Dropout Nation

There will be plenty of talk in Washington in the coming year about the unlikely possibility of reauthorizing the No Child Left Behind Act, as well as about the consequences of sequestration-related reductions in spending increases based on assumed — and not actual — rates of inflation (also poorly characterized breathlessly as “budget cuts”). But as it was true this year, the nation’s 50 statehouses (along with the John Wilson Building that houses D.C. city government) will be the real battlefields over the reform of American public education.

The good news for reformers is that they have made plenty of progress. In Connecticut (which was on Dropout Nation‘s States to Watch list last year), Gov. Dan Malloy successfully passed a series of reform measures, while in Wisconsin, Gov. Scott Walker an effort by the National Education Association and other public sector unions to recall him from office. Then there were a series of voter referendums, including one in another DN State to Watch, Washington, to allow charter schools to come into existence, as well as Georgia’s Amendment 1, which allows the Peach State’s government to authorize charters (and allow for the expansion of school choice). Meanwhile the move in Michigan to pass a right-to-work law that effectively ends the forced payment of dues by teachers to affiliates of the NEA and American Federation of Teachers serves as harbinger of things to come for traditionalist forces on the teacher quality front.

At the same time, reformers have to keep in mind that NEA and AFT affiliates, along with their allies, remain influential forces. This was seen last month in Idaho where three reform measures launched by Gov. Butch Otter and Supt. Tom Luna were defeated at the polls, as well as the defeats of reform-minded gubernatorial candidates such as Ovid Lamontagne in New Hampshire and Rob McKenna in Washington State. The fact that three states with strong Republican majorities – Alabama, Mississippi, and Virginia — failed to pass measures teacher quality and school choice measures should also give reformers pause. And the battle over the implementation of Common Core reading and math standards will remain fierce, with Republican reformers likely being hesitant to push further, especially given that opposition to the standards among conservatives played a role in Indiana Supt. Tony Bennett re-election defeat last month at the hands of Glenda Ritz.

Then there are the battles to come, most of which will be driven by the long-term fiscal woes facing governors and legislatures. Even as tax revenues will likely increase by four percent during the 2012-2013 fiscal year, those revenues will largely be consumed by Medicaid costs, which will increase by at least $4.9 billion (not including an additional $4.1 billion in supplemental spending on the healthcare program, and Texas’ $4.7 billion in additional spending still pending legislative approval). As a result of these increasing costs (along with the $1.1 trillion in defined-benefit teacher pension deficits and unfunded retired teacher healthcare liabilities), states are likely to spend less on education. This, in turn, will lead to cost-cutting governors teaming up with reformers on new efforts that traditionalist forces will strongly oppose.

Certainly Florida, Louisiana, New Jersey, and Michigan — which captured headlines this year — will continue to do so in 2013. Given Gov. Chris Christie’s re-election bid, the Garden State will be especially interesting to watch, while Snyder will certainly command attention for his effort to overhaul school funding and his battle with Detroit’s recalcitrant (and incompetent) school board over the schools now placed under control of the state-run Education Achievement Authority. The move by the Sunshine State to name Tony Bennett as its education czar will also lead to aggressive reform efforts — and battles with NEA and AFT affiliates. One can expect more out of Connecticut in the coming year. And on Friday, Dropout Nation will comment on the possibilities stemming from the formation of bipartisan legislative coalitions in Washington State and New York.

But there are other states where there will be plenty of action on the reform front that deserve attention. Four of them have made Dropout Nation‘s 2013 list of States to Watch:

Mississippi: Earlier this year, there was plenty of optimism among reformers in the Magnolia State over the prospects of revamping the Magnolia State’s weak charter schools law, which doesn’t allow for the launch of start-up charter schools and only allows for the conversion of failing traditional district schools. After all, they had allies in newly-elected Gov. Phil Bryant and Lt. Gov. Tate Reeves, as well as the backing of top legislative leaders in the Republican-controlled legislature. But thanks to the efforts of the state’s traditional districts, along with the NEA affiliate there (which poured most of its $108,400 it poured into statewide elections in 2011 into GOP coffers), and the opposition of the state branch of the National Association for the Advancement of Colored People, the proposed legislation never made it out of the legislative chambers.

