education – Page 4

Five Recommendations to Solve LAUSD’s Looming Fiscal Crisis

September 9, 2018 By Lisa Snell, Aaron Garth Smith, Tyler Koteskey, Marc Joffe and Truong Bui 1 Comment

These recommendations are excerpted from the policy study “A 2018 Evaluation of LAUSD’s Fiscal Outlook.”

From the Independent Financial Review Panel’s report of Los Angeles Unified School District emerges a dire picture that should alarm parents, educators and community stakeholders alike. It found that maintaining the status quo would grow the budget deficit to about $600 million by 2019–2020, concluding that failure to act would have real ramifications for the district’s 550,000 students including financial insolvency and even state takeover. For years district officials have avoided substantive reforms, but the warnings of distant fiscal calamity have now become a reality that leaders must address head-on. While the path ahead involves many difficult decisions and political headwinds, the process of right-sizing LAUSD presents an opportunity to lay the foundation for a 21st-century education system that’s productive, agile, and responsive to the needs of students and communities. In other words, right-sizing isn’t about budget cuts and layoffs, but rather optimizing all facets of operations with the goal of providing high-quality options to all students at a cost that aligns with revenues. To do this, LAUSD leaders should focus on five key reforms.

#1 OVERHAUL LONG-TERM DEBT OBLIGATIONS

LAUSD has little control over rising pension contributions because reducing these obligations requires state-level reforms. However, general staffing surges that are not supported by enrollment can increase pension costs, since the district must make pension contributions for each new hire.

Further, LAUSD does have discretion over OPEB costs as well as health and welfare benefits for active employees. The district has several significant cost-saving options available to it, ranging from ending retiree health care benefits altogether to engaging in a variety of cost-sharing and cost-reducing strategies.

At its August 2017 board retreat on reducing health care costs, LAUSD staff presented five cost-saving options, as shown in Table 20.

Ultimately the board upheld the status quo for health care benefits for another three years at an annual cost approaching $1 billion.

#2 GO AFTER LOW-HANGING FRUIT

It should come as no surprise that LAUSD can become more efficient, but what’s less obvious is how relatively minor changes in operations can result in substantial savings that can put a dent in the district’s budget deficit. In fact, the Independent Financial Review Panel’s report found over $143 million in potential savings outside of staffing and long-term obligations, including:

Improve student attendance ($45 million): Because the state of California provides revenue based on Average Daily Attendance, LAUSD loses money with every student absence from school. Increasing the district’s attendance to just the statewide average—a relatively low bar to achieve—would generate an additional $45 million per year. Of course, this would not only help boost LAUSD’s bottom-line but also improve academic outcomes such as graduation rates and college and career readiness. In 2009–2010, Long Beach Unified shifted 10 of its social workers and counselors to working with campuses on truancy issues to increase student attendance. The chronic absence rate in Long Beach Unified dropped from 19.8 percent in 2011 to 10 percent by 2014. By 2015, the school district’s overall attendance rate was 96.17 percent up from 96.01 percent in 2014 and above the state average.

Improve staff attendance ($15 million): Currently, only 75 percent of LAUSD staff members have strong attendance as defined by the district. Bolstering this number to 90 percent would save about $15 million on substitute teachers while also providing students with more stable classroom environments. To save even more money, LAUSD could require select administrators to substitute teach five days per year, a policy that saved Scottsdale, Arizona about 7 percent of their substitute budget and also allowed district staff to stay connected to the classroom.

#3 INITIATE STAFF REDUCTIONS AND STRATEGIC SCHOOL CLOSURES

The reality is that LAUSD’s financial quagmire requires district leaders to make substantive cutbacks in both staffing and schools. Even though its declining enrollment has necessitated a reduction of about 10,000 staff, LAUSD has actually increased staffing levels in recent years while seeing costs associated with salaries and benefits also rise. This problem will only magnify if projected enrollment declines continue to hold true.

To start, LAUSD must recognize that the lion’s share of new hires have been administrative staff, even during declining enrollment. Therefore, district officials should first evaluate every central office staff position as part of its school finance overhaul.

Next, teacher layoffs are unavoidable but LAUSD can approach them in a manner that will help increase student outcomes even as overall staffing levels decrease. Importantly, district and union officials should work together to review and renegotiate factors that hamstring flexibility and do nothing to further student achievement, such as automatic pay increases, rigid staffing requirements, and termination provisions that favor costly teachers with seniority. For example, Boston Public Schools replaced a seniority-driven system by renegotiating its collective bargaining contract to give more autonomy over staffing to school leaders, and Hartford Public Schools’ contract now provides principals with more flexibility over things such as scheduling. Increasing district and school-level flexibility will not only minimize staff reductions and protect against future layoffs, but also help ensure that the district retains its highest-performing talent in the process. LAUSD should also follow the Independent Financial Review Panel’s guidance by offering early retirement incentives to senior staff and help reduce the percentage of teachers who have reached the maximum salary level, which is currently 10 percent higher than the state-wide average.

Lastly, underutilized schools are costly for districts to maintain as fixed costs such as facilities, school administration, and custodial services increase per-pupil expenses as enrollment declines. This means that schools that are at or near capacity—which are often higher-performing—essentially subsidize schools with declining enrollment and have less funding to expand programs, services and enrollment as a result. Undoubtedly, closing schools is a difficult yet necessary process for LAUSD to undertake, but district officials should prioritize closing underperforming schools and proactively engage communities throughout the process in order to maximize transparency and build understanding. Kansas City Public Schools closed 26 schools and laid off about 1,000 staff members in 2010, which ultimately helped the district close its budget deficit, improve academically, and reverse enrollment declines, as students transferred to higher performing schools. According to Superintendent R. Stephen Green, “When you close a number of facilities, it creates a bit of disruption, but it was a much-needed process to go through, given the financial stability that was needed for the district.”

Los Angeles also has declining enrollment without ensuring that all school sites are self-sustaining. While many other large urban districts with significant enrollment declines have worked to close and realign some schools to save money, LAUSD continues to keep under-enrolled schools open, even as it has opened many new schools over the last decade. In some areas of the district where school sites are very close to one another, the older schools have lost enrollment to newer schools. The district has not released a transparent recent report about the current capacity from one school to another or identified which schools may be under-enrolled and subsidized by the district.

