Teachers and Legislators Getting Schooled on Bad Policies

 

Facing a large budget deficit, the Plum School Board has voted to lay off 23 teachers.  The principal causes of the $1.48 million deficit are salary increases of over $900,000 and a requirement to boost the District’s pension contribution by $1,000,000 for the upcoming fiscal year. Limited to raising tax revenues over the current fiscal year by a state imposed index, the School Board has opted not to apply for an exemption from the Department of Education to increase tax rates.

 

 

Teachers were asked to voluntarily forgo the salary increases called for in the contract but rebuffed the request, necessitating the personnel reductions. As required by a state law that does not allow teacher layoffs for economic reasons but does permit layoffs for enrollment declines or program eliminations, the Plum school board is targeting several programs for elimination including ROTC, television production, and family consumer science among others.  Predictably, the teachers’ union head responded that “children should not be held hostage”-adding that the union wants to save all programs now and in the future. 

 

How ironic. Teachers’ unions have pushed for and received the job protection legislation that prevents school boards from making teacher layoffs across departments and working to achieve the least disruptive results of layoffs.  By forcing school boards to eliminate entire programs in order to make layoffs, the legislation does exactly what the teachers want; hold taxpayers hostage. They pit parents against taxpayers knowing students and parents of children taking classes in the programs targeted for elimination will raise a fuss and clamor to preserve the programs.  This strategy of pitting parents against the taxpayers and the school board on behalf of teachers works well when strikes or threat of strikes occurs. It is very clever to set up a scheme that deflects attention from the creators of the problem to the school board.

 

All this is now occurring in the reality of the massive and growing shortfalls in the Pennsylvania teachers’ and state employees’ pension plans.  These shortfalls will necessitate very large additional contributions from the state coffers as well as school districts over the next few years if major changes in the pension laws are not forthcoming. The reforms proposed by the Governor earlier this year would go a long way to dealing with the problem.  However, these reforms face enormous opposition from state employee and teacher unions with the threat of court challenges.

The plan to implement a new payout scheme for future years of service of employees who are currently employed while preserving the benefits earned to date is a major obstacle. Outcomes in the court are not assured and reforms could be nullified completely or delayed for many years.

 

But the lesson from Plum for teachers and the Legislature could not be clearer or starker.  With the billions of dollars that will have to be poured into pensions over the next several years if dramatic pension reform is not enacted, the state and school districts are facing an excruciatingly difficult dilemma of deep spending cuts or tax hikes. And as long as the law is in place that requires program elimination to layoff teachers, school boards will eventually be forced to cut into education muscle and bone.

 

Here is the reality. If teachers and state employee unions are not willing to accept the proposals outlined by the Governor, they will inevitably see their wages and non-pension benefits cut and many of their associates lose their jobs. The only alternative will be tax hikes that will cost many private sector jobs and hurt the state’s economy, a situation that over the long term helps no one-and certainly not the public sector unions.

 

It is now incumbent on the General Assembly to move quickly on substantial pension reform legislation to avert the coming disaster. It should also immediately amend the statute that requires entire programs be eliminated in order to have teacher layoffs.  And that should be followed by emulating the states, including the addition of Wisconsin in 2011, that do not permit teacher strikes. Teacher strikes are the ultimate argument against public sector unions.  Nowhere is the Madisonian admonition for the government not to create and/or side with powerful interest groups more in evidence. The opportunities for powerful public sector unions to use their considerable resources and influence to get friendly legislators elected and to have those legislators work for legislation favorable to the unions are demonstrably antithetical to good governance and sound fiscal policy. And they are the ultimate weapon against taxpayers.

 

The teachers and state employees have a decision to make. Will they fight pension reform with great zeal and vehemence and likely win a pyrrhic victory wherein they cause great damage to themselves and the state’s economy and taxpayers?  

Big Decision Day for Philly Schools

While the closing and reuse of Schenley High School has grabbed attention, the school district across the state is going to vote tonight on closing 27 public schools, an action that, if taken, is being described as one of the largest school closing plans in recent history.

