Archive for category Education

When Does It End? When We Are Finished.

The other day, I was speaking to a reform member of one of the local school boards.  We were talking about continued union-backed resistance to reform. Some of the parents who’ve steadfastly supported the board, and continue to support their policies, have been asking, “When does it end?”

“When do you stop having kids?” was my initial, somewhat snappy, suggested reply.

A more satisfying one is the one given by Charlton Heston as Michelangelo to Rex Harrison’s Pope Julius: When we are finished.

Since it’s so easy for one school board to undo much of what’s been accomplished, at this point, reform boards need to keep winning elections.  They need to do that in the face of union bullying, collusion with the PTA, staged demonstrations during board meetings, and coordinated attempts to undermine change.

Eventually, however, choice (for example) will simply be the Way Things Are Done.  They’ll be the received cultural wisdom, and everyone will assume that things have always, and will always be that way.  Merit pay, no union representation, end of tenure, these things will just be the way that schools operate.

The unions and their friends will never entirely disappear.  But at that point, the fights will move from core issues to more marginal ones.  It will become clear that the big battle – the battle to reshape how we think about managing our schools – has been won.

That’s when it ends.


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Amendment 66 – Exacerbates The Revenue Problem

Rather than aid poorer school districts, Amendment 66 will, in the long run, likely end up hurting them, making budgeting harder for those districts, and lives more difficult for both the students and teachers who live and work there.

The state is complaining that it’s chronically short of cash for education, both as a result of decreased tax revenues since the recession, and the state’s budget restrictions.  In response, they have proposed a two-tiered income tax system, the first in over a quarter of a century in Colorado.

Currently, Colorado has a flat, 4.63% income tax rate from the first dollar of income.  The proposed system would raise that to 5% for income under $75,000 and to 5.9% for income over $75,000.  Colorado has roughly 1.8 million filers in the first bracket, and just under 600,000 filers in the proposed upper bracket.  Proponents claim this would raise roughly $1 billion a year in new revenue, which they also claim would go largely to the poorer and neediest school districts.

How could a $1 billion tax increase make things worse for these districts?  Because the income tax, unlike the property tax, is pro-cyclical.  When the economy is doing well, incomes are highers, and receipts from the income tax rise.  The income tax varies much more with the business cycle than the property tax does because incomes vary much more than property values do.

This conclusion is borne out by a 2010 Tax Foundation study comparing variations in various sources of state and local income nationwide.  Corporate income tax was the most volatile, with personal income tax next.  A more recent analysis, also by the Tax Foundation, confirmed this result, and found that over the last 20 years, the least volatile source of state and local revenue has been the property tax, the primary source of income for school districts.

This has particular resonance for Colorado.  In 2008-2009, Colorado ranked 36th in year-over-year percentage change in state tax revenues; increasing the state’s dependence on personal income taxes will likely make them more volatile, and adding a progressive component will make them more volatile still.

Under Amendment 66, the state will backfill much of the difference for poorer districts.  This means that those poorer districts will find themselves more dependent on a more volatile source of income: personal income taxes.  When times are good, this will help them.  But when the next recession inevitably hits, it’s those poorer districts, the ones that Amendment 66 claims to help the most, who will in fact, suffer the most.


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The Higher-Ed Bubble, In One Chart (and one article)

Rep. Mike Coffman took a lot of heat for suggesting that perhaps it was time to re-evaluate these priorities, with his words being distorted into an attack on the liberal arts in particular, and higher education in general.  Turns out he was onto something. recently came up with a list of the 8 College Degrees With the Worst Return on Investment.  The list won’t surprise anyone who’s been paying attention for the last couple of decades:
  1. Sociology
  2. Fine Arts
  3. Education
  4. Religious Studies/Theology
  5. Hospitality/Tourism
  6. Nutrition
  7. Psychology
  8. Communications

Just for grins, I looked up how many of CU’s undergraduate degress over the last quarter-century (well, since 1989), have been awarded in these majors:

For fun, I added in almost anything with the word “Studies” in it, and that’s what the percentage line (right-hand axis) shows.

Peaking at just over one-third of all bachelor’s in 2004, over 30% of all undergraduate majors are still in these low-return majors.  The dropoff occurred between 2004 and 2008, but has since – astonishingly – stabilized since the popping of the housing bubble, when job prospects for graduates have almost never been worse.  Students are taking on crushing burdens of debt to graduate with these degrees.

You and I will be subjected to sob stories about how Colorado is under-funding its higher education.   Instead, perhaps we ought to be taking a closer look at what we’re funding.