The key question is to examine whether a school has enough enrollment to sustain the cost of running the school. In 2008, the district estimated that its schools would have a 16 percent vacancy rate by 2012. It predicted it would have the capacity to seat 670,000 students, but only 560,000 were expected to enroll. A Los Angeles Times analysis in 2008 noted that “the district plans to build campuses that will take hundreds of students from those schools, further reducing their enrollment. By the time the building program is completed in 2012, there will be tens of thousands of empty seats at dozens of once-crowded schools.”

If we assume that LAUSD still has the capacity for 670,000 seats, then the current enrollment level of 500,000 students means that it is past time for the district to do a transparent audit of school capacity and how it might save money by closing the most under-enrolled schools. Independent charter schools have used some of this excess capacity for their students, but a transparent examination would ensure that the district can accurately assess all its financial options. In addition, evidence shows that closing the lowest performing and most under-enrolled schools can improve the quality of education for the most disadvantaged students.

A growing body of research indicates that school closure increases educational opportunity so long as students have access to better schools. Closure students who attended better schools tended to make greater academic gains than did their peers from low-performing schools in the same sector that remained open.

A new report on LAUSD’s real estate assets by the LAUSD Advisory Task Force calls for the district to “analyze the current occupancy of core District assets to determine whether consolidation of and/or relocation of certain tenants to more optimal locations could create savings, maximize revenue, and/or reduce functional obsolescence.” With a more thoughtful approach to managing individual school sites and vacant property, the district could actually raise money with long-term leases to charter operators or with other commercial or community uses of their underutilized real estate assets. In addition, school consolidation could help ensure every school has more qualified staff, rather than distributing LAUSD’s scarce resources over too many school sites.

When LAUSD keeps open schools that are under-capacity, district-wide personnel may continue to grow while individual school communities feel staff shortages at the school level. This is because each school, independent of enrollment, requires a certain fixed number of staff positions, some of which may be vacant as enrollment shrinks. As the Los Angeles School Report noted in a May 2016 feature, former Superintendent Michelle King cited feedback from a principals’ survey she received that “showed principals expressing frustration with a lack of clerical staff, a lack of time to complete tasks and limited opportunities for instructional training. ‘Principals say there are not enough hours in the day to get everything they need done and improve teaching and learning due to a lack of sufficient personnel,’ King said.” In this way, the district can have too many employees that are unsustainable given the current level of enrollment and district revenue, while individual schools can also be under-staffed and stretched thin.

But when schools consolidate, fewer fixed staff positions are needed and are more likely to be filled. The district is staffing too many schools at an inadequate level and could increase staff and school support at individual schools by consolidating and closing some schools. LAUSD needs to make a transparent accounting of site-based enrollment, spending, and revenue based on the students who are enrolled at each site, examine how each school uses resources, and determine how that impacts the district as a whole. Until that is accomplished, the district will continue to have too many staff members that are not effectively deployed to best serve the needs of students.

#4 MITIGATE ENROLLMENT DECLINES BY FOCUSING ON QUALITY OPTIONS

Over a six-year period, LAUSD’s enrollment fell by nearly 100,000 students, about half of which is due to families choosing charter schools, with many others opting to enroll in traditional public schools outside of the district. With forecasted student attrition of 2.8 percent per year and lackluster outcomes in many of LAUSD’s schools, fundamental changes within classrooms are clearly in order. The Independent Financial Review Panel found that “there may be lessons to be learned from the migration of students to charter schools” and “it is very important that the District carefully analyze charter programs and focus on which students are leaving and why” so that LAUSD can ultimately improve its programmatic offerings for families. More bluntly, the days of district monopoly and residential assignment are coming to an end, and if LAUSD is going to attract and retain students then officials must be more responsive to parent needs. Fortunately, numerous districts across the U.S. have already undertaken substantive reforms to adapt to this new operating environment, and LAUSD has much to learn from them. One prominent example is Denver Public Schools (DPS).

DPS has adopted “portfolio management,” a model in which a district’s primary role is to approve operators, provide support, and evaluate school outcomes. Portfolio management is based on the belief that school-level autonomy drives performance by allowing school leaders and teachers to more effectively meet student needs. While traditional districts tend to prescribe a one-size-fits-all model by mandating inputs (e.g. staffing ratios, curriculum, etc.) portfolio management recognizes that each school has unique challenges and is thus more concerned with holding educators accountable for outcomes rather than how they operate. Ultimately, this helps to promote a diverse supply of schools that, when combined with a strong intra-district choice policy, can give parents more meaningful options that in turn help improve overall satisfaction and retention. As part of its strategic roadmap, The Denver Plan 2020, DPS is striving to have 80 percent of its students attending a high-performing school by 2020.

New data by the advocacy group Parent Revolution show that 234 LA Unified schools scored in the bottom two levels — orange or red — for both English and math on the California accountability dashboard. In the 2016–2017 school year, 155,779 students were enrolled in those 234 schools. LAUSD has 34 schools that are red in both English and math. Last year those schools enrolled 26,400 students. At a minimum, 30 percent of LAUSD students could use a higher-performing school.

#5 MODERNIZE THE DISTRICT’S SCHOOL FINANCE SYSTEM

Currently, LAUSD employs an antiquated school finance system. Instead of providing principals with actual dollars based on students, it allocates staffing positions that are determined using rigid ratios and district-wide average salaries. As Marguerite Roza of Georgetown University’s Edunomics Lab explains, “The district sends out teachers, principals, administrative assistants, lunchroom staff, librarians, and the like, and pays the bills out of the district coffers. Schools do not have their own bank accounts, nor do they receive reports that show the true costs of the resources that land in their buildings.” As well, according to Harvard researcher and former LAUSD budget director Jon Fullerton, the district’s budgeting systems “do not connect automatically with accounting systems, and both may be isolated from the human-resources systems that track who is hired, when, and for how much.” As a result, funding is delivered to schools in a manner that is non-transparent, inequitable, and less responsive to enrollment changes. This makes it difficult to provide leaders with valuable data that could help the district become more productive with its education dollars.

