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April 16, 2014 standard

These days, Illinois’ virtually-insolvent defined-benefit pensions — along with those of Chicago — have become as much a topic of conversation for taxpayers in the state as last night’s Bulls or Cubs game. From the lawsuit filed earlier this year by a group of unions (including the National Education Association affiliate and that of the American Federation of Teachers), to the move last week by state legislators to help the Second City address insolvencies in two of its pensions, to the declarations of pension reform by both Illinois Gov. Pat Quinn and Republican rival Bruce Rauner, there will be more talk about how the Land of Lincoln must pay down its $95 billion in long-term pension obligations, the nation’s second-largest after California, according to data from the Pew Charitable Trusts.

But none of the discussions will matter unless the Land of Lincoln deals honestly with the level of insolvencies it faces. This is especially true when it comes to dealing with the Teachers’ Retirement System, which likely has the second-worst teachers’ pension deficit in the nation after that of the notoriously-underfunded California Teachers Retirement System. And based on TRS’ latest comprehensive annual financial report, the state is still refusing to deal candidly with reality.

The pension officially reports a deficit of $56 billion for 2012-2013. The problem is that the pension is understanding the level of its insolvency. For one, the underfunding only includes $1.6 billion in investment losses and not all of the losses (or gains) TRS has achieved over the past five years. This is because of an actuarial technique called smoothing, an actuarial trick the state forced the pension to adopt five years ago, which effectively allows the pension to effectively hide investment losses under the guise of keeping the volatility pensions experience with investments from wrecking havoc on state and district budgets. As a result, taxpayers and policymakers aren’t getting a full picture of the pension’s insolvency.

The bigger problem is that TRS is using overly inflated assumptions of investment growth over time. The pension assumes an eight percent rate of return even though it admits that its assets have only achieved a rate of return (net of investment fees) of just five percent between 2009 and 2013. In fact, TRS admits that its assets have only increased by 63 percent within the past 13 years (even as liabilities have increased by nearly a three-fold in that same period). What TRS should be doing is assuming a more-realistic actuarial rate of return, somewhere around 5.2 percent (or the five-year rate of return for investments, according to investment firm Wilshire Associates). This would then force politicians to deal more-honestly with the pension woes.

To get to the true level of TRS’ insolvency, Dropout Nation uses a version of a technique developed by Moody’s Investors Service, which assumes a more-realistic 5.5 percent rate of a return. [Moody's bases its rate of return on the performance of a bond index, which can range between four and six percent.] Based on those numbers, TRS’ true insolvency is likely $76 billion, or 36 percent higher than officially reported. This means that TRS’ insolvency has increased by seven percent (or $5 billion) within the last year, based on an earlier Dropout Nation‘s estimate of the pension’s unfunded liabilities. If Illinois state government was forced to pay down the insolvency over a 17-year period of amortization, it would cost taxpayers $4.5 billion, or more than double the $3.8 billion contributed to the pension this past fiscal year.

Getting to the heart of the numbers is particularly critical because TRS will face even more Baby Boomers heading into retirement over the coming years. On average, 6,404 teachers covered by TRS have retired every year over the past decade, based on a Dropout Nation analysis of the pension’s retirement data. Each retiree and their surviving spouse, on average, collects an annual annuity of $45,792. So TRS can easily expect to pay out at least an additional $293 million in annuities every year, and likely, even more than that; TRS reports that it paid out an additional $344 million in annuities in 2012-2013, higher than even Dropout Nation‘s estimate. Since the pension reform plan enacted last year, SB-1, still allows for teachers who joined payrolls before this coming June to cash in unused sick and vacation days in order to boost pension payouts — and still allows Baby Boomers to collect three percent annual cost-of-living raises for all but two of the first 1o years in retirement — this means that TRS will become even more insolvent than it currently is. And, in turn, estimates that the plan will reduce the state’s overall pension deficit by $24 billion over the next 30 years is likely an illusion.