Things may be different in 2013. Reformers managed a victory last month when House Speaker Philip Gunn tossed Rep. Linda Whittington, a Democrat and executive director of the local branch of Communities in Schools who voted down the previous charter school expansion, off the lower house’s education committee. Her replacement, freshman Republican Charles Busby, is a charter schools supporter, and will likely support whatever school choice that comes the panel’s way. Reeves, who had attempted to force the hands of Republican and Democrat traditionalists during the last legislative session, are likely to be even more forceful this time around. Earlier this month, Reeves, Gunn, and the top two leaders of the state senate’s education panel toured charters in three states as part of an effort to drum up support.

But there will be some obstacles to passage of the charter school expansion bill. The first lies with whether traditional districts will have veto power over both new charters and traditional district schools that families want to take over and transform through the Parent Trigger law. The insistence by Reeves and others that traditional district schools rated C or lower by the state be allowed to be converted into charters without seeking the approval of the districts that control them was one reason why the charter school expansion bill was shot down this past legislative session. Reformers are right in insisting on getting districts out of the business of deciding whether new charters can operate within communities; after all, giving districts veto power over charters is like allowing McDonald’s to decide if a Wendy’s can operate next door to it, and more importantly, it would also allow for families to use the Parent Trigger law currently on the books to maximum advantage. But for legislators who have to deal with the reality that districts are often the largest employers in their back yards — and serve as the nexus for political activity within the Magnolia State and other southern states — embracing such a position may be a step too far to take. Meanwhile reform outfits such as the Black Alliance for Educational Options will have to play a stronger role in countering the NAACP, which also retains strong clout among old-school and even some new-school black legislators.

What may help reformers is the likely push by some in the state to fund early childhood education programs. The Magnolia State’s embarrassing status as the only state that doesn’t fund preschool programs, especially in light of its equally appalling reputation as an epicenter of the nation’s education crisis, may lead Bryant and Reeves to make charter school expansion a condition of passing a law allowing for preschool financing. It will be hard for black legislators and Democrats to turn down the early childhood education bill just because they refuse to embrace systemic reform.

Illinois: Over the past couple of years, the Land of Lincoln has garnered attention on the school reform front — and not just because of Rahm Emanuel’s battles with the Karen Lewis and the AFT’s ChiTown affiliate. Two years ago, Rahm’s predecessor Richard Daley capped his long career as the state’s leading reformer by working with allies and even the state’s NEA and AFT affiliates to pass a modest overhaul of the teacher evaluation system. Last month, as a form of revenge exacted against Emanuel by Lewis, the state legislature made it harder for the city to shut down its traditional district schools. Next year, one can expect Emanuel to mount an aggressive effort to expand charter schools in the City of Big Shoulders, effectively weakening the AFT by taking an important step toward embracing the Hollywood Model of Education.

But the biggest reform effort that may happen next year will not likely lie with teacher evaluations, charter schools, or school shutdowns. Instead, it will lie with how Gov. Pat Quinn deals with the state’s defined-benefit pension woes.

The Prairie State’s teacher pension fund has long held the reputation for being among the nation’s biggest busts. But with a nine percent increase in its pension deficit between its 2010 and 2011 fiscal years (on top of a 93 percent increase in the insolvency between 2002 and 2010), taxpayers are bearing an even heftier burden, especially at time in which Medicaid will consume even more state dollars. Quinn and his predecessors, including the infamous Rod Blagojevich, have done little to address the teachers’ pension insolvency (and all of its pension deficits) in any sensible way. A move by the state in 2003 to float $1o billion in pension obligation bonds in 2003 to delay the inevitable have proven costly; taxpayers have already paid $4.1 billion in interest and principal payments in the nine years since the bonds were issued, and will pay another $17.2 billion by the time the bonds should be paid off in 2033, according to data from the Illinois Policy Institute. Another pension bond float in 2011 will add another

