Dropout Nation

The Cost of Affordable Care Act: School Reform Division: One wouldn’t think that today’s U.S. Supreme Court ruling on the Affordable Care Act would have any impact on the battle over reforming American public education. But when one considers that states must deal with both the fast-rising costs of operating healthcare programs, and the $1.1 trillion in teachers’ pension deficits and unfunded retired teacher healthcare costs borne by states (along with districts) from decades of dealmaking with affiliates of the National Education Association and the American Federation of Teachers, there will be more impetus to reform traditional teacher compensation systems and other practices that are both too expensive and ineffective to keep around.

Even before Obamacare was upheld today by the high court in a 5-4 ruling, states have been wrangling with the high costs of Medicaid. State spending on Medicaid (excluding federal matching subsidies) increased by 10 percent between the 2008-2009 and 2010-2011 fiscal years, according to Dropout Nation‘s  analysis of data from the National Association of State Budget Officers. Now with the Supremes blessing all but a provision of the law that allows the federal government to withhold existing and new matching subsidies from states if they don’t comply with it, the costs will increase by 32 percent in one year (and, based on the experiences of  Tennessee and Massachusetts, even more than that). Although states have come up with a variety of gimmicks to stem their Medicaid burdens, 18 states still spent more on Medicaid than they originally budgeted during the 2010-2011 fiscal year; last year, states spent $19.4 billion more in the 2011-2012 fiscal year than the year before.

Considering that the current economic malaise continues to wreck havoc on both state tax receipts and on local economies, along with the reality that plenty of high school dropouts and Baby Boomers will likely end up on Medicaid rolls in the coming decade, states are finding themselves having to reconsider other cost sectors. One of them is American public education. Cost-cutting governors and their school reform-minded counterparts are now realizing the full cost of the array of degree- and seniority-based pay scales, defined-benefit pensions, almost-free healthcare, and near-lifetime employment that has made teaching the most-lucrative profession (and most-insulated from hiring and firing) within the public sector. The average state spent 34 cents on benefits for every dollar of teacher salary in 2008-2009 versus 28 cents six years ago. These burdens, along the unlikelihood of future federal bailouts, and the realization that traditional teacher compensation ineffective at rewarding high-quality teachers and spurring student achievement, have led state leaders to find common cause with the school reform movement, which has proven over the past two decades that the current system of paying teachers does little to either improve student achievement or reward good-and-great teachers for their important work.

Thanks in part to President Barack Obama’s other signature effort, the American Recovery and Reinvestment Act, states have been able to shelter education and Medicaid from cuts. No longer. States spent just $1.9 billion more on education in 2011-2012 than they did they did the previous year. As seen last year in New Jersey and this year in other states, states will do more to increase teacher contributions to healthcare costs and pensions. More states will also follow the path of Florida and embark on performance-based pay plans in order to better reward high-quality teachers. And with states such as New York and Louisiana revamping their teacher evaluation systems — and using objective student performance data in performance management — more efforts will be made to end near-lifetime employment.

But an even greater reckoning may start with addressing the size of the teacher workforce. At least 34 percent of the nation’s 3.2 million teachers are dedicated to courses such as music and shop classes, subjects that are neither as important as reading, math, science or foreign languages, often end up being used by principals to warehouse laggard teachers, and are likely better taught by experienced professionals and retirees. As I noted last year, state budget cuts could force districts to reduce those headcounts and embrace new approaches such as recruiting the millions of middle-aged professionals — including lawyers, nurses, blue-collar welders, auto shop owners and professional musicians — who are ready, willing and able to take on teaching those subjects at least on a part-time or contractual basis.

Then there is the potential consequences on expanding school choice. Over the past couple of years, charter schools have fought hard at the state level to get the same funding as traditional district counterparts. Charter school activists in states such as Connecticut, for example, have managed to make some gains on that front. But increasing Medicaid costs will make it more difficult for charters to gain more money. In fact, one can argue that by asking for more funds, the charter school movement could weaken one of the very reasons why they have gotten support: The view that charters can provide high-quality education for its students at lower cost-points than traditional district counterparts. More than likely, traditional districts will more likely go the way of charters, being forced to ditch central district bureaucracies as part of what may be the eventual march to the Hollywood Model of Education.

Another issue lies with the longstanding debate among choice activists about whether vouchers should be the vehicle for giving families expansive opportunities or use voucher-like tax credits that are given to companies that issue private school scholarships. Considering that vouchers are far more costly to state governments (and involve moving real dollars) than tax credit plans (which only involve cutting taxes paid by those who receive the credit the same way they are given a deduction for charitable donations), it is quite likely that tax credit plans will become more-appealing to reformers in cash-strapped states.

