A Case Study in “Wrongness”

Here I examine a case study in almost everything that is wrong with the status quo in American public schooling. Despite what Michigan’s House Education Committee Chair Lyons* would have you believe, the status quo defenders are not greedy, unionized teachers trying to protect their own perquisites over the needs of children. No, “status quo” is Latin for the “existing state” of things. The state of public education for a generation of children now has been a regime of testing, competition, choice, and punishment — firing of teachers and administrators and closing of schools and entire districts. What passes for education reform in Michigan — and has for some time now — is what John Austin, President of the State Board of Education, has called “a ‘Wild West’ of unfettered, unregulated new school creation, decoupled from the goal of improving learning and student outcomes.”

Amy Biolchini of mlive.com did some great reporting on a new charter school set to open in Ypsilanti in the fall of 2014. This story illustrates almost all that is wrong with our actual educational status quo in Michigan.

Schools fail but get to begin again with new names

The new K–5 school is being opened on the same site by the same owners (Global Educational Excellence) as a failed previous charter school, Victory Academy. That school had operated for six years before its authorizer, Bay Mills Community College (not known for its exacting standards), chose not to renew its charter due to its “financial condition and academic performance.” Financially, the school budget was in deficit. Academically, its final 2010–11 MEAP scores showed one student proficient in writing (4th grade) and none in science (fifth grade). The four-year trends in reading and math scores show volatility in the percentages rated “not proficient,” as one would expect with such small numbers of students, but those percentages of failure were higher (generally much higher) than state averages in all cases:

Accountability measures spelled out by state and federal laws depend upon multiyear data and trends, so the easiest way to avoid failure and sanctions is to cut off those trends and begin from scratch. That is what is happening here, where the same operators in the same location with a similar student population just get a do-over by obtaining a new charter and renaming the school.

Teachers are replaced by devices

"One-to-one computing" and a "digital curriculum" are touted as a more efficient (read: "cheaper") and "student-centered" (meaning "do-it-yourself") way to deliver educational services. I doubt there is a single soul involved in education who does not think that it should be student centered, but there is a yawning gap between the label and the reality. For example, the Education Achievement Authority (EAA), home to “persistently failing” schools in Detroit taken over by the state, provides this allegedly newer and better kind of education. The model cannot possibly work, however, when students must share devices and when the promised digital curriculum is not available. Numerous reports (see the EclectaBlog series for examples) from teachers, former teachers, parents, and students subjected to the EAA allege that only about half the necessary platforms have been available for use and that the touted curriculum often does not exist. This is a particular problem for the many beginning and/or minimally trained Teach for America staff members who are not experienced with developing and implementing curricula themselves.

Adaptive software that offers just the right degree of challenge for each student can be a helpful part of a complete educational program, especially for students who are far behind on basic skills, but a completely on-line education leaves out a lot of important aspects of an excellent education. Calling it “student centered” does not mean that it serves all or even most of a student’s genuine educational needs.

Students work alone, not together; at keyboards, not hands-on

I experienced a very regimented elementary education in the overcrowded classrooms of the 1950s, wherein student participation was tightly limited and controlled. I still managed to learn, but that system worked poorly for a very large percentage of students. By the 1970s, educators had a good grasp of the importance of interactive discussions in class, both in engaging students more completely and in encouraging them to think in complex and evaluative ways. By the mid-1980s, educators knew that hands-on learning was much more powerful and effective than memorization for fostering deep conceptual understanding. By the 21st Century, educators understood the importance of having students work collaboratively on authentic problems in project-based learning. This model helps students to develop the cooperation, communication, and presentation skills they will need to be effective in both college and the workplace. Throughout these decades, more and more students did well in school, achieving higher scores on achievement tests and higher graduation rates.

Using devices to deliver a digital curriculum is simply not enough to provide a well-rounded education and to develop important collaborative and social skills. This model can be expected to fail at least as many students as did the similarly restrictive one of the 1950s. After well over a decade of increasingly prescriptive and decreasingly creative classroom methods mandated by the new status quo, achievement levels have stagnated or receded — but “reformers” refuse to admit to this obvious failure. They have, in fact, created the very crisis they invented to justify their ersatz reforms, when public schools had been on an upward trajectory for many, many years before the test-and-punish regime began with No Child Left Behind.