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PERA – It’s All For The Kids

Not all school spending is for the kids.  A lot of it is for the teachers, at the expense of the kids.  Over the last five years, even as school districts and teachers unions complain that per-student spending has been “slashed,” “cut to the bone,” or “eviscerated,” per-student spending on the PERA School Division has been growing well beyond inflation.  Here are the per-student contributions by the major local school districts (minus Denver, which has its own PERA division), and statewide:

Over the least 5 years, this has translated to growth rates well in excess of inflation:

And who’s been picking up the tab?  The Employer contribution has been growing far in excess of the Employee contribution in absolute terms.  The employer contribution has been growing at 10% per year from 2006-2011, while the Employee contribution has grown at a 3% rate over the same period.  The overall per-student increase has been just under 8.5%.

Not only is PERA taking money from the classroom, it’s taking taxpayer dollars from the classroom at a wildly disproportionate rate.  Is this what the teachers unions mean by “shared sacrifice?”

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The Higher Ed Bubble as a Cultural Opportunity

Welcome, Instapundit readers!  And welcome, Transterrestials!

Over the last few years, talk of a Higher Education Bubble has grown.  As the costs have skyrocketed and returns have dropped, both students and employers are increasingly questioning the value of what’s being taught.

Higher ed, as currently packaged, marketed, and sold, is increasingly being valued on the basis of past performance rather than underlying value, which is pretty much the investment definition of a bubble.

While some established colleges and universities are moving towards online offerings, Stuart Butler argues convincingly in the current National Affairs that the more likely development is new schools using new technology and models to provide a different, more relevant mix of skills:

In truth, a takeover scenario is less likely than an end run — in which new technological developments, and new educational institutions with very different business models, circumvent higher education’s established players. Today, competitors are exploring markets that are ill-served by the traditional model, such as working Americans who want to enhance their skills and lower-income potential students looking for much cheaper degrees. Meanwhile, rapid change in information technology is giving creative new entrants a growing technological edge — an essential precondition for transformative change.

The most obvious technological threat to the comfortable world of higher education is online education. Online learning changes the entire relationship between student and teacher; it enables information to be transferred, and student performance to be monitored, at a fraction of conventional costs. Often called “distance learning,” online education has the potential to completely upend today’s established universities.

Following the election, PJ Media made the case that restoring American values ultimately rests on cultural, rather than political solutions.  This coming shakeup presents the perfect opportunity for conservatives to retake the liberal arts classroom, without the overhead of faculty battles, “going undercover,” or otherwise remaking the culture of a hostile academy.  The model is much the same as when the right, beginning with Heritage, created a parallel system of think tanks to get conservative or free-market thought into the hands of policy-makers.  Cultural conservatives and classical liberals can give themselves back the voice they’ve lost in undergraduate education, while beginning to undo the massive damage the Academic Left has done to students and the culture as a whole.

Jacques Barzun, who passed away recently, published a collection of essays in the late 80s, The Culture We Deserve.  He discusses the baleful effects of handing over our culture to college liberal arts departments.  The proper repository of culture is the people, and it is the proper job of education to transmit that culture from generation to generation.  Instead, universities, beginning in the late 1800s, began to teach scholarship instead.  Rather than experiencing the cultural canon, students were taught to analyze it in increasingly narrow and politicized terms.  The purpose of “Hamlet” isn’t to serve as a template for the study of patriarchal roles in Tudor England, it’s to teach about the failure of thought as a substitute for action.

The liberal arts ought all to be pulling in the same direction to teach a common cultural literacy, understanding of each enhancing appreciation for the others.   Barzun understands that historical knowledge is necessary to know the mindset of the artist.  But chasing after the respectability of science, college history departments have increasingly forsaken broad historical themes for narrow, isolated problems, what he terms, “retrospective sociology.”  Victor Davis Hanson observed the same thing, in the difference between how his Fresno State students read Thucydides, and how it was taught at Stanford:

Scholars and graduate students talk grandly of Thucydides ”the realist” whose bleak assessment of human nature was a valuable antithesis to romanticism. But this remote, literary language takes us far from the actual Thucydides, a hard-eyed pragmatist whose judgments derive from first-hand experience. As a working mother at Fresno put it, ”Thucydides might like Carter better, but he’d want Reagan dealing with the Russians.” Another student, an immigrant, agreed: ”Be trusting with someone else’s life — not mine.”