STUDENT-BASED BUDGETING

To modernize its school finance system, LAUSD should allocate dollars on a per-pupil basis by adopting student-based budgeting, a funding portability framework that sends dollars to schools rather than staffing positions. This not only promotes equity and portability across schools within the district, but it also empowers principals to have more decision-making authority over how dollars are ultimately spent. Allocating funding to schools in per-pupil terms would promote greater efficiency by allowing dollars to grow and contract in direct proportion to student needs. In this way, student-based budgeting would allow principals to make their schools more responsive to parents’ needs, increasing the likelihood of higher enrollment and potentially generating new revenue at the school level.

Moreover, when money goes directly to schools on a per-pupil basis, it becomes clear which schools are unable to financially sustain themselves and which schools may be candidates for consolidation to avoid insolvency. As part of this shift, LAUSD can also empower principals to purchase certain services from either the district or external vendors to optimize pricing and quality, which are often constrained by district contracts. This allows school leaders to make better use of their budgeted dollars while also helping to address central office bloat. Given LAUSD’s financial position and need to reduce personnel, student-based budgeting would allow school-level staffing based on the funding resources generated by the students in the school.

Student-based budgeting is based on five key principles:

Funding systems should be as simple and transparent as possible.
Per-pupil funding should be based on the needs of each student.
Per-pupil funding should follow the student to the public school of their choice.
Principals should receive actual dollars—not staffing positions or other allotments—to spend flexibly based on school needs.
Funding allocation principles should apply to all sources of education revenue.

It requires a shift in mindset from top-down compliance to supporting autonomous school leaders, and some roles will fundamentally change or become obsolete in this new environment as a result. As one educator who participated in an Education Resource Strategies summit on school-level budgeting explained:

There has been a philosophical change: the principal is the CEO of the school. The central office is there to support them. We inverted the pyramid so that the principal is on top, telling the central office what they need, rather than on the bottom. That’s required a cultural change and huge structural changes in the district.

LAUSD has already laid the foundation for this reform by piloting autonomous schools through its Belmont Pilot Schools Network, which started in the 2007–2008 school year. In the 2017–2018 academic year LAUSD allocates $46 million to 83 schools that receive their resources based on a per-pupil formula that is allocated directly to schools. In these schools, principals have more autonomy to purchase school-based staffing and differentiated district support. LAUSD should take the next step by adopting a district-wide program as numerous districts such as Boston Public Schools, Houston Independent School District, and New York City Department of Education have already done.

THE CHANGING ROLE OF THE DISTRICT

Under a student-based budgeting system, the district itself still monitors school performance and makes big-picture decisions about which schools may need to be closed or consolidated based on enrollment and academic performance. The district’s new role would be to hold individual schools accountable for district-wide student goals, such as improving graduation rates or increasing proficiency in 3rd-grade reading. The district would not mandate how a principal and school community use their resources to meet district-wide instructional
goals, but would instead set the benchmarks and goals for the district.

In order to measure progress and monitor performance, LAUSD should revamp its knowledge infrastructure to better integrate key information systems. This means going beyond merging budgeting, accounting and human resource data by ensuring that student enrollment and achievement data are also readily available for cross-referencing analysis. This would ensure that individual school leaders and district leaders have the tools necessary to make sound financial decisions that are driven by academic strategy and outcomes.

For example, district leaders should know not only exactly how much is spent on each school but also how dollars are allocated across classrooms and courses. Disaggregating data to per-pupil terms at the classroom-level would help school leaders and district administrators assess the alignment of funding with strategic instructional intent and student outcomes, and more effectively consider trade-offs in how money is spent. This is especially important since research has shown that districts allocate funding in a manner that doesn’t align with stated priorities such as focusing on low-achieving students, a fact that leaders are often unaware of given antiquated accounting and budgeting practices. For example, a district may say its goal is to improve 3rd-grade reading and then spend all of its resources on high school AP classes. Without attaching school- and classroom-level expenditures to instructional priorities, school leaders, and districts have little information about how they are targeting resources to instructional priorities.

Such transparency would help LAUSD’s current measurement of progress, as the district doesn’t track or publicly report its allocations at the school level based on student characteristics. As a result, education stakeholders and policymakers cannot easily determine if the new LCFF revenue, which the California Legislature intended to help high-needs students, is boosting spending in the schools these students attend. As Marguerite Roza noted in a recent report evaluating California’s LCFF revenue, “this lack of financial transparency makes it difficult to assess the degree to which LCFF is delivering—or not delivering—on the state’s pledge to drive resources to the highest-need students.” A more transparent student-based system would allow district leaders to track these dollars and make more informed decisions about how best to use the district’s scarce resources to improve student outcomes.

Student-based budgeting has helped other districts determine which schools should be closed or consolidated and which schools should be expanded or replicated. For example, after adopting student-based budgeting, the Denver school board approved the closing of eight schools that were under-enrolled and low-performing. The board projected that the realignment of students from these schools to higher performing schools would achieve projected yearly operating savings of $3.5 million. Those resources were used to improve the education of students who were affected by the school closures, delivering additional resources to under-performing schools, and creating funding opportunities for new schools and new programs. In addition to the standard per-pupil revenue that followed students to their new schools, the district reinvested $2 million, or 60 percent of the savings from school closures, into the schools of reassignment. In this way, a student-based budgeting funding system is an important modern financial tool that can help right-size LAUSD’s financial ship.

Full Study: A 2018 Evaluation of LAUSD’s Fiscal Outlook: Revisiting the Findings of the 2015 Independent Financial Review Panel

This article was originally published by the Reason Foundation

Filed Under: Top Stories Tagged With: education, education reform, LAUSD, Los Angeles

California Teacher Pension Debt Swamps School Budgets

July 25, 2018 By Jessica Calefati 3 Comments

California’s public schools have enjoyed a remarkable restoration of funding since the bone-deep cuts they endured during the recession, but many are now facing a grave financial threat as they struggle to protect pensions crucial for teachers’ retirement.

Over the next three years, schools may need to use well over half of all the new money they’re projected to receive to cover their growing pension obligations, leaving little extra for classrooms, state Department of Finance and Legislative Analyst’s Office estimates show. This is true even though the California State Teachers’ Retirement System just beat its investment goals for the second straight year.

Some districts are predicting deficits and many districts are bracing for what’s to come by cutting programs, reducing staff or drawing down their reserves—even though per-pupil funding is at its highest level in three decades and voters recently extended a tax hike on the rich to help pay for schools.

At the same time, some districts are grappling with how to simultaneously afford raises for teachers who have threatened to strike.