Proponents of the action, including the District’s Superintendent, say that if it does not happen there might be issues with payroll or opening the District as a whole after the summer. We noted last fall how the Philadelphia School District borrowed $300 million to keep things afloat.

The District’s CAFR shows that it had 249 elementary, junior/middle, and senior public schools in FY 2003. There were 228 in FY 2011, a decline of 8% (the rate of closure in Pittsburgh has been much greater, with 88 schools in 2003 and 56 in 2011, a decrease of 36%). Twenty seven more would be a 12% decline from where the District stands now. Interestingly in both Philadelphia and Pittsburgh senior schools have stayed relatively constant; the biggest percentage drops in both districts occurred in the junior/middle school level.

Is There a Catch in Receiver Plan?

The Duquesne School District is about to move into the next step of school district financial recovery under state law as the Secretary of Education has just asked the County Common Pleas Court to appoint the person who has been acting as chief recovery officer to become a receiver under Act 141 as the Duquesne School Board opted to reject the plan to send the remaining students of the District (all of elementary age) to neighboring districts. That request has been made on a voluntary basis (several have already said they won’t) so there is a possibility that a state mandate would come to pass.

The court does not have to take the person nominated by the Secretary to be the receiver; it can name its own or ask for an alternate. Whoever becomes the receiver essentially becomes the school board, except the receiver cannot levy or raise taxes. The receiver has the power to implement the recovery plan, communicate with the state on a quarterly basis, make sure employees of the district are following the plan, tell the school board to raise taxes, and go to court to get a directive to get employees to comply with the recovery plan.

The act says that receivership is to terminate three years after the receiver is appointed unless the state petitions the court for an extension. Even after receivership is terminated the district remains in oversight from the state for a five year period, most likely to ensure that the district does not slip back into distress.

Educational Détente

The superintendent of Pittsburgh Public Schools wants to move relations with the charter schools in the City from what it is now, which she described as "certainly not a happy, collaborative one" to something else, where perhaps the PPS can learn by talking. About 10% of the PPS’ $520 million budget goes to pay for students living in the District but attending brick and mortar or cyber charter schools. The most recent audited financial statement on PPS’ website (for fiscal year 2009) showed that the ratio of PPS students to all charter students was 9.5 to 1. In 2002 the ratio was 36.6 to 1-slipping enrollment in the PPS (down 25% over that time frame) and a large boost in charter school enrollment will have that effect.

That is for total (brick and mortar and cyber) but from the article it does not appear that the superintendent is going to seek out the leadership of cyber charters, so a deeper look at the charter schools with a physical presence in the City of Pittsburgh is warranted. From the Pennsylvania Department of Education’s institution search within the Pittsburgh-Mt. Oliver intermediate unit it is shown that nine charter schools are in the City. Several CEOs of these schools were mentioned in the article, including one that has been around since 1998 and commented that relations in the beginning were "very adversarial…very tense".

Five charters in the City-Academy, Career Connections, City High, Manchester, and Urban League-reported total enrollment of 1,342 in the 2006-07 school year. With 30,885 students enrolled in PPS that year, the ratio of PPS students to students in those charters was 23 to 1. In 2011-12, those same five charters had boosted enrollment to 1,511 (up 13%) while PPS enrollment fell to 26,653 (down 14%). The ratio stood at 17 PPS to 1 charter student. It is important to note that two additional charters opened since 2008 and there are additional applications pending. In 2011-12 the nine charters in the City had a total enrollment of 2,284.

Has the passage of time and seeing the staying power of several charters led to the change in attitude on the part of PPS in seeking the meeting? Or is it simply different people in positions of power who may not be as openly hostile to charters? Is PPS trying to get some "trade secrets" on what the charters are doing well in order to emulate them and head off future enrollment and financial losses?