With more-realistic numbers, state legislators and Gov. Quinn (or Rauner, if he beats Quinn in November) can deal with TRS’ woes more decisively. This should start with requiring teachers (and in many cases, thanks to collective bargaining agreements, the districts) to contribute even more than the 24 percent of annual contributions made to the pension every yearpercent of salary they currently pay toward retirement. It is increasingly clear that the state can no longer assume 71 percent of the burden. Addressing these issues will require Illinois officials to take bolder steps than they have been willing to do. This includes overhauling how TRS (along with other state pensions) are managed; as I noted today in this week’s column in Rare, the NEA’s and AFT’s state affiliates have long controlled pension operations and won’t give up that influence without a fight.

But addressing TRS’ insolvency isn’t just about the red ink. One of the problems with SB 1 (and similar pension reforms across the country) is that the brunt of the changes are borne not by Baby Boomers, but by younger workers, who are both forced to subsidize veteran colleagues (both in the form of contributions as well as taxes they also pay) and at the same time, lose out on opportunities to truly save for their own retirements. Under the pension reform plan, for example, younger Illinois teachers will lose out on five three-percent cost of living raises during the first 10 years of annuity payments. This means they lose money twice, both in the form of contributions (which are supposed to be savings, but actually goes to fund the retirements of others), and in money they expected to get in exchange for subsidizing other people’s pensions.

Moving away from defined-benefit pensions to hybrid pension plans that features defined-contribution accounts as well as cash-balanced accounts that guarantees an annual savings rate to actually save for their old age, would help younger teachers reap the rewards of their labors in their senior citizen years. This, along with overhauling the rest of traditional teacher compensation, would particularly benefit high-quality teachers in the first 15 years of their careers, who deserve reward for all they do to help children succeed.

But none of this is possible until Quinn and his colleagues get real about the true extent of TRS’ virtual insolvency as well as deal with the state’s other long-term debts. Until this happens, Illini will be merely toying with their problems.

March 18, 2014 standard

On this week’s Dropout Nation Podcast, RiShawn Biddle pays attention to Bill Gates’ defense of Common Core, and explains why the Microsoft cofounder is correct, both about the importance of the reading and math standards in helping all children succeed, as well as speaking truth to opponents of the standards who stand amorally against brighter futures for our kids.

You can listen to the Podcast at RiShawn Biddle Radio or download directly to your mobile or desktop device. Also, subscribe to the podcast series, and embed this podcast on your site. It is also available on iTunesBlubrry, Stitcher, and PodBean.

 

December 17, 2013 standard

One of the problems with the Obama Administration’s effort to eviscerate the No Child Left Behind Act and its accountability provisions lies with its focus on just the worst-performing five percent of schools and another 10 percent of schools with wide achievement gaps. Because of this narrow focus, the administration has given 41 states and the District of Columbia carte blanch to let schools and districts — especially those in suburbia — off the hook for serving up mediocre instruction and curricula. Obama Administration officials, including U.S. Secretary of Education Arne Duncan, have defended this approach by arguing that No Child’s Adequate Yearly Progress system penalized far too many schools arbitrarily for failing to improve student achievement — and claimed that as many as 90 percent would be found failing under No Child if nothing was done. At the same time, Duncan argued that the waivers was allowing states to develop accountability systems that would put more schools under scrutiny. For one, states promised to lower the minimum number of students identified in a socioeconomic subgroup for accountability purposes in exchange for evading federal law. And because states gained the flexibility to use approaches other than subgroup accountability to hold districts and schools responsible for improving student achievement, states could, in theory, actually expand accountability, if they wanted.

But as Dropout Nation and reformers such as Andy Rotherham and Charles Barone of Democrats for Education Reform had pointed out before the administration formally launched the waiver effort — and as the administration’s own data proved — the first argument had no merit at all. As for the second? It makes no sense. How can the waiver gambit narrow accountability and yet expand it at the same time? On any intellectual basis, the administration’s double-talk doesn’t square with reality.

Your editor has predicted that this narrowing of accountability, along with the overall evisceration of No Child’s straightforward and sensible approach, would have dire consequences on advancing systemic reform and ultimately, on poor and minority children often subject to the worse American public education has to offer before the implementation of No Child 11 years ago. Some of these consequences are being borne out in a study released today by the New America Foundation on how states are failing to identify schools and districts failing to serve all children well. The waiver gambit clearly allowed the states to develop accountability systems that allow most failing schools off the hook for poor performance. Even worse, the new accountability systems may actually be causing the kind of arbitrary labeling of schools that Duncan wrongly accused No Child of doing.

