weak oversight by Gandhi’s office.

Charter sector leaders in D.C. are incensed that DCPS is getting a huge payout to fill budget holes while they get nothing. They’re right to be angry. In the hands of charter school leaders, these funds could go to building new programs to help the 40-plus percent of the city’s students educated outside DCPS.

Charter sector leaders in D.C. are incensed that DCPS is getting a huge payout to fill budget holes while they get nothing.

It also shows a dark underside of some of Michelle Rhee’s signature human-capital reforms: They’re expensive and not yet fully paid for, even with the eye-popping philanthropic commitments Rhee secured. The IMPACT teacher evaluation system and merit pay are exciting reforms, but they were secured with huge across-the-board raises to buy the support of the union. Likewise, getting the ability to fire poor teachers required giving many of those substandard educators a year of employment on the central office budget while they look for another job in the system. Reformers need to keep these implementation challenges in mind. For various reasons (often political ones), far-reaching reform of teacher pay and performance models does not come cheaply.

As the Post reports, there’s little chance this money will find its way into charter school classrooms, even if the sector lobbies hard for it. Under Fenty and now under Gray, DCPS gets the lion’s share of every public education dollar. Parents in the District can only wonder what the “other half” of this city’s public school system would look like with truly equal funding – and thank heavens that the charter sector’s leaders manage to turn out good results on a very thin dime.

The first gift the committee wants to give districts is increased flexibility to transfer categorical funds aimed at one underserved population into Title I. (You may recall that Mike called for something very similar more than a year ago.) This could wind up being a huge plus for children in these programs, enabling the funding of whole-school programs to address the needs of underprivileged youngsters without the mountains of red tape that currently accompany these dollars.

Second, the proposed law would repeal the so-called "maintenance of effort" requirement, which makes certain federal grant funds contingent on states and localities continuing to spend the same amount of their own money on education. This is becoming increasingly difficult to do in light of other budget pressures, including rising health care costs (both in Medicaid and on public worker payrolls).

On a whole, the House committee's proposals seem like a step towards more sensible school finance system.

Maintenance of effort requirements also hold federal grant-giving hostage to the fallacy that education simply costs what it costs, year in and year out, with regular increases in funding and no improvements in productivity. With continuing fiscal pressure at all levels of government, districts and charter schools are beginning to explore smart ways to improve instruction at lower cost. It makes perfect sense for the federal government to loosen the maintenance of effort requirement and give local governments some room to balance their budgets.

These budget pressures are having mostly negative effects in the short term, of course. It's tough for every affected district to innovate their way out of spending cuts all at once. However, the mandatory cuts to grant programs under the MOE requirement are merely a symptom of the "new normal" for state and local agencies. Removing the specter of those cuts is a net positive for schools and their leaders.

On a whole, the House committee's proposals seem like a step towards more sensible school finance system. In their concern with preventing bad decisions about how federal grant dollars are allocated, previous iterations of ESEA created onerous requirements that made those funds tough to use well and tied local hands too tightly. As always, however, if the feds do ease these restrictions, the onus will be on state and local governments to step up and create great programs on tight budgets to justify their new-found flexibility.

News in Education (NIE) is a program sponsored by many newspapers around the country that provides access to free newspaper content (either electronically or with physical papers in some cases) to K-12 teachers for use in their classrooms. The classroom materials seem to vary in quality, but many offer lessons drawn from newspaper content in disciplines from reading and social studies to math and science, and in any case the free newspaper access is valuable in and of itself.

If you're an educator or school leader, check out the Newspaper Association of America Foundation's page on NIE programs for a list of papers near you offering the resource. Looks like a great way to get timely reading material and other resources for the classroom for a song. Thanks to reader Courtney Clark of the N&O for the tip!

The problem seems to be how we allocate resources, not how much money is available.

All the contributors miss a point that hits principals and superintendents the hardest, however: If a good teacher walks out the door to work in another district, or another profession entirely, because his manager doesn't have the flexibility to pay him more (and potentially pay a less-effective colleague less in order to balance the staff budget), something is screwed up about teacher pay. Given how much money we spend on K-12 education in America, and how quickly budgets have grown compared to modest enrollment growth, the problem seems to be how we allocate resources, not how much money is available.

Note that this is not about building bigger and better state- or district-wide formulas as some education reformers prefer. Value-added models are great tools for principals to evaluate their teachers, but there's no reason to believe they're a silver bullet. Subjective measures like attitude and teamwork matter, after all, and principals shouldn't necessarily have their hands tied on how they use objective, test-based measures.

The credentialism and bias toward seniority preferred by teacher unions isn't helpful, either. A principal who is losing an amazing fifth-year teacher who only has a BA doesn't care what the salary scale says she can pay; she wants to retain her star staff member. Worries about cronyism are overblown in an era of increasing accountability where principals can lose their jobs over poor performance (see the high turnover among principals in D.C. Public Schools). Add meaningful parental choice to the mix and you ensure parents' voices are heard about what is important to them and their kids. If you get principals' incentives right, they'll use whatever flexibility they can get to reward the best performers.

If you get principals' incentives right, they'll use whatever flexibility they can get to reward the best performers.

It's worth noting, too, that letting principals negotiate salaries themselves could reduce the problem of teachers moving to central office to get a raise. If district offices had to compete against their own principals for talent, classroom rockstars would have more reason to keep teaching if that's what they love and their principals can afford to pay them their true value.

Although the private sector is less regimented about pay than public school systems, it is isn't always the model of excellence some education reformers paint it to be. Credentialism runs amok there, too, with businesses demanding college degrees for entry-level jobs that could be done by a bright high-school grad. (See the Times' recent article on employment among young veterans for an example of how this hurts employers and veterans alike.)

School boards and state policymakers can learn some lessons from the private sector, but can also set an example for other public sector employers and fussy private companies. They can roll back one-size-fits-all policies about inputs (salary schedules based on degrees and time served and restrictive teacher-licensing requirements) and give school leaders more control over their own budgets, starting with teacher pay. Of course, managers need professional development to get great at this skill. Let individual principals determine who is underpaid or overpaid, and let them pay great educators what they're worth, not what the salary schedule dictates.

In many places, this has meant across the board layoffs and a reduction in services provided to kids. This new era presents a tough challenge for superintendents and school budget officers charged with balancing the budget and doing right by the youngsters in their charge. Schools must be empowered (and incentivized) to deliver instruction more effectively, improving both quality and cost-efficiency. Fordham works to provide resources for school leaders to do just that, as well as provide analysis and advice to policymakers hoping to make the jobs of K-12 leaders easier. (Check out our policy brief from last year for a few ideas for state policy.)

On this blog, I'll examine a broad range of topics related to school finance: state funding formulas, healthcare and retirement benefits for teachers, parent access to financial data, and more. I'll be joined from time to time by other experts from the non-profit and public sectors as well.

A bit about me: I came to K-12 education from the private sector, where I worked as a management consultant in the hospitality industry. I left to pursue an MBA at Duke University, and during that program I was a summer fellow with Education Pioneers working in charter finance for the District of Columbia government. Now I serve as Fordham's director of finance, keeping the money (and operations) side of our organization humming.

I hope you'll join me here to explore how governments can distribute education dollars effectively and fairly — and how schools can spend them to greatest effect. Please share your experiences in the comments as well!

Douglas County Superintendent Elizabeth Celania-Fagen, who started in June 2010, said she cut the district’s payments to union members nearly in half last spring and will end the extra spending altogether in January.

“I’d rather not make comments on the past,” Celania-Fagen said. “Going forward, my responsibility is to do what’s right for our students in these economic circumstances and to be accountable for taxpayer dollars.”

It’s difficult to make an argument that taxpayers should be directly subsidizing union leaders. Organized labor already extracts indirect subsidies by skimming dues from teachers’ paychecks, sometimes against the desires of teachers. Kudos to the Post for shining some light on this. Hopefully the districts they found that don’t track these costs at all will start paying attention in light of the story.

The education reform community needs to think beyond the next levy referendum when it comes to providing resources to our schools. Health care reform — specifically, containing the cost of entitlements like Medicare and Medicaid — has become a major issue impacting American schools. While a few forward-thinking groups like the Massachusetts Business Alliance for Education have grasped this and become active on health care policy in their state capitals, it’s not on most people’s agendas.

Yet the simple arithmetic is unavoidable: Medicaid can’t continue to grow faster than the long-term growth rate of the economy without sucking up more and more of state budgets. Education aid necessarily suffers under any scenario where government continues to pay for rapid, unchecked increases in entitlement spending.

The political reality is equally stark: The AARP and other lobbying groups for recipients of state-financed medical care are very good at protecting these entitlements, and deficit hawks usually form a lonely minority in opposing their demands. Bipartisan reform efforts are beginning to emerge at the federal level, but they won’t get far if no one makes the case for spending tax dollars wisely and investing heavily in young people.

— Chris Tessone

Update: Please see Sherman Dorn’s correction below. I regret the error!

Originally, the bill would have granted vouchers of up to $4,626 based on a family’s economic circumstances. But managers in more than 300 school districts have complained about the possible loss of state and local funding, apparently afraid of competition for students’ dollars from the parochial school down the block. Huffman now wants to limit the amount of each voucher to the total per-pupil aid the child’s school district receives from the state. This means that children in property-rich suburbs, where a growing number of poor families are concentrated, could get just a few hundred bucks a year when they leave for a private school, while many thousands of dollars stay with the school district.

It’s hard to imagine a worse trade-off: Districts get to keep the cash without providing services, while poor and working-class parents in the ‘burbs are forced to scrimp and save even more than their urban counterparts to have some measure of control over their children’s education. Choice-friendly legislators and advocacy groups in Ohio should ask themselves, who are the state’s education dollars intended to benefit: school budget officers, or kids?

Scott is not alone. After losing a ballot measure over his signature public-sector reform, Ohio’s John Kasich declared, “It’s time to pause,” despite the fact that voters largely support the education reform portions of the law. Where 2011 was defined by tough discussions about how to balance competing state-level priorities in an era of austerity — with teacher unions frequently on the losing end of those battles — many politicians gearing up for 2012 are striking a softer tone. (By contrast, the bipartisan duo of Chris Christie in New Jersey and Andrew Cuomo in New York have made progress, if haltingly, toward reform of the public sector, and both seem braced for productive work in 2012.)

Sweeping problems under the rug would be a mistake, however. The growing pressure on state budgets from health care cost inflation will not go away. Collections from property taxes are not likely to recover quickly. We need politicians who can make the case for unpopular decisions, not ones who pander to our childish desires to have our cake and eat it too.

But hoping that district leaders will be shamed into spending more frugally is not enough. How do I know? Because even when they’re required to report on financial problems publicly, district leaders and politicians are utterly shameless in nearly all cases, tinkering around the edges rather than facing facts.

Take Montgomery County, Maryland. Last week the county released a report showing the school district’s pension costs have increased by 369 percent over the past eight years. The state pays for teacher pensions, but the county is on the hook for everyone else’s plan.  The council president claims this is “a huge cause for concern,” but no one is seriously considering changes to build a better retirement system. They’re pushing for quick fixes, increasing teacher contributions to a fundamentally unsustainable program.