Dilemma for a Small District

Cut positions in order to save the district. That’s the position taken by the administration of the Northgate School District, a district serving the North Hills communities of Avalon and Bellevue. Population has fallen in the communities, as has public school enrollment, but there are more teachers now (115) than there were in the 1995-96 school year (110). Thus, the proposal to layoff 23 teachers and 10 aides at a meeting this week. As we have written before, Pennsylvania only allows layoffs of public school employees when there is a drop in enrollment or a program is shuttered, not for economic conditions.

Consider: in 95-96 enrollment was 1,644 students and the pupil to teacher ratio was 14.9. In 12-13 enrollment was 1,211 and the resulting ratio was 10.5. Laying off 23 teachers-and assuming enrollment does not change dramatically for next year, say it stands at 1,180-the pupil-teacher ratio would be 12.8, lower than the national average of 15.1 and that of Pennsylvania (13.8) as of 2010. Curiously, a November 2011 article detailing a new four-year contract for teachers recalled three teachers who had been laid off and stated that it had "eliminated the need for additional layoffs".

The superintendent-who was hired last May-went on record saying he would not support merging with another district due to losing the character of neighborhood schools that serve the district. Property tax rates went up 24% in the District from 2001 through 2012 and, at 28.6 mills now, the District has one of the highest millage rates in Allegheny County. Northgate, like all districts in the state, are facing steep increases to pension costs. How does the District work its way out of this situation?

Pittsburgh Schools Staring at Huge Deficits

In its recent proposed budget document for fiscal 2013 and the outlook through 2016, the Pittsburgh School District reveals rapidly expanding deficits over the next four years. Spending is projected to rise from $516.5 million in 2013 to $561.9 million in 2016, while revenue edges up a slim $6 million from $512 million to $518 million.

Causes for the $35 million jump in spending are listed as; salary increases, swelling pension payments, and expanding health care costs. Much of the rising costs is locked in by labor contracts and long term obligations entered into years ago. Realistically, significant savings can be achieved only through more personnel cuts or a large turnover in staff in which senior, high paid employees are replaced by entry level and lower compensated workers.

Layoffs of teachers can occur for only two reasons: one, declining enrollment and two, elimination of programs or some combination of the two. Thus, it is difficult to project declining employee compensation through layoffs. Eliminating entire programs is possible, but at some point program cuts can reduce the quality of the educational experience and make the District even less attractive. The state law that imposes the idiotic set of requirements needs to be addressed. It is far better to add a couple of kids to each class rather than eliminate a science program or foreign language courses.

But be that as it may, Pittsburgh schools are looking at serious financial trouble. There is one path to lower spending still open although it is not a desirable one. Note that enrollment continues to slide, dropping below 25,000 in the last school year. The decline in student count has been falling at a rate of over 1,000 per year for many years. The latest census shows a significant drop in the population in the numbers of children who will be of school age in the next years. There was also a big decline in the numbers of adults in the child rearing age groups suggesting that the Pittsburgh Schools are a major factor in outmigration.

Ironically, the District can cut spending growth only by continuous downsizing its operations. The tragedy is that spending per student is holding above $21,000 and will rise even further as enrollment drops. Expenditure cuts cannot match enrollment reductions because of the pension and health care commitments and the increases in costs they will entail.

The answer for education in Pittsburgh is-as it has always been-to adopt a voucher program and allow children and parents to attend schools of their choice. Maintaining the government monopoly schools to protect the teacher unions and the educrats who benefit from the state run monopoly that fails in its moral obligation to prepare students for life after school is disgraceful. The never ending string of excuses will continue unless or until Pittsburgh parents and residents demand change. The state could help with a voucher law, but the state has shown itself to be content to live with the status quo. As a result thousands of Pennsylvania children are being denied the opportunity to participate fully in the American dream.

PPS: What Results from Staff Reductions?

