Sky Not 'Falling' on School Budgets

APRIL 4, 2011


If you listen to anyone up and down the food chain of public-school funding in California, Gov. Jerry Brown’s failure to negotiate a budget deal with Republicans means that the sky is falling on revenues for public schools.

This groupthink rhetoric is so unanimous at nearly every level of education and the unquestioning media that it has become a fact, even if it is a half-truth. Let’s examine some of these myths:

“Revenues are falling.”

That is a half truth that ignores the expenditure side of the school financing ledger, which requires more deregulation under ABX 4 2 (2009).

“Chicken Little — California Version.”

Many grade school children can tell you the story of Chicken Little, who concocts a story that the sky is falling when an acorn falls on his head. Little runs off to get other animals to join him on his journey to eventually tell the King. The Fox then lures them into his lair to eat them all. But Cocky Lockey warns them and they escape.

Only in the California version, it is the King who fabricates the story and his foxy bureaucratic apparatchicks (pun intended) who want to lure everyone into believing it. In either version, the moral of the story is to not believe everything you are told.

“The Sky is Falling…”

On the website “Thoughts on Public Education,” funded by the Hewlett Foundation and the Silicon Valley Education Foundation, it is estimated that this could portend from $2 billion to $5 billion in school budget cuts.

Bob Blattner, a public school financing consultant, says that schools should plan on a cut from $800 to $1,300 per student.

“…But So Are Mandated Earmarks”

It is hard to deny the sky is falling on the revenue side of the public-school financing system. What taxpayers and voters are not told is that the Legislature deregulated the expenditure side of K-12 schools under ABX 4 2, resulting in $4.5 billion in potential cost savings, equating to $731 per student.  This was mainly accomplished by eliminating funding for “categorical” jobs programs, as recommended by the State Legislative Analyst’s Office (LAO). Those programs are politically protected job categories unrelated to core teaching.

To clarify, this is not a funding reduction that would have been spent on core teachers. It avoided a $731 per student increase in local school property or parcel taxes. Ending “earmarks” has thus far saved California’s K-12 school system from doomsday.

The State Legislative Analyst recommended another round of deregulation of “categorical” school funding to save $7.4 billion in ancillary costs, reflecting $1,201 per student in potential costs savings for the 2011-12 school year.

It is unclear if this brings any net cuts to schools. So according to the above numbers, the Chicken Littles in California are warning of budget cuts from $800 to $1,300 per student. But the Cockey Lockeys are putting this warning in the context of $1,201 in potential cost reductions that could be authorized if the Legislature further deregulated categorical school funding formulas in accordance with the LAO’s recommendations.

In other words, it isn’t clear that there will be any net budget cuts to K-12 public schools if the Legislature further reduces mandated earmarks.

Falling Sky or Windfall?

Put differently, there is no need for local school districts to create a panic and put school parcel taxes on the ballot to “save public schools.”  Local taxpayers, PTAs, teachers unions and educational foundations that are lured into the fox’s den to raise property or parcel taxes for public schools could end up duped.

If local school districts pass a parcel tax equivalent to, say, $800 per student and the Legislature deregulates program earmarks up to $1,201 per student, a local school district could realize a $2,001 per student windfall while crying that the “sky is falling.”

Water rate hikes are already reportedly crowding out the possibility of raising taxes for public schools. This is not even considering the expected electricity rate hikes starting in 2012 due to mandated green power and cap and trade programs.

Ending Earmarks Suspends the Gravity of Cuts

Local school districts’ efforts would be better spent putting pressure on the Legislature to further deregulate mandated earmarks than in wasting resources on parcel-tax campaigns. Public school funding advocates need to educate themselves that ABX 4 2 is a way to suspend the law of gravity so that acorns don’t fall on the heads of school children resulting in hysterical stories about falling skies.

According to the LAO, the items where additional cost savings could be achieved under ABX 4 2 are as follows:

1. Relaxing the cap on the number of students in grades K-3.

2. Shifting transportation funding for the Hard to Serve program from “restricted” to “unrestricted” because it is based on a “use it or lose it” rule that discourages cost effectiveness. Last year, the HTS transportation program was provided for by special funds and could not be converted into discretionary funding. The state LAO “sees no reason to continue” this program as “restricted.”

3. Amending Proposition 49 for After School Education and Safety (ASES) programs by a ballot measure so that school districts are not forced to increase class sizes and decrease instructional days (furloughs) “while supplemental after school activities remain untouched.”

Prop. 49 was the 2002 initiative that Arnold Schwarzenegger, the year before he ran for governor, used to make himself politically popular in the state. Voters approved it. According to Ballotpedia, it mandates $550 million a year on these programs.

4. Consolidating the five “fractured” Career Technical Education (CTE) programs comprising $427 million by “eliminating” most program requirements.

5. Removing contracting-out restrictions. Under existing rules, “contracting for services cannot be done solely for achieving savings … and cannot result in the lay off or demotion of existing district employees” — i.e., more special interests and vote buying.

6. Removing restrictions that force school districts to pay former teachers their pre-layoff salary rate if the teachers are substitute teachers for 20 days in a 60-day period. School districts that use revolving-door temp teachers while core teachers are sent out of the classroom undergoing “professional development” are ripe for this abuse.

7. Reducing the “programmatic overlap, confusion, and administrative hassles” between the state Quality Education Investment Act (from SB 1133 in 2006) and the Federal School Improvement Program, saving more than $700 million over 3 years.

8. Eliminating 40 mandates imposed on K-12 “restricted” funding programs, “many of which do almost nothing to benefit students and educators.”