Liberal arts departments also began to teach more and more contemporary art and literature.  So it’s no wonder that the culture has stagnated as it is deprived of the chance to be experienced on its own terms before being subjected to analysis.  New art and literature has evolved to please critics and provide scholars layers of meaning, rather than to please audiences and ruminate on life.  This line of thinking would lead Barzun to write From Dawn to Decadence, arguing that western culture had reached an impasse.

Though Barzun didn’t say so, this situation is tailor-made for the Left.  With contemporary culture stagnating, and cultural literacy reduced to analysis, leftist political philosophy fills the vacuum.  Allan Bloom decried this development in The Closing of the American Mind.   It’s also true that the success of companies such as The Teaching Company show that working Americans know that they’ve missed out, and thirst for something to fill that gap.  If for themselves, why not for their kids?

The opportunity for conservatives, with the creation of new institutions, is clear.  Our view of how the liberal arts ought to work is the traditional view – as a set of studies to enhance and understand the human condition.  We are aided by the fact that the reasoning and writing skills necessary for their mastery are in demand in the world.

While the shakeup provides an opportunity for conservatives, we shouldn’t overestimate the window available.  Many of the most successful of the big-money, high-wealth donors to the Democrats have been Internet entrepreneurs.  Many of those fortunes have been made in social media, and education, at its best, is an intensely social activity.  First movers will be able help shape both expectations and will have a leg up on defining credentialing and certification standards.

Barzun closed From Dawn to Decadence with the hope that we could replace or reinvigorate the university, and revive our cultural creativity.  With the right effort, conservatives could use the coming shakeup of higher education to do both.

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Investing in School…Bonds

I’ve written before about the proposed Jefferson County Schools mill levy increase, issues 3A and 3B, which will be on the ballot this fall.  The committee supporting the measure is named Citizens for JeffCo Schools (sic), and according to EdNews Colorado (confirmed by TRACER documents), it has raised a little under $50,000 this year.  Twenty thousand of that comes from Robert W. Baird, an investment bank based in Wisconsin.  Another $15,000 has come from FirstBank, meaning that the remainder of small contributions – under $15,000 – is less than the $15K from FirstBank.

Robert Baird, as it turns out, is the district’s investment banker, confirmed in the minutes of the June 14 School Board meeting (available here).  This means that should the bond pass, Baird stands to make a fair amount of money underwriting the refi.

This cycling of money by investment banks back into bond referenda that they stand to benefit materially from is extremely distasteful, and has gotten attention before.

Someone should ask the 3A/3B proponents about this.

UPDATE: Go to JeffCo Students First Action to see what you can do to stop this measure.

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JeffCo Unions on PERA – Watch What We Say, Not What We Do

This year, Jefferson County Public Schools will be seeking – yet again – a mill levy increase that will reportedly raise $39 million. There are two measures on the ballot: 3A, which will fund operations, and 3B, which will be used to fund capital improvements.

Sheila Atwell, JeffCo parent and president of JeffCo Students First has been leading the opposition to the increase. On July 20, 2012, she and Cindy Stevenson, Jefferson County School Superintendent, debated the measures at the Arvada Chamber of Commerce Leadership Breakfast. During the discussion, Atwell raised the explosive growth of PERA costs to the district over the last few years.

As can be seen in the chart below, Jefferson County is not alone in seeing PERA absorb a greater and greater proportion of its operating budget:

Using reasonable growth rates, Mrs. Atwell projects that within a few years, PERA will eat up 20% – one dollar in five – of Jefferson County’s operating expenses.

Supporters of 3A an 3B have responded that PERA contributions are set at the state level, that neither the county nor the school board have any control over them, and that for that reason, they are irrelevant to the debate over 3A and 3B.  Dr. Stevenson had this to say in response to a question about PERA reform at the breakfast:


“As far as PERA goes, it’s a worthy debate to have as a state. We can have that debate. That’s a good thing for a state to debate: how are we going to manage this? But, at the end of the day, we have to pay our share. We are not opposed to reform. Our employees aren’t opposed to refom. But we also have to remember those great starts and strong finishes in the meantime. How are we going to support our kids in their classrooms? And at some point as a state, we’ll untangle this.

“So, yes, it is legislative. Yes, we have to follow the law. Yes, all of those things. But it’s in our budget. We’re gonna pay it no matter what. So, I don’t think PERA is the issue for 3A/3B. It may be an issue, but it is not the issue for 3A/3B.” (Emphasis added.)