The situation could become even more bleak if California’s economy doesn’t keep growing.

If there’s another recession – which economists say is increasingly likely given the record length of the expansion underway now – the higher pension payments scheduled could push some districts deeper into the red, Legislative Analyst’s Office data indicates.

“Many districts’ budgets would be upside down with expenses growing faster than revenues,” said Michael Fine, CEO of the Fiscal Crisis and Management Assistance Team, the state agency responsible for overseeing schools with financial problems.

School systems that saved money over the last few years will be able to use it to buy time, Fine said, but those reserves “won’t eliminate the impact or make that problem go away.” Tackling it will likely require new sources of revenue or an array of cuts.

“Building maintenance could suffer, grounds care could suffer, class size could suffer, instructional coaches could suffer, athletic programs could suffer, technology could suffer, intervention programs could suffer” Fine said.

The problems stem from the state Legislature’s reticence to mandate steeper payments into the California State Teachers’ Retirement System. The system was badly underfunded and careening toward collapse four years ago when school districts, teachers and the state all agreed to pay more to reduce its unfunded liability, which now stands at $107 billion.

Districts took on the greatest share of those new costs, agreeing to increase payments from 8 percent of their payroll in 2013 to 19 percent by 2020.

No matter how burdensome the larger and larger pension payments may be, actuaries say they’re necessary to protect teachers’ hard-earned retirement and prevent the system from running out of money. Teachers don’t get social security, and unlike firefighters or police officers, most retirees earn modest pensions of about $55,000 a year.

The Brown administration has directed an additional $20 billion to the state’s public schools since 2013 and says districts have had plenty of time to plan for the pension payments ahead. But many school leaders and advocates want the state to invest even more, especially since California still ranks near the bottom in per-pupil spending compared to other states.

“Knowing that these liabilities were growing, we provided districts with the resources they needed to plan accordingly,” said H.D. Palmer, a spokesman for the state Department of Finance.

Meanwhile, the state’s largest teachers union is downplaying the problem and encouraging its members to bargain for raises. California’s teachers may be among the nation’s most generously paid, but they say the money doesn’t go very far because the state’s cost of living is so high.

School officials are left with a Gordian knot of politically charged problems, forced to make escalating payments into the pension fund while trying to elevate disadvantaged students’ sagging classroom performance, which remains among the country’s worst despite the state’s big investment in their learning through a policy championed by Brown.

“We need to graduate more kids and close academic achievement gaps, but we can’t move the needle when costs are rising like this,” said Dennis Meyers, executive director of the California School Boards Association, who stressed that his group is not seeking to reduce teachers’ retirement benefits.

“We simply need more revenue, and we’re out here waving the white flag, looking for relief.”

Each of California’s school districts is bound to tackle these challenges differently, so CALmatters visited three of them whose circumstances are emblematic of what others across the state are experiencing. During those visits, we spoke with the people working to solve the problem.

Fremont Unified devotes a greater share of its budget to salary than any other district in the state (discover the percentage devoted to salaries at each of California’s school districts here). So when the largest pension payments are phased in, Fremont will be hit especially hard. That means the district’s budget could face cuts even as enrollment in the Bay Area school system grows.

Sacramento City Unified knew that larger pension payments were coming and saved money to prepare for them. Then the local teachers union criticized the district for hoarding cash and threatened to strike. Now, the contested funds are being used to finance a raise that teachers say is long overdue and that the county superintendent believes the district can’t afford.

And in Los Angeles, growing demand for charter schools and a dwindling birth rate has led to declining enrollment in the district’s own schools, which means pension payments will rise even as the district’s state funding shrinks. School officials recently predicted that a quarter billion dollar budget deficit was just two years away.

♦♦♦

Raul Parungao’s distinctive grin and his cheery demeanor belie his concern about Fremont Unified’s finances.

Situated between Oakland and San Jose in the pricey Bay Area, the school system pays its employees more than most. That makes it a desirable place to work but also means it will be hit especially hard when the largest payments required under Brown’s pension plan are phased in.

“There’s this sense in the community that we’re flush with cash, but I try to remind people about the other half of the story,” said Parungao, the district’s chief business officer.

Even though revenue is rising because enrollment is growing, the district must hire and pay more employees to serve them. And over the next three years, while Fremont predicts its revenue will grow by $26 million, a 7 percent bump, it also expects its employee pension and health care costs to climb by $14 million, a 23 percent surge.

“Here’s the bottom line: the extra revenue we expect to get from the state won’t be enough to keep pace with our pension contributions,” Parungao said. “The problem hasn’t exploded big yet, but it will. It’s only a matter of time. I haven’t met another chief business official who isn’t concerned about this.”

Meanwhile, Fremont’s teachers just won a small raise after months of protracted negotiations.

The current pay scale is competitive, with veterans making $114,000 a year, but leaders of the local union say about half of teachers still don’t make enough to live in the district and must commute from up to an hour away.

But no matter how tough it may be for the district to afford this 1 percent pay hike, teachers deserve one, said Victoria Birbeck, the union’s president.

“The series of small raises we’ve received haven’t covered cost of living,” she said. “Besides, the district has known about the governor’s plan for a few years now. There should have been better planning.”

Parungao said planning isn’t the problem.

The district stretched to offer teachers a raise last year and even had to shift its budget by millions of dollars to accommodate that 2 percent increase, which came after a 13 percent bump over the prior three years. Plans to upgrade students’ textbooks and computers were postponed and class size for kindergarten, first and second grade students increased slightly.

Given the district’s rising pension and other fixed costs, the new agreement’s $7 million price tag will be tough to accommodate. Still, Michele Burke, one of the district’s board members, acknowledged that for many teachers, $1 spent on pensions isn’t as good as $1 spent on salary.

“As we negotiate with the union, STRS is the elephant in the room,” she said in an interview before the deal was finalized, referring to the acronym for the California State Teachers’ Retirement System. “We’re paying toward your future, but those payments don’t help put food on the dinner table.”

Sacramento Mayor Darrell Steinberg only worked with a few key players one weekend last fall when he helped broker a deal to avert a citywide teacher strike, and former school board president Jay Hansen was one of them.

Hansen had tried for months to negotiate the terms of a pay increase for the city’s 3,000 teachers, but the district and leaders of the local teachers union were far apart and neither side would budge. An acrimonious relationship between the two camps was partly to blame for the impasse.