The educational design is driven by profit considerations, not educational concerns

The fact that for-profit vendors seem to be poised to run the show at the planned new school is also emblematic of something wrong with our new, “improved” educational status quo. Each student at the new school will be assigned an Android tablet “programmed and provided by Amplify, a company that provides devices programmed with classroom-ready curriculum.” Amplify is owned by Rupert Murdoch’s News Corp. Forbes Magazine, a publication not exactly hostile to business, published an article on Amplify last fall. Author Jordan Shapiro reported on what sound like killer educational games, such as Fruit Ninja geometry and Lexica, a role-playing game that includes interaction with literary characters and incentive to read more outside the game in order to do better within it. He did express reservations about the message implicit in the humanities games looking “old-fashioned, antique, and fantastical” while the “science and math games look modern, polished, and innovative.” But I agree with the premise that well-designed games can be a great way to engage today’s students in learning they might otherwise resist or avoid.

But Amplify also won a multimillion-dollar contract to develop Common Core formative assessments, thus ensuring a long-running profit stream from all the schools and districts that will be forced to use them. It can make money on designing curricula, delivering it, and assessing the effectiveness of its delivery. As another Forbes article, “Charter School Gravy Train Runs Express to Fat City,” noted last fall, “dozens of bankers, hedge fund types and private equity investors gathered in New York to hear about the latest and greatest opportunities to collect a cut of your property taxes [at] the Capital Roundtable’s conference on ‘private equity investing in for-profit education companies.’”

Very rich people have jumped into the charter movement not simply out of philanthropic concern, but because it is a terrific way to get even richer. “It’s the tax code that makes charter schools so lucrative: Under the federal ‘New Markets Tax Credit’ program that became law toward the end of the Clinton presidency, firms that invest in charters and other projects located in ‘underserved’ areas can collect a generous tax credit — up to 39% — to offset their costs. So attractive is the math, according to a 2010 article by Juan Gonzalez in the New York Daily News, ‘that a lender who uses it can almost double his money in seven years.’”

The billions of public dollars once spent almost exclusively by non-profit educational organizations are now out there for the picking. What could possibly go wrong, when those in control are motivated by profit rather than by “what is right for kids”?

So, we have a new school rising from the ashes of a failed one, where kids can be taught cheaply by devices rather than people, where achievement is defined strictly in terms of mastering a particular curriculum that includes no collaborative skills beyond role-playing games and no authentic hands-on or project-based learning, by providers who are all guaranteed a good profit no matter how the students do. THIS is today’s educational status quo — and no one has been able to demonstrate that it works well, let alone better than the allegedly “failing” system it is replacing. Yet “reform” proponents — really defenders of the current status quo — keep doubling down on what has patently not been working, as exemplified by this one proposed school. As the old movie admonition goes: Be afraid. Be very afraid.

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* In a recent radio interview, Rep. Lisa Posthumus Lyons said, of critics of the EAA, “We have found that there’s no depths that the defenders of the status quo won’t go to stop innovation and change.”

Dueling Facts about K–12 Funding

This is an election year, so we will continue to hear conflicting stories about how public schools in Michigan are funded. On both sides, the facts are largely correct, yet the conclusions — spending has gone up or has gone down — are opposite. How can this be? Whom are we to believe?

The kind of sound bites we will be incessantly exposed to during a campaign season cannot adequately capture the full story of school funding. Nor can I, in a single blog post. But I will explain some of the reasons the facts and conclusions seem to contradict one another. The bottom line is that, while state spending has increased, the amount of that spending available to traditional public school districts (which I will call “districts” for brevity) for operations has not, when one controls for inflation. The reasons include
(1) tax cuts significantly reduced revenue for school aid;
(2) existing school aid money has been diverted to other uses;
(3) nominal increases in funding were not equitably distributed;
(4) nominal increases were absorbed by mandated retirement contributions;
(5) overall funding has not kept pace with inflation;
(6) Proposal A and the Headlee Amendment constraints will delay recovery of property tax bases for many years; and
(7) funding has not kept pace with the concentration of needier students left in public districts by choice and charters.