On one hand, the New America report, written by its resident expert on the waiver, Anne Hyslop, clearly shows that the waiver gambit is letting persistently failing schools off the hook. Seventy-three percent of 6,058 failure mills in 16 states identified under No Child in 2011-2012 escaped scrutiny under the waiver gambit this year. This means 4,458 schools were allowed to provide shoddy curricula and instruction to 2.4 million children (based on Dropout Nation‘s analysis of federal Common Core data). Worst among the offenders is Nevada, which allowed 88 percent of its schools identified as failing under No Child in 2011-2012 to avoid scrutiny a year later, followed by Florida, with nearly 82 percent of failing schools let off the hook, and South Carolina with four-fifths of schools identified as failing under No Child allowed to escape the disinfecting spotlight of accountability a year later. On average, a state’s new accountability system allowed two-thirds of schools identified as failing under No Child to suddenly avoid accountability.

Even worse, the waivers allowed states to let off the hook those failure mills in “restructuring” or forced to overhaul their operations after six or more years of persistently failing status. On average, three out of every five schools identified as persistently failing were let off the hook thanks to the Obama Administration’s waiver gambit, according to Hyslop in the report. That’s 578 schools allowed to educationally neglect more than 319,000 children (based on Dropout Nation‘s analysis). Nevada was again the worst offender, with 87 percent — or nearly nine out of every ten — of its worst failure mills allowed to avoid the consequences of educational abuse and neglect. South Carolina followed behind Nevada, with 78 percent of its worst failure mills allowed to skip out on accountability, while three out of every four of Tennessee’s long-term failure mills allowed to escape consequences of educational neglect. Meanwhile two-thirds of schools failing to make Adequate Yearly Progress for the last four to five years — 688 schools serving another 377,230 children — were also let off the hook thanks to the waiver gambit. This time, Massachusetts was the worst offender, with 87 percent of these failure mills let off the hook, while Nevada and South Carolina followed behind with, respectively, 85 percent and 74 percent of failure mills let off the hook.

The New America report also shows that few states used the flexibility given under the waivers to hold more districts and schools accountable for poorly serving kids, especially those from poor and minority households. Eleven of the 16 states analyzed by New America significantly identified fewer schools for restructuring and other interventions in 2012-2013 than they did seven years earlier. Only five states — Indiana, Mississippi, Oklahoma, Oregon, and Tennessee — went the opposite direction and targeted more schools for overhaul. This isn’t shocking given the Obama Administration’s goals for the waiver gambit, the administration’s sloppiness in implementation, and evidence from other studies — including a report issued in February by the Education Trust — that show that states have used the waiver gambit to effectively render poor and minority children invisible.

It would have been great if Hyslop provided some demographic and socioeconomic details on the schools that have been allowed to escape scrutiny; one suspects that most of the failure mills let off the hook are in suburban districts which have been the most-exposed by No Child’s accountability measures, and thus, were more than happy with the results of the administration’s gambit, but that’s hard for your editor to know without looking through the source data himself. In any case, Hyslop’s report provides more evidence that the waiver gambit has so far not been of benefit to children subjected to the worst educational malpractice.

But the weakening of accountability isn’t the only problem identified by Hyslop in the report. The fact that the new accountability regimes seem to arbitrarily identifying new schools as being academically failing — something which Duncan claimed was a problem under No Child’s accountability measures — makes the administration’s gambit an even greater farce than your editor ever anticipated.

On average, just 22 percent of persistent failure mills targeted for restructuring under No Child in 2011-2012 were identified as being so-called Focus and Priority schools under the waiver gambit a year later. The remaining 88 percent were schools previously considered mediocre or otherwise under No Child While Massachusetts managed to make sure that persistent failure mills accounted for 81 percent of Focus and Priority schools, most states allowed its worst-performing schools (and the districts that run them) to escape the consequences of educational neglect, while putting under scrutiny new schools which were considered relatively well-performing. By lumping in new collections of schools previously deemed well-performing under No Child while allowing persistent failure mills to escape scrutiny, waiver states are essentially communicating to the public that they aren’t serious in their accountability efforts. After all, how can one school now be subjected to school improvement measures when a longstanding failure mill is left off the hook often without having improved how it educates children in its care?