“It’s like the Hatfields and the McCoys,” Hansen said. “No one remembers why they can’t get along.”

At issue during the talks was the $81 million sitting in Sacramento City Unified’s savings account, a sum the district had built up over several years with spoils from California’s booming economy.

The union said the money should go toward class size reduction and raises for teachers that would make the district a more attractive place to work. Sacramento educators are paid less than their peers in nearby districts, but they also receive more generous lifetime health benefits, records show. The district said that it had saved the money to help cover rising pension and employee health care costs in the lean budget years ahead.

In the end, Steinberg helped craft an agreement that gives Sacramento teachers an 11 percent raise over three years. But just a few weeks after Steinberg announced the deal during a celebratory news conference on the steps of City Hall, Sacramento County Superintendent Dave Gordon delivered some bad news: the district can’t afford it.

“Based on the review of the public disclosure and the multi-year projections provided by the district, our office has concerns over the district’s ability to afford this compensation package and maintain ongoing fiscal solvency,” Gordon wrote in a December letter to the district.

The district’s own budget offers proof of Gordon’s concerns.

Over the next three years, the school system anticipates its revenue will grow by $6 million, a 1 percent increase, while its pension and health care costs grow by more than $18 million, an 11 percent increase. A popular summer program for struggling students has already been eliminated to save money.

A second letter Gordon sent in January further underscores his concerns. He called the district’s plan to use one-time money to help cover the cost of the new contract a “poor business practice” that “only perpetuates the district’s ongoing structural deficit.”

“The pension contributions are putting a strain on everyone’s budgets,” Gordon said in an interview.

Even though Hansen had been the union’s adversary during months of stalled contract talks, he defended the district’s decision to offer teachers a raise, calling it “the right thing to do” despite the school system’s escalating pension and health care costs. “We did it anyway,” he added.

Steinberg echoed Hansen’s perspective.

“A strike would have been calamitous for everybody,” he said. And Sacramento isn’t the only place in California where teachers are thinking about a show of force. At least half a dozen other local unions fighting for higher wages have held labor actions in recent months.

In an interview with CALmatters that union leaders cut short after refusing to answer some questions, Executive Director John Borsos rejected any suggestion that the district won’t be able to afford the contract it recently signed or that it ever claimed to have needed the money stockpiled in its savings account to cover rising pension costs.

“They have more than enough to cover the pension increases,” Borsos said. “And they didn’t make that argument at the bargaining table.”

♦♦♦

Gov. Jerry Brown promised his 2014 funding plan would shore-up California’s teacher pension system, but at least one young Los Angeles teacher, Josh Brown, says he’s not counting on it. The Oliver Wendell Holmes Middle School special educator is so worried about the system’s solvency that he has an alternative retirement plan: using a portion of his salary to invest in the stock market.

“I’m a fifth-year teacher, I’m 30 years old, and I’m paying into a pension system that may or may not be around when I retire,” he said. “If I were 65-years-old and retiring soon, I would feel differently. Right now, I feel frustrated and worried.”

The largest payments required under the plan will be tough for many districts to manage, but they’re going to be especially vexing for large urban districts like Los Angeles Unified, which lost 100,000 students in the last decade and expects to shed more (here’s the toll of that under-enrollment, school by school). That’s a problem because California’s schools are funded on a per-pupil basis and fewer students means less money.

In Los Angeles, the swift enrollment decline is due to a dwindling birthrate and growing demand for charter schools, which are publicly funded but independently run, meaning their budgets are separate from the district’s.

Over the next three years, the district anticipates its employee pension and health care costs will climb $90 million, a 5 percent increase, while its revenue dips about $270 million, a 4 percent decline. The result is a $258 million budget deficit in 2020 that the district can no longer paper over, push off or ignore.

“We’re going to have to tighten our belts to save our schools,” said Nick Melvoin, a board member whose stark views on district finances have been criticized by skeptical local union leaders and fellow board members. “We’re in a death spiral.”

The district plans to tackle the deficit with a one-time $105 million bailout from the state and central office staff reductions. But observers says officials will soon need to consider some painful measures it has so far been able to avoid, like boosting high school class sizes or closing schools with dwindling numbers of students.

At least 55 schools across the district are under-enrolled by a quarter, and ten of those are half empty, a CALmatters analysis of building capacity and enrollment data shows.

“Our costs are rising, and as a result, there are hard choices and trade-offs to make each time we look at the budget,” said Scott Price, the district’s chief financial officer.

Parent Paul Robak fears that if the district doesn’t tackle its budget problems soon, it could be taken over by the state. At a recent board meeting, he urged the members to reject a healthcare spending plan that would further squeeze the budget. The members listened and thanked him for testifying before approving the agreement.

“It’s as if the board members are prancing down the lane and covering their ears, pretending nothing’s wrong,” said Robak, who has been active on the district’s parent councils for a decade. “Everyone will lose if we fail to act.”

Board member Kelly Gonez also acknowledged the district’s budget woes and the pressure of rising pension and health care costs but said officials should be trying to ease the pain by finding new sources of revenue, not by making cuts. All but one other board member declined to comment.

Even as a fiscal crisis looms, Los Angeles teachers are negotiating for a raise.

“Everyone who works in the district comes to work with an expectation they’re going to be treated fairly. They need to be treated fairly,” Austin Beutner, a former investment banker and the district’s new superintendent, told the Los Angeles Times. “How we strike that balance remains to be seen.”

United Teachers Los Angeles President Alex Caputo-Pearl declined CALmatters’ request for an interview. However, at a Pepperdine University event held before the state bailout was announced, he pledged to keep pushing for more money and predicted that the state would come through.

“If we take it off the table,” Caputo-Pearl said, “then we are acknowledging that the public district system is going to go off a fiscal cliff, which (is something) I’m not willing to acknowledge.”

♦♦♦

Flooded with calls from anxious school officials, Sen. Anthony Portantino of La Canada Flintridge and several other Democrats pushed earlier this year for a fix that would boost districts’ funding by $1 billion a year. In the end, Portantino convinced Brown to include about half as much in the state budget he signed a few weeks ago.

He insisted that the money be “flexible,” meaning districts may use it to cover rising pension costs or for anything else. But California’s schools are still underfunded compared to other states, and to better fulfill their responsibility to students and taxpayers, that must change, he said.

