Republican politicians may no longer be the loudest critics of teachers unions. Influential Democrats are now speaking up also, such as New York Governor Andrew Cuomo. Here’s what he said in a recent interview:
“If (the public) understood what was happening with education to their children, there would be an outrage in this city,” Cuomo said. “I’m telling you, they would take City Hall down brick by brick.
“It’s only because it’s complicated that people don’t get it.”
Cuomo said the teachers union is “more interested in protecting the rights of its members than improving the system for the kids it is supposed to be serving.”
“Somewhere along the way, I believe we flipped the purpose of this,” Cuomo said. “This was never a teacher employment program and this was never an industry to hire superintendents and teachers.
“This was a program to educate kids….”
Responding to a union member who said he represents the students:
“No, you don’t,” Cuomo said he told the person. “You represent the teachers. Teacher salaries, teacher pensions, teacher tenure, teacher vacation rights. I respect that. But don’t say you represent the students.”
If the liberal Democrat Governor of New York can say such things, shouldn’t Oregon’s Governor do the same? After all, he’s the same Governor who signed Oregon’s 1999 charter school bill into law against the objections of―guess who? The teachers union.
By William Newell with John Glennon and Brandon Maxwell
Most Oregon taxpayers are likely to have heard of the multi-billion dollar problem of unfunded pension debt for public sector workers. Oregon’s Public Employee Retirement System (PERS) is one of the most generous in the country, and paying for it has forced cities, counties, and school districts to repeatedly cut services to current residents in order to transfer large amounts of revenue to retirees. Despite robust stock market returns on PERS investments, the PERS fund is still billions of dollars short of being fully funded.
While this problem has been well chronicled by the news media over the past 15 years, there is another aspect of retirement debt that has received much less scrutiny: Other Post-Employment Benefits (OPEB). These are benefits promised to employees that will be paid out during retirement years in addition to pensions. Such promises typically include health care coverage, but may also include life insurance, longterm disability insurance, or any other benefit negotiated by the employee.
More than a decade ago, the Government Accounting Standards Board (GASB) recognized that such promises imposed real obligations on public employers, but the amount was not being specifically identified in annual financial reports. Therefore, GASB adopted Statement 45, which requires that all units of government undertake regular valuations of their OPEB obligations and clearly state those obligations in annual financial reports.
OPEB audits must calculate liabilities for all current and future retirees, amortized over a period not to exceed 30 years. Based on these calculations, actuaries determine what the Annual Required Contribution (ARC) would be if each entity paid for current OPEB benefits as well as future obligations, on an amortized basis.
However, the ARC is not actually mandatory, despite use of the word “required;” governments must publish information about net OPEB liabilities, but are not required to create OPEB trust funds or pay anything for future obligations.
PORTLAND, Ore. – Cascade Policy Institute today announced the release of a new report showing that Oregon public employers have more than $2.6 billion in unfunded actuarially accrued liabilities associated with non-pension benefits promised to current and future retirees. These benefits, often referred to as “Other Post-Employment Benefits (OPEB),” typically include health care coverage for retirees, but may include other forms of deferred compensation such as life insurance.
A decade ago, the Governmental Accounting Standards Board (GASB) mandated that public employers begin clearly stating financial obligations for OPEB in their comprehensive annual financial reports. However, employers were not required to set up trust funds to pay for these promises. As a result, the Cascade review of 125 financial reports of state, regional, and local governments shows that most employers have no money set aside and are paying for OPEB obligations out of annual operating revenues. This cannibalizes funds needed for actual services.
The Portland transit agency TriMet has the biggest unfunded OPEB liability, estimated to be $950 million as of January 2014. Other employers with relatively large unfunded liabilities include Lebanon school district, Tillamook County, and the city of Corvallis.
Cascade President and CEO John A. Charles, Jr. said, “Over a period of decades, Oregon public employers have deliberately back-loaded employment contracts so that the cost of generous compensation packages would not become apparent until decades later, when the decision-makers themselves would be long gone. Those time bombs are now exploding, harming public school students, transit riders, and others who rely on public services.”
The Cascade paper is a call to action for the legislature to impose some form of fiscal discipline on public employers by requiring them to make annual contributions to OPEB trust funds. Legislation to accomplish this has been considered in past sessions but never approved.
In commenting on this failure, Charles noted, “Actuaries always state what it would take to amortize OPEB liabilities over a 25-year period; these are referred to as ‘annual required contributions (ARC).’ Unfortunately, most government managers treat the ARC as merely a suggestion. All the Oregon legislature has to do is pass a one-page bill reaffirming that ‘required’ means ‘required.’ How hard can that be?”