One can easily argue that states are on the path to ruining the credibility of their own accountability systems. This has already happened in Indiana, where the A-to-F grading system implemented as part of its No Child waiver has fallen apart amid revelations that former Supt. Tony Bennett amended rules governing the grading of 13 schools that served children from kindergarten to 10th grade, a non-traditional format (and, ultimately, changed grades for 165 schools throughout the Hoosier State), and sparring matches between Bennett’s successor, Glenda Ritz (who surreptitiously revealed Bennett’s move) and the state board of education over additional alterations to the accountability system. One can imagine more trouble coming down the line as districts, as well as affiliates of the National Education Association and the American Federation of Teachers, complain about how some failure mills have been left off the hook while other schools have been placed under academic watch.

This year has provided more evidence that the Obama Administration’s waiver gambit is shoddy and disgraceful policymaking. It’s time for the administration — or better yet, Congress — to put this counterproductive initiative to an end. And it is time to go back to No Child’s more-sensible approach to accountability.

December 2, 2013 standard

On this week’s Dropout Nation Podcast — and part four of the series on Common Core — RiShawn Biddle explains three critical challenges to implementing Common Core reading and math standards — and how families can help reformers overcome them starting with the classroom.

You can listen to the Podcast at RiShawn Biddle Radio or download directly to your mobile or desktop device. Also, subscribe to the podcast series, and embed this podcast on your site. It is also available on iTunesBlubrry, Stitcher, and PodBean.

 

November 12, 2013 standard

On Friday, Dropout Nation revealed how Maryland effectively inflated its results on the reading portion of the 2013 National Assessment of Educational Progress by excluding at least 60 percent of fourth- and eighth graders in its special education and English Language Learner ghettos. But as it was noted last week, the Old Line State wasn’t the only one which excluded high numbers of special ed and ELL students from reading portion of the federal exam of student achievement. The U.S. Department of Defense Education Authority, the federal school system serving children of the nation’s military, was one offender. An even more-prominent offender was Tennessee, which excluded 27 percent of eighth-grade special ed students and 18 percent of fourth-graders condemned to special ed ghettos from the exam. This shocking information came even as the Volunteer State was being hailed by reformers for strong improvements in average scale score performance between 2011 and this year.

But some asked your editor about the states that excluded high percentages of their students from the math portion of exam. This data was initially ignored because state excluded 20 percent or more of kids labeled special ed and ELL from NAEP’s math exams. But when Dropout Nation took a closer look at the numbers, it notice that there were some egregious offenders, states that excluded between 11 percent and 19 percent of kids stuck in special ed and ELL programs, levels higher than the 10 percent national average.

Maryland is certainly on the list of the worst offenders. The Old Line State excluded 17 percent of eighth-grade ELL students from NAEP math participation, the worst offender among the eight states (along with Department of Defense and the District of Columbia) that excluded more than 10 percent of students from the exam; it behaved more-honorably with its fourth-grade special ed and ELL students, excluding, respectively, just six percent and three percent of students in each category.

Tennessee was also another offender. As Dropout Nation noted last week, it excluded 14 percent of eighth-grade special ed kids from NAEP’s math exam. Given that Tennessee’s average scale score for eighth-graders on NAEP increased by four points (or nearly half a grade level) between 2011 and 2013, and its average score for fourth-graders in reading increased by six points (or half a grade level) in that same period, the high levels of exclusions by the state in both reading and math raises questions about whether the gains are real or result from the gamesmanship that has helped Maryland appear to better in improving student achievement than it really is.

The worst offender of all in excluding special ed and ELL students from NAEP math is North Dakota. It excluded 17 percent of fourth-graders in special ed ghettos from NAEP math, the highest levels in that category. It was the also the biggest offender in excluding eighth-grade special ed students, with an exclusion rate of 19 percent or nearly a fifth of kids mired in special ed misery whose performance could have been measured by the federal exam. The high exclusion levels apparently didn’t do much to cover up the Roughrider’s failures to embrace systemic reform: The average scale score declined by one point (from 269 points to 268) between 2011 and 2013.

