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Published in Print: January 27, 2010, as Budget Cuts Touted as Chance to Change Ineffective Practices

Experts Urge Districts to Do More With Less

Set of papers explores ways to lower school costs.

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The nation’s school districts are facing a budget crisis that is expected to only get worse as the effects of the recession linger. But some thought leaders are insisting that schools and districts can and should use the opportunity to target resources in a way that serves their students better.

A conference this month, “A Penny Saved: How Schools and Districts Can Tighten Their Belts While Serving Students Better,” sponsored by the American Enterprise Institute and the Thomas B. Fordham Institute, highlighted what the organizers see as fresh thinking on education spending.

Education has enjoyed a “privileged position” for many years, consistently taking in more revenue each year than the rate of inflation, said James W. Guthrie, a senior fellow and the director of education policy studies at the Dallas-based George W. Bush Institute and a professor of public policy and education at Southern Methodist University. But that is changing, and schools will be forced to adapt, he said.

“All of these resources are starting to evaporate,” Mr. Guthrie said at the Jan. 11 event attended by 145 people, an audience that included both researchers and educators. “We cannot expect these fiscal dividends in the future.”

A paper written by Mr. Guthrie and Arthur Peng, a research assistant at Vanderbilt University, warns that districts face a “forthcoming fiscal tsunami.” Mr. Guthrie said states and districts are going to have to take a hard look at personnel decisions because the number of teachers and other school staff members has grown for decades without much correlation with student enrollment. Staffing will require rethinking, as will the trillions in unfunded liabilities facing the pension plans states and districts manage, the paper says.

Commissioned by Frederick M. Hess, the AEI’s director of education policy studies, and Eric Osberg, a vice president of the Fordham Institute, the 10 papers presented here will be published in a book later this year by Harvard Education Press.

Per-Unit Costs

It can be difficult for school districts to get a grasp on how much is being spent and why. But Marguerite Roza, a research associate professor at the University of Washington’s Center on Reinventing Public Education, suggests converting what districts spend into a per-unit cost in order to help administrators understand what they are spending where.

“Districts can often find other ways to provide opportunities at a lower cost,” she said.

Todd Hobein
conducts a
biology class of
34 students at
Ashland High
School in
Ashland, Ore.
The class has 15
more students
than in past
years, the result
of budget cuts
last spring and
an increase in
enrollment this
school year.
Todd Hobein conducts a biology class of 34 students at Ashland High School in Ashland, Ore. The class has 15 more students than in past years, the result of budget cuts last spring and an increase in enrollment this school year.
—Jim Craven/Medford Mail Tribune/AP

In one district Ms. Roza and her colleagues studied, officials were spending $1,348 per student on cheerleading, a high cost because cheerleading was offered as a class and with a stipend for the teacher. When presented with the research, the superintendent made cheerleading an after-school activity, removing the need for a teaching salary and lowering the cost.

While many cuts will have to come from personnel, which is the largest expense for districts, there are also opportunities for efficiency in district operations, said Michael D. Casserly, the executive director of the Council of the Great City Schools, a Washington-based group that represents large urban districts.

Most school districts are not making business decisions based on data, said Kartik Jayaram, a partner with McKinsey & Company.

One fallacy, Mr. Casserly said, is that “just doing across-the-board cuts in the name of equity” will get the kind of results school administrators need.

Through its Performance Measurement and Benchmarking Project, the city schools’ group aims to help districts create measures for operational performance and learn from other districts that are delivering services in the most efficient and effective way. ("Urban Districts Compare Notes on Operation," Feb. 11, 2009.)

For example, Mr. Casserly said, a district with 10,000 teachers and an 11.1 percent teacher-absentee rate can save $230,000 just by lowering that rate to 6 percent—the median among the urban districts that participate in the organization’s benchmarking project.

John E. Chubb, the senior executive vice president and chief development officer of New York City-based EdisonLearning, an educational management organization and online-learning company, said schools can become more productive and cost-effective by expanding online-learning offerings.

“It would be a tragedy in education if as a result of this crisis, we just tighten our belts and don’t do anything better for our kids,” he said.

Mixing traditional whole-group instruction with periods for students to work on mastery—and if need be, remediation—using computer-based programs is one way to use online learning, Mr. Chubb suggested. The online instruction can supplement the work of classroom teachers, who usually don’t have the time or the resources to customize lessons for each student’s learning needs.

Steven F. Wilson, the president of Ascend Learning, a charter-management organization, proposed what he said is heresy in some education circles: increasing class size. The amount of money districts have spent on class-size reduction has been “appallingly expensive” without showing dramatic student-achievement gains, he said.

Lots of Constituencies

Communicating the necessity and reasoning behind budget cuts can be difficult, said José M. Torres, the superintendent of the 41,000-student U-46 school district in Elgin, Ill., who was a discussant at the conference.

“The people who are the greatest affected don’t have months to think through it like we [school officials] did,” he said. “Every cut has a constituency.”

But superintendents don’t have to fly blind in attempts to reorganize districts, one of the presenters stressed. More than 50 years of management research can help school leaders, said Stacey Childress, a senior lecturer at Harvard Business School and the co-founder of the Public Education Leadership Project, a partnership between the business school and the Harvard Graduate School of Education.

First, though, she said, district leaders will have to unlearn some behaviors that have helped create inefficient organizations. When a new superintendent enters a district, he or she often adds layers of new programs on top of existing programs to avoid political battles, a tactic made possible by steady increases in revenue. But leaving old initiatives in place often hinders the long-term effectiveness of the new strategies, Ms. Childress said.

“Strong strategic leadership at the top is not sufficient, but it is necessary,” she said.

Despite what can seem like almost insurmountable political pressures, cost-cutting can be done successfully, said Nathan Levenson, a founder and managing director of the Boston-based consulting firm District and Community Partners, who spent three years as the superintendent of the 4,850-student Arlington, Mass. district.

But first, school leaders have to be willing to go against the grain. Mr. Levenson said when he arrived in Arlington, the district had a strategic plan with 157 goals and 45 first priorities.

“The reason we had 45 first priorities was because we had exactly 45 large constituency groups,” he said. Along with his management team, Mr. Levenson crafted a plan that created overarching priorities and shifted money to core goals, such as boosting reading achievement.

“Every time we did a shift, I created a new enemy,” he said. “I thought if we could prove we were getting results, it would mitigate the pain.”

But the fighting, Mr. Levenson said, led to his departure in August 2008. “The pressure for success from the outside has to become greater than the pressure to maintain the status quo,” he said.

Vol. 29, Issue 19, Page 8

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