“In a few months, we’ll have a new governor with a new set of priorities,” Portantino said. “Is there more to do? Absolutely.”

CalSTRS’ first official report on the impact of districts’ growing pension obligations is due to the Legislature mid next year, when school budgets will likely be squeezed the most.

In the meantime, Fine hopes a recession doesn’t strike soon and that districts can manage their budgets without needing to make cuts or send out pink slips. He was a deputy superintendent in Riverside during the Great Recession and remembers how painful it was to carry out round after round of layoffs.

“We lost one of the best counselors and some very bright teachers. I had to layoff someone who years earlier had taught my young children how to swim,” Fine said. “I remember their faces.”

This article was originally published by CalMatters.org

Filed Under: Top Stories Tagged With: education, education reform, LAO, pensions

LAUSD Questioned Over Positive Reviews for Teachers at Struggling Schools

July 14, 2018 By Chris Reed 2 Comments

A new study raises fresh concerns about the giant Los Angeles Unified School District and whether it shows good faith in its dealings with struggling schools in poor minority communities.

The Los Angeles-based Parent Revolution group, which focuses on improving education and increasing educational opportunities for poor minority students, analyzed 44 LAUSD schools with weak test scores last school year. At these schools, only 20 percent of students met or did better than state math standards and only 28 percent in English.

Yet last school year, 68 percent of teachers in these schools were not subject to official evaluations – either through oversight or via exemptions ordered by their principals. Of teachers who were evaluated, 96 percent were found to meet or do better than district performance standards. Over the past three school years, the figure edged up to 97 percent getting positive evaluations – meaning only about one in every 30 evaluated teachers is found wanting.

“We do see this in other districts, where almost everyone has a satisfactory rating and it’s disconnected from student achievement,” Seth Litt, Parent Revolution’s executive director, told the Los Angeles Times. “It shouldn’t be disconnected.”

The findings parallel those that emerged from the landmark Vergara v. California lawsuit, in which nine students from state public schools represented by civil-rights attorneys hired by the Students Matter group alleged five state teacher job protection laws were so powerful that they had the unconstitutional effect of keeping incompetent teachers on the job and funneling them toward schools in poor communities.

Evidence presented by the plaintiffs in the case showed that only 2.2 teachers on average are fired each year for unsatisfactory performance in a state with 275,000 teachers at its public schools.

The case’s primary focus was on Los Angeles Unified. In a twist that few expected, some of the most powerful testimony against the teacher protection laws came from then-LAUSD Superintendent John Deasy. He testified in early 2014 that even if a teacher were “grossly ineffective,” it could cost the district millions in legal bills to fire the teacher.

Later that year, state Judge Rolf Treu agreed with the plaintiffs that the five teacher protection laws unconstitutionally deprived the students of their right to a good public education. Treu likened the laws’ effects to those of segregation before the U.S. Supreme Court’s 1954 ruling in Brown v. Board of Education. Treu’s decision was overturned on appeal on the grounds that the trial failed to clearly establish a factual nexus between student performance and the job protection laws.

3 state justices wanted to hear teacher tenure case

But education reformers were somewhat heartened by what happened next. Three members of the California Supreme Court wanted to hear an appeal of the appellate ruling, suggesting at the least some interest in Treu’s reasoning, which was mocked as novel and weak by attorneys for teacher unions. While they were voted down by the state high court’s other four justices, they could be a factor in future litigation.

As for Los Angeles Unified, litigation over school practices affecting minorities and high-needs students has been common for decades. In September 2017, for a recent example, the district reached a $151 million settlement in a lawsuit filed by the ACLU over the improper diversion of Local Control Funding Formula dollars that were supposed to be used to help struggling students in poor communities, especially English-language learners.

LAUSD was also the target in 2010 of what a federal government statement called “the first proactive civil rights enforcement action taken by the Department of Education under the Obama administration” – prompted by what then-Education Secretary Arne Duncan called the district’s failure to adequately educate many Latino and African-American students. The case was settled in 2011 after the district agreed to make several substantial changes meant to improve these students’ performance.

But evidence presented in the Vergara case showed no subsequent gains by these student groups.

Los Angeles Unified has 640,000 students, making it by far the largest school district in California. Only the New York City school system, which has about 1 million students, is larger in the U.S.

This article was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: education, education reform, LAUSD

Schools Have More Money So Why the Financial Distress?

June 26, 2018 By David Crane 5 Comments

Spending on California schools is nearing $100 billion per year, more than $16,000 per student. School revenues have never been higher. Yet some school districts are making cuts. Imagine you are the parent of a child in the Oakland Unified School District, which serves nearly 50,000 children. Your child is attending a school:

On a state list of schools at risk of not meeting financial obligations;
Making cuts despite record revenues; and
Charged with manipulating financial records.

Every parent knows that denying a quality education to a child is a form of abuse. Surely every state legislator, governor and school board member knows it too. But where is their outrage? These problems are fixable if addressed by elected officials who care about students.

OUSD will get much worse. School budgets in California are supposed to be extra healthy during bull markets, when tax revenues swell from capital gains. But the other side of that coin is that California schools are expected to suffer financial distress during bear markets when capital gains decline. If OUSD is in trouble in the ninth year of a bull market and after the stock market has nearly quadrupled since 2009 and California enacted a 30 percent income tax increase in 2012, just imagine its finances during the next bear market.

Those are not the only problems. Under current law California school boards are prevented by the state legislature and governor from offering disproportionate pay to employees willing to work in high-poverty zones, cutting pension spending, altering tenure rules or granting principals the power to fire poorly performing employees. Those are also addressable by elected officials who care about children.

These are the times when every California governor, legislator and school board member should be required to send their child, niece or nephew to a distressed urban public school district. But they are not. So at a minimum, every political donor and voter should act as if their child is attending OUSD.

David Crane is a Lecturer and Research Scholar at Stanford University and President of Govern for California

This article was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: education

Unions defend recent strikes — but voters should make up their own minds

May 18, 2018 By Larry Sand Leave a Comment

In a USA Today op-ed last month, American Federation of Teachers president Randi Weingarten defended the teachers’ strikes in West Virginia, Oklahoma, Kentucky, Arizona, and Colorado, by sketching a familiar hero-villain scenario. “Teachers are standing up for their students and themselves against largely red states with weak labor laws and where governors and legislators have opted for tax cuts for the wealthy instead of investments for children,” she wrote. Pointing to the Janus v. AFSCME Supreme Court case, which she portrayed as a right-wing ploy to “get public sector unions out of politics,” Weingarten proclaimed, “Teachers’ voices — and their votes — are powerful, and educators have parents and communities supporting them.”