For all these reasons, traditional school districts have greater needs and less inflation-adjusted revenue available to actually educate children than since before the Great Recession began. If you consult the Senate Fiscal Agency’s ten-year history [www.senate.michigan.gov/sfa/Departments/DataCharts/DCk12_FoundationHistory.pdf‎] of per-pupil Foundation Allowances for every district and charter in the state, you will see that they are now below what they were in 2006–07, before the recession began. This is why an unprecedented number of districts are in deficit or flirting with deficits.

When Funding “Increases” Equal Decreases

The simple math used to demonstrate “increases” is misleading. In his January 2014 State of the State address, Governor Snyder asserted that state spending on K–12 education (not counting preschool or adult education) has increased $660 per pupil from 2010–11 to the 2013–14 current school year. This is true (although the actual math says it was $666). Total state spending was divided by the official fall student count to produce the figure.

Why is this misleading? People assume that increased state spending translates into more money for school operations — that is, more money in the classroom. It has not, in the aggregate. (It may have for some districts but not others; we are talking statewide averages here.) Nearly all of the increased funding went to the Michigan Public School Employees Retirement System (MPSERS). Due to legislative changes beginning in 2007, newer teachers will never have the kind of traditional pension once enjoyed by their colleagues, but the unfunded liability for current retirees and older teachers is still considerable and grew enormously when invested monies lost value during the recession. This MPSERS liability tends to soak up any alleged increases in funding. This year, for example, the state budgeted a modest increase in the per-pupil Foundation Allowance. Charter schools, almost none of which participate in MPSERS, enjoyed this increase. Traditional schools sent all of it — and usually a bit more — right back to MPSERS. The “increase” translated into an operational decrease in funding for them.

It is difficult to overstate the effect that the rising MPSERS liability has had on traditional public school districts. Remember: they were required by law to participate in MPSERS. Every employee, from kitchen workers to bus drivers to custodians to substitute teachers, had to be part of the system. Yet the state sets benefit levels and districts have no control over the costs. For example, the state offered financial incentives for older teachers to retire — allegedly “saving money” for the schools, which could replace them with younger teachers at lower pay rates. But those incentives permanently increased the retirement pay — and the MPSERS liability — for those retirees. That immediately translated into increased diversion of operating funds to retirement costs. Declining numbers of employees contributing to the system (due to lay-offs, diversion of teachers to charters, cyber schools, and the Educational Achievement Authority; changes to the system for newer employees; and privatization of non-instructional district employees) has exacerbated the revenue constraints — even as participants contribute substantially more to their own and to existing retirees’ pensions and post-retirement health care.

The state annually mandates the percentage of payroll that districts must contribute to MPSERS. Legislation that reformed this system capped the district/employer contribution to MPSERS at 25.8 percent of payroll. That is, for every $100 of salary to the employee, another $25.80 is owed to MPSERS. This has been the driving force behind privatization of all but regular teaching jobs. Most districts now contract with a third party to provide substitute teachers, for example. If the subs are not district employees, then this surcharge is not owed. The same savings can be found through contracting out for non-teaching jobs. (That also means, of course, that the contract employees have lost significant benefits.)

The cap on contributions means that the state pays any amount over it needed to fund the system; in fact, the state has made additional contributions in some years toward the accumulated unfunded liability that was exacerbated by the effect of the Great Recession on MPSERS invested assets. These contributions all come from the State School Aid Fund, though, which means that less dedicated funding has been available for school operations.

In addition to the MPSERS drain, many of the increases in funding on Snyder’s watch have not been rolled into the Foundation Allowance and are or will be disappearing. These include various “performance-based” awards, as well as this year’s one-time “equity” payment for the lowest-funded districts — which presumably can go back to the previous level of inequity next year. All of these disappearing pots of money are experienced as funding cuts on the ground.

Diversions from and Reductions in the State School Aid Fund

The state’s School Aid Fund (SAF) collects earmarked revenues from many sources. The state has historically supplemented the SAF with appropriations from its General Fund, as well. But, in recent years, the SAF has taken major hits from two directions: deliberate reductions in its revenue streams and diversion of its funds to new uses.