School spending needs more than a technical fix. More transparency could help create pressure, and weighted student funding could give parents more perceived “skin in the game” by tying a dollar amount to their own child’s education. In the end, though, we need political coalitions of taxpayers and parents who are angry at the status quo and will vote — and donate to campaigns — in order to funnel school dollars where they’ll be most effective.

The UK’s schools minister, Nick Gibb, didn’t mince words in condemning the strike:

Mr Gibb said: “Strikes benefit no-one – they will disrupt pupils’ education, hugely inconvenience parents, and damage teachers’ reputation.

“It’s irresponsible to strike while negotiations are ongoing. Many parents will struggle to understand why schools are closed when the pension deal on the table means that teachers will still be better rewarded than the vast majority of workers in the private sector.

“Reforms to public sector pensions are essential – the status quo is not an option. The cost to the taxpayer of teacher pensions is already forecast to double from £5bn in 2006 to £10bn in 2016, and will carry on rising rapidly as life expectancy continues to improve.

More here.

The Department of Education just released a national study (pdf) confirming with hard data what many experts have said for years: rigid salary schedules established are a major source of inequity within school districts. (It’s important to stress that this is not a “loophole,” but a carefully structured policy embedded in most contracts at the behest of teacher unions.) Here’s CAP’s Cindy Brown in the New York Times:

A few researchers have documented the problem with statewide data in Florida and some other states, said Cynthia Brown, a vice president at the Center for American Progress, a liberal research group. “But I’m excited because this is the first time that data documenting the problem has ever been collected on a nationwide basis,” she said. “Many of us have known for a long time that in some individual districts the high-poverty schools weren’t getting their fair share of state and local funds.”

As Marguerite Roza said this morning at our conference, the way we spend money runs completely contrary to our stated priorities: We claim to give the disadvantaged a leg up through high-quality basic education, yet we spend more on wealthy kids than poor ones and more on PE teachers than math and science instructors. Our education finance system needs serious reform.

Ten Connecticut school districts can produce two high school graduates for the price of one Hartford high school diploma, according to Department of Education data.

The most recent 13 years of education, representing kindergarten through 12^th grade, cost $165,275 in Hartford. With a graduation rate of 69.3 percent, the cost per diploma in Hartford is $238,492.

In 2010, Hartford’s costs were less than double the costs of the most efficient school districts.

Presumably, students who drop out gain some benefits from their schooling, even if they don’t receive a degree. But a partial high school education is not much of an asset in the labor market relative to completion of a rigorous secondary program and vocational training. This analysis reveals just how much of Hartford’s K-12 investment is being squandered for likely little gain in outcomes for kids who don’t make it to graduation day.

The Yankee Institute’s analysis reveals an important side of the “doing more with less” coin: Schools that can deliver higher quality and better outcomes for the same level of spending should be highlighted as best practices just as should schools that are able to trim expenses and achieve the same level of quality. Hopefully Hartford and other low-efficiency districts in Connecticut can look to their more productive peers for strategies to increase their graduation rates.

“The rapidly rising fees give us all heartburn,” said Gibor Basri, the vice chancellor for equity and inclusion at Berkeley, who has met with the protesters several times. “We don’t believe that higher education is a private right but a public good.”

The funding challenge in higher ed has implications for K-12 spending as well. Society has a responsibility to fund education — both to provide equality of opportunity for all children and to develop human capital for the improvement of civic life and our economy. But what to do when taxpayers have already provided massive increases in funding after inflation over a sustained period, as they have for K-12 over the past several decades?

We can’t afford to focus only on the revenue side of the equation anymore if our goal is to ensure that quality education remains a public good. Just as taxpayers have their responsibility for this good, so, too, do service providers entrusted with public dollars: teachers, administrators, and school boards. When these folks avoid having tough conversations about efficiency, they weaken society’s promise of a free, top-notch education for all.

Reformers who are focused on “doing more with less” in the nation’s schools should reclaim the high ground on school finance. We all agree that education is a public good — but after huge increases in funding for K-12, the burden must shift to spending those dollars wisely and with the best possible results for kids.

As school levies fail across central Ohio, I am concerned and disappointed to see so many school districts quickly threaten to reduce the quality of our children’s education. Providing an excellent education for our children may be the single most important thing we can do as responsible citizens.

To give hope to our children in tough economic times, we must learn to do more with less. When I read the statement made by Westerville’s school-board president, “We’ll be looking at state-minimum requirements,” I lost confidence in the leadership of the district in which I live. As the operator of the Columbus Collegiate Academy, a charter school on the Near East Side, I run a school on a shoestring budget. Unlike traditional district schools, we don’t have access to local property-tax dollars.

When I see levies on the ballot, I can only dream about what we could do for our students, 94 percent of whom are minorities and 88 percent of whom are economically disadvantaged, with additional revenue. Although it is unlikely we ever will receive public revenue at the same level as others, we would never settle for providing our students with “state-minimum requirements.”

Instead of slighting our students with the bare minimum, we ask our teachers and administrators to do more with less. Our staff has stepped up and has been honored with a national EPIC award, placing us among the elite middle schools in the country. We also solicit the help of others.

We rally volunteers to help with landscaping, painting, cleaning and other tasks to save on costs. We reach out to foundations, corporations and individuals and have been fortunate enough to partner with the JPMorgan Chase Foundation, the Columbus Foundation, Commerce National Bank, the Thomas B. Fordham Foundation (our authorizer), hundreds of individuals and many others. Perhaps districts could learn from their charter-school counterparts.

JPMorgan Chase compassionately and generously supports our enrichment programs. The Columbus Foundation graciously invested in the future of our students by funding our high-school placement program.

Before we give our children the state-minimum requirements, let’s find every way to rally our community around education.

The real funding disparity in Ohio occurs in charter schools. Charter schools in Ohio serve a population of which 68 percent are minorities (districts statewide: 25 percent) and 67 percent are economically disadvantaged (districts statewide: 45 percent) because the majority of charter schools are located in the eight urban districts.

Despite serving a population of students that have been traditionally underserved in our country, we do it with a third less funding than traditional districts. The real outcry in school funding should be this often untold, separate and certainly unequal story that continues almost 60 years after Brown vs. Board of Education.

This post first appeared as a letter to the editor in the Columbus Dispatch.

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.

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 the rest is locked into bureaucratic routine. It’s next to impossible to shift resources from established programs and flesh-and-blood workers into new uses like equipment, software, and remote instructional staff. Yet to foster and maximize technology-based learning opportunities, we must find ways for public dollars to do just that—and to accompany kids to online providers chosen by their parents, teachers, or themselves.

Today’s school funding arrangement developed haphazardly, a product of politics and advocacy, not design. Some of the money comes from the state, some from Washington and some is generated locally. This translates into a labyrinth of rules and regulations connected to a maze of separate funding paths, each with its own “allowable uses” and reporting requirements. Education innovators get trapped in this maze—which is even harder to escape when budget totals are flat.

This is a particular problem for digital learning, because today’s funding arrangements assume that a student will attend a specific school, where salaries and other costs are paid by the district. Little money actually flows through the school. Most of the budget is accounted for by staff positions that are centrally allocated according to school size.

Because funds cannot easily flow into new uses, promising innovations cannot be fully developed or persuasively demonstrated in K-12 education. Which is good reason for visionaries and innovators to take their best technological applications into realms other than education.

What would it take for education funding to be transformed into a system that promotes digital learning and technological innovation? Public dollars would have to go to the best possible instruction for students utilizing any means that can work. Our system for funding public education would need to:

• Fund education, not institutions;
• Move money as students move;
• Pay for unconventional forms of instruction as readily as for conventional schools; and
• Withhold funding from ineffective programs
• Encourage innovation by ensuring people who had new ideas about instruction could, if families wanted to use them, get public funding.

If states and localities (and Uncle Sam) would combine all the money they now spend on K-12 education and divide it up by enrollment, with the same or a weighted fraction of the total assigned to each child, and then distribute these dollars to schools in the same way, they would sweep away the major obstacles to innovation and improvement in today’s funding system. They would also compel a dramatic reduction in overhead. Money would not be held centrally to preserve particular schools or programs, but would go wherever children are educated. This would allow new uses of funds, an essential precondition to innovation and widespread use of digital learning.

A technology-friendly funding system would apply to all students no matter where they receive their education and no matter how many instructional providers serve them. To make this happen, some government entity—probably the state—would need to assemble all of the funds available from all sources, keep an account for every student, and faithfully allocate its contents to whatever school or education program a student attends. Each student’s account would, in a sense, constitute a “backpack” of funding that the student would carry with her to any eligible school or program in which she enrolls—and wherever it may be located.

If a family decided to rely on one school or instructional provider for all of a child’s education, all of the money would go to that school or provider. Some youngsters, however, would enroll in courses provided by different organizations, in which case the funds would be divided. Students and families would be free to shop for the best combination of courses and experiences their backpack funds could cover. Providers would compete, both on the quality and effectiveness of their services and on cost. States could create a list of ineffective providers that were ineligible to receive public funds.

Every school or independent instructional provider would have to post its prices. No school or on-line provider could charge more than the full amount in a student’s backpack.

This portable, flexible, student-based funding system would instantly impact the budgets of existing schools and would create powerful incentives for them to improve their offerings so as not to lose pupils to other institutions or course providers. At the same time, innovators (educators and social service professionals with new ideas) would be encouraged by knowing that they could get full funding for every student enrolled in their school or program.

Funding systems can’t cause innovation: they can only interfere with or foster it. Whether innovation occurs, at what pace, and to what ultimate benefit, depends on other factors. But a finance system such as that described here would make promising breakthroughs much more likely—and and much more likely to scale rapidly. School finance would be placed into the service of improved learning rather than left as a major impediment to it.

For more on this issue by Paul T. Hill, download “School Finance in the Digital-Learning Era.”

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.

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 conventional measures — in fact, it won an award for good business practices and performance management. Yet despite high local tax rates and a driven base of parents, there’s no more money to continue MoCo’s very conventional brand of reform.

States and districts all around the country are trying new things to address stagnant budgets: hybrid classrooms, targeted increases in class size, changes to benefits, and so on. MCPS has great human capital and is widely recognized as one of the most innovative large districts in the country. Think what they could come up with if administrators and school board members would stop begging for resources the county doesn’t have and start looking for new ways to deliver high quality at an affordable cost.

The sweeping pension changes, presented by House Republican Leader Tom Cross and Democratic Speaker Michael Madigan, would establish three retirement options for government workers to choose from going forward. State employees could keep their retirement benefit in place but pay more; take smaller benefits but pay no more; or set up a 401(k)-style plan that would give employees more control of their investments but also see them roll the dice on the markets.

I’ve made no secret of how little I think of last year’s “reform” in Illinois, which simply took money out of the pockets of young teachers to make up for the bad choices made by legislators and unions. This is a much better start, and it’s cheering that the Democratic leadership is on board.

Labor doesn’t like it, with the Illinois AFL-CIO’s president claiming this measure would reform the pension system “on the backs of working families.” But working people are going to be hurt no matter what, since the retirement system is in terrible fiscal shape. The question is whether reform shares the pain or soaks only new workers, and whether Illinois can compensate new teachers in an attractive and competitive way. The state needs to get both those questions right.

Keep it up, Illinois reformers.

Ed Sector's analysis hits the important high points of the crisis in teacher pensions: this is a crucial education policy issue (because it's eating up needed funds that no longer reach the classroom), that existing defined-benefit pensions mistreat the majority of teachers in favor of a select few, and that reforms ought to share the pain among stakeholders rather than soak new teachers.

