Sunday, March 25, 2007

A minor quibble

The Mass Budget and Policy Center is a fine organization that gives generally sound analysis of Massachusetts budget issues.

I'd like to quibble over a detail in their analysis of the the governor's budget for FY08.

The new cost in FY 2008 of paying for inflation and enrollment changes is $127 million. That is the number that our analysis uses as the baseline education cost increase.
$127 million is indeed the number that the spreadsheet spits out if every method of aid allocation other than mandatory increases to fill in every town and regional school district from required local contributions up to the foundation budget level is disabled.

However, looking at the "Comparison to FY07" table, zooming over to the change of aid from last year column, we find that only 143 out of 328 districts receive any increase at all, while 181 are unchanged.

Summing the foundation budgets for the districts that do receive an automatic aid increase this year, I calculate that as $4.5 Billion, or about 55% of the total. Implying that a comparable percentage increase for the other 181 towns and regional schools would bring the inflation-only baseline up to $232 million, or about $32 million more than Patrick's proposal.

The legislator's preliminary announced goal was for a $255 million increase over last year, including 2nd year committments to fund target local share reform.

Neither my corrrection nor the Mass Budget Center's is really a good estimate of inflation, for that we should compare foundation budget costs between last year and this, and there, I find a 4.8% increase, compared with a $3.63% figure corresponding to the baseline increase of $127 million. So we could estimate a $169 million increase as the inflation cost. That implies that the foundation budget has indeed been truly adjusted for school cost inflation; some suspect that the foundation budget has not really been keeping up with the minimal cost of an acceptable school, because doing so would force the state to make significant additional "baseline" foundation aid allocations.

I'd go with a number closer to $232 million, if we want to give the 181 towns that did not automatically receive additional aid an increase comparable to the 143 that did in the baseline budget.

Tuesday, March 20, 2007

An example

The Cape Cod regional school has twelve member towns, and each of them fits into the 17.5% target local share category. That is to say, they are all fairly wealthy and judged by target local share capable of making equal contributions for the schools.

The governor's preliminary numbers for this year assesses Provincetown $16,440 per student, which is 54.7% above its target of $10,631 per student.

Not to be outdone, Chatham is assessed $16,479, with the same $10,631 judged as the target local share.

Yarmouth is the lucky winner at this regional school, assessed exactly at its target local share of $10,223.

Overall, the state forces $916,319 of excess payments, unequally spread among ten of the member towns ranging from 11.7% overpayment to 55% overpayment, with two lucky towns paying at their target share.

Presumably, if this group of twelve towns were all given the correct and roughly equal minimum assessments exactly at their target share, at least seven of the member towns would vote to continue supporting the school generously. The mutually agreeable burden, beyond the foundation level, would be split equally and fairly among the towns. It's quite likely accommodations would even be made to acknowledge the difficulty for the towns which are currently subsidized to come immediately up to an equal assessment

And this is, in fact, the goal of the target local share reform, but the problem is, in this the second year of phasing in towards target local share, these towns still have a disparity of state-mandated spending of 55% between top and bottom, though all of the towns are judged equally capable of supporting the school.

And how about that $16,479 required assessment for Chatham? Why should the state mandate any town to spend that much money per student, when most other towns across the state spend half that much on their schools?

This is the most extreme example in the state, and my apologies to the folks on the Cape if this posting inflames any simmering disputes between these towns.

The purpose of this post is to illustrate the importance of finding a way to quickly resolve these absurd unjustifiable disparities between comparable towns participating in regional schools.

Given that the state is in a fiscal crunch, it seems the smartest way to approach this is with regulatory relief that seeks to minimize the required new spending at the state level. The governor's proposal slows down reform to save money, but putting a cap on the excess spending requirements in a way that avoids allocations of additional local school aid from the state can keep the reform on the five year schedule, or even accelerate it so that most of the reform occurs on the "gradual" four year schedule originally proposed by the Department of Ed.

Thursday, March 15, 2007

Background on the concept of Target Local Share

A paper can be found here describing a reform currently underway in Massachusetts' education funding formulas for allocating state aid and spending burden.

The basic goal of this reform is to assure that required spending and aid allocations are based on communities' ability to pay. I agree and believe this is an overdue reform.

I quote below the timetable and methodology this paper advocates for the reform.

Above-effort cities and towns should be given some relief on an annual basis. This is the group that should be most aggrieved, and whose relief should be easiest to accomplish. These communities should no longer be required to raise their annual contributions by the MRGF. Furthermore, their requirements should be lowered by a certain percentage of the amount that they currently exceed their effort goal. This proposal uses 25 percent, resulting in a drop of $91 million in FY06. Phasing in this relief over four years would accomplish big improvements in disparity at relatively little cost in additional state aid. In the second year of implementation, 50 percent of the excess would be eliminated, and in the third year 75 percent. In the fourth year and thereafter, no city or town would be required to make more than its effort goal.

