Friday, February 19, 2010



By Michael A. Rebell | School Funding News

With the nation hunkered down for what looks to be lengthy bad times, American public schools, grappling with the most severe budget cuts in more than three decades, are reducing educational services to millions of children.

This past fall California laid off 20,000 teachers, resulting in average class sizes in Los Angeles high schools of 42.5. Teachers in Hawaii were “furloughed” and classes cancelled for 17 straight Fridays, In Illinois, 30,000 children lost preschool services, bilingual education was cut 25 percent and teacher recruitment in hard-to-staff schools was substantially reduced. Georgia cut $112 million intended to help close the gap between wealthier and poorer districts.

And there’s worse to come. Even after plugging budget holes with money from the American Recovery and Reinvestment Act (ARRA) – originally intended to stimulate innovation and create opportunities for low-income students -- 39 states are now reporting midyear shortfalls and projecting additional large gaps for FY2011. In New York, Governor David Paterson has proposed cutting the base budget by $1.4 billion next year.

The American boom-and-bust approach to educational opportunity has drastic consequences. Children cannot learn in over-sized classes, especially in needy schools with the least experienced teachers. Furloughs shorten the school calendar at a time when research increasingly argues for longer school days and years -- especially for low-performing students. And the persistence of such conditions permanently damages the life chances of entire generations of children.

But cutting education services in this manner is not only unconscionable – it’s unconstitutional.

In recent years, the highest courts in 21 states have held that state constitutions guarantee the right of all public school students to an “adequate,” a “thorough and efficient,” or a “sound, basic education.” The courts in these “adequacy” cases have consistently emphasized that children are entitled to meaningful educational services that will prepare them for the competitive global marketplace and to function as capable citizens in a democratic society. And, in most instances, they have ordered states to substantially increase education spending in poorer districts.

The courts that have specifically considered the issue of the impact of budget cuts on constitutional rights to an adequate education have also agreed – in every single instance -- that the constitutional right to a quality education is not conditional and should not evaporate during times of recession. In Washington State, the Superior Court ruled that “the duty of the state to fully fund the common school program is not suspended in any part during period of fiscal crisis, even where the existing tax revenue is not sufficient to fund programs that the Legislature believes are necessary to meet the needs of the people of this state.” High courts in New Hampshire and New Jersey have issued similar rulings.
Many budget cutting actions states are currently taking are violating these constitutional precepts. A case study analysis indicates that serious constitutional issues are raised by New York State’s past decisions to freeze current year foundation funding at last year’s levels, to extend the phase-in of increases resulting from the CFE litigation well beyond the four year period identified by the courts, and by the governor’s recent proposal not only to continue the freeze, but to actually reduce foundation funding by $1.4 billion for the next fiscal year.

Does that mean school spending is completely untouchable, even in times of economic crisis? No – but it does mean that when vital educational services are at issue, the burden is on the state to show how necessary services for all students will be maintained, despite a reduction in appropriations. All feasible steps to do so must be taken, including assiduously pursuing additional revenue sources and minimizing the actual costs of constitutional compliance.

To fulfill these requirements, courts and legislatures must undertake cost analyses that relate to the essential outcomes of public education and that identify the resources needed to attain these outcomes, especially in regard to low-income students and other disadvantaged children. State education finance systems should establish a basic foundation funding amount that corresponds to the funding levels needed to provide the core sound basic educational services. Additional categorical funding mechanisms must supplement, not supplant, the constitutional foundation.

When cost reductions must be made, states should be required to devise specific policies that save money without affecting the constitutional core of educational opportunity. These might include:

Zero-based budgeting. During flush times, most states simply layer new education initiatives over old ones, even when the latter haven’t proved their worth. Often the motivation for this is to avoid fights over “sacred cow” programs that are the darlings of advocacy groups. A zero-based approach would require managers to reconsider and justify every item in the district’s budget.

Multiyear budgeting. Stable funding can promote cost savings by, for example, eliminating hasty purchasing at the end of the year to avoid losing an appropriation or the scrapping of new programs simply because of heavy start-up costs. It could also enable many schools to forego the current common practice of proactively laying off teachers in the spring to cover a range of possible budgetary scenarios in the fall. The costs of recruiting, hiring and training a single replacement teacher have estimated between $10,000 and $20,000.

School district consolidation. The potential savings of this approach are enormous in certain states: One study found that doubling enrollment reduces costs by 61.7 percent for a 300-pupil district and 14.4 percent for a 1,500 pupil district. Bigger districts can offer a wider range of courses, academic and curricular supports, technological resources and effective teachers.

Pension reform. Teacher retirement constitutes one of the largest components of state public employee retirement systems, and now the stock market collapse has created a crisis in pension obligations for school districts. California’s teacher pension alone has lost $56 billion. In New York City, pension fund contributions in fiscal 2008 were $5.7 billion, or approximately 10 percent of the entire budget. Chicago is saddled with similar costs. Reducing pension payments for newer teachers offers some respite, but real savings will come only from scaling back promised benefits for older teachers. With life expectancy now nearing 80, many states still allow teachers to retire with full benefits at 55 – and many of these “retirees” engage in double-dipping, continuing to work for the school system or for private employers.

Finally, all states must put practical mechanisms in place to avoid periodic funding crises whenever downturns and recessions occur. The basic mechanism needed is quite simple: states need to follow the biblical example of Joseph in Egypt and store surplus during the good years so that resources will be available to maintain stable service in the bad years that will inevitably follow. Most states have stabilization or rainy day funds, but the funds are capped at levels far below what’s necessary. States should eliminate caps and establish dedicated revenue sources, such as a substantial percentage of sales or income taxes, for education and education stabilization funds.

A longer draft of this paper is available here [PDF].

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