The Cascade report, Unfunded OPEB Liabilities for Oregon Public Employers: A $2.6 Billion Time Bomb, can be downloaded here.
School choice is widespread in America, including in Oregon—unless you are poor. Affluent families have choice because they can move to different neighborhoods or communities, send their children to private schools, or supplement schooling with tutors, online courses, and enrichment programs. Lower- and middle-income families, meanwhile, too often are trapped with one option: a school in need of improvement assigned to them based on their zip code.
Some states such as Arizona, Wisconsin, and Florida have made significant progress toward providing more Kindergarten through 12th grade options for many children. Public charter schools (including online charters) and private school attendance made possible by state funded vouchers or tax credits are increasing families’ opportunities to find the right fit for their children. But these options are constantly under attack by those who represent the status quo: those who want the public school system to stay just the way it is, so it continues to provide virtually guaranteed jobs and benefits for certain teachers and administrators―regardless of the results achieved by the children they are supposed to serve.
Nobel Prize winning economist Milton Friedman first popularized the school choice voucher concept in his 1962 book, Capitalism and Freedom. Now, a new concept is capturing the imaginations of a new generation of parents and policy makers: Education Savings Accounts (ESAs). Going beyond the voucher or tax credit idea for school choice, ESAs introduce market concepts that help parents become active shoppers for educational services, thus improving their quality while reducing costs.
As Matthew Ladner, Ph.D. wrote in a major study for the Friedman Foundation for Educational Choice:
Education savings accounts are the way of the future. Under such accounts—managed by parents with state supervision to ensure accountability—parents can use their children’s education funding to choose among public and private schools, online education programs, certified private tutors, community colleges, and even universities. Education savings accounts bring Milton Friedman’s original school voucher idea into the 21st century.
ESAs differ from state-funded vouchers. Typically, parents can redeem vouchers only at state-approved public and private schools. In contrast, ESAs allow parents to choose among public schools, private schools, private tutors, community colleges, online education programs, and universities. In addition, ESAs allow parents to put unused funds into college savings plans, thus changing the “use it or lose it” mentality in the current public school funding system. ESAs promote user-based subsidies (like the food stamp program) rather than supplier-based subsidies that represent the current public school funding model.
Conceived of by the Goldwater Institute of Arizona, Education Savings Accounts were first passed by that state’s legislature in 2011 for special-needs children. Known as Empowerment Scholarship Accounts there, the program was expanded in 2012 to children adopted out of the state foster system, children of active-duty military parents, and children in “D” and “F” failing schools. Children entering Kindergarten were added in 2013 and funding for the accounts was increased. Arizona parents can get all the information they need about these accounts from the state’s Department of Education.
Nationally, school choice is becoming a more bipartisan issue as many Republicans are being joined by leading Democrats, such as former Clinton White House Press Secretary Mike McCurry. McCurry is now chair of the national Children’s Scholarship Fund, which provides privately funded tuition scholarships to low-income elementary school kids. He describes the school choice movement as a rare example of centrism in our increasingly polarized American politics.
And, U.S. Senator Cory Booker of New Jersey (D) has long been a school choice advocate. Speaking in 2001 for Cascade Policy Institute, Booker told Black students at Portland’s Self-Enhancement, Inc. how important school choice is for his fellow African Americans.
It is time for Oregon to move further toward school choice for every child, and ESAs offer an attractive way to start the journey. Already, our state has over 120 public charter schools made possible by passage of a 1999 bill in a Republican-controlled legislature that was signed into law by a Democratic governor (John Kitzhaber).
In the 2015 state legislative session, Oregonians will have an opportunity to start down the ESA road with passage of House Bill 2770, the Education Equity Emergency Act (E3). It will create Empowerment Scholarship Accounts modeled after the highly successful Arizona program. These scholarships will help level the educational playing field for kids with special educational needs, in foster care, or in low-income families. Scholarship recipients can use ninety percent of their state education funding for approved educational expenses like private schools, tutoring, education therapy, textbooks, online education programs, community colleges, universities, or college savings plans.
One sponsor of the 2014 version of the bill, SB 1576, noted, “These students have had unique challenges in their lives and require enhanced educational flexibility to ensure successful degree attainment.”*
The Act is designed to impose no financial burden on the state or on the school districts that scholarship students currently attend. Scholarship participation will be capped at 0.5% of students in a school district unless a district chooses to allow additional participation.