The writers (rightly) single out Illinois as a bad example that Rhode Island and other states should avoid. As I noted a few weeks ago, the "reform" there essentially amounts to theft from all new teachers. The RI plan is going to be painful for a lot of people, but it's smarter and fairer.

Go check out the report. I know it's Friday, but it's a quick read. The folks at Ed Sector have done a great job of making this technical subject approachable and interesting.

? Chris Tessone

The experience of the cities studied doesn't bear that out, however. Looking at Milwaukee, DC, Pittsburgh, Detroit, and Kansas City, closing under-enrolled schools saved nearly 4% of the district's total budget annually on average (based on 2011-12 budget totals). In Kansas City, the savings cited in the report, $30 million, amount to almost 10% of the total annual budget. In DC, the $16.7 million savings translates into roughly 185 teaching jobs every year.

The report is useful in its consideration of the political and operational challenges faced by districts with buildings that are below capacity and draining budgets. Superintendents should certainly not oversell the potential savings from right-sizing. But even in the efficiency-blind world of K-12 budgets in urban districts, tens of millions of dollars represent real money and building closures are a worthy strategy to consider.

? Chris Tessone

The story of how cities avoided layoffs is interesting. More districts cut class time or school days than cut or reduced workers' benefits. Most simply reduced head count through attrition. These data could bolster the case of reformers like Scott Walker who argue that state policy should tackle runaway growth in benefits because school boards and administrators will not. Clearly only a tiny minority of districts were willing to touch these areas of their budget.

Some districts were much harder hit than the average, however, including our hometown of Dayton, OH. No doubt our Ohio team will comment on the particulars of the case there. Overall, however, NCTQ's survey suggests that many cities have found a way around massive layoffs and the Obama administration's dire predictions of huge job losses in education going forward may not be justified.

? Chris Tessone

As the authors point out, this result is not consistent with teachers being "desperately underpaid," in Education Secretary Arne Duncan's words.

We need to take the conversation on teacher pay beyond averages, however. As we and others have noted before, younger teachers are under-compensated for the dramatic increases in effectiveness they realize in their first few years of teaching. We also ignore the alternatives certain teachers have in the labor market, paying PE teachers (who have few job options in the private sector) much more than physics and math teachers.

If we want to spend every education dollar effectively, we have to move beyond one-size-fits-all strategies and focus on each individual teacher's capabilities and effectiveness in driving student learning. This new AEI paper is worth checking out and brings valuable data to the table.

? Chris Tessone

Based on the Sacramento Bee's description of the plan, the change to a hybrid plan is far less radical than it needs to be to improve mobility of benefits for young workers (teachers included). The new system would still provide 2/3 of projected retirement income out of a defined-benefit plan workers would only earn after a full, multi-decade career in public service. It's also hard not to wonder how deeply Gov. Brown believes in this plan, since he pitched a much less serious reform in the spring that failed due to Republican opposition.

It's a better start to the reform process in California than that earlier plan, however. If Brown sticks to his guns against his union backers and gets these reforms through the legislature, it would be a positive first step in fixing the state's broken system of public employee compensation. Our latest report, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century, provides a case study of how the federal government enacted similar reforms in the 1980s. Check it out, Jerry!

? Chris Tessone

We here at Gadfly thought it might be fun to track how some of the companies most associated with education reform are doing. So far I've added five companies to the Fordham Investment Index (or FINNdex): Netflix (associated with digital learning backer Reed Hastings), Wal-Mart Stores (the Walton family), The Gap (the Fisher family, supporters of KIPP and other efforts), Microsoft Corporation (Bill Gates), and KB Home (founded by reformer Eli Broad).

The market has not been kind to the FINNdex year-to-date. Unfortunately, many of education's leading funders come from the technology and real estate sectors, which have had a rough time over the past few years. The chart below shows performance of an equal investment in all five stocks (in blue) versus the S&P 500 (in red):

Let us know in the comments which other stocks associated with education reformers you think we should add. We'll update you on the performance of the FINNdex as its members pop up in the news from time to time.

My hometown newspaper, the Southern Illinoisan, is running a story that explains who benefits the most richly from the old Tier 1 pension: union functionaries who stopped teaching decades before retirement but still receive a state-funded pension:

Then there is Kenneth Drum. TRS pays Drum more than $160,000 a year, despite Drum only working for 12 years as a teacher.

Drum's large pension comes not from his time in the classroom, but rather because of a 20-year career at IFT. Drum has collected more than $2 million from TRS since retiring in 1994, and is one of 21 former NEA, IEA, IFT or IASB employees who has collected more than $1 million from the TRS since retiring.

Comerford said he couldn't speak for individuals as to why they didn't take an IFT pension when they went to work for the union instead of continuing paying into a public system.

I commend the full paper to your attention, but here are the key takeaways:

• Traditional pension systems are bad for many teachers and aren't structured to attract the best young workers.
• Retiree health care, which is free for many retired teachers, is a major contributor to cost growth in retirement benefits.
• The time for reform is now. There are lots of good examples of pension reform in the public and private sector that school districts and states can draw on. Fordham has an upcoming publication profiling several such cases.

My colleague Raegen Miller at the Center for American Progress also released a paper on this subject recently that is well worth reading.

Pensions can be a very technical subject, but they're also soaking up growing chunks of school funding. It's an issue that deserves greater attention from the wider education policy community.

? Chris Tessone

On the teacher front, we know from the Center on Education Policy's recent survey and other data that school districts mostly used their EduJobs money to protect fringe benefits and administrative staff while laying off teachers in the arts and other non-core subjects. [Update: CEP disputes my interpretation of the survey: see the comments below.] There is no reason to expect anything but business as usual from another round of subsidies. When the new money goes away, districts will still not have adjusted to the new normal, to their students' detriment. More subsidies just protect the status quo at great expense to taxpayers.

Funds for school modernization are nice as far as that goes. The emphasis on rural schools means the dollars are more likely to go to a high-need area. But having a nice building is not likely to jump start any child's education, and project labor requirements in many locales may blunt the job creation impact of the program as well. I'd rate this warm and fuzzy but ultimately marginal as an education policy, and questionable as a job creation band-aid.

? Chris Tessone

"It got down to monetary reasons more than anything else," Superintendent Larry Johnke said. The $50,000 savings will preserve a vocational education program that otherwise would have been scrapped.

The tradeoff here is not between a fifth day of school and voc-ed. That program was likely just the easiest to cut without running up against the union, school board, or some other stakeholder.

This feels so obvious I shouldn't have to write it, but the basic job of schools is schooling. What ancillary program, benefit, or perk could possibly be so important that it's worth cutting 20% of the core function of schools to preserve? And if you can't afford five days of school a week in your current configuration, reconfigure. Don't cut 20% of the main service taxpayers pay you to provide.

? Chris Tessone

Florida

This year, Florida required public employees to start contributing to their retirement plans. Workers are only asked to kick in 3 percent, but it's a start. (This was enough to spur a lawsuit nonetheless.) The state also increased the retirement age and applied other technical fixes to reduce its liabilities. Overall, the plan is expected to save the state nearly a billion dollars. Collective bargaining was not on the table in 2011, and likely won't be anytime soon. The right to bargain is?enshrined in the Sunshine State's constitution. (That being said, Florida's constitution also frames the state as right-to-work. For teachers, this means that they cannot be required to pay union dues?or strike.)

Illinois

Illinois saw no action on pension costs or collective bargaining this year. Not a surprise for a Democrat-dominated legislature. The Land of Lincoln?did enact pension reform last year, but the state still faces huge unfunded liabilities. Last year's reforms also soaked new workers,?dramatically limiting the benefits they'll receive compared to workers currently in the system (and compared to workers receiving Social Security, which Illinois teachers do not).

Indiana

The most far-sighted state in 2011's round of pension reforms is likely Indiana, which began implementation of a defined-contribution (DC) plan for all public employees. Indiana also made great strides on collective-bargaining reform, barring districts from bartering away their rights to evaluate teachers and restricting the scope of most deals to wages and salary-related benefits.

Ohio

Ohio was the site of massive protests by teacher unions over proposed changes to the collective-bargaining process.?The state's Senate Bill 5 empowers local school districts by restricting the scope of bargaining dramatically (for example, removing health-care benefits from the collective-bargaining table), giving them options in the case of fiscal emergencies, and requiring that the state's or district's ability to pay be made part of the negotiation process. No major changes were made to retirement systems in the state, and SB 5 will be put to a referendum this fall.

Wisconsin

Governor Scott Walker's ambitious changes to the public sector touched off a firestorm earlier this year, inspiring some and angering many. Some union supporters even compared the governor to?Hosni Mubarak and?Adolf Hitler. In the end, the legislature passed a law that significantly reduces the scope of collective bargaining for teachers, restricting it to wages only. The new law also requires unions to be recertified every year by a vote of their members. Despite backlash, Walker's?law has survived legal challenges and is pending implementation. The Assembly also ended a practice by which employers paid for their employees' required share of retirement contributions, a move which is already helping to alleviate district budget strains (and reduce layoffs).

Which state was the "reformiest" in the 2011 legislative session?

Read why each state thinks they should be considered the 2011 Ed Reform Idol:

Florida

Illinois

Indiana

Ohio

Wisconsin

?Chris Tessone

Correction: Advance Illinois' Robin Steans pointed out to us after the event that Illinois' recent reforms increased requirements for the Chicago teacher's union to strike, from 51 percent of voting members to 75 percent of all members. This clearly impacts the environment in which Chicago's district leadership bargains with teachers. I regret the omission.

Last year, K-12 budgets were cut $1.8 billion nationwide. According to estimates by the National Assn. of State Budget Officers, cuts to K-12 for the new fiscal year may reach $2.5 billion.

"They've long since been cutting deep into the bone," said Michael Leachman of the nonpartisan Center on Budget Policies and Priorities, based in Washington.

CBPP may have an axe to grind here: they believe government costs what it costs and seem to have little interest in increasing the effectiveness of services. But it's too bad the Times didn't investigate these "historic cuts" a little more deeply.

The nation spends over $600 billion a year on K-12 education. So $4.3 billion in cumulative cuts over two years amounts to less than 1 percent of all spending. If you cut your household budget by 0.7%, would you call that "cutting deep into the bone"? No. Yet analysts and politicians are trying to sell you on the notion that schools can't absorb a 0.7% cut without getting rid of art, libraries, and thousands of teachers.

The truth is, the depth and impact of education budget cuts have varied from place to place. California has indeed seen harmful cuts, in part due to dysfunction in Sacramento and the intransigence of special interests. But the story need not be so dire.?The real question to ask is not why education budgets have seen tiny cuts in one of the worst economic environments in years, but rather why these miniscule cuts have impacted students so badly in states and localities that have not been responsible in their spending.

? Chris Tessone

The most immediate impact will be that the wall of money flowing on a regular basis from the feds to state and local governments may stop, since bondholders will get priority if the debt ceiling is not raised. States will have to contend with a loss of Medicare and Medicaid support, typically the largest portions of state budgets along with education. It's hard to imagine this not impacting states' education spending. Even short delays may force districts that are living "check to check" with no reserves to borrow cash. Minnesota schools have already been forced to do this by the government shutdown there.