Defusing an objection by simultaneously feigning flexibility while maintaining its irrelevance is a classic strategy for dealing with a dangerous issue, and in fact, that’s exactly what Dr. Stevenson is doing here. In fact, both assertions are demonstrably false.

In 2012, four major PERA reform bills were introduced into the legislature:

  • SB12-016, which would have given local governments the ability to shift up to 2% of the employer contributions to employees, something the state government can already do
  • HB12-1250, which would have tied PERA employer health care contributions to expenses, rather than to employee salaries
  • SB12-082, which would have raised the PERA retirement age to that of Social Security
  • SB12-119, which would have required PERA to adjust benefits and contributions to keep the amortization period for benefits at or under 30 years

All are moderate measures.  None was passed.  In fact, none even made it to a floor vote.  A lobbyist search shows that each was opposed  by some combination of AFT, the AFL-CIO, the CEA, or CASE (the Colorado Association of School Executives).  Jefferson County teachers are represented by the JCEA, the county branch of the CEA.  The AFT and AFL-CIO jointly run the Colorado Classified School Employees Association, the union for the administrative staff.  And CASE presented Dr. Stevenson with its 2010 Superintendent of the Year Award.  It’s quite clear that, contrary to Dr. Stevenson’s assertions, JeffCo public school employees – or at least their representatives – are solidly opposed to PERA reform.

As for the Board itself, the unions have been active in school board races for at least that several cycles.  A TRACER search reveals that two of the Board members, Paula Noonan and Jill Fellman, received considerable union financial assistance in their election campaigns, while Linda Dahlkemper is the wife of former Congressional candidate Mike Feeley, so was evidently well-connected on her own, and able to raise enough money from the Democratic establishment.  (In fact, a number of current and former Democrat officeholders were prominent contributors to her campaign.)  And the union contributed several thousand dollars to the losing 2009 campaign of Sue Marinelli.  It would be unreasonable to expect board members, some of whom likely hold their seats as a result of union support, to support reforms so strongly opposed by their campaign benefactors.

It is the height of disingenuousness to claim that the solution to PERA is at the state level, and to claim that the district has no flexibility in dealing with it, and then to oppose those very reforms, including one that would have explicitly given the Board the very flexibility it says it doesn’t have.  (In fact, the Board and the unions are always at liberty to negotiate changes to the employer-employee contribution mix.)

Dr. Stevenson claims that because of that inflexibility, PERA contributions are set by the state, so 3A& 3B are irrelevant.  However, the reason that JeffCo is pursuing a mill levy increase this year is that in December, the district finished paying off a bond issue, and the Board wants to hold onto that revenue stream, so that it doesn’t have to come back to the voters and ask for the entire mill levy increase.  Instead, it can apply the existing bond mill levy to the proposed increase, making the apparent increase smaller.  In theory, a mill levy dedicated to debt can only be used for other debt, once the initial bond is paid off.  In reality:

“What [those proposing the increase] realized was we had a unique opportunity right now to get money into our classrooms for great teachers, great education, and not increase your property taxes to an extreme level.  Here’s why we have that opportunity.  We are going to be paying off bonds in December, that’s true.  That equals about 4.75 mills.  Now, there’s nothing in statute that says the Board has to refund that.  We can do that, or we can apply it to other debt.  Sheila is right: you can’t move bond mills – that’s the way I think about it – to operations.  However, we can look at the total mill increase.”  (Emphasis added.)

Dr. Stevenson all but admits that the right way to think about the JeffCO school budget – any budget, in fact – is to consider it as a whole.  Money not used for debt reduction can be applied to operations.  Or PERA.

Whenever a government asks for a tax increase, it’s sold on the basis of things like “great starts and strong finishes,” but much of the time, ends up going to feather the nest of those proposing it. Mrs. Atwell has correctly identified the source of a large and growing structural gap in JeffCo’s school financing, one which ought to be addressed before asking the public to turn over more money to the district.

UPDATE: Go to JeffCo Students First Action to see what you can do to stop this measure.

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JeffCo’s Teachers Unions Shell Game

Another year, another school bond issue.  This year, it’s Jefferson County where Referenda 3A & 3B will be on the ballot, asking property owners to increase the mill levy.  3A will fund operations, 3B capital investment.

The unions favoring the increase are using the usual scare tactics, of course.  But this year, thanks to Sheila Atwell at Jeffco Students First (among others), they’re having to play defense on a number of issues, including the district’s PERA contributions.