Oregon has a history of bold experimentation in other policy areas. Now is the time to experiment with expanding the role of parents choosing―and the market delivering―better education for Oregon’s children. Education Savings Accounts will empower families to find better educational options, leave the “use it or lose it” funding mechanism behind, and save toward their children’s higher education. Altogether, ESAs will provide winning solutions for children, their parents, and Oregon’s future.
* From a letter by State Senator Tim Knopp to then Chair of the Senate Education and Workforce Development Committee Mark Hass requesting a hearing on SB 1576 during the January 2014 interim legislative hearing days. The hearing took place on January 16, 2014. Archived video is here.
(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. An earlier version of this Commentary was published in January 2014.)
“I wish that the education system could understand that not every child fits into the same sized box, and everyone needs to do what is right for their family,” says Lisa, a Portland-area mother whose children receive tuition assistance from the Children’s Scholarship Fund-Portland.
When Cascade Policy Institute started this privately funded scholarship program in 1999, we learned “hands-on” that middle- and lower-income parents share the same interest in their children’s education as do parents of greater means, and they are motivated to seek the same kinds of opportunities on their behalf.
Parents know a solid education prepares students for life, and that path begins in grade school. But many children are trapped in neighborhood public schools assigned to them by their street addresses that, for many reasons, may not meet their needs or standards that are important to their families.
“Education reform” debates usually focus on how to get the maximum number of children minimally educated. But real-life parents want to get at least a minimum number of children (their own) maximally educated. These two goals shouldn’t be at odds. In fact, the second can drive the first―if more parents had the opportunity to make meaningful choices about their children’s education.
Fifteen years ago, the national Children’s Scholarship Fund (CSF) offered dollar-for-dollar matching grants to independent local partner programs that would provide partial tuition assistance to low-income grade school children to attend the schools of their choice. Cascade Policy Institute was among the nonprofit organizations which took up this unprecedented challenge, raising $1 million in local funds to start a $2 million local program, the Children’s Scholarship Fund-Portland. Since then, CSF and its partners have invested $610 million in private funding to help more than 145,000 children nationwide.
While they don’t have much discretionary income (the average CSF-Portland family income is $39,000), CSF families always must pay part of their tuition themselves (Portland parents pay $1,799 on average). This ensures that the scholarship remains a “hand up,” rather than a handout. Because they have “skin in the game,” CSF parents are motivated to choose schools carefully and to encourage their children to make the most of their opportunities.
The private schools CSF students attend typically spend one-third to one-half what neighboring public schools spend per student (the average tuition for CSF-Portland students is $3,856 this year), with better results in terms of graduation rates and college attendance. However, the point of the CSF program is not to prove that private schools are better than public schools. Rather, CSF believes that parents are the primary educators of their children and have their interests at heart. When empowered with a modest amount of financial help (the average Portland scholarship award is $1,497), parents will invest their own money, time, effort, and discipline to obtain the kind of education they want for their students.
CSF partner programs respect the decision-making processes of families and support parents in directing their children’s education. This family-centered element is what sets parent-focused school choice efforts apart from other ways of addressing the failures of today’s public education system. No one can design a school system that meets every child’s needs. No statistical data analysis or bureaucratic goal setting can ensure that any particular child makes it to high school graduation, succeeds in college, or excels in a career. No school can be all things to all children―nor should it. But most parents, including low-income ones, are keenly aware of their own students’ needs, aptitudes, strengths, and interests―and what it takes for them to learn.
“The children have grown in spades since attending [their] school,” says Lisa. “They have a school family that is very comforting to them. They feel safe every single day. They know that everything that is being done is centered on their lives and future….In their prior school they were pushed aside, never pushed into academically challenging areas. Here at this school every opportunity is given to them to succeed and become better students and better learners.”
Top-down education reform focuses on what is not working for large numbers of people―but keeps those students in the system while the problems are being “fixed.” School choice focuses on what is working across all kinds of schools―and empowers parents to choose the options that best help their children learn.
Top-down approaches pour more money into a broken system. School choice programs achieve more satisfactory results with more modest amounts of money because the dynamic is shifted in favor of parents. Government-focused education reform analyzes the forest; school choice promotes the best interest of the trees. School choice programs like CSF-Portland prove that good things happen when parents have opportunities to choose excellence for their own children.
(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. Versions of this Cascade Commentary have been previously published.)
Next week is National School Choice Week. Every January, National School Choice Week highlights the need for effective educational options for all children “in a positive, forward-looking, fun, nonpolitical, and nonpartisan way.”
Planned by a diverse coalition of individuals and organizations, National School Choice Week features special events and activities that support school choice programs and proposals. School Choice Week began four years ago with 150 events. Since then, it has grown into the world’s largest celebration of education reform. The 2015 School Choice Week will feature more than 10,200 independently planned events nationwide.