Some voters may be persuaded by the argument that teachers are picketing for more money “for children,” but they would be better off looking at some basic facts. While teachers in some cases are underpaid and certain school districts underfunded, teachers on the whole, according to researcher James Agresti, get paid much better than commonly acknowledged. For the 2016–2017 school year, the average salary of full-time public school teachers was $58,950. That figure excludes benefits such as health insurance, paid leave, and pensions, which, according to the U.S. Department of Labor, make up an average of 33 percent of total compensation for public school teachers. When benefits get added in, teachers’ average annual compensation jumps to $87,854. And even that amount doesn’t include unfunded pension liabilities and certain post-employment benefits like health insurance, not measured by the Labor Department. Private-industry employees work an average of 37 percent more hours per year than public school teachers, including the time that teachers spend for lesson preparation, grading, and other activities. “Unlike less rigorous studies, this data from the DOL is based on detailed records of work hours instead of subjective estimates about how long people think they work,” Agresti adds.

Teachers aren’t just well compensated; they’re also more numerous than ever before, especially in proportion to their students. Researcher and economics professor Benjamin Scafidi found that, between 1950 and 2015, the number of teachers increased about 2.5 times faster than the number of students, and hiring of other education employees—administrators, teacher aides, counselors, social workers—rose more than seven times faster than the increase in students. Despite the staffing surge, students’ academic achievement has stagnated or fallen during that time. Scafidi suggests that, had non-teaching personnel growth been in line with student population growth, and the teaching force risen “only” 1.5 times as fast as student growth, U.S. schools would have had an additional $37.2 billion to spend annually. With that windfall, he suggests, we could have raised every public school teacher’s salary by more than $11,700 per year, given poor families more than $2,600 in cash per child to attend private schools of their parents’ choice, and more than doubled taxpayer funding for early-childhood education.

It’s no secret that lavish teacher pensions are eating up money that should be spent on students. Robert Costrell, a finance expert at the University of Arkansas, found that 10.6 percent of all education spending goes toward teacher-retirement benefits—more than double the proportion spent on pensions in 2004. “As a percentage of their total compensation package, teacher retirement benefits eat up twice as much as other workers,” Bellwether Education Partners policy analyst Chad Alderman explains. Teachers—including bad teachers—have a powerful incentive to stay on in their jobs, since they automatically earn more just by showing up each fall, regardless of how effective they are. Pension benefits start accruing later in a teacher’s career, so younger teachers are helping to prop up pensions for lifers, with little to show for it; if a teacher leaves the field early, he gets no pension at all.

States typically administer teacher pensions, but health-care benefits frequently vary according to the local school district. While some districts cut teachers’ health benefits off when Medicare kicks in, others, such as the Los Angeles Unified School District, are much more generous. LAUSD provides the same expansive health coverage for retirees (and their spouses) as it does for current employees; neither group pays a premium for its insurance. The district recently announced that the unfunded liability for retiree health benefits has risen to $15.2 billion, up from a reported $13.5 billion in 2016, which translates to a cost of $525 per student.

Come November, the teachers’ unions and their unhappy members will be taking their case to the voters. Taxpayers need to look at the facts underneath the teachers-as-victims rhetoric and vote for fiscal sanity.

Larry Sand, a retired teacher, is president of the California Teachers Empowerment Network and a contributor to City Journal’s book, The Beholden State: California’s Lost Promise and How to Recapture It.

This article was originally published by City Journal Online

Filed Under: Top Stories Tagged With: education, education reform, LAUSD, Randi Weingarten, Teachers, unions

The CTA’s ongoing charter school whoppers

May 11, 2018 By Larry Sand 6 Comments

Washington Post writer Jay Mathews is “woke” to the fact that the California Teachers Association lies.

Jay Mathews has been around the block a few times. He has been with the Washington Post since 1971, and for many of those years he has written about education issues, often arguing for sensible reforms. Which is why I was stunned to see a Mathews’ headline last week which read, “Maybe this teachers union needs a crash course in truth in advertising.” Seems that the venerable scribe was perplexed and angered by a radio spot run by the California Teachers Association in which the union does its usual – lies, exaggerates, builds strawmen and tries to elicit gasps out of everyone within earshot.

The basic premise of the ad is that evil right wingers Donald Trump, Betsy DeVos and the Koch Brothers see your seven year-old as a cash cow and want her to go to “their corporate charter schools” to make them rich beyond their wildest dreams.

CTA business as usual here, but if Jay Mathews is now woke, I guess that’s a good thing.

Mathews also may have gotten a jolt if he saw a recent post on the CTA website in which the union informs us that Tony Thurmond, their candidate for California Superintendent of Public Instruction, will be holding a tele-town hall on May 9^th. Alluding to Thurmond’s opponent Marshall Tuck, CTA claims “… corporate billionaires are pouring millionsinto the races of candidates who share their agenda to divert funding away from neighborhood public schools to privately-run charter schools.” In fact, Tuck is adamantly opposed to privately run charters and has stated so many times, claiming, “Profit has no place in our public schools….”

If he hasn’t already done so, I would advise Mr. Mathews to visit a website established by CTA in 2016 called Kids Not Profits. In addition to the exaggeration about the privatization of charters (less than 3 percent in California are), it includes the time-worn fantasy that charters “cherry-pick their students” and weed out students with special needs.

In fact, as R Street Institute’s Steven Greenhut writes, the opposite is true. Using information from a report by ProPublica, an organization whose focus is investigative journalism, Greenhut found a national pattern in which public school districts have used alternative schools, including charters, as a “a silent release valve for high schools … that are straining under the pressure of accountability reform.” These public schools dump off weak students “whose test scores, truancy and risk of dropping out threaten their standing.”

So just who are the cherry pickers?

Also, parents who have kids with special needs are prone to send their kids to charters. For example, the mother of a child in Florida, who has “oral motor delays, including extreme feeding difficulties” could not find a traditional public school (TPS) that could accommodate her daughter and found a charter school that could.