So the “sky is falling” on state revenues for public schools. But so are school program mandated earmarks that could potentially fully offset any revenue losses.

This is the side of the story not being told in the mainstream media. Look for any books of the story of Chicken Little to be banned soon in California public schools. Sometimes it takes a children’s story to tell the whole truth.

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  1. David from Oceanside
    David from Oceanside 5 April, 2011, 07:43

    This was all new to this reader. Thanks. I hope this is reported in the mass media.

    Reply this comment
  2. Rick
    Rick 5 April, 2011, 14:11

    David, you will not find this in the mass media, because the mass media (for the most part) does not engage in the type of distortions, half-truths, and twisted logic that permeates Mr. Lusvardi’s rant. Given space constraints, I’ll just focus on one issue–the claim that categorical programs are just “ancillary” “jobs” programs that do nothing for kids. In fact, these programs provide important resources and services to students, such as textbooks, after school tutoring programs, summer school, counselors, and services to special education students. Yes, cutting these programs does save money on “the expenditure side of the school financing ledger,” but these cuts are not merely “regulatory,” as Mr. Lusvardi would have you believe. They are real cuts to real programs that serve our sons and daughters.

    Reply this comment
  3. Jennifer
    Jennifer 6 April, 2011, 09:21

    On the one hand, it is true that categoricals represent state micromanagement of the schools. Which is why this (now two-year-old) bill made sense and has helped ease some of the worst of the budget cuts. A review of the program last May details its effects:

    On the other hand, it is like saying, “we’ll remove the restrictions on your HSA, so now you have more money!” Well, yes, but I still have to pay for health care. Thus, the biggest restricted categorical left is Special Education ($3B). Perhaps Mr. Lusvardi recommends moving the kids back into regular classrooms without aides or other intervention?

    What the bill set out to do in 2009 makes sense in terms of flexibility and has already helped ease some of the current pain. Moving money set aside for building maintenance into classrooms was a reasonable short-term accommodation.

    But the conclusion that a big pocket of money is still in front of us and will somehow make up for future shortfalls in school funding is nonsense.

    Reply this comment
  4. Lea
    Lea 6 April, 2011, 09:22

    Let’s talk about the excessive cost in administrative management and employee benefits, instead.

    Categorical fundings are meant to ensure money is allocated to programs and/or part of the population that could be otherwise overlooked, mostly because underrepresented. Categorical money come with string attached and districts are accountatable for spending and results.

    The AASA has pushed for quite some time to have full control of school budget.*
    I have yet to see the AASA advocating for cut in administrative costs, bonus, benefits, etc. etc.
    I have yet to see the AASA advocating for for increased accountability, or for student success in the classroom (see agenda item below “Do not mandate a four‐year graduation requirement for accountability.”)

    I cannot help but wonder how funds would be spent and allocated if districts had full control over them.

    * From The American Association of School Administrators ( AASA ):

    ” 2010 AASA Legislative Agenda
    Feb. 10, 2010

    • Allow monitored seclusion and restraint as an option of last resort for students who pose a danger to themselves and others.

    • Ensure that states receiving State Fiscal Stabilization Funds, either now or in the future, are not able to disproportionately reduce the amount of state spending on education relative to other areas of their budget. The federal government should supplement and support, not dictate the work of local school

    • School systems should not be required to spend state and local funds for federal mandates.

    • Do not mandate a four‐year graduation requirement for accountability.

    • Drive funds to school systems through formulas and maximize local control.

    • Permit school districts to reduce local effort by up to 50 percent of federal funding increases.

    • Eliminate the requirement for parental consent for Medicaid reimbursement or include it in the
    annual parental consent provisions of the Individualized Education Program.

    • Avoid federal overreach into nutrition policies, which are best addressed at the local level.

    • Permit schools to claim reimbursement from Medicaid for health‐care services to students served under section 504 of the Vocational Rehabilitation Act.

    • Increase Medicaid reimbursements for low‐income students, including school‐based administrative and transportation claims.

    • AASA opposes federal funding to non‐public schools.

    • Permit the private school voucher program in the District of Columbia, known as the D.C.
    Opportunity Scholarship Program, to expire and eliminate the authorization of the program.

    • Make Qualified Zone Academy Bonds and Qualified School Construction Bonds more marketable.

    • Provide direct federal grants and stimulus funds for school modernization, renovation, greening
    and new construction…”

    Reply this comment
  5. Dean Smith
    Dean Smith 7 April, 2011, 17:24

    “Permit the private school voucher program in the District of Columbia, known as the D.C. Opportunity Scholarship Program, to expire and eliminate the authorization of the program.” WOW—what stupidity!

    Why not eleminate Public Education altogether. Let those who value education provide it for their children privately. I can find nothing in the Constution that requires me to pay for the education of illegal immigrants, and your “special needs” window lickers.

    Reply this comment
  6. Susan W. Morrison
    Susan W. Morrison 8 April, 2011, 18:49

    If it’s true that former teachers are supposed to be returned to their original pay grade if they substitute more than 20 days in 60, then why was I, a retired teacher (35 years, paid only $120 per day for taking on a very difficult class for 2 months as a favor to the principal? (I should have been making $300 or better.) I’ll never do that again. I can make more money than that elsewhere with less stress and effort. There still are some market principles and free choices left in public education.

    Reply this comment
  7. Wayne Lusvardi
    Wayne Lusvardi 11 April, 2011, 20:25

    It isn’t me doing any distorting. Take your “rant” and call the California Legislative Office LAO and dump on them. Sure, you are right, non-core services would be cut if “categorical” programs are phased out. But what choice do we have if there is no money? What else would you suggest?

    Thanks for reading the article.

    Reply this comment

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