The ObamaCare ruling serves as another reminder that money will be as much a driver in spurring the transformation of American public education as the nation’s dropout and learning crises. And school reformers will have to smartly play the opportunities that have arisen from future fiscal challenges.

Update: As education lawyer Julia Martin notes at Title I-Derland, the Supreme Court’s ruling restricting the federal government from withholding existing Medicaid funding to states may also make it difficult for either the Obama administration or that of Republican presidential nominee presumptive Mitt Romney to change the formula funding approach in Title I. While the administration can withhold funding from states for not meeting regulations for existing funding streams, it cannot withhold such funding if states don’t abide by new regulations. On one hand, it could mean that applying the competitive grant approach used by Obama and U.S. Secretary of Education Arne Duncan to spur reform may only be limited to new programs such as Race to the Top. At the same time, one could argue that any president could simply bolster such efforts — and effectively starve Title I (which should be done) by simply shifting federal dollars away from that program. Effectively, the federal government may not be limited from structuring how it subsidizes state and local education systems as Martin thinks.

When Unions Don’t Support Each Other, Chicago Division:  One of the more-interesting aspects of the battle between Chicago Mayor Rahm Emanuel and AFT’s Second City local is the lack of support the teachers’ union will likely get from other public-sector counterparts if it proceeds with a strike action. As Les Sustar of the Socialist Worker notes in his piece on the battle, ChiTown affiliates of the Service Employees International Union and UNITE HERE have already reached contract deals with city government, effectively forcing them to cross picket lines if the AFT engages in a work stoppage. Other unions, especially generally private-sector oriented players such as the International Brotherhood of Teamsters, are also more-interested in working with Emanuel on his plans to contract out city garbage hauling and resuscitate infrastructure than sparring with him on an matter unrelated to their own profit-making and influence-advancing. And then there is the likely lukewarm support for the Chicago AFT’s action from national President Randi Weingarten, who is trying to revive her failed triangulation strategy; given that Chicago AFT boss Karen Lewis is also a likely rival for Weingarten’s job (and a clear rival against New York City counterpart Michael Mulgrew, who, along with Weingarten, is part of the internal coalition that has long run AFT affairs), Weingarten gets little out from providing more than moral support.

But there are two big issues that Sustar doesn’t hit upon, and both explain why there may be little support among public sector unions for the Chicago AFT’s strike threats.

The first issue lies with the desire among SEIU to further expand its own territory. This will eventually mean tapping the nation’s school districts and the array of rank-and-file members in so-called classified, or staff positions outside of teaching that the AFT (along with the NEA) generally represent. Given that the AFT and NEA tend to give those positions, including guidance counselors and custodians, the short shrift during times of layoffs, one can imagine that those employees would rather fall under the SEIU’s umbrella (and gain leverage in budget and contract discussions) than remain under a teachers’ union umbrella. One can easily see the SEIU’s Chicago branch leadership approaching this strike as an opportunity to gain new members (and the dollars they bring), especially when the concerns of classified workers diverge greatly from that of teachers.

The second lies with the reality that there may be more school reform-minded members in the ranks of other public sector unions than one may initially surmise. Given that those workers do send their kids to Chicago’s traditional district schools (and probably more likely to send their kids to public school than teachers who work in those classrooms), they are just as likely to be concerned about the quality of curricula and instruction their kids receive as parents outside of unions; they have likely seen some of the benefits of the reform efforts undertaken by Emanuel and predecessor Richard Daley (the Younger), and are likely more supportive of reform than one would think. As seen earlier this month in Wisconsin, with Gov. Scott Walker’s successful effort to hold on to his job, at least a third of families from union backgrounds may not feel so much solidarity with rank-and-file counterparts in the AFT and NEA. As a result, there’s no reason to back a strike action that in your opinion, accomplishes nothing for your children or anyone else’s.

Errata: It’s great to see that the American Enterprise Institute is holding an event discussing the Parent Power movement. But it is curious to see that the think tank is holding the event without inviting someone like Connecticut Parents Union President Gwen Samuel (a Dropout Nation contributing editor who led the passage of the nation’s second Parent Trigger law) or Kelly Williams-Bolar (whose conviction for the laughable offense of stealing education has helped galvanize efforts around the country). Perhaps Rick Hess may think to offer another seat to either one of them, or to Shree Medlock or Ken Campbell of the Black Alliance for Educational Options (one of the early Parent Power activist groups). Certainly AEI can invite whoever it wants to sit on any of its panels — and it is nice that they put Derrell Bradford on the panel to at least give the event some diversity. But given that the Parent Power movement is one in which poor and minority families are major players, it would be a good idea for AEI to find at least one parent activist from that background.