The longer-term impact, even if a deal is reached, would come from a ratings downgrade on America's debt. Districts routinely sell bonds to finance the construction or renovation of school buildings, and these bonds, like US Treasury bills, are rated by credit rating agencies. Moody's has warned that if US sovereign debt is downgraded, these so-called "muni" bonds would also be downgraded. This would cause interest rates to rise on many of these bonds, meaning districts would pay their lenders tens or hundreds of thousands of dollars more per year.

Nothing is certain at this point. A deal could come early next week, or even later today. If a meaningful deal is not reached, however, either a full default or a ratings downgrade would pull resources away from schools. No doubt state budget analysts and district financial officers are watching the drama unfold. Let's hope kids don't suffer from the rancor in Washington.

? Chris Tessone

Meanwhile, Newark Public Schools is under new management and is trying to end the "dance of the lemons," the practice by which bad teachers are shuffled from one poor-performing school to the next. Cami Anderson, the new district superintendent, has found that pulling these teachers out of the classroom is expensive in New Jersey:

[B]ecause of the state's tenure law, which guarantees a paycheck to teachers regardless of whether any principal wants to retain or hire them, Ms. Anderson's new policy will cost the district an extra $10 million to $15 million a year that will go to paying the teachers who are not able to find jobs within the district.

"In other words, by doing the right thing, we created a massive budget issue," she said. Newark schools have a $900 million budget and employ about 4,000 teachers.

Ten other states, including New York, have tenure laws that make it impossible to dismiss tenured teachers even when no principal wishes to hire them.

This puts the lie to David Cohen's argument. There is no amorphous education "system" that does not have teacher evaluation and retention at its core. Reforms like IMPACT in DC and benching bad teachers in Newark are systemic. And as Newark's experience proves, if you're missing a critical piece like being able to terminate a tenured educator for cause, the system keeps performing badly.

? Chris Tessone

School district officials across Florida are bemoaning the Legislature's decision to cut traditional public schools out of?PECO?the Public Education Capital Outlay program. The state's 350 charter schools will share $55 million, while the approximately 3,000 traditional schools will go without.

"Every cent allocated for school construction went to charter schools," complained Lee Swift, a Charlotte County school board member who heads the Florida School Boards Association.

Swift said lawmakers should focus on "properly funded traditional schools" instead of pressing for more charters that drain resources from the traditional schools.

Charters are growing around the state, however, and many districts are stagnating or losing enrollment. Districts have also been flush with cash for construction in recent years even as charters have received less funding. Last year's Ball State report on charter funding inequity states that districts in Florida "encumber funds or withhold local sources from total funds available before providing charter schools with their 'fair share.'" Charters were already getting a raw deal before this measure was passed.

Florida has done the sensible thing by protecting a growing and historically underfunded sector of its education system.?Traditional public schools will continue to tap local sources for construction and maintenance, revenues that charters don't have access to. Cutting all schools equally, or even protecting districts at the expense of charters, only looks fair if you ignore the entire funding picture.

? Chris Tessone

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

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 leadership teams that successfully balance measuring short-term goals and achieving their critical long-term missions.

The truth is, high-stakes accountability of any kind is new to education. The fact that DC now routinely fires its worst performers is unprecedented. Strong leadership is required (from unions as well as management) to create professional cultures in districts to ensure that test scores are used responsibly. Cheaters and those who do drill and kill exclusively have to be shamed and fired, not protected with rhetoric about the evils of measurement. Managers have to be given the freedom to reward work that improves student achievement.

The lesson is not that we should "stop worrying so much about tests" any more than a business can "stop worrying" about its bottom line. Professionals are capable of working toward the short-term and the long-term at the same time.

? Chris Tessone

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

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 should not be an after-thought, as it is in the Times column.

Certainly across-the-board cuts are not smart. Districts facing a budget shortfall of a few percent should not be firing half their librarians. But the fact that many districts routinely do so is itself proof that management and labor have worked together to make the system itself unworkable. The current budget environment is the perfect time to reengineer that system to deliver higher quality and greater flexibility.

? Chris Tessone

Economic recovery is not likely to bring an end to the "stretching the school dollar" era. As we and others have reported, many states still have catching up to do in funding their pension promises. The rising cost of health care is also weighing on school budgets. This means that rising revenues will not necessarily find their way into new classroom programs or innovative reforms. Instead they'll be funneled to pay for increasingly expensive fringe benefits that are mostly out of sync with what high-performing young workers expect. School boards and state legislatures will have to implement more sweeping changes to get increased bang for the buck.

? Chris Tessone

Nathan Levenson, managing director of the District Management Council and a former district superintendent in Massachusetts, highlights this in an interview today with StudentsFirst, talking specifically about special education and early intervention:

I like to simplify this topic, and assert that only three things really matter in early intervention -- reading, reading, and reading. The stats are clear -- reading is the gateway to all other learning. Children who struggle in reading are over-referred to special education and often never catch up. This is especially sad, since we have "cracked the code" on how to teach reading. The National Reading Panel and the What Works Clearing House spell it out. Some districts feel they don't have enough money to implement a best practice reading program, but our studies have shown that typically it costs 1/2 to 1/5 as much as the current mish-mash of elementary support programs. The obstacles aren't dollars, but focus, turf battles, silos, and other organizational self-imposed barriers.

The mentality that schools don't have enough resources ? despite marked increases in per-pupil spending over decades ? can lead to blaming every failure in education on a lack of resources. Levenson's experience as a superintendent puts the lie to this attitude. His community was able to deliver far better services to children by rooting out costly, ineffective practices and replacing them with improved solutions. The greatest barriers were not financial, but political.

The interview is well worth reading, and for more detail check out Nate's AEI paper on special education and his chapter in the Fordham-AEI book, Stretching the School Dollar: How Schools and Districts Can Save Money While Serving Students Best.

? Chris Tessone

It's a huge risk. By and large, turnarounds are unsuccessful. For Democracy Prep, which had the city's highest progress report score for a middle school last year, this would be its first attempt at a turnaround. In New York City, the Bloomberg administration has relied largely on shutting failing schools down and re-starting from scratch, a method that critics say disperses the neediest children and destabilizes communities. Under Mr. Lambert's plan, the students stay put, and the management and board are wiped out.

It's great to see "acquisitions" like this one. Democracy Prep is a solid performer, and this gives them a new school complete with kids, parent and community recognition, and some momentum. Clearly it comes with challenges as well, however, with more than 40% of their kids being held back to repeat a grade. The question this raises for me is, why do we wait to talk about these kinds of takeovers until a school is failing?

Entrepreneurs, charter school founders among them, start businesses for many reasons. Not all of them are great long-term managers. Instead, what the most successful of them have is a keen sense of the needs of customers and stakeholders and the ability to manage through the very risky and tumultuous startup period. Many young businesses eventually attract venture capital that comes with help in managing further growth or get bought out by strategic investors, larger companies that grow their product selection or markets by acquiring smaller firms. Charter schools rarely have an "out" like this. They either grow into networks, fail, or limp along as mom and pops.

The charter sector could do with more "strategic investor"-style CMOs that develop serious expertise in managing adolescent schools. Let schools get some momentum and prove they can achieve some early academic results and secure community buy-in. Then the "takeover artist" CMO would come in, shore up the school's financial and operational house if necessary (we know many charters struggle with this), contribute management expertise, and add them to their portfolio via a non-profit acquisition or management agreement.

Such a strategy would help a broad range of stakeholders. School founders would have an exit strategy; even if they intend to continue running the school (and should, if they're good at it), they could offload some of the management burden. Cities and portfolio districts could gain some confidence that the improvements their startup schools make are sustainable. CMOs would have a new route to achieving scale. Most importantly, the charter movement would be investing in taking schools from good to better rather than waiting until failure is imminent to bring a larger charter network into the picture.

? Chris Tessone

It is worth noting that most of these reforms leave public-sector workers, especially those newly-hired, worse off. In many states, this is a necessary evil, with budgets straining and taxes being ratcheted ever higher. Some states have done better than others in making fundamental reforms to address the sustainability of workers' benefits without soaking new workers or taxpayers, however. Here are our best and worst of the year so far, recognizing that actions in New York and Connecticut are still pending. Thanks to our indefatigable research intern, Josh Pierson, for digging up some of the details on states' reforms.

Best:

• Arizona: Senate Bill 1614?increases teachers' contributions to the Arizona State Retirement System, saving the state $39 million in FY 2012. Senate Bill 1609 modifies the "rule of 85" retirement option (effectively raising the retirement age), requires "double dipping" retired workers to contribute more to the pension system, and limits the amount of service time teachers can buy in the retirement system to increase their pension payouts. Teachers were excluded (for better or worse) from a provision that reduces cost of living adjustments when the retirement fund fails to hit its investment targets. Most importantly, the state will study adding a defined contribution plan for its workers.
• Indiana: Senate Bill 524 creates a defined contribution retirement option for new state workers, teachers included. Workers will pay 3% of their salaries into the system, and school districts will pay the same amount they currently pay into the defined benefit plan.
• New Jersey: The Garden State's reforms are the most sweeping enacted this year by far. Senate Bill 2937 increased teachers' contributions to their pensions and bumped the retirement age up to 65, but it also gives workers a contractual right to their employers' contributions to the system. This means they can sue if their employer fails to pay up. Even more importantly, the bill addresses one of NJ's biggest problems, its largely unfunded skyrocketing health care costs. The reform package requires teachers to contribute meaningfully to their health care plans but also incentivizes school districts to develop cost-saving health care alternatives, passing on some of the savings to their workers.

Worst:

• Hawaii: The state's schools have been in a notoriously bad financial state, famously prompting them to close one day a week in recent years. House Bill 1035 freezes benefits increases until the state retirement system is 100% funded. So far, so good. Except the bill funds the shortfall on the backs of new workers and taxpayers; existing employees are exempted from any increases in contributions.
• North Dakota: Senate Bill 2108 increases employee contributions to 12.3% and employer contributions to 18.7%. Do the math: 30% of every worker's salary goes to the pension system, far above the norm for workers in either the public or private sector.
• Oklahoma: The Sooner State's retirement system is only 48% funded, so legislators came up with a novel way to close the gap: pretend it isn't really there. House Bill 2132 changes how cost of living adjustments are classified, switching them to a "pay as you go" model instead of saving for them ahead of time. Voila ? the system went to 56% funded overnight! On paper, at least. OK taxpayers will likely have to pay up for those cost of living increases in the end, though.

Our takeaway from this year's reforms is that many state legislatures and school boards should go back to the drawing board. Move new workers to portable, defined-contribution or cash balance retirement schemes, and put an end to retiree health benefits funded entirely by employers, the costs of which are exploding and which very few private-sector workers enjoy. Use any savings to improve the raises teachers receive in their first few years on the job, when research suggests they make the biggest gains in effectiveness. Continuing to steal from younger and more mobile workers while reducing their benefits is not a viable option and is certain to make teaching less attractive to high performers.

? Chris Tessone

Commentators in the UK see this as a possible boon for the Conservative/Liberal Democrat coalition's attempts to reform the delivery of education dramatically. Austerity measures to balance the budget may not have left the public at large with much sympathy for workers whose jobs are largely protected and who receive comparatively lavish pensions. Certainly parents are unlikely to appreciate their kids missing out on a day of instruction.