The actual methodolgy implemented by the legislature starting last year calls for a five-year phase-in period, but also continues to grow annual contributions by their MRGF prior to reducing effort - and this has meant the first two years of reform are considerably below the gradual target that this paper set.

As for where I disagree with this paper:

It is important to have a quantifiable goal for taxpayer equity, but it is neither reasonable nor necessary to make a radical change from the existing system. As long as there is a goal, it can serve as a target, which can be approached gradually over time.

This paper was written during the second year for phase-in of a different reform with the Orwellian name of "disparity reduction". Since that time, "disparity reduction" has forced many locales to make radical redistributions of their local contributions - that is, of the property tax revenues towns raise - and this shift has often resulted in shifts of 20% or more of budgets from one school district to another, typically from a local elementary school to a regional upper school.

Because disparity reduction has been performed on unequalized contributions, existing errors have often been propagated and amplified. If target local share had been implemented prior to or in conjunction with disparity reduction, I think the outcome would have been reasonable, but the status quo is unacceptable.

I agree with the concept that the burden of regional schools should reflect ability to pay (many people do not, and believe the contract under which regional schools were formed should govern assessments). But I vehemently, rabidly protest having an unfair formula wrench away local school funds to subsidize other communities of comparable ability to pay, or to allow the state to withhold aid that is calculated as due.

Thus I disagree with the commissioner of education's expression that gradually phasing in taxpaper equity is reasonable, particularly given that "disparity reduction" has not been gradual and has often moved away from, rather than towards, taxpaper equity.

The governor's proposed budget for this year scales back the 2nd year goal for target local share reform from the the 40% target established by the legislature to 30%. Recall, that 40% target was below this paper's proposed 50% target for the second year. At 30%, regional assessments for many towns continue to move away from, rather than towards, equity for FY08.

If this reform is going to be slowed down because the state cannot afford to pay the full freight, I think it is time for the state to explore regulatory changes that would release some of the extremes but which would have relatively small cost of actual aid dollars. One such reform option is to limit the maximum required contribution for all towns to something like 110% of their target share. A limit at that level would:

- Lop off about 55% of the excess effort - about $270 Million
- Cost about the same as the governor's scaled back 30% proposal.
- Benefit about 154 communities which currently have mandated spending above 110% of target share.

The reason it would cost so little in aid dollars is that aid allocation is non-linear, and most of these corrections don't push communities beyond the threshold where additional aid would kick in. For the few locales where aid does kick in, it is aid that the formulas acknowledge is due, and these locales are among the furthest from target aid levels in the state. Aid would also kick in for some regional schools where spending is currently at or just above foundation; but the amount of aid required to correct for the locales which are currently being punished by the formulas is relatively small potatoes. The aggrieved locales are typically small or medium-sized towns, and only about one out of every three or four towns in each regional has a very large difference from target. Meaning, again, a large bang for the buck in restoring equity at very little cost to the state - and all of the cost is something the state acknowledges it ought to be bearing sooner if not later.

I think a cap is appropriate even if it is as part of the legislature's 40% plan. A cap at 120% of foundation would add only $10 million of additional current year cost, and would quell much of the riot over excessive regional allocations. And $10 Million is the sort of aid that would otherwise likely be allocated as "foundation reserve" funds that ought to be going to the same locales. A 120% cap is enough to get most errant regional allocations to make meaningful movement in the correct direction, something not apparent in the preliminary governor's spreadsheet.

Wednesday, March 14, 2007

Review of the logic of NCLB, reality check

Assume for a moment that the reality check from today's Washington Post is correct - 100% proficiency is not a realistic expectation and it will leave most schools labelled as inadequate and subject to NCLB sanctions - what does this imply of the logic for NCLB sanctions?

The logic, if this assumption is correct, is that the sanctions prescribed are appropriate reforms for most schools, regardless of their academic performance. That is, these reforms in and of themselves are good for schools, whether or not the schools make adequate progress.

Here are the allowed sanctions. My review of each prescribed sanction suggests that none of them appear appropriate school reforms in and of themselves. Your mileage may vary, but it seems worth asking whether support for NCLB correlates with different player's opinions on each of these sanctions as stand-alone reforms.

Requirements for Corrective Action

The district must take one of the following ...

replace school staff relevant to the failure
institute and implement a new curriculum
significantly decrease management authority in the school
appoint outside experts to advise the school
extend school year or school day
restructure internal organization of the school.

Requirements for a Restructuring Plan
School plan must include one of the following alternative governance arrangements --

Reopen school as a public charter school
Replace all or most of school staff, including the principal
Enter into a contract with an entity, such as a private management company, with a demonstrated record of effectiveness to operate the school
Any other major restructuring of the school's governance arrangement

WP: 'No Child' Target Is Called Out of Reach

The Washington Post has often toed to inside-the-beltway line that NCLB mandates and sanctions are both achieveable and working. Today's article gives reality a passing nod, by pointing out a couple of the things I've said here.

