Opinion
School & District Management Commentary

Districts’ Financial Crisis Is Not the Time to Talk Reform

By Harold J. Kwalwasser — June 03, 2010 4 min read

It seems that every day for the past few months there has been an article reporting that some school district faces widespread teacher layoffs this fall. The recession has sapped local and state funds, and the districts have no choice.

U.S. Rep. George Miller, D-Calif., and U.S. Sen. Tom Harkin, D-Iowa, have responded by proposing that the federal government spend an additional $23 billion largely to save teachers from wholesale firings. The Obama administration has endorsed the idea.

In an essay last month, the Hoover Institution’s Eric A. Hanushek objected. His argument was simple. In every crisis, one should find opportunity. The opportunity he has found from this crisis is precisely the disaster Miller and Harkin want to avoid. Hanushek wants to eliminate what he considers the excessive number of teachers hired over the last couple of decades.

For a variety of reasons, any argument that concludes there is a “bloat” in teaching staffs should be closely scrutinized. But even if Hanushek’s premise is correct, his desire to seize upon a funding crisis to solve it is bad public policy.

Financial chaos does not promote positive change. When districts’ funding is uncertain, administrators and school boards have no time to worry about innovation and transformation. All life is sucked from discussions of reform. The nitty-gritty of how to balance the budget, whether it is how many teachers to fire or which programs to cut, drowns out any consideration of real, long-term improvement.

Hanushek has a long and distinguished career studying education. The one thing he has not been is a school administrator. My résumé in education is neither as long nor as distinguished as his, but that is one thing I have done.

When I was the general counsel of the Los Angeles Unified School District in the early part of the last decade, the superintendent, former Gov. Roy Romer of Colorado, had a strong commitment to reform. Then January would roll around, and we would receive notice from our legislative representatives in Sacramento that our state funds would likely be cut. We would immediately pass the word to the staff and the unions, and everyone suddenly began jockeying. In March, we would get another notice, and the politicking would go through another round. In some years, it went on well past the supposed budget deadline in June.

Did reform fit in? No. In the real world, the politics of layoffs and program trumped reform every time. And even if we kept talking about reform, we were looking over our shoulders at Sacramento, doubting whether it was worth having the discussion at all since we did not know if we would have money to pay for our better ideas.

The first casualty of budget instability then is the very innovation and transformation that Eric Hanushek—and virtually everyone else in this country—wants.

Moreover, the amount of the shortfall this year, $23 billion, bears no relation to the number of teachers who may not be needed. Indeed, it bears no relation to any well-thought-out plan of reform. It is an entirely arbitrary amount, determined solely by the consequences of the recession.

The lack of logic about pushing districts to absorb the $23 billion in lost funds is compounded by the fact that nothing suggests that those districts that will be hit the hardest have been guilty of hiring more teachers than necessary. On the contrary, the leanest districts, which already have the least to spend, may suffer most.

As usual, so-called opportunities like responding to a budget crisis afflict those districts serving large numbers of low-income students. Richer districts are not so obliged.

The budget roller coaster is not just a problem in California. It is a problem in states all across the country. School districts traditionally relied on property taxes to fund schools. That led to an inequity. Some districts were simply richer than others, and, not entirely by coincidence, the districts that were richer tended to have more middle-class kids and fewer minorities.

So states stepped in—either on their own or in response to a court order. The richer districts would still rely heavily on property taxes, but poorer ones would now rely more on state aid.

But state funds come with a curse. They are not stable. State budgets go up and down depending on income taxes and sales taxes. Since those budgets must be balanced, either taxes are raised to compensate for revenue loss (not often a popular idea), or state spending is cut—including money for schools.

Unlike state taxes, property taxes (with the exception of the last two years) are highly stable. Even if these districts have losses, their wealthier residents may accept a property-tax increase to keep things as they have been. If there are changes to be made, it is likely to be because the schools have come up with a better idea. It is not just to avoid going broke.

In New York state in February 2009, the chair of the education committee of the Assembly released a district-by-district analysis of the budget cuts school districts likely faced (before President Barack Obama’s stimulus package was approved). Wealthy suburban districts faced losses of $100 to $500 per student. The losses to poorer, urban districts were $1,000 to $1,700. That same scenario confronts school districts across the country this year. It makes our promises to end the achievement gap hollow.

If and when we want to cut money to schools, it should be a deliberate act. The current shortfalls are not an opportunity to seize, but a disaster to prevent. We should set public policy with a firmer sense of the facts and a clearer idea of where the ax is going to fall.

A version of this article appeared in the June 09, 2010 edition of Education Week as Districts’ Financial Crisis Is Not the Time to Talk Reform

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