? Chris Tessone

Federal mandates are coming under attack across the board, often for good reason. Idaho has announced it will refuse to comply with NCLB ? not ask for a waiver ? while the Council of Chief State School Officers is planning to blitz Arne Duncan with waiver requests. In South Carolina's case, however, lawmakers felt they couldn't continue to privilege special education students over every other recipient of state dollars. The state could, of course, have made its case more compelling by matching spending cuts with an agenda of effectiveness in education services, possibly?following Massachusetts' example of outsourcing services to more cost-conscious providers.

The federal response ? that states should allow special education spending to balloon in a time of fiscal austerity when everyone else in the school system is pressured to be more efficient ? is senseless. Washington's mindless maintenance of effort rules simply distort local budgets in favor of certain groups of students, regardless of local needs or resource constraints. As a result, ED is inserting its own judgment into the South Carolina budget process, which it has no business doing.

? Chris Tessone

Why have costs continued to skyrocket while performance lags?

A major cause is pensions. New York City doled out $4,822 for each child in its public schools on fringe and retiree benefits for teachers and other education employees in 2008-09 (the latest available) ? a whopping 27% of the total spent per kid.

That's more than twice the $1,493 cost of health care and pensions per kid in the 1999-2000 school year, and double the 13.4% of $11,121 in per-pupil spending back then, data by the Independent Budget Office show. ?Unlike the increases in salaries and staffing, this isn't something that was planned or desired,? said Charles Brecher, research director for the Citizens Budget Commission. ?It's proven to be very difficult to manage and control.?

New York's retirement system for teachers mandates 8% returns and taps taxpayers whenever the market fails to deliver. This puts kids on the hook for market risk instead of workers; if the retirement plan's investments don't perform well, more resources get sliced out of classroom budgets. Teachers, meanwhile, pay only 3% of their salaries for that risk-free 8% return.

Practically every other profession is able to attract high-quality workers without Ponzi-scheme retirement benefits, yet traditionalists decry any attempt to reform teacher pensions on the basis that it will turn young people off to education. It's time to fix a system in which everyone except teachers pays dearly for their guaranteed investment returns.

?Chris Tessone

The solution proposed on Monday by Rep. James Roebuck (D-Phila.) is extreme, however. He proposes that the state pay the entire bill for virtual-school students, as well as youngsters in traditional charter schools, leaving more resources to educate fewer kids in district schools. Since there's on a finite amount of money available for public education in the state, this short-changes children who attend schools of choice.?The proposal also defeats one of the purposes of school choice: competition for students and the resources to educate them.

Virtual schools present some unique governance and school-finance challenges, but rewarding districts for failing to serve kids effectively is not a good solution. Instead, Pennsylvania legislators should develop a financing system where the state steps in to correct disparities but still allows as much local funding as possible to follow a child wherever he or she goes in the education system. Pennsylvania's citizens are taxed to provide resources for all children in public schools, not to preserve buildings and jobs in the traditional system of district schools.

?Chris Tessone

In this go-round, the council cut $25M from the schools budget, after which the school board suddenly found $21M in health care savings, which it promptly used to reverse an expected increase in the proportion of health care costs paid by teachers. The Post, a vocal parents' group, and others are unhappy the savings weren't used more directly in the classroom.

The whole thing reveals one of the thorniest problems of traditional "marble cake" school governance. Both the council and the school board are agents of the taxpayers of Montgomery County. They are each serving others sets of interests as well, however: students, parents, teachers, public workers other than teachers, business owners, etc. The present system of governance in Montgomery County doesn't seem to be succeeding at working out the conflicts among those groups in an orderly and transparent way.

The role these businesses can play seems to be twofold. First, they are more flexible than districts at providing services where and when they're needed, reducing the amount of time kids are pulled out from their normal classrooms and getting past rigid staffing formulas. Second, because they are a level removed from the difficult politics of special ed, they may have more power to say no to services that are not effective.

Outsourcing these services is no walk in the park, of course. Shady operators will have every incentive to overcharge and underdeliver. Districts must consider which services they're outsourcing, and to whom. The need for careful oversight is a given.

However, serving a population of students with very diverse needs using a variety of outside providers with narrow specialties and an incentive to help children overcome their challenges for good (if possible) is a worthy approach to try. It could both save money and provide a path to more individualized instruction for all youngsters.

- Chris Tessone

Stefan's tenure in DC provides some hopeful signs that ED will continue to step up its game on charters. First, while he's a strong advocate for public charter schools, he focused strongly on school quality while running the program at OSSE. For instance, the office added a competitive grant component to its teacher compensation program last summer, developed by my colleague Jessica Sutter.

Second, Huh is not a natural-born bureaucrat ? he understands that building more quality schools means taking calculated risks. For example, most of ED's grantees in the Credit Enhancement Program for charter school facilities have used those funds in safe ways that have not dramatically increased access to capital for new charters. Texas uses its $10 million from the Department only for bond financing, which typically only very mature, safe charters can access. Under Stefan's direction, DC has instead largely backed younger schools that have proven themselves to be managed by reliable, thoughtful folks but have had difficulty lining up financing, meaning more public charters in the District can build or renovate high-quality facilities.

Given the reality of a flat budget for the Education Department and an increasing need for new, quality public schools, there is a significant opportunity for the Administration to remake its charter school program along the lines of Race to the Top: more competitive grants and a stronger focus on quality. It's a big challenge, but from where I sit, Stefan Huh is the right guy for the job.

So-called "Abbott districts," which get more money under another NJ Supreme Court ruling that deemed education in those locales inadequate, are among the highest-spending districts in the country. Newark, which is one of them, tops out at $23,000 per student using the state's new accounting method. Education in these districts is indeed inadequate and horribly shortchanges the youngsters who live there, but after 25 years of receiving extra resources, it seems clear that the problem goes deeper than money. Unfortunately, the question of what constitutes an "adequate" education in New Jersey has largely revolved around funding issues rather than processes and outcomes for children.

Nevertheless, I agree with Bruce Baker that the court's rather narrow decision was the correct one. (This may be one for the record books.) Bruce found in a recent analysis that while New Jersey's funding system is fairly progressive, giving more state aid to poorer districts, Gov. Christie's recent cuts hit high-poverty districts the hardest. Today's decision is a perfect example of checks and balances functioning correctly, with the court restoring support to the poorest and most challenged residents of New Jersey.

Hopefully these restored funds will be put to good use. Newark has a newly-appointed superintendent and the state education department has new leadership as well. There's an opportunity here to end business as usual and deploy the substantial resources afforded New Jersey's worst-performing school systems to provide an education for kids that far surpasses "adequate." Hopefully the state's education leaders will rise to the occasion.

On Tuesday, Drs. David Driscoll (former Commissioner of Education in MA and a Fordham Board member) and Tony Bennett (State Superintendent of Instruction in IN) testified before the Ohio State Senate finance committee. Both men articulated the challenges facing state departments of education and the smart solutions proposed by the education reform movement. Many of us were impressed by the respectful back-and-forth between the two of them and senators from both sides of the aisle. Given the riotous protests over SB5 just a few short weeks ago, it was heartening to see lawmakers remaining open-minded in their search for solutions to improve public education in Ohio.

I spent the afternoon visiting KIPP Journey and Columbus Collegiate Academy. The students at KIPP, when asked to describe what the school meant to them, deftly turned arguments about poor home life limiting education on their heads. They all said KIPP was a place where they felt safe, cared for, and challenged ? because some of them lacked these things at home, it was all the more important that they find them at school from dedicated teachers. At least three of the kids I talked to (all young men) used the word "family" to describe the community at their school.

The next day, I was in Dayton. When I was leaving for my trip, a friend from Ohio told me (a bit harshly), "Don't judge Ohio based on Dayton." But what I saw going around to schools there made me hope that others in the state share Daytonians' spirit. The city clearly faces very real challenges; that much is obvious from the shuttered factories, boarded-up homes, and high joblessness figures. Yet the community has also stepped up with support for some great schools like the Stivers School for the Arts, a magnet inside Dayton Public Schools, the Dayton Early College Academy, and others. Everyone I talked to believes strongly that Dayton's troubles needn't be permanent and see education as the best lever they have to reverse its trajectory.

The key constraint in Dayton (as in many other places) is human capital. There are plenty of charter schools in and around the city, but few have the kinds of transformational leaders and high-quality boards needed to move Dayton's kids to the next level. I suspect the other, greener kind of capital would follow if there were a way to entice more sharp, entrepreneurial educators to start schools there. Bringing TFA to Ohio is a great first step, but there's still a heavy lift ahead to create a sustainable pipeline of top-notch human capital into Dayton's schools.

On a more personal note, the highlight of the trip for me was getting connected to Fordham's roots in Dayton. I saw the Finn family plot, where Checker's ancestors dating back to the late 19th century are buried. Terry also took me to see ghosts of schools past, places where Fordham poured a lot of sweat and dollars into charters and after-school programs that weren't long term successes, learning hard lessons along the way.

It all drove home the lesson that education is at heart a local endeavor. National and state policy are critically important, but at the end of the day, their purpose is to clear the ground so that teachers and school leaders can prepare kids for a brighter future. I have a lot of hope that that future can become a reality because of the great things I saw going on in Ohio.

?When you are basing the effectiveness of teachers on lots of softer things, whether the kids feel good, whether the classroom is happy, whether we're creative (don't get me wrong, those things are important), but if the kids can't read?that's not acceptable,? former Washington D.C. Schools Chancellor Michelle Rhee asserted indignantly in a recent interview with Charlie Rose, defending the standardized test-based reform movement that she has touted to an applauding media. [...]

From the perspective of corporate reformers and complicit Democrats, who employ the language and ideology of corporate America, public schools are factories designed to manufacture potential employees, human products who can compete effectively on the global market, and help the United States ?Win the Future.? This is a striking departure from the original mission of public schools, which conceived of our schools as not just skills centers, but civil institutions which cultivate democratic values ? empathy, compassion, citizenship, creativity, and other ?softer things.?

Given yesterday's news that half of Detroit adults are functionally illiterate (PDF), this is a strange charge to make against reformers. Empathy is precisely what drives people to label a system unacceptable when it leads to outcomes like this. Having grown up in a working-class family, I know what that lack of basic skills means for people: inability to get a job requiring skilled labor, difficulty managing one's money and other affairs, frequent unemployment, even shame at having to ask for help with reading and writing.

Empathy for parents and students does not always look soft. If one takes the crisis in American education seriously, one has to be outraged on behalf of people whom the system has failed. Having half of the adults in a major American city be functionally illiterate is an unconscionable failure of the status quo in education. We know another generation of children locked in failing schools will see the same outcomes. Accusing reformers of being greedy and unsympathetic is a pointless non sequitur.

I find little evidence that the unionization of public employees has any effect ? whether positive or negative ? on the fiscal soundness of state pension plans. This, along with the fact that we already know why pensions are in trouble, and it has little to do with unions, once again represents strong tentative evidence that the push to eliminate collective bargaining is misguided, and the blame on unions is misplaced. States with little or no union presence are, on average, in no better shape.

Pensions are far from the only issue at hand. The Pew report cited by Matthew shows that, in addition to the $660 billion gap in pension systems, there is a $604 billion shortfall to pay for generous health benefits for public-sector retirees. This gap has little to do with the financial crisis, because states didn't have much savings to lose in the markets to begin with.