Altogether, 10 states excluded 11 percent or more of fourth-graders in special ed from the math portion of the 2013 NAEP. Besides North North Dakota, there was also California, Montana, Washington State, Delaware, Oregon, Michigan, Georgia, Texas, and Wisconsin. California and Texas deserves special mention because traditionalists in both states have succeeded in rolling back or eviscerating the very accountability measures that exposed how poorly districts in those states were serving our most-vulnerable children. The high levels of exclusion for both states portends the educational neglect and malpractice that will be borne upon kids in special ed ghettos in each state in the coming decade. Delaware also gets special mention because it has been touted for embracing systemic reform, especially in overhauling its teacher evaluation systems as part of the Race to the Top grant it received a few years ago.

Fourth Grade NAEP Math 2013 Special Ed Exclusion Rate

STATE

% EXCLUDED

North Dakota

17

California

16

Montana

14

Washington State

14

Delaware

13

Oregon

13

Michigan

12

Georgia

11

Texas

11

Wisconsin

11

Source: U.S. Department of Education

Another 19 states excluded more than 11 percent of eighth-graders in special ed from NAEP 2013. Besides North Dakota and Tennessee, another major offender is Kentucky, which excluded 17 percent of eighth-graders in special ed from the math portion of the exam. The Bluegrass State garnered a bad reputation two years ago when it was found that it excluded high levels of its most-vulnerable kids from the federal exam. And again, California and Texas are also on the list of worst offenders.

Eighth Grade NAEP Math 2013 Special Ed Exclusion Rate

STATE

% EXCLUDED

North Dakota

19

Kentucky

17

Michigan

15

Arkansas

14

Tennessee

14

Washington State

14

West Virginia

13

California

12

Connecticut

12

Idaho

12

Kansas

12

Minnesota

12

Montana

12

Nebraska

12

Texas

12

Utah

12

Georgia

11

Indiana

11

New Mexico

11

Source: U.S. Department of Education

As for fourth-grade ELL students? Tops on the list of worst offenders were the Department of Defense and Maine, both of which excluded 12 percent of kids struggling with English language proficiency. North Dakota is also on the list.

Fourth Grade NAEP Math 2013 ELL Exclusion Rate

STATE

% EXCLUDED

Department of Defense

12

Maine

12

North Dakota

11

Source: U.S. Department of Education

And among the worst offenders in excluding eighth-grade ELL students from NAEP? The list includes the usual suspects (including top-ranked Maryland, North Dakota, and Department of Defense) and one state that should know better: Florida. Along with the District of Columbia, the Sunshine State, has been at the forefront of aggressive systemic reform was among the eight states with an exclusion rate greater than 11 percent. Shameful.

Eighth Grade NAEP Math 2013 ELL Exclusion Rate

STATE

% EXCLUDED

Maryland

17

Michigan

16

North Dakota

15

Department of Defense

13

Florida

13

Massachusetts

13

Georgia

12

Kentucky

11

Pennsylvania

11

District of Columbia

11

Source: U.S. Department of Education

When states excludes the performance of large numbers of its most-vulnerable kids from being measured, they are essentially admitting that they are doing poorly by these children. More importantly, because exclusion levels can hide educational malpractice, excluding the performance of large numbers of kids is no different than any other form of test fraud. No one should find these exclusion rates to be acceptable. Period.

Photo courtesy of District Administration.

November 11, 2013 audio

On this week’s Dropout Nation Podcast — and part three of the series on Common Core — RiShawn Biddle explains to families the wrongheaded reasons why movement conservatives, hardcore progressive traditionalists, and others (including otherwise well-meaning reformers who know better such as Jay P. Greene and Robert Enlow of the Milton & Rose Friedman Foundation) oppose the standards.

You can listen to the Podcast at RiShawn Biddle Radio or download directly to your mobile or desktop device. Also, subscribe to the podcast series, and embed this podcast on your site. It is also available on iTunesBlubrryZune Marketplace, Stitcher, and PodBean.