The consequences of the growing pension burden, along with that of Chicago’s school district (a driving force behind the sparring between Emanuel and Lewis that led to the AFT affiliate’s work stoppage last September), were magnified this year when bond rating agency Moody’s downgraded the state’s bonds from “stable” to “negative” outlook. This may finally force Quinn and the top leaders in the state legislature, House Speaker Michael Madigan and Senate President John Cullertson, to actually make some serious steps toward addressing the crisis. One possibility being floated by state Rep. Elaine Nekritz, a Quinn ally, and colleague Daniel Biss, would take some steps in the right direction by reducing annual cost-of-living increases (which added $900 million in additional teacher pension payouts in 2011 alone) as well as force districts to pick up part of the state’s current share of pension contributions. But considering that districts often pick up the share of pension contributions that teachers are supposed to pay out of their own pockets, one can expect districts to balk at picking up new costs. More importantly, it doesn’t address the need increase the minimum retirement age from 55 to 67 (which would reap considerable savings for the state), move the pension from a service-based system to one based on age of retirement, or include a plan to move future retirees into a hybrid pension plan that features a defined-contribution account as well as a cash-balanced plan that guarantees an annual savings rate.

The last point, an idea touted in one form or another by the National Council on Teacher Quality and Josh McGee of the Laura and John Arnold Foundation, is especially important for this reason: That younger teachers often get the proverbial shaft in most efforts to fix pensions. Since states, at the behest of NEA and AFT affiliates, tend to create a second tier with lower levels of annuity payouts; so Baby Boomers gain the benefits at the expense of their younger colleagues. Add in the fact that defined-benefit pensions are not portable, and the new generation of teachers — many of whom may either come into teaching after careers in other sectors, or may start out young and then move on to other careers — lose out on the retirement savings they rightfully earned. It would make sense for Illinois to make sure that any pension reform involves portability for younger teachers.

One aspect of pension reform will have to focus on ending the deals between the state, districts, and NEA and AFT affiliates that have given Prairie State teachers the kind of annuities unavailable in the private sector. The average Illinois teacher will get an annuity equal to 75 percent of the average salary earned during the last four years of service; thanks to annual cost-of-living increases, a teacher who retired in 1995 has seen her annuity increase from $65,000 to more than $100,000 a year in 2012. Teachers and other school official can also boost their annuity payments by trading in as much as 340 days (or nearly two full school years) of unused sick days, earning tens of thousands in additional payouts. One idea that must come into play is to embrace the concept of sick days being use it-or-lose it benefits (and thus ending the ability to use unused days for boosting annuity payments). Given the role of sick days in exacerbating the teacher absenteeism that hinders student progress (and hurts those teachers who work hard even through illness), it may also make sense for the Prairie State to look at reducing the number of sick days teachers receive by half. But none of this can be done without actually revamping traditional teacher compensation — including degree- and seniority-based pay scales — which have been proven to do little either in improving student achievement or rewarding good and great teachers who deserve more money now instead of having to wait decades into the future.

Chances are that neither Quinn nor his counterparts will mount anything as radical as being suggested by Dropout Nation and others. An indictment of a top state official is actually more-likely. But with so much attention on the problem, the Land of Lincoln will at least attempt something other than borrowing its way out of no way.

Indiana: As I mentioned last month, Tony Bennett’s defeat at the hands of the NEA-backed Glenda Ritz is certainly a setback. But it won'[t stop efforts cold. For one, the school reform efforts in Indiana have been going on for at least two decades, starting with the work of former state Higher Education Commissioner Stan Jones and Indiana Chamber of Commerce honcho Derek Redelman. More importantly, many of the leading players who have shaped those efforts — from Redelman and his boss, Kevin Brinegar, to former state senate education committee chair-turned-Higher Education Commissioner Teresa Lubbers, to former Indianapolis Mayor and Mind Trust founder Bart Peterson — are still on the scene. The epicenter of reform at the state level will simply move from 151 West Ohio Street to the state Higher Education Commission next door and the governor’s Education Roundtable (which is managed by the higher education agency’s staff). The Roundtable will likely make life as uncomfortable for Ritz as it did for Suellen Reed during the last years of her tenure.