Andrew Campanella, president of National School Choice Week, explains, “More American families than ever before are actively choosing the best educational environments for their children, which has galvanized millions of additional parents―those without options―to demand greater choices for their own children. National School Choice Week will [provide] a platform for people to celebrate school choice where it exists and demand it where it does not.”
Students have different talents, interests, and needs; and they learn in different ways. The landscape of educational options to meet those needs is far more diverse today than it was even a few years ago. It’s becoming increasingly evident that more choices in education are the way of the future. For more information, visit National School Choice Week online at schoolchoiceweek.com.
By Darla M. Romfo
Last fall I had the pleasure of attending the awards ceremony for the Broad Prize for Urban Education. In the ensuing days, many bloggers and journalists weighed in with criticism, including one who pointed out that “although recent winners of the Broad Prize show positive results compared to many large urban districts, their scores are largely flat—or worse—over the past several years.”
I am sure this must be both disappointing and frustrating to Mr. and Mrs. Broad who made the fortune they are giving away by innovating, adapting, and always getting better. They wanted this prize to inspire the same kind of actions in public education.
Teddy Forstmann, who, along with John Walton, founded the Children’s Scholarship Fund (CSF) in 1998, was a man cut from the same cloth as Mr. Broad. Ted hoped the demand demonstrated when parents of 1.25 million children applied for 40,000 partial scholarships to escape their assigned public school would get the ball rolling and bring about substantial educational improvement for all children within the four-year window for those first scholarships. In Ted’s experience, demand for a better product and a bit of competition led to an improved product. Ted was certainly frustrated with the snail’s pace of it all.
And by now everyone who has ever uttered the words “education reform” is a little frustrated. More than a decade later, billions more in taxpayer dollars, in addition to the billions heaped on by private philanthropy, has been spent to achieve largely mediocre to poor overall results. There are pockets of hope, and we do have much better data. Now we know there is not only an achievement gap between minorities and whites, but also between all U.S. students and children in other countries.
It’s not clear that if we had full blown school choice, the end of teacher tenure, higher standards, or whatever flavor of education reform you favor, that every child would have the opportunity to reach their full potential. Certainly, one or some combination of those things would help many children; but we would still have kids who live in poverty and very unsettled home situations coming to school every day with needs that are beyond what can be addressed by education reform alone.
One thing I have both experienced through relationships with students I’ve met through CSF and observed in the lives of others is that a caring adult who really invests in an authentic relationship with a child will bring enormous benefits to the child, to say nothing of the rewards to the adult. I know Ted and John both experienced this with children they helped directly apart from their education reform efforts. John once told me on a school visit in Omaha that giving the scholarships and meeting the kids and their parents grounded the whole effort of trying to reform the larger system. He knew no matter what happened with those efforts, he was having a direct impact on the lives of kids today.
We can’t stop trying to get education right in America, but maybe we will get further faster if every adult who can gets involved in the life of a child who has a couple of strikes against them. Whether it is through a mentoring program, a scholarship program, a school-based program, or some other means, it could make the ultimate difference in a child’s life, and you don’t have to be up to speed on the latest education reform idea to do it and make it work. Anyone who is willing to give of themselves to another human being will bring about change in that person and themselves. Isn’t that the real reason we are all here anyway?
(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. A version of this Commentary was published in 2014.)
In Governor Kitzhaber’s final inaugural address this week, he focused on the themes of equality and community. Specifically, he wants to reduce the gap between rich and poor. He also believes that only through collective action can we achieve that goal.
Unfortunately, his obsession with “equal outcome” guarantees that we will lose “equal opportunity.”
For instance, our Governor is passionate about spending more public money on the “free” public education system, because free education is supposed to make everyone better off. But the taxes required for this very expensive entitlement impose major burdens on families that prefer to educate their children at home or through private schools.
Is the Governor proposing legislation offering a money-back guarantee so that dissatisfied parents can get a refund and spend their tax dollars on the schools of their own choosing? No, he is not. His insistence that we all pay for a generic service makes him feel better about himself, but deprives actual students of educational opportunities.
The governor may dream of a more equal world, but if he insists on regulating his way towards that goal, he will dramatically reduce our personal freedom. And what most people really care about is the opportunity to pursue their own dreams, regardless of whether the eventual outcome makes them richer or poorer than their neighbors.
Imagine a world where we buy our groceries in government stores. We can only shop at the store nearest our house. If we want to shop somewhere else, we’re forced to move our family into another neighborhood―if we can afford it.