Looking at the bigger picture, there have been a gaggle of studies comparing student achievement in charters and TPS. Most studies give the edge to charters to varying degrees. But even if charters do the same job as TPS, charters should be deemed preferable as they do it by receiving, on average, 28 percent less funding than TPS.

Additionally, a revealing new study conducted by Patrick Wolf, Corey De Angeles, et al shows that in eight big American cities, each dollar invested in a child’s k-12 schooling results in $6.44 in lifetime earnings in public charter schools compared to just $4.67 in lifetime earnings in TPS.

That traditional public schools dump kids into charters, frequently can’t handle kids with special needs and don’t give students the same bang for the buck as charters are realities that CTA and other teachers unions either omit or lie about when they push their anti-charter agenda.

One other tidbit not discussed by CTA is that charters are less likely to be unionized than they were six years ago. The National Alliance for Public Charter Schools found that 11.3 percent of the nation’s charters in the 2016–17 school year were unionized, down from 12.3 percent in 2009–10.

That Jay Mathews has awakened to the prevalent dishonesty of the teachers unions is encouraging. As we celebrate National Charter Schools Week, I only hope more mainstream media writers follow suit and aggressively expose teacher union mendacity.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

This article was originally published by the California Policy Center.

Filed Under: Top Stories Tagged With: California Teachers Association, Charter Schools, CTA, education, education reform

School Spending Up; Student Performance Down

May 6, 2018 By David Crane 8 Comments

California school boards are prevented by the state Legislature and governor from offering disproportionate pay to employees willing to work in high-poverty zones, cutting pension spending, altering tenure rules or granting principals the power to fire poorly performing employees. The outcome: poor student performance and shaky finances despite a big increase in spending.

All it takes is 62 legislators and the governor to change that outcome. Every legislator knows that school districts should not be forced to grant permanent employment after just 24 months or to divert money from current to retired teachers and should be permitted to pay more to teachers who take on tougher assignments and to fire under-performers.

The only thing stopping them is fear. They are afraid of CTA, the largest commercial and political special interest roaming the halls of the State Capitol. But don’t blame CTA. Its members collect ~$70 billion per year from taxpayers. You too would roam the Capitol if you collected that kind of money from legislators. Blame legislators and governors who don’t have the courage to attack the real causes of school distress. It is they who are letting down students — especially our most vulnerable students. Just look at what’s happening in San Francisco and around the state.

But the legislature and governor don’t get all the blame. Believe it or not, some districts subsidize retirees at the expense of current employees. San Francisco could pay teachers an extra $40 million this year if it stopped subsidizing health insurance for retirees who, like their fellow Californians, could obtain health insurance on the state’s excellent Obamacare exchange (Covered California) until they become eligible for Medicare. The city of Glendale shows how. The San Francisco school board doesn’t need permission from the state to make that change right now. But instead, it is asking voters to approve an additional tax on property. Middle class residents already find it tough going in San Francisco. Now the school board wants to make it even harder in order to subsidize retirees. Fixing that doesn’t take rocket science. It just takes courage.

David Crane is a lecturer and research scholar at Stanford University and President of Govern for California.

This article was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: California Teachers Association, CTA, education, education reform

Has landmark 2013 school finance law produced poor test scores?

April 22, 2018 By Chris Reed 6 Comments

Five years after Gov. Jerry Brown and the Legislature passed a sweeping new school finance law meant to provide extra help to struggling students in poor, minority communities, new federal test scores raise difficult questions about the effectiveness of the 2013 measure.

Every two years, at the order of the federal government, the National Assessment of Educational Progress tests are administered to check on fourth- and eighth-graders’ progress in math and reading in all 50 states. While eighth-graders showed gains on reading, California’s overall scores for 2017 released earlier this month remained on average among the worst in the nation, as the EdSource website reported.

But a deeper dive into the data showed that California fourth-graders scored worse on math than any state but Alaska. Poor scores by African-American students caught the eye of Ryan Smith, executive director of the Education-Trust West. “At a time when California is claiming to lead on issues of what’s right in our country, we should see black students improve at far greater rates, not sliding back decades,” he told EdSource.

What made the results particularly disappointing were the high expectations that had accompanied the enactment in 2013 of the Local Control Funding Formula (LCFF) – arguably the biggest change in California public education since Gov. Pete Wilson and the Legislature approved the hiring of thousands of new teachers in 1996 as part of an ambitious effort to reduce the number of students in first-, second- and third-grade classes to no more than 20 per teacher.

Brown led the push for LCFF, calling it a commitment to social justice and education equity. The measure guaranteed additional funding to districts with high concentrations of English-language learners, impoverished families and foster children. The law’s second main component also eliminated most of the top-down funding edicts imposed on school districts.

Brown argued that local districts had a better grasp on what their students’ needs were than state lawmakers and Sacramento bureaucrats, and that LCFF would give local schools extra resources that would allow them to improve education outcomes for struggling students.

Claims that funds were diverted came early and often

But even before this month’s disappointing test scores, the Local Control program had drawn fire. In January 2015, the Legislative Analyst’s Office said none of the 50 school districts it reviewed had set up adequate standards to make sure the funds were used as they were supposed to be. Soon after, Education Trust-West and other groups which advocate for poor and minority students said funds meant to specifically help these students were instead used for overall district spending, starting with teacher raises.

Brown supported state Superintendent of Public Instruction Tom Torlakson after he formally rejected the criticism – with both saying, in effect, that local control meant local control. Efforts in recent years by lawmakers to force a stricter accounting of LCFF dollars have been blocked by teachers union allies in the Legislature, notably Assemblyman Patrick O’Donnell, the Long Beach Democrat who chairs the Assembly Education Committee. In 2016, the governor vetoed an LCFF accountability measures that managed to win the Legislature’s unanimous approval.

But in January, in presenting his final budget before being termed out, Brown offered an indirect concession to those upset with how LCFF dollars had been used.

“While many districts have seized the opportunities offered under the formula to better serve their students, others have been slower to make changes,” his 2018-19 spending plan noted. “To improve student achievement and transparency, the budget proposes requiring school districts to create a link between their local accountability plans and their budgets to show how increased funding is being spent to support English learners, students from low-income families, and youth in foster care.”

This story was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: education, Jerry Brown