The absolute level of health care liability per person ? not the gap, but the dollar amount states will have to shell out eventually ? seems to be related to unionization density. I plotted the money owed to public-sector retirees by each citizen of a state against the percentage of public workers covered by union contracts using the data Matthew identified. The result is a weak but statistically significant (95% level) relationship:

So unions do seem to have had a hand in securing pricier health care benefits for their members in retirement. It's sort of odd that the Shanker Institute would make the contrary argument ? namely that unions are ineffective at improving their members' compensation!

I don't really think "who's to blame?" is the right question to ask, however. The real question is, which kinds of compensation strike the right balance between attracting the best and brightest to teaching and maintaining financial sustainability? Retirement and health care benefits that are expensive, blow up in times of fiscal crisis, and overwhelmingly benefit teachers near retirement do not seem to fit the bill.

I agree with Matthew that there's no need to vilify unions. That does not mean we shouldn't reform the systems that lead to massive unfunded liabilities and a profession that is unattractive to the entrepreneurial, high-performing college kids we want to draw into education.

This points to what should be the fundamental progressive response?the critique that many progressives seem hesitant to seize: that educational opportunities should be among the most precious public goods. While public education does provide an important private benefit to children and their families, it also lies at the center of our societal well-being. Educational opportunities should therefore never be distributed by market forces, because markets exist to create inequalities?they thrive by creating ?winners? and? ?losers.?

Progressives may be hesitant to seize this critique because it's wrong and misunderstands markets. First, Welner ignores consumers. If Wal-Mart and another retailer compete, in a well-functioning market the consumer wins by paying lower prices, enjoying higher quality, or both, regardless of whether Wal-Mart or its competitor wins a given customer's business. Markets don't exist for the sake of competition, or to provide wealth for "winning" competitors. Competition is intended to serve end users.

Second, education markets, unlike the ones in business, are not usually tasked with allocating profits. Even in places where for-profit charter operators are permitted, profits for those operators should not be a primary or even secondary concern of the education system. Instead, markets provide a mechanism for empowering parents, decentralizing decision-making, and fostering a variety of educational approaches.

Best of all in our current environment of stretched resources, the autonomy afforded by a market-based approach allows schools to tailor their approach to available resources better than one-size-fits-all approaches. Rocketship is successful by using a small number of high-quality teachers blended with online learning; KIPP's model stresses lots of seat time in a more traditional classroom environment. Students are better off with both options, which tap different kinds of teachers, than with schools that all require the same kind of educator.

The goal should not be instruction that looks identical in schools across the country to ensure an empty kind of parity among students. It should be an equally effective education, adapted to students' and parents' needs, so that all children can reach their potential. The market approach is not perfect and needs careful tending, as Fordham's Terry Ryan has demonstrated in Ohio recently, but it is certainly not the regressive corporate bogeyman Welner is wringing his hands about.

The county's elected leaders have rescinded a request made last month seeking to be excused from a state formula for funding education.

The decision would allow the county to reduce the amount of money it gives to Montgomery County Public Schools in the next fiscal year ? and potentially every year thereafter.

In a letter Thursday to the Maryland State Board of Education, County Council President Valerie Ervin (D-Dist. 5) of Silver Spring and County Executive Isiah Leggett (D) said they do not plan to seek a waiver from Maryland's maintenance-of-effort law.

The county spends roughly $15,000 per pupil, according to the Maryland Report Card, and found itself unable to cover the increased cost from enrollment gains in recent years.

The most interesting part of the story to me is the battle between the County Council, which sees an unsustainable budget, and the school board, which has been demanding that more county resources to be diverted to the already-flush schools. The Council seems to have tied the hands of the district with this move, committing Montgomery County to lower spending for the foreseeable future.

Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit ? made possible, lawyers said, because Michigan's constitutional protections are weaker ? could spur other places to try to follow suit.

?These things do tend to be herd-oriented,? said Sylvester J. Schieber, an economist and consultant who studies pensions.

Governments are simply very prone to mismanaging pension funds, over-promising in good times and underfunding in bad. Latin America learned this the hard way prior to pension reforms in the 1980s and 90s. We are blessed with much stronger institutions than Chile and Argentina had then, and reform would be good for teachers on balance, especially the young and talented ones who are very likely to quit the profession. It would insulate public-sector retirees from political risk and the demographic shocks that are making things very challenging for Detroit right now.

A few objections. First, it simply can't be the case that teachers in the UK only work 15.6 weeks a year, which is what the chart implies (~625 hours / 40 hours). In fact, the Association of Teachers and Lecturers, a teacher union there, claims British educators are overworked and average 50 hour weeks much of the year. There's clearly a fundamental problem with the underlying data for hours worked ? one of Russo's commenters suggests contact hours, not work hours, are being measured.

Second, salary divided by GDP per capita is not a useful measure of how well a profession is compensated, because it suggests teachers in the US deserve the same fixed share of economic output that teachers in other countries command. In doing so, the chart compares apples to oranges ? Korea's teachers are drawn from the top 5% of their class in high school and go through highly selective programs (the same story prevails in Finland). Korea also has a student-teacher ratio of 30:1 and math teachers making $4M a year in virtual education:

South Korea is able to pay teachers high starting salaries because it employs relatively fewer than other nations. As a result, the student-teacher ratio in South Korea is 30:1, compared to the OECD average of 17:1.

It's a smart tradeoff because studies show that teacher quality has significantly more impact on student outcomes than class size. Dollar for dollar, it's better to attract a small number of outstanding educators with high starting salaries than to attract a large number of mediocre ones with lower starting salaries ? even if that means having a high student-teacher ratio.

The moral of the story? Beware of drawing simple conclusions from misleading infographics. They can conceal much more than they reveal.

That's a false dichotomy. Reformers believe that good teachers are capable of transforming the lives of their students, leveling the playing field for poor kids and providing every child with the opportunity to live up to their full potential. But it's not that home life and background play no role ? it's that hard work by students doesn't amount to much without good teaching. The a priori assumption that all under-performing students must be duds is offensive.

I don't say this abstractly. I come from a working class family living in an economically-depressed rural area in the middle of the country. Three generations of my family worked as coal miners, sheet metal workers, and firefighters after coming to the US from Italy (which my grandparents still called "the Old Country" when I was a kid). My brother and I succeeded and found middle-class careers in small part because of our hard work ? but in larger part because of the hard work of teachers who didn't believe our free/reduced lunch status determined our ability to learn.

Why do people like Dr. Quintero, who profess to be pro-teacher, argue that teachers are irrelevant or interchangeable? Why do they fight so hard to spread the belief that we have to fix poverty outside of our schools before professionals in schools can be effective? From where I sit, that's a libel against effective educators. It's not pro-teacher to say teachers can't help the millions of kids who are achieving below grade level and need support.

? Chris Tessone

Congress could require that as a condition of receiving funding under the ESEA, each state must: (1) help school districts create immediate, additional cost savings; (2) publicly monitor districts' fiscal health and create a plan for escalating involvement when a district nears and reaches fiscal crisis; and (3) assist in stabilizing districts' revenues for the long term.

I'm not sure why there should be a role for the federal government in this (the paper on which the EdWeek article is based seems to boil this down to "because it's important" and "because the Feds can"). That is far from the only worry I have, though. Bowman also calls for a federal maintenance of effort mandate for all state school spending throughout the country. Not only would it make fiscal crises worse (if you can't cough up enough state funding, you lose your federal funding!), but innovative state policies to save money would now be illegal.

There are some good ideas here, too, though. Bowman calls for state governments to have plans in place ahead of time to restructure financially troubled school districts; many states have simply not thought this through. She's wrong that funding cliffs and fiscal crises can be eliminated, but the consequences need not be so catastrophic as they've proven to be this time.

GA's Senate Bill 184 sets three basic policies. First, local school boards cannot use length of tenure as the "primary or sole determining factor" in deciding whom to lay off during reductions in force. Second, performance should be the primary determining factor in making these layoffs. The bill states clearly that "one measure of [teacher performance] may be student academic performance." That is, local districts are free to decide how much to weight to assign to test scores and the like, and for which teachers they're relevant. Third, the bill establishes a commission of teachers, ed school profs, school managers, and others to identify effective professional development opportunities by 2015 to help all teachers improve their craft. It looks likely that the governor will sign the bill into law.

Some teachers and union folks say we can't evaluate teachers until we have a universally-valid evaluation system. Some reformers cling to a magical 50% weight for student test scores (or value-added) for performance evaluations, as if that's applicable to every locale and circumstance. Both approaches are wrong-headed. This bill moves in the right direction of setting a broad framework for reductions in force while empowering districts to work out the details locally.

? Chris Tessone

The D.C. Opportunity Scholarship Program ? which provides low-income District students with federal money to attend private schools ? is a top priority of Speaker John Boehner (R-Ohio). The program was closed to new entrants by Democrats in 2009, but Boehner has sought to revive and expand the program. The House passed a Boehner-authored bill last month -- the SOAR Act -- to reauthorize the program for five more years, and that bill will be included in the final spending deal and signed into law by Obama.

The SOAR Act includes the so-called "three sector" payments, meaning that DCPS and public charter schools will also benefit from the program. I worked in the charter financing office in DC last summer and saw how much good those funds have done for the charter sector in the city. This seems like a big win for school choice and all kids in DC.

?Chris Tessone

The combined weight of those state and federal cuts would force Florida's Volusia County school district to cut an estimated 900 employees, including teachers, administrators, and clerical staff, said Margaret A. Smith, the system's superintendent.

The district, which has a total operating budget of about $470 million, also might have to cut back programs in art, music, and physical education, as well as extracurricular and sports programs, she said.

Volusia County is a good object lesson in why it's turning out to be so hard for districts to do more with less and what that failure costs. Unable to adjust classroom staffing due to Florida's onerous class-size mandates, the district is requiring principals like Marie Stratton to pull double duty managing multiple schools. Based on her schools' enrollment figures, she's managing 35-plus teachers and who knows how many paraprofessionals, yet the district is powerless to increase class sizes by one kid to pay for the managerial capacity they need for each school.

Not that most districts are being all that forward-thinking even where they're free to innovate. The "creative steps" Ed Week reports that schools are considering involve sharing services with other districts. Good for what it's worth, but hardly high-impact.

District leaders, unions, politicians, and, frankly, parents need to recognize that every priority comes with a price tag that prevents you from doing something else. If you want to do more, you have to rethink the basic assumptions of delivery models and labor contracts that lock schools into the status quo.

? Chris Tessone

In light of the heroic efforts of some school districts around the country to "do more with more" by raising fees paid by students for things like school supplies, driver's ed, and sports, I'm excited to announce that the Thomas B. Fordham Institute will be charging you, our readers, for all the thoughts we produce as of today, April 1, 2011.

The fees will follow a tiered schedule based on how good the thoughts produced are. Half-baked thoughts produced during staff meetings or the Education Gadfly Show podcast will cost $500. Carefully researched ideas arrived at through rigorous analysis will cost anywhere from $5,000 to $10,000, based on their impact on student test scores. Brilliant ideas that have the potential to save American education before the next school year (most of which come from our staff assistant and interns) will cost a mere 1 million bucks. They have the potential to put us out of business if they work, after all, so we have to charge a bit more for them.