The union claims, with some truth, that:

PERA contribution rates also cannot be changed through this November’s election.  Money from 3A supports local schools and prevents further cuts to instruction; money from 3B goes to badly-needed maintenance and repair on the schools.  Money from 3A and 3B does not go to PERA.

Currently, it is not possible for the Jeffco Board of Education to ask district employees to pay a higher percentage of their own PERA contributions to offset budget shortfalls.  Senate Bill 11-074 was introduced in February 2011 and would have allowed school districts like Jeffco to raise the employee contribution rate and lower the employer rate, but that bill died in committee.  No new legislation has been presented since 2011.

Because no new legislation has been introduced since 2011, changes made to PERA contribution rates can only made through legislation by the Colorado General Assembly at the state capitol.

Others have suggested that PERA is a union issue.  It is not.  Unions cannot change the state-mandated rates.  PERA is a state issue and citizens who want to see it changed need to lobby their state representatives to do so.

Mixed in with the truth, however, is a healthy helping of disingenuousness.  They are correct to this extent: The specifics of PERA are set by the legislature, and are not really negotiable at the local level.

That’s about where it ends.  That PERA contributions are fixed, doesn’t mean that they don’t exist.  They are a very real – and growing – part of the school budget.  By taking that off the table for discussion, the CEA is asking homeowners – all taxpayers, really – to work harder and longer to fund union members’ retirements, while putting off their own.

The Democrats in the state legislature did indeed kill a bill, SB11-074, that would have permitted localities and school districts to shift some of the PERA contributions from employer to employee, as the state can do.  A quick search of the Secretary of State’s site shows that among those instructing their lobbyists to oppose SB11-074 were PERA itself, the Colorado AFL-CIO, and the CEA.

To use the fact that the structure is set by the legislature as an excuse to persuade taxpayers to raise their own taxes for your benefit, advise them to seek redress at the Capitol if they don’t like it, and then actively work to frustrate that reform, is the kind of tactic that might have worked once, before the Age of Transparency, but no longer.

There was a 3% reduction in pay, but there’s no reason to attribute that specifically to PERA, to call it the teachers’ contribution to PERA solvency, as the union tries to do elsewhere on the page.  What they want to do is to day that taxes aren’t going to PERA, while their pay decreases are.  It’s the same sort of rhetorical shell game that unions often play.

The Bureau of Labor Statistics quarterly survey of wages shows that the average weekly JeffCO wage declined by 3.9% year-over-year in QA of 2011.  So it’s all in the spirit of shared sacrifice.

UPDATE: Go to JeffCo Students First Action to see what you can do to stop this measure.

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Amortize This!

In Pension accounting, the amortization period is how long it would take to pay off the current unfunded liability, based on current contributions, and current employees.

Typically, pensions try to keep that time at about 30 years, or a normal, long career.  That does a pretty good job of matching contributions to liabilities.

The amortization period for PERA’s school fund is now 59 years.

PERA’s retirement age is 58.

Retirees who haven’t even been born yet are having their benefits amortized by current contributions.

Sleep well.

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Devouring the School Budget From Within

PERA’s problems don’t stop with the state.  While the Colorado government has consistently shorted PERA on its Annual Contribution (theoretical) Requirement, local school districts have less flexibility in kicking the can down the road.  As a result, their PERA contributions have increased rapidly, in some cases very rapidly, over the last decade or so.  Here are the compound annual growth rates for four of the largest school districts from 2003 – 2011 (except for Cherry Creek, for which data was only available starting in 2006).

These numbers include all PERA contributions, both to the School Trust Fund and to the Health Care Trust Fund HCTF).

What does this mean for school budgets?  Well, taking the Schedule 4 disclosures in the Statistical sections, we can derive the annual operating expenditures.  For the government funds, we take the total expenses, subtract out the CapEx and the Debt Service, and then divide that number into the annual PERA contribution (described three years rolling in the Financial Section Notes).

The result?  Not pretty:

The role of debt service in school finance is another matter well worth examining, but in this case, adding it in would just alter the level, not the trend.  But consider that in JeffCo, 1 in every 9 dollars goes to PERA. In Cherry Creek and Aurora, it’s 1 in 10 dollars.

It’s not that school spending isn’t rising.  It’s that PERA contributions are skyrocketing.  And school budgets are starting to feel the pressure.

UPDATE: A typo in the Cherry Creek numbers prior to 2009 exaggerated the rate of increase, and created a “knee” in the data between 2008 and 2009.  The 2006-2008 contributions were actually higher than I had reported.  I’ve corrected the charts.

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