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Education policy maven Rick Hess of the American Enterprise Institute think tank offers straight talk on matters of policy, politics, research, and reform. Read more from this blog.

Education Opinion

Local School Autonomy Requires Marketplaces for Educational Services

By Guest Blogger — October 30, 2017 4 min read
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This month, Rick is out working on a new project exploring the lessons of Bush-Obama school reform. In his stead, we’ve got a terrific lineup of guest bloggers. Kicking us off this week is Mike Vannozzi, a VP at TSC2 Group, an outfit involved in Nevada school reform.

In 2016, the state of Nevada passed a set of regulations that required the Clark County School District (CCSD), the nation’s fifth largest school district, to fundamentally change the way it did business. Based on the work of Canadian educator Mike Strembitsky, the Nevada legislature passed regulations that required CCSD to transition from a centralized organizational model into a model whereby each individual school could customize their educational program to their own “particularized, specialized, or localized circumstances.” Turning a large, centralized district into a confederation of more than 330 schools was a tremendous challenge. To assist the district, the legislature appointed my company—TSC2 Group, an outfit involved in Nevada school reform—to work with administrators, legislators, and the community to ensure the reorganization was implemented as intended. After a year of preparation and administrative work, CCSD is now taking its first real steps to decentralize the budget and power to local schools.

At the heart of the reform was the notion that local schools should have the autonomy to use money allocated to them to customize their learning environments. To accomplish this, the reorganization law required 85% of all district money to follow the student to the school site so that it could be budgeted and spent by local school principals with input from parents, teachers, support staff, and other stakeholders. How much money are we talking about? In 2017, CCSD’s general fund budget was $2.4 billion; that means under the reorganization law, the district would allocate about $2 billion directly to local schools. This concept, while simple enough for the public to understand, got really complicated when we got under the hood.

To begin to understand the complexity, you first must understand this: CCSD has a basic monopoly on K-12 education services in Southern Nevada. Sure, we have private schools and a growing charter system, but CCSD is ten times larger than both of those systems combined, and our neighboring districts are small and mostly rural. When it comes to education-related services in Clark County, CCSD is pretty much the only game in town. That means nearly everyone who has expertise in K-12 education administration in Southern Nevada works for CCSD.

Like other school districts, CCSD spends a lot on people. About 55% of the district’s general fund budget pays for teachers, support staff, and administrators that report to the school every day. That’s about $1.3 billion of the $2.4 billion budget. The other $1.1 billion pays for a broad array of people and services that either directly support schools or the central administration. About 40% of this $1.1 billion pays for special education services (exclusive of the federal contribution), and $250 million pays for the general administration of the district. Another $60 million pays for custodial services, $60 million pays for utilities, and the balance pays for dozens of programs that serve local schools but are controlled by the central administration.

The general theory of the reorganization was this: if you give schools control over their money, they’d have control over the provision of services, and they’d use their money to drive toward outcomes that boost student achievement. While this makes sense from a business perspective, it didn’t always work out that way. Take special education, for example: we could transfer schools the money that pays for services to students with special needs, but the provision of these services is either dictated by Individualized Education Programs (IEPs) or 504 plans. When a child needs a service, that service is ordered for them through the district, under the requirements of state and federal law. The school principal usually has input into this process, but they do not have control over how much that service costs, and they usually do not directly supervise the person providing the service to the child. What’s more, CCSD has an effective monopoly on the pool of people who provide special education services for children. Even if a principal had money to pay for these services, they’d probably only be able to buy services from one place: the district.

What about the other services? We could transfer schools the budget for other people, like custodians and school nurses, who work at the school site, but only some of these services could be purchased outside of the district monopoly. A school could, in theory, purchase reasonably-priced custodial services from an outside vendor, but is there a reasonably-priced market outside of the district where you could purchase school nursing or counseling services? In larger metros with more balkanized education systems, there might be. Here in Southern Nevada, there’s not.

I say all this to make the following point: local school autonomy has the potential to do great things for our kids. If principals, teachers, parents, and school-based personnel have greater control over and accountability for the activities that happen at their local school, principals could focus more of their resources on instruction, wrap-around services, or English language aquisition. But true local school autonomy cannot be realized overnight, especially in places where large districts have cornered the market on the workforce that provides educational services. As reformers move forward with initiatives to boost local school autonomy, they’ll rightly focus on the budget and the amount of control that schools have over it. But they also need to focus on creating marketplaces where local schools can get the types of education services they need to reach their goals.

Mike Vannozzi

The opinions expressed in Rick Hess Straight Up are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.