We've set up this plan to be as painless as possible for you, our audience. You'll be billed automatically by email whenever Mike, Amber, or one of our other researchers has an idea. Installment plans and payments via PayPal are available. Not only will this system help Fordham be more effective going forward, but I only get a bonus this year if I double our revenue. I'm sure you'll agree, this is an exciting change for us and for the children of America.

? Chris Tessone, Finance Director and Aspiring Fat Cat

Provided further, That each local educational agency receiving funds available under this paragraph shall be required to file with the State educational agency, no later than December 1, 2009, a school-by-school listing of per-pupil educational expenditures from State and local sources during the 2008?2009 academic year: Provided further, That each State educational agency shall report that information to the Secretary of Education by March 31, 2010. (p. 67 of the ARRA.)

These data came up at the Center for American Progress?American Enterprise Institute event on Title I a few weeks ago. As I recall, Carmel Martin, Assistant Secretary of Education for Planning, Evaluation, and Policy Development, said ED is still sifting through the data, and no decision has been made about whether they will ask for something like this on an ongoing basis from more school districts.

The Department should release these data (which they've had for a year) to the public, and they should strongly consider incentivizing states to require annual public reporting of school-level data. Rhode Island is already doing it, as I mentioned earlier this week. Releasing the data will ensure they get used to improve school spending and efficiency rather than sitting on a shelf somewhere.

? Chris Tessone

Last week, I attended a great panel at the Yale SOM Education Leadership Conference on teacher contracts, ably moderated by Andy Rotherham. Discussing the district's 2009 contract, New Haven Public Schools assistant superintendent Garth Harries placed a lot of blame for the restrictive nature of labor agreements on the poor state of education management, saying that teachers will routinely go above and beyond the requirements of their contract if they trust management. The AFT's Joan Devlin, speaking to a largely unsympathetic crowd, agreed, pointing out that a good working relationship between the New Haven local and district management allowed everyone to move from haggling over hours to talking about how to reform schools together. The entire panel agreed that bold, visionary leadership with integrity is rare at the district level.

I am not naive about the battles unions fight against reform; they deserve criticism for opposing everything from the firing of absence-prone teachers to charter schools in one place or another. However, as Fordham's 2008 report, The Leadership Limbo, illustrated, district leaders often blame unions when they themselves are not using the flexibility afforded them by labor agreements to the fullest. That report also illustrates that managers and school boards? in states without collective bargaining have not fought all that much harder for flexibility than those in states where unions have more leverage.

Reducing state mandates on districts ? whether by abolishing statewide tenure and salary rules or ending mandatory collective bargaining ? can set the stage for meaningful reform. But without strong management and a collaborative relationship with teachers, nothing happens once that stage is set.

? Chris Tessone

As the Times article notes, many schools are already finding their infrastructure inadequate to support tools like smartboards, computer labs, and adaptive testing that are or will become standard features of 21st century schools. More importantly, NYC DOE's Innovation Zone schools are developing thoughtful methods for using technology in the classroom effectively, a sharp contrast to the "smartboards and fairy dust" approach to networking classrooms seen in some other districts and charter networks. In order to bend the cost curve so that tailored instruction for all kids is affordable, districts will have to spend more money on technology, not less. A half billion dollar investment may be tough to swallow, even in a huge district like New York City, but it should pay dividends for years to come.

? Chris Tessone

Other states (like New Jersey) have mandated that districts publish financial reports using a Uniform Chart of Accounts, a set of guidelines for classifying school and central office expenses and revenues. However, Rhode Island is the first state I know of that provides the reports and raw data in a format that empowers users to perform their own analysis easily ? in this case, using Microsoft Excel. RI's effort also includes the state's rapidly growing charter sector and benchmarks every district against charters and the rest of the state.

The level of detail is exceptional, with reports on spending in functional areas (face-to-face instruction, classroom materials, professional development), subject areas, even how much a district spends on retirees. (One spends 10% of their budget on retired personnel!) The reports could go further, of course. As far as I can tell, the data are not presented at the school level, which would be helpful for comparing spending within districts. Ensuring districts apply the rules faithfully and don't game ambiguities in the system will also be a concern. However, in talking with Cynthia Brown, the project's director, I got the clear impression that the state wants to make the reports as transparent and useful to the citizens of Rhode Island as possible.

That's admirable, and the Department of Education deserves a round of applause for a timely and powerful move toward greater financial accountability.

Update: RIDE's Cynthia Brown wrote in to correct me on an important point: their database does break out school-level data. Here's how to find it: "The location segment contains a 5 digit code, the first 2 digits of which represent the school level (elementary, middle, or high) with the last 3 digits representing the specific school within the district.? We also capture the information for district pre-schools, alternative schools, and specific school placements for students receiving services outside of the district." Even better!

? Chris Tessone

Of course, in the rest of the professional world managers strive to make thorough and objective decisions about their workers without a universal evaluation system. Marketers, engineers, and event planners do not need national "frameworks" and "continuous improvement models" in order to be evaluated by their managers (much less to be fired for malfeasance). It doesn't work perfectly, but it works. Why, in Weingarten's eyes, are teachers so different?

Her op-ed employs the clever trick of arguing that common ground is not that far away, if only those stubborn reformers would be willing to give up and agree with the unions. I'd call that a tautology ? if you'd only agree with my position, we wouldn't be fighting!

This is nearly as insidious as Rick Hess's favorite "it's for the kids" line. Weingarten lays out a fundamental difference between the AFT and reformers like Joel Klein, then papers over it with a call for collaboration that looks strikingly like the "highly effective until proven otherwise" status quo in teacher evaluation. There's nothing transformative about that.

? Chris Tessone

Futures, previously known as Lockwood Elementary, was redesigned in 2007 and a particularly young staff was hired to change the school's old reputation as a place that held low expectations for its low-income and minority students.

The state education code holds no provisions for performance, though. Instead, it dictates that layoffs must be made in order of seniority. Most Futures teachers have been in the classroom for fewer than five years.

?What did we do the redesign for?? asked the school's principal, Steven Daubenspeck.

The union president blames the school's principal. She implies that all teachers are interchangeable widgets, so he should have kept the school's low-performing senior teachers instead of trying to turn the school around using new blood:

The president of the Oakland teachers' union, Betty Olson-Jones, said she feels for the teachers of Futures Elementary and that she plans to visit the school. However, she said, small school leaders ? like those at Futures ? that hired young teachers over older ones when they were redesigned are causing part of the problem. ?When [the division into small schools] happened, many of the teachers who were there and who wanted to be there and were veteran teachers were not invited back,? she said. ?And so, from 2001 through 2008, you saw a lot of veteran teachers moved into other schools.?

I frequently hear the excuse that poor kids can't learn because their parents aren't engaged. What does it say to the parents at this school that when the district experiences a $900 per pupil drop in revenue, their kids, 93 percent of whom are on free lunches, should bear the brunt of the pain? What does that do to the parents' engagement with or trust in their schools?

? Chris Tessone

Merit pay trials in the US have mostly followed a familiar pattern: they're structured as one-time bonuses and are tied to some kind of objective measure like test scores or teacher value-added. This may look superficially similar to professionals' compensation on Wall Street and in the nation's top law firms, but crucial components are missing that make up true merit pay in the professional working world.

Permanent raises based on merit provide a more meaningful incentive than annual bonuses, though the latter are a helpful supplement. Performance-based raises tell professionals that they're hitting milestones on the way to full professional effectiveness (or not), and they communicate the worker's long-term value to an organization. One-time bonuses that sit on top of a never-changing salary schedule that undervalues newer employees' growth are bound to be ineffective by comparison.

Management needs discretion to use both objective and subjective measures of effectiveness to evaluate merit. This is a scary idea for many teachers, but it's a pro-teacher idea at its core. Every teacher benefits from working with colleagues who are team players and build up others by their efforts. Yet these team contributions are often easy to see and difficult to quantify. Managers have to be free to reward this behavior and shouldn't be bound exclusively to the kinds of objective measures that can pass academic peer review.

Finally, principals and superintendents have to be free to employ the ultimate merit pay tool in some cases: zero pay for zero performance (that is, the power to hire and fire). This is a pro-teacher idea as well, but what's good for the profession is not necessarily good for every teacher. Good work is not being rewarded if there is no absolute floor for performance.

I agree in principle with most of Steve Peha's points about the NYC study and pay for performance generally: teachers are not motivated by the same things that motivate investment bankers, teaching is a bad fit for the kinds of standalone bonuses we've used previously in the US, and educators are already working pretty hard. A real merit pay trial would not treat teachers like bankers; rather, it would reward long-term value and empower the kind of leadership that is critical to good instruction.

That's a hard sell to teachers, unions, and other stakeholders ? but it would make teaching more rewarding and more attractive to high achievers.

? Chris Tessone

?

The blue line is pension wealth accumulated by a teacher under Missouri's teacher pension plan who begins work at age 25. Note that the teacher earns essentially nothing until their 12th year of service and only five figures past their 20th year of service. Over the five years after that, the teacher's retirement wealth increases five-fold.

Lest you think this insanity is particular to Missouri, take a look at neighboring Illinois, where a new law revamping teacher pensions was just passed:

New teachers in Illinois can only hope to get their money back (at best) until they've been teaching for 26 years.

As I've mentioned before, this system can't help but attract highly risk-averse workers to the detriment of others. It creates a situation where the handful of teachers who never leave the profession or work outside the area covered by a given retirement system take money out of the pockets of everyone else. Unless you're one of those teachers, you'd be far better off with a higher base salary and a defined-contribution plan where your retirement wealth increases steadily as a function of your salary.

The Atlantic's Megan McArdle brought this up (and many other issues) in a recent post on teacher turnover. Minimizing turnover has some value; it doesn't deserve to be one of the most important policy priorities in education as it is now.

Costrell and Podgursky get into the effects of this in their policy brief. The status quo incentivizes a host of bad outcomes and behaviors: burnt-out teachers stay longer than they should, workers game their salaries and take jobs they don't want to improve retirement payouts, and people suffer catastrophic losses in retirement wealth if they move or quit teaching. Reforming retirement systems is one change among many that could improve teacher quality and recruitment.

? Chris Tessone

Liam's post earlier made me think of this moment. I take his point that the subjects of experiments in education are kids who depend on adults for a good education and often can't recover from disastrous experiences at school. Even if the imperfect solutions found through such experiments can be brought to meaningful scale and used successfully for a while, the cost of failure can be high.

School kids can weather innovative departures from the status quo better than adults, though. Human children are blessed with innate curiosity ? a trait our educational system seems uniquely efficient at driving out of them in many cases. Adults have a lot more to lose from experimental ideas ? jobs, contracts for services, political power.

The kinds of experiments that have been spectacular failures ? the laptop fad, open classrooms, and so forth ? also seem tailored to scratch adult itches. At the risk of sounding Pollyanna about children's engagement and curiosity, perhaps the issue is experimenting on children rather than constructing experiments that are responsive to results and involve students in something important. This works better the more awareness and agency kids have, to be sure. But high stakes are no argument against continuous experimentation and improvement. They're just an argument for getting the scope and process of that experimentation right.

