What is PPS’ Worldview on Incentives?

A news article described the achievements of several schools in the Pittsburgh School District under one of the incentive programs created under the current bargaining agreement between the District and the Pittsburgh Federation of Teachers. As our 2010 report on pay for performance noted, the Students and Teachers Achieving Results, or STAR, incentive program would allow for teacher bonuses of up to $6,000 and staff (represented by the PFT) bonuses of up to $2,000 if the school falls within the top 15% of all Pennsylvania schools on student achievement. The contract stated that if eight schools did not get in the top 15% the threshold would be lowered to the top 25% of all schools so that the goal of a minimum of eight would be met. The article noted that ten schools were named STAR schools by the District.

When the District applied for money from the Gates Foundation with its proposal titled "Empowering Effective Teachers in the Pittsburgh Public Schools" it posited the following: "the plan will correlate teacher compensation with demonstrated student achievement…this is an important step for Pittsburgh, as nearly all of PPS teacher compensation is driven by salary schedule, which is based on factors that research demonstrates are not linked to student achievement: teachers’ educational achievement and years of service".

On the PPS’ Empowering Effective Teachers website page it states "For too long, teachers have gone unrecognized for their individual strengths and contributions to student learning. School districts have been unable to measure differences in teacher effectiveness or use this information to help teachers improve. Until now."

What of the teachers at one school that achieved the bonuses? One said "The monetary incentive isn‘t what I‘m coming here for every day" (but probably was not turned down). Another said "It doesn‘t take just one player to win the game. It‘s the team working together". (as often as teachers say that students need to come to school ready to learn, will the bonus money be shared with parents?) Note that while the STAR bonuses go to only the schools that achieve, there is no differentiation between teachers within the schools that might have done more for the achievement. The teacher who might have greater "individual strengths"-in the words of the EET webpage-gets the same bonus as another at the school. That’s what comes as a result of the District wanting pay for performance but deferring to the teachers’ union since implementing the vision was subject to collective bargaining (as noted in the Gates Foundation proposal).

The PFT president pointed out in the article that teachers who did not get the STAR bonus could "earn an extra $10,000 yearly by working a longer school week and year, assuming more responsibilities as they climb the career ladder." In other words, the teachers that read the article or heard the news through the grapevine should not feel slighted, they can earn money by taking on other duties as they go up the salary scale, which is what the PPS said was one of the factors that does not do anything for student achievement based on what was written in the EET proposal.

But the topper came from the Superintendent who said "We don‘t want teachers in competition with each other because when that happens, kids lose in that kind of culture, and other undesirable things happen…teachers can start jockeying for particular children." So much for individual strengths and differences in teacher effectiveness-based on this statement the Superintendent feels teachers will "cherry pick" students to boost their bonuses. That sounds like the argument public school defenders make about charter or private school enrollment, not about their own teachers. Note again this is not the head of the teachers union-this is the chief executive officer of the District saying that. It has long been understood that principals assign students to classes; but more to the point, does the Superintendent actually believe this?

Does Brewer Know What “Ales” the State?

A news article today spoke of the astronomical growth experienced by one Pennsylvania brewery and its plans in the not too distant future to build another brewery to keep up with demand.

Could the location be the Keystone state or somewhere else? Probably hard to say, but the brewery’s owner noted in the article that "Pennsylvania is a great location. But it’s not very business-friendly. You look for fair tax breaks, fair taxation. And the bottom line is more jobs. That’s what it’s all about."

So what is the company advocating for? Does it want Pennsylvania to reform its tax system so that businesses can grow and businesses from other places would be attracted to locate here without special tax treatment i.e. low business taxes for all and a sensible regulatory climate?

Or does it want the state to amp up its plethora of incentives, credits, tax free zones, and other targeted programs so that it will be incentivized to stay put? With every state playing the tax incentive game there are plenty of opportunities for the brewery to point out that it could locate somewhere else. Policymakers panic, carve out a package, offer it to the company, and hope for the best. The benefits are touted while the direct and indirect costs of picking winners and losers in the economic development game are downplayed. Then the business who thought the tax and business climate was unfriendly no longer thinks that way.

Hits and Misses in Pew Report

Elected and appointed officials in the field of economic development are often long on the benefits of proposed spending to stimulate growth but very short on the follow up to find out if the programs actually work.

That’s not new news. Pennsylvania’s Legislative Budget and Finance Committee (LBFC) did a report in 2000 that served as a fairly comprehensive performance audit on DCED’s programs and found the monitoring of efforts ranged from "rigorous to none" and that the Department rarely "verif[ied] the accuracy of jobs data". More recently, the Auditor General looked at the Opportunity Grant program and found lax effort to check on job creation numbers.

So the new Pew Center on the States report on evaluating how well states do in monitoring their incentive programs is treading on familiar ground. It is a very ambitious undertaking, ranking all 50 states and DC. All states spend the money to attract and retain jobs, the report notes, but there is great variation in how well the states do in monitoring the effectiveness, the "bang for the buck" of the incentives. There should be more emphasis on measuring whether what is promised is what is delivered, and there should be consequences for not achieving targets.

By reviewing documents and interviewing officials, Pennsylvania comes out in the middle of the pack, along with 11 others, labeled as having "mixed results". Under the dual evaluation of "scope" and "quality" PA got high marks for having a schedule for reviewing programs and determining whether incentives are achieving stated goals. The problem is that the rating came from the review of two documents from LBFC, one on tax credits and one on Keystone Opportunity zones.

Besides the 14 tax credits reviewed in the LBFC report that Pew referenced a quick look at DCED’s program and funding finder shows that 53 links for "loans" and 61 links for "grants" come up, meaning that PA might be rigorous on a fraction of its incentive programs reviewed by Pew. The same could hold true for the other 49 states based on what the evaluators examined, meaning they could look rigorous or lax in relative standing. This does nothing to include the plethora of incentive programs states might have authorized for their local governments to carry out but are not monitored by the state itself.