About 80 percent of the fund’s dedicated revenue comes from the statewide education property tax, plus portions of the sales and income taxes. The rest comes from lottery profits and several smaller taxes, including real-estate transfer, tobacco, and liquor taxes. Gov. Snyder and the Michigan Legislature eliminated the Michigan Business Tax, which had contributed more than $700 million a year to the SAF. They are also phasing out the Personal Property Tax on most business equipment, for a cut in the State Education Tax and in local school taxes estimated by the Senate Fiscal Agency as another $19.9 million in 2014, $20M in 2015, $44.7M in 2016, and $45M in 2017. Revenue for only partial replacement of the Personal Property Tax has been identified, and the SFA warns that the requirement on the Legislature to make even those appropriations is not considered legally binding.

As the recession deepened, Governor Granholm made an emergency, one-time allocation from the SAF to higher education, which had always been funded through the state's General Fund. Governor Snyder chose to make that a permanent diversion and to double the amount. Thus, some $400 million per year is now unavailable to K–12 schools because it goes instead to colleges and universities.

Expanded preschool programs, which most educators would agree are necessary, took another $65 million from the SAF this year. The governor proposes to double that amount next year, making $140 million per year not available for K–12 needs.

Unaddressed But Increased Needs

The governor’s calculations alleging increased funding do not factor in inflation. Districts must contend with inflationary increases in costs for utilities (especially this winter!), technology, books, materials, buses and fuel, professional services, and so forth. Most district employees have experienced pay cuts and benefit cost-sharing increases since the recession hit, and none have yet regained that take-home pay. Teachers at the lower rungs of the longevity ladder have also been hard hit by freezes in the “step increases” that normally raise their pay as they gain experience. But a desire to fairly compensate their employees is hardly the only reason districts are clamoring for funding increases.

Unfunded mandates are an ongoing problem. New teacher evaluation requirements and the adoption of the Common Core State Standards (CCSS) both involve considerable expenses not reimbursed by either federal or state funding. Districts have already invested years of planning in them, and the CCSS requires software and a huge number of computing platforms for its on-line assessment tests. There are also large costs associated with compliance with the Affordable Care Act, in addition to expected annual premium increases for health coverage.

Simultaneously, the need for and cost of purely educational services rises as district student populations change. At-risk students are increasingly concentrated in poorer districts, as other students are diverted to charters and to wealthier districts through “choice.” The state does offer additional at-risk funding, although the level of such supplemental funding does not approach that needed to adequately address the needs. Duncombe & Yinger (2005), in the Economics of Education Review, estimated that economically disadvantaged students would cost 100% more to properly educate. State law offers 11.5 percent more. State appropriations are inadequate, however, so the actual supplement was less than 7 percent last year, according to the Michigan Department of Education.

Special Education is similarly underfunded. Under the Individuals with Disabilities Education Act (IDEA), the federal government mandated an “appropriate” education in the “least restrictive environment” for students with specific learning disabilities, speech or language impairments, intellectual disabilities, autism, or emotional disturbances. It has never, however, come close to meeting its commitment to fund 40 percent of the difference between the cost of educating a disabled student and a general student. Under the sequester, the federal share fell to 14.9 percent, forcing additional costs to come from per-pupil funding for other students. So the districts, which educate a much higher percentage of students with disabilities than do charters, are at a great economic disadvantage in meeting all their students’ needs.

The funding burden is exacerbated in Michigan, which mandates special education through age 26. Keep in mind that 72 percent of Michigan charter school students are elementary (K–5) school students (CREDO, 2013), so this burden would be minimized for them even if they did not serve a much lower proportion of each grade cohort of special education students.

The Bottom Line

The overall-funding-divided-by-pupil-count calculation used to trumpet “increased” education funding is both technically true and deeply fraudulent. This simple average significantly misrepresents how much funding can actually be used to support and improve teaching and learning and vital school operations. Moreover, averages mask significant differences in the actual per-pupil funding received by individual districts or available to them for operations. Unprecedented numbers of districts are in deficit, on the edge of such trouble, or rapidly burning through any fund balances they once used to cushion annual funding volatility. Of all the factors I review above that contribute to this problem, the MPSERS drain is the most severe. Most other states appropriate employee pension contributions separately from direct K–12 spending. When the U.S. Department of Education corrects its data for our diversion of funding to pension costs, it ranks Michigan as 26th in per-pupil spending — a dramatic decline in our ranking since the pre–Proposal A period.

If you believe the “increased funding” line and really think that school districts are crying wolf, I encourage you to speak with your community’s parents, teachers, school staff, and school boards to learn the truth they live with daily.