In this imaginary world, we elect food boards to oversee our grocery stores. And many of us think the food is free. Well, not quite. We all pay taxes to the government, which then recycles those dollars to grocery store districts and eventually down to our neighborhood stores. We think we eat pretty well, although the government spends five dollars for a gallon of milk and six-fifty for a loaf of bread. The bread is often stale and the milk is often sour.
Each district has a central office staff of specialists and administrators who work hard designing store shelves, checkout lanes, and (most importantly) the nutritional content of every food item. Since we’re a nation that separates Church and State, the big battles at food board meetings often revolve around whether stores can sell Christmas cookies.
Now, imagine that voters decide to give the government less money for the public food system. Suddenly, food stores find themselves in a crisis. There isn’t enough tax money to keep food district central bureaucracies intact. Stores don’t have enough money to keep all the clerks employed. Food superintendents are faced with the difficult task of eliminating some items from the shelves.
How could we possibly feed ourselves without the government taxing us, building big brick food buildings, and telling us where to shop?
If this imaginary world―and its problems―sounds familiar, you’re way ahead of me. It’s the world of our public school system. It’s the world most of us grew up in. Our parents grew up in the same world, but children now are growing up in a different world.
We can no longer afford to dump more money into a system that isn’t keeping pace with the progress all around us. Technology has opened limitless ways for students to gain knowledge and skills and to interact with their instructors and peers. The landscape of educational options centered on the needs and aspirations of individual students is far more diverse than it was even ten years ago. And many of these new options can actually save taxpayers real money.
Many advocate that we should lead the world in education spending. But you don’t get to be the competitive leader in any industry by being the world’s highest-cost producer. Don’t you want to be the producer with the highest quality, but at an affordable cost? The driving force to achieve high quality, while keeping costs down, is the profit motive. But that’s exactly the motive that doesn’t exist in our public school system.
Why aren’t we worried about a tax revolt decimating our local grocery store shelves? It’s because our grocery stores are private. They’re subject to intense competition, and each of us has virtually unlimited choices about where we shop.
For those who can’t afford food, we don’t build government food stores. We give them food stamps, and they shop in the same stores and for the same products that everyone else does. In essence, our public schools are the equivalent of the former Soviet Union’s collective farms. Communism said government should own and run the food stores―and the farms. The result was a nation that couldn’t feed itself.
We don’t have to ask whether to replace our current public school system with a private one. We can simply let education dollars be spent where the customers (parents) think they should go.
Please don’t let the details of any specific “school choice” proposal stop you from accepting the concept. Instead, let’s figure out why so many of our tax dollars don’t reach the classroom―and why nearly half the people who work for our public school system don’t teach. Let’s look for ways to put the children first and the system second.
The only proven way to accomplish these things is through competition and parental choice. Spending more dollars in the current system will just get us more of the same. Many states are broke, preventing them from spending more money on public schools. And many parents are fed up, wondering why their kids are underperforming or unmotivated in K-12 schools and unprepared for their college courses and future careers.
School choice has entered a new world. Because Americans are increasingly vocal about providing parents at every income level with the ability to choose their children’s schools, states are adopting broad-based school choice initiatives. Every child who drops out of school, or who graduates functionally illiterate, is being tossed into the sea without a lifeboat. If you think rearranging the deck chairs on this ship will save those children, think again. The way of the future is to put the power of educational choice back into the hands of parents, where it belongs.
(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. Different versions of this Commentary have been published starting in 1994.)
“The regime trembles at the sight of a smartphone.”* That quote comes from Portland-based independent journalist and world traveler Michael J. Totten. One might guess that he wrote it about Portland’s city government and its aversion to ridesharing services like Uber that rely on smartphone apps to put riders and drivers together. But he didn’t.
He wrote it about the Cuban government after his visit to Havana last year. He summed up his observations in a lengthy piece he titled “The Last Communist City.” Hopefully, now that President Obama is taking steps to liberalize relations with Cuba, Havana may not be a communist city much longer.
But as we celebrate a new year, Portland still seems mired in the past. City regulators first tried to fine Uber for picking up passengers without official permission in December. Then the Mayor agreed to form a Task Force to revise its antiquated taxi regulations. Uber agreed not to initiate rides within city limits until April 9, by which time the City hopes to figure out how to accommodate the modern app economy.
Still, given how upset Portland officials were when Uber entered the city unannounced, the next question one might ask is:
Which city will welcome Uber and other ridesharing companies to serve their citizens first: Portland, Oregon or Havana, Cuba?
* Letter from Cuba: To Embargo or Not, Michael J. Totten, “World Affairs,” March/April 2014