Following last night’s school board meeting, the Pittsburgh Public Schools will have fewer staff members at the start of the 2012-13 school year, including 176 K-12 teachers. A look at the audited financial statements of the District shows what we have pointed out for many years: enrollment continues to fall. In the 2005-06 school year there were 32,529 students, and at the beginning of the 2011-12 school year that just concluded there were 26,652 students. Note that in the audit enrollment is taken on the first day of school. Recent numbers provided by the District that we reported in a blog put enrollment at 24,624 on the last day of the 11-12 year.

If we use the audited enrollment and audited headcount shows that all classifications of employee groups fell from 2005-06 through 2011-12 with the exception of health service, which reported one more employee in 11-12 than in 05-06. Administration, instruction, pupil affairs, operations/maintenance, and food service all reported fewer employees. The key measure is the group in instruction identified as teachers: in 2005-06 there were 2,722 and the pupil-teacher ratio was 11.9. In 11-12 there were 2,196 and the pupil-teacher ratio was 12.1.

If the layoff/furlough of teachers stands, there will be 2,020 (assuming pre-K teachers who were laid off are not included in this total) teachers at the start of the 2012-13 school year that begins next month. If enrollment at the beginning of the year remains around 24k or so the pupil-teacher ratio will not change much. If enrollment at the beginning of the year slides even further from the 24k, let’s say to 23,900 on the first day of 2012-13 with 2,020 teachers, the pupil-teacher ratio will stand at 11.8.

A Closer Look at PPS Enrollment

Our recent Brief on the Pittsburgh Promise scholarship program and its effects on enrollment and achievement can be expanded upon with the arrival of new enrollment numbers for the 2010-11 and the 2011-12 school years. Total K-12 enrollment (measured by the number of students enrolled on the last day of school) fell slightly from 25,042 to 24,624, about 418 students.

Recall that one of the stated goals of the Promise is to "mitigate and reverse…enrollment declines in the Pittsburgh Public Schools (PPS)". Taken at face value, the Promise is not looking to grow charter school enrollment, even though those students meeting performance, residency, and attendance benchmarks qualify for Promise funds. The goal is to entice students to remain or attract new ones to the PPS.

RAND performed the first large scale evaluation of the Promise and focused on enrollment in grades 5-12 two years before the Promise first awarded scholarships (2005-06 and 2006-07) and three years of awarding scholarships (2007-08, 2008-09, and 2009-10) "…in order to gauge whether any ‘trickle down’ effects on enrollment may occur as those students and their parents began to prepare for high school". In actual numbers for grades 5-12 for those five years, enrollment trended this way (in 000s): 17, 17, 15.9, 15.0, 14.5.

Adding in the two new years since the report (10-11 and 11-12) for those grades showed enrollment at 14.8 and 14.6. Slightly higher than 09-10, but lower than the pre-Promise years covered by the evaluation. Boosters could argue that as a percentage of school-age youth in the City PPS enrollment has been steady, but that’s not reversing the trend of falling enrollment. They could say that students are staying in City-based charters, but that’s not stated in the goal, either.

PPS Goes Virtual

File this under the old slogan "if you can’t beat them, join them". The Pittsburgh Public Schools (PPS) has announced plans to open an online academy aimed at attracting students in the District that have opted to enroll at a cyber charter school. It could also position itself as an option for students in PPS schools that want an online option, or perhaps those attending a brick and mortar charter school.

When it first gets up and running it will be open to grades 6-9, but the hope is that there will be enough interest to expand it to grades up to twelfth. According to District financials enrollment from FY02-FY10 fell 23% in PPS schools but increased 225% for charter and cyber-charter schools. A press release from the District notes that about 800 "potential PPS students" attended cyber charter schools.

Placed in possibly an interesting middle ground in this proposal is the Allegheny Intermediate Unit, the regional service unit that covers the 42 suburban districts in Allegheny County (not the Pittsburgh Public Schools, which has its own unit). The AIU has an online cyber charter school that may have students from PPS currently enrolled: it also writes a curriculum for cyber education that it offers to districts. According to printed reports, that curriculum will be offered to the PPS for at least two years before the District intends to offer its own teachers and instruction model.