THE MYTH THAT ONLY FURLOUGHS CAN BALANCE SCHOOL BUDGETS

By Seth Rosenblatt | EdSource Today |  http://bit.ly/MaZuHU

July 4th, 2012  ::  With the continued uncertainty around public school financing in California once again (and the possibility of “trigger cuts” to education if the governor’s tax measure fails in November), California school children face the possibility of a school year that is shorter by as much as four weeks. An article in the Sacramento Bee outlines the choices that many districts are facing. It states: “The Legislative Analyst’s Office has estimated that eliminating a school week statewide would save $1 billion.” The LAO is wrong – eliminating a week of school actually saves no money at all.

Coming from the business world and then serving on a school board for five years, I have come to appreciate how much people oversimplify the application of business practices to government, and very often citizens are quick to judge government as incompetent before understanding all of the context and the complexity of the issues. I have written many articles discussing how often these government critics are misguided. But there are indeed some areas where government can learn from business, and one of them is regarding the unique, very strange, but all too common public sector cost-cutting approach called “furlough days.” What it means is that public agencies tell their employees not to come into work a certain number of days so that the agencies can reduce the employees’ pay proportionally.

Almost every article written on the topic (and nearly every discussion among government officials) just assumes that the only way to reduce employees’ salaries is through furlough days. In the government lexicon, salary reduction = furlough days.

This linkage echoes a century-old, hourly-wage framework when reducing employee costs meant reducing hours worked. However, teachers – and most government workers – generally fit the job description of a salaried professional more so than a factory worker. Obviously reducing someone’s income is a horrible step to be forced to take, but if it must be done for financial reasons, why in the public sector does it automatically mean everyone should work less? Note that when private sector businesses reduce salaries (which many have had to do over the last five years), employees tend to work more, not less (even if just to pick up the slack for other employees who were laid off).

So the LAO is wrong because the furlough day in and of itself saves no money (except maybe for a little bit of electricity saved by not turning on the lights). It is the salary reduction that saves the money. Yet, this apparently obvious analysis seems quite foreign to most in government. In almost all school districts (and other government agencies) across the state, it’s just assumed that you have to offer furlough days to save money. This is a case where government is just being dumb – furlough days are antiquated and hurt children.

The obvious alternative is to cut compensation, but leave the workload intact. But the current mindset is so ingrained that we have assumed the coupling of reduction of compensation with reduction of workload when we should be talking about them separately. There could be reasons (employee morale, etc.) to adjust the workload of employees, but we need to address these issues separately and not assume an automatic linkage. And, admittedly, any change like this will likely have to be negotiated with labor groups, which may push back very hard on a “salary cut only” scenario. Also, such negotiations often include a provision to restore this pay as the first priority when funding returns.

It saddens me greatly to see so many school districts shorten the school year and also cut non-student days, which are used largely for professional development to make instruction better. These actions directly hurt our kids, yet no one seems to be speaking for them. Of course our educational system is woefully underfunded, and it’s devastating that employees have to sacrifice financially because of it. But if such sacrifice is required, why also hurt children for no reason other than that’s the way we’ve always done it? We know the state system is failing our kids – but let’s not exacerbate the harm by the failure of local school boards to stand up for them on this issue. Parents should be up in arms and demand to both their local school board and their local unions that we just can’t accept them any longer.

<<Seth Rosenblatt is the president of the Governing Board of the San Carlos School District, currently in his second term. He also serves as the president of the San Mateo County School Boards Association and sits on the Executive Committee of the Joint Venture Silicon Valley Sustainable Schools Task Force. He has two children in San Carlos public schools. He writes frequently on issues in public education, in regional and national publications as well as on his own blog. In his business career, Seth has more than 20 years of experience in media and technology, including executive positions in start-up companies and large enterprises. Seth currently operates his own consulting firm for technology companies focused on strategy, marketing, and business development. He holds a B.A. in Economics from Dartmouth College and an M.B.A. from Harvard Business School.