Two items in particular:

But testing experts say there are vast academic differences among children of the same racial or socioeconomic background. Countries with far less racial diversity than the United States still find wide variations in student performance. Even in relatively homogenous Singapore, for example, a world leader in science and math tests, a quarter of the students tested are not proficient in math, and 49 percent fall short in science.


Although no major school system is known to have reached 100 percent proficiency, Education Department officials pointed to individual schools across the country that have reached the standard as evidence that it is possible. In Virginia, schools have achieved universal proficiency on reading and math tests 45 times since 2002, officials said.

The only school they cited in the Washington region as having met that mark was the Thomas Jefferson High School for Science and Technology in Fairfax County, a regional school with selective admissions. Principal Evan M. Glazer said his school, which has an elite reputation, was hardly a representative example. On whether the nation can replicate that success, Glazer said: "I don't think it's very realistic."

I doubt that inconvenient truths will change the zeitgeist inside the beltway, where rhetorical flourish trumps reality, but who knows?

On the home front in Massachusetts, the policy issue relevant to this article regards Massachusetts' position having the most stringent proficiency standard in the nation. Which pre-ordains about 98% of schools as failing, even if they beat Singapore's achievements in math performance. As I pointed out here, only Boston Latin Academy - an exam school - currently comes close to meeting the 100% proficiency standard that will soon be required of all schools in Massachusetts.

This blog is going to focus on problems in the funding formulas, also overseen by the MASS DOE, in the coming months, rather than on the testing and sanctions side of schools. We'll probably be back to focusing on testing again next fall, once this spring's MCAS test scores start making headlines about failing schools again, but for the time being, we'll focus on inequities in the highly-regulated spending and aid allocation formulas in MASS.

Sunday, March 04, 2007

What happened since 1993

Last post I gave a brief background of how Ed Reform financing has had to wrestle with Massachusett's Prop 2.5, with the suprising unintended consequence that some locales with a stingy history have had windfalls of state aide t0 assure their childen have equal education funding.

To make this clear, I support the idea of progressive financing for schools, but not the idea that town with a history of underfunding its schools because of tax aversion should receive more state support for their schools that a town with similar wealth but with greater support for education.

At the time ed reform began, in 1993, the legislature had to come up with a mechanism to assure that towns increase their funding of schools in line with their Prop-2.5 limited tax base. What they came up with was a factor called "Municipal Revenue Growth Factor", and the formula was quite simple - a town's required spending for education had to rise by its MRGF, and the state would generally continue to support it either at the level of the previous year or bring it up to the calculated "foundation budget" level.

After 13 years, this led to even wilder disparities between seemingly similar locales. Some cities, such as Cambridge, with skyrocketing housing prices and a declining public school population, were forced to pay well above "foundation" spending, as much as double the foundation level - upwards of $20,000 per student per year in some cases; while some other locales of quite average ability to pay were subsidized far beyond their need and never forced to pay a cent above the foundation level.

Last year, after discussing the problem for a number of years, the governor and legislature chose to phase in a correction to the problem. Over a five year period, they would allow towns that had been forced to pay beyond their calculated means to reduce their schools spending and receive additional state assistance to fill in the gap - assuring that spending would remain at or above the foundation level.

I'll save the special case of regional schools for another post, along with the current political dilemmas of this reform.

Friday, March 02, 2007

Massachusetts Ed Reform funding, as constrained by Prop 2.5

In Massachusetts, property taxes are limited by a ballot initiative call proposition 2.5. Basicly, a town's total property tax levy cannot rise by more than 2.5% each year unless the town votes to approve a larger increase. The baseline is set at whatever a town's tax levy was in 1980 when the initiative passed.

Education reform was initiated in 1993, with the goal of assuring that every municipality spends at least a "foundation" amount of money for its schools. State funds are allocated to towns to increase their total spending to at least the "foundation" level.

Now, you might notice that these two laws are at odds. The state has limited ability to force towns to increase spending because of the Prop 2.5 limitations. But comparable towns were spending wildly different amounts of money for schools when Ed Reform began. And, no suprise, 14 years later - towns STILL are treated quite differently in terms of education funding equity.

Simply put, Prop 2.5's limits on funds that a town can raise, combined with the goal of equalizing financial resources for schools in different towns, means some tax-averse towns have been getting a windfall, while some other towns that historically supported their schools more than comparable wealth towns have been shortchanged in the allocation of state education and regional school funds.

There's the background.

Last year, the legislature began to phase in a correction seeking to achieve greater equity of state support for schools based on a town's school burden and ability to pay. The intention was to bring shortchanged towns up to appropriate funding levels in five years. This could have been achieved immediately by reducing state funds to locales receiving more than equitable funding, but that approach was never even contemplated - and thus, the reform requires additional state revenues.

Now we've got a new governor with his own priorities, and the state budget is tighter than anticipated. And one of the ways he's proposed for saving money is to slow down the correction for state funding.

To be continued ...