? Chris Tessone

First, the mantra of investment professionals is: past performance is no guarantee of future returns. In order to determine whether pensions are adequately funded, we need to understand how markets will perform going forward. This is tough to do reliably ? if Chad or I knew the answer, we wouldn't be working at think-tanks. Many academics are fretting about whether American capital markets will continue to outperform other countries going forward, however.* Second, the 1926-present time period used in Ed Sector's analysis? includes the post-WW2 boom years, which are unlikely ever to be repeated. Third, pension funds look nothing like the balanced portfolio Chad uses in his analysis. In particular, they are heavily weighted in the direction of private capital investments that behave very differently from public markets.

The most important question is whether defined-benefit pensions are good for teachers at all, though. We know that politicians are prone to skip pension contributions to fill other holes in state and local budgets. Illinois has provided us a perfect example of this flaw in public pensions over the years. As I mentioned last week, pensions as currently structured also take a big bite out of total compensation that could be converted to salary or savings for taxpayers. This would help attract better young teachers and keep high performers. Finally, it makes little sense to have states run the risk that a down year in the markets will blow a big hole in their budgets. At the end of the day teachers, not politicians, should have control over how their retirement wealth is managed.

Update: Chad points out in an update to his post that Education Sector has made recommendations along the lines of my last paragraph above in the past, including their report Better Benefits.

?Chris Tessone

* One of the seminal papers on this is "Global Stock Markets in the Twentieth Century" by Philippe Jorion and William Goetzmann in the Journal of Finance.

But unions also play a vital role in protecting against abuses in the workplace, and in my experience they are integral to training, deploying and managing a professional work force.

Bloomberg made his billions with Bloomberg LP, his financial data and analysis firm. Are the programmers and financial analysts there unionized? I bet not. Historically, unions protected minimally skilled workers; outside of the public sector, they've had little to do with protecting and developing professional workers. Now that public-sector unions have enormous leverage over state and local governments, however, they're not going to roll over and take a back seat because Democratic politicians ask nicely.

The rhetoric from some progressive politicians and policy wonks on public-sector unions is verging on the absurd. The message seems to be "we need strong unions, but let's get rid of all the costly practices they fight for." Good luck with that, Mayor Mike.

—Chris Tessone

Yet most teacher compensation systems look like the first option. According to an oped in today's Wall Street Journal by the University of Arkansas' Bob Costrell, for every dollar Milwaukee teachers receive in salary, the public is spending another 74 cents on gold-plated benefits ? almost three times the cost of benefits in the private sector. The cost of those benefits, which are skewed dramatically in the direction of older teachers close to retirement, lowers starting salaries and takes choices away from workers.

This tradeoff between benefits and salary doesn't come up much in our discussions of teacher quality, but it should. Most young workers are not attracted by low starting salaries and the faint promise of retirement benefits long into the future. The growing mobility of workers argues for more flexible compensation systems.

The current system is increasingly likely to draw from a small pool of highly risk-averse workers who are willing to take those low salaries for the promise of a job forever. Benefits for public-sector workers are squeezing budgets everywhere ? but the hidden costs of weeding talented people out of the recruitment pool for public-sector jobs with skewed pay practices are too high to bear.

?Chris Tessone

Of course, school funding in Washington is far from "uniform." Retirement funding for DCPS teachers falls outside the formula, the city spends hundreds more per student on capital projects for traditional public schools than the $2,800 per student available to charters, and DCPS receives revenue from other city agencies outside the formula. Last year's Ball State study of charter school funding assessed the gap between DCPS and the charter sector in DC at over $12,000 per student in the 2006-07 school year.

Despite this sizable funding gap, the District's charter schools have performed at least as well as traditional district schools, with several star charter operators doing much better. They're doing more with a lot less and should be encouraged both for the choices they provide to parents here and for their admirable efficiency. Instead, Mayor Gray has decided it's "fair" to cut support for highly efficient schools of choice as much or more than support for less efficient district schools. That seems like a missed opportunity to save money in the long run and drive better outcomes for kids.

?Chris Tessone

Terry Grier, the superintendent in Houston, said the city stood to lose 15 percent to 20 percent of its total budget. The district could still raise the local property tax rate a few cents and stay under the state-imposed cap, but it would produce nowhere near enough to cover the loss of state money, Mr. Grier said. One way to cushion the blow, he said, would be to lift state rules on class size and to let administrators single out unproductive teachers for layoffs, regardless of their seniority. ?Let us get out from under some of these state mandates,? he said.

Some other districts don't seem to be going down this path of looking for smart cuts, however. The?Wall Street Journal ran articles today ("Cities Act to Gain Budgetary Clout") and yesterday ("Tax Complaint: Too Low") detailing cities' efforts to raise property and income taxes above state-mandated caps, mostly to fill school budget deficits. Local governments and school boards who think the only way to avoid layoffs is to raise taxes should learn from supes like Dr. Grier who know that flexibility in the hands of smart district leadership is worth big bucks.

?Chris Tessone

One change struck me as odd among the proposals: a ban on districts paying more than 80% of teachers' health care costs. I get where the proposal is coming from ? when state and local tax coffers are full, politicians (school board members among them) love to win points with unions through huge giveaways to teachers. It's not a response to demands in the labor market, but blatant vote mongering. We see the fruits of these popular but irresponsible moves when tax revenues dry up.

If onerous state mandates like step-and-lane are removed, one hopes some Ohio districts will step up to develop better, more effective human capital policies that drive student achievement and attract high performing teachers. What if the part of the labor market those districts target demands benefits covering 85% of health care costs in exchange for smarter accountability and better instruction? Why tie districts down in new ways while cutting old mandates?

Perhaps the bill's sponsors feel like this is the best tool they have at the state level for reining in exploding benefits costs. I can appreciate that. But in the end, local control in the US needs to be re-examined and re-invented. If school boards exhibit dysfunctional behavior when bargaining benefits, clever tweaks to their power from the state capital are unlikely to fix the problem. We've got to be bolder.

?Chris Tessone

DC, like many large urban districts, has an ongoing discussion about how appropriate these kinds of magnet programs are. As detailed in the report, they're usually expensive. Some in DC think this is money well spent to keep high-earning professional families in the city; others contend that the money should be spent where it would have the highest impact on student achievement, usually in high-poverty schools.

The more surprising part of the news is that this kind of data is available and transparent to district leadership in DC at all, much less to the general public. Too many systems apply average salaries to school budgets districtwide, giving them very little visibility into how spending in a given school matches up with the community's priorities. Marguerite Roza's recent book, Educational Economics: Where Do School Funds Go? describes this problem in some detail.

No matter where a community comes down on magnet schools and other spending priorities, it can't have any confidence that the money follows those priorities without accurate, school-level spending data. It's a boring subject for most, but it's critical.

What is perhaps most laudable in Andrew Cuomo's proposed budget is that he seems to be taking the crisis as a chance to bend the cost curve in government for good, taking on basic funding formulas in addition to proposing temporary cuts.?What's not clear, however, is that he, the legislature, public-sector unions, or other players in the state are thinking creatively enough about how to re-envision how government works.

On Monday, Lou Gerstner, former CEO of IBM, had an op-ed in the Wall Street Journal arguing for just this kind of restructuring, and one of his fundamental tenets is, ?Focus on programs, not costs.? In a previous life, when I was a management consultant, this was my dogma. If tasked with cutting 5% of a business unit's budget for a client, my first step was to think about how I would fulfill that unit's mission if I had to start from scratch. If I could succeed in reinventing a process or two more cost-effectively, I could usually make cuts while improving operations ? not making things worse.

At least when it comes to schools, the powers that be in New York seem to be heading down the well-worn path of uncreative cuts that will hurt effectiveness. Gotham Schools quotes a union official making sarcastic comments about the cuts; Mayor Bloomberg has threatened ?thousands? of layoffs in New York City schools; and as Peter mentioned in his post, the governor's own quasi-Race to the Top programs seem destined to be far less effective than reducing state mandates and providing political cover for tough negotiations on public-sector benefits would be.

The optimist in me hopes that by making the case that fiscal discipline is here to stay, Governor Cuomo has at least set the stage for the kind of reinvention New York State's education system needs. But the serious partners he'll need among the state's political leadership are nowhere to be found so far.

So we look at things about school choice, and there's over 150 private schools in our community. And so there's choices for. [sic] And there's choices in our 200 [district] schools with their thematic approaches. So choice is something that's in abundant supply in Montgomery County.

The background is that the Montgomery County Board of Education recently denied two applications to start public charter schools in the county on Dr. Weast's recommendation. The State Board of Education yesterday overturned both those decisions, citing anti-charter bias, an arbitrary review process that broke the county's own rules, and a made-up standard of ?uniqueness? for new public charter schools.

The mess in Montgomery County cuts across a number of pressing issues in education reform. While the county is one of the wealthiest in the country, it has a stubborn and growing achievement gap by some measures. Complacency about good student achievement on average takes attention away from discussion about moving the needle for poor and minority kids, which is a pressing issue. There's also no reason why middle class kids don't also deserve a variety of high quality choices, a topic Peter recently brought up here.

Finally, MCPS's recommendations to kill these two charter school applications illustrate the bad fruits of our tortured system of education governance and finance. Superintendent Weast explicitly raised the specter of budget cuts in his recommendation to deny the schools' applications. He and the county Board have their eyes on what's best for district schools as an institution, and yet the law gives them a veto over innovative non-district schools that would compete with them. It's a thorny conflict of interest, but it's not inevitable. Other, better governance models for public charter schools can be found all over the country ? or just across the border in DC.

?Chris Tessone

If you're trying to evaluate teacher effectiveness for the purposes of deciding who is most likely to help students learn, the information needs to be accurate enough so the decisions you make are likely to be better decisions than those you would have made without the information?and that's all. If, for example, you had to choose between hiring Teacher A and Teacher B, and you had evidence that Teacher A was much more effective that met P < .10 standards of accuracy but not P < .05, that evidence might not be good enough to get into a peer-reviewed journal but you'd be an idiot if you ignored it in choosing who to hire. That's because while evidence of teacher effects can theoretically wait forever until it's good enough to enter the scholarly record, someone needs to be hired for teaching?today.

We hear the same kinds of criticisms in K-12 about value-added data and other metrics for assessing teacher quality. Just today, Bruce Baker has been tweeting about how, in his opinion, the problems identified by the initial findings from the Gates Foundation's Measures of Effective Teaching project mean using value-added data is worse than doing nothing; he'd rather continue with quality-blind layoffs and professional development policies.

I came to education from the corporate world, and this belief that we have to define teacher quality with perfect academic rigor strikes me as making mountains out of molehills. Defining what makes a star corporate HR professional (for example) is almost as tough as identifying universal hallmarks of good teaching. The measures you can track ? the performance and turnover rates of employees they recruit, morale measured by surveys, etc. ? are imperfect at best and are rarely under the perfect control of the staff member being evaluated.

Corporations strive to make good personnel decisions despite all this. They develop cultural expectations for what good work looks like, they adjust their metrics and rules of thumb as they go, and, most importantly, they trust managers to coach low performers ? and fire them if they don't improve. It's not perfect, but it leads to an environment that cultivates hard-working and effective professionals most of the time.

We shouldn't be afraid of teacher quality metrics just because they have flaws. Instead, we should continually refine those metrics, expect superintendents to articulate local standards of teacher quality for instructional leaders, and give principals the tools and responsibility to apply them in place of the quality-blind personnel policies we have in so many districts around the country. With fiscal pain likely to continue for years to come, we need to get better quality for the same buck if we want to see student outcomes improve.

?Chris Tessone