One possibility: The Republican-controlled state legislature finally moving to make the state superintendent an appointee of the governor. This was an idea outgoing Gov. Mitch Daniels pushed during his first campaign for the top office eight years ago, and it remains one with strong support. If Daniels’ successor, Mike Pence, forces the issues, legislators are more than likely to make it happen. There wouldn’t be much that Ritz’s Democrat allies could do about it. Given the strong reform credentials of some within the party, as well as the end of former lower house Democrat leader B. Patrick Bauer’s status as an obstacle to serious conversations about reform, the Democrats may actually go along with it. And that would be an important step in the right direction.

Yet Ritz will still play a role in rallying opposition to systemic reform. She has already announced plans to put the kibosh on the Hoosier State’s move to end social promotion by requiring third graders to be proficient in reading before heading into the next grade. Ritz is also likely to support an effort by some in the state legislature to stop the implementation of Common Core reading and math standards, joining Virginia’s Patricia Wright and Texas Gov. Rick Perry as the foremost political opponents of the curriculum reform effort. And Ritz is unlikely to do much on the teacher quality reform or school choice front.

Meanwhile reformers must also pay attention to Indianapolis Public Schools, the worst-performing district in the Midwest outside of Detroit, which now has three reform-minded candidates on its school board. This now means there is a six-to-one majority on the board who will likely aim to oust Eugene White, the failed school leader whose long tenure with the district has been anything but exemplary. Expect White to be sacked by June of next year, setting the stage for the possibility of the district bringing in a reform-minded player within the state from outside traditional education circles; depending on whether they want the cleanup job, Mind Trust boss David Harris and M. Karega Rausch, the former city charter schools director who now runs Stand for Children’s Hoosier State operation, could be among the possible candidates. At the same time, the reform-oriented board may also support calls by the Mind Trust and other groups to put the district under mayoral control. Whether or not Indianapolis Mayor Greg Ballard wants to take on the whole mess is a different story. He refused to champion such legislation during the short legislative session this year. At the same time, moves he has made within the past year (including the hiring of Teach for America alum  suggest that he would be happy to play a more-active role in reshaping IPS’s future.

Iowa: The Hawkeye State is better-known for being the home of the famed (and once-prominently used) standardized testing regime than for any recent innovations on the education front. This made the successful first steps made by once-and-future governor Terry Branstad and his education director, Jason Glass, even more remarkable. Earlier this year, Branstad managed to win legislative approval for a literacy reform effort under which third graders that weren’t proficient in reading would either be held back a grade or put into a summer reading remediation program, as well as increasing the frequency of teacher evaluations from once every three years to annual reviews. Certainly the steps would be considered small fry compared to more-aggressive efforts undertaken by Indiana and Louisiana. But considering that the Democrat-controlled senate wanted almost none of Branstad’s original proposals, the fact that he got anything done at all is still commendable.

Branstad is now stepping it up a notch on the reform front. He is rallying the state’s business players to back his reform efforts. He is also likely to take advantage of the fact that Democrats in the state senate control the body by just a two-vote margin; state senate majority leader Mike Gronstal, who likely senses that he won’t have much margin with which to work, will likely pass a teacher quality measure that will feature more-robust use of student test score data in evaluations. Branstad will also push for an overhaul of the state’s charter school law, which, in rare moment of unanimity, was rated by both the National Alliance for Public Charter Schools and the Center for Education Reform as being among America’s most-restrictive in allowing for the launch of charters. While Branstad hasn’t been specific about what he will do on this front, expect the governor to embrace the approach of allowing the state’s education department to authorize charters (and take away the veto power currently given to districts).

The governor’s biggest push on the reform front is likely to lie with an overhaul of the current school funding formula, which currently ladles “allowable growth” in state aid to districts without regard to their performance in improving student achievement. Branstad wants to move to a performance-based funding system, with additional funds based on “measurable” improvements. Such a move isn’t going to be appreciated either by districts or by state senate’s Democrat majority, which has criticized the governor for submitting budgets that had no increases in education spending. But with Medicaid now consuming 18 percent of the state’s budget — and the likelihood of greater growth thanks to the Affordable Care Act — Branstad may have leverage in pushing for such an overhaul.