Category: At the State Level

Bobby Jindal’s Anti-Common Core Tirade Weakens Governance Reform

The last time Dropout Nation took a look at the battle between Louisiana Gov. Bobby Jindal and other state officials over his effort to halt the implementation of Common Core,…

The last time Dropout Nation took a look at the battle between Louisiana Gov. Bobby Jindal and other state officials over his effort to halt the implementation of Common Core, the governor was engaging in the politics of personal destruction, trying to destroy the reputation of Supt. John White, who is pushing ahead with putting the reading and math standards in place. Since then, as expected, the fracas between Jindal and Common Core supporters has moved into the courtroom.

statelogoLast week, the state board of education voted to join the suit filed earlier last month against Jindal’s executive order halting Common Core implementation by a cadre of seven families and charter school teachers (with the help of the Choice Foundation and Black Alliance for Educational Options). Days later, Jindal counter-sued the board, asking a state court judge to invalidate the memorandum of understanding it struck with the PARCC consortium to use its Common Core-aligned tests.

Meanwhile outside the courtroom, Jindal’s hopes that his decision to oppose Common Core (after first backing it) would win allies in the Bayou State fell apart this week when U.S. Sen. David Vitter, the likely Republican nominee to succeed the governor declared his backing for the standards. As with Republicans in the state legislature who opposed Jindal’s effort to halt Common Core implementation, Vitter’s endorsement of the standards further isolates the governor, proving once again that his strategy against implementation is a failure.

Yet Jindal continues to oppose Common Core unabated,, The amended motion submitted by the governor to halt the roll-out of Common Core-aligned tests embraces nearly every faulty argument offered up by opponents of the standards at the national level — and embraces their conspiracy-theorizing to boot. Jindal’s argument for canceling the state’s memorandum with PARCC doesn’t stand even basic legal scrutiny. More importantly for reformers across the country, Jindal’s antics in opposing Common Core implementation is weakening much-needed efforts to revamp state education governance.

The amended brief alone is less a work of legal argumentation than a recitation of every anti-Common Core argument that can be cribbed from the texts of the Pioneer Institute and the American Principles Project. But since Dropout Nation has Ginzu-knifed these fairy tales ad nauseam, I won’t spend more time on it.

The heart of Jindal’s complaint is that the Louisiana Board of Elementary and Secondary Education’s memorandum with PARCC should be cancelled because it violates the state constitution. How? Because PARCC’s governing board (of which Louisiana is a member) is charged with overseeing the development and roll-out of the assessments, and that a super-majority of board members decide on various issues related to the effort, Jindal argues that the state board is essentially handing off its responsibilities to a “private non-Louisiana entity” and thus, illegally “binding” the state’s citizens to education policy that the state won’t decide (and, as far as Jindal is concerned, will ultimately be decided by the federal government, which supposedly “compelled” the state to strike the memorandum with PARCC as a condition of competiting for Race to the Top funding).

Jindal’s argument would be convincing if not for some inconvenient facts. For one, as Dropout Nation noted last year, PARCC doesn’t set the test proficiency cut scores that are key to ensuring that standards are reinforced; this is a job that is done by the state board and the superintendent. There’s also the fact that Louisiana can still require PARCC to make adjustments to the tests, including add questions that may result from amendments to Common Core’s reading and math standards; this is going to be done for Massachusetts, which amended Common Core as part of adopting the standards four years ago.

This means that the state board still controls the testing and assessment aspect of education policymaking — and that the PARCC is doing is essentially no different than what every testing company does on behalf of the states for which they work.Ā [The consequences of this reality, by the way, is why your editor expressed skepticism to the transparency-as-accountability approach advocated by many Common Core supporters as a replacement for the No Child Left Behind Act’s accountability provisions.]

A bigger problem with Jindal’s argument is that the state’s memorandum with PARCC is perfectly legal based on the wording of the state’s own Competency-Based Education Program law, which was amended two years ago (at the governor’s own behest, by the way) to charge the state board of education with implementing tests based on Common Core, the only set of”nationally recognized content standards” available in any form. As Jindal’s attorneys admit, the law gives the state board of education plenty of leeway in selecting any testing regime or vendor it so chooses. Not only can the state board choose to work with PARCC, Jindal isn’t allowed to use his role as the state’s chief budget administrator to interfere with any of its assessment decisions.

Jindal’s brief, in short, is merely political posturing in legal type. It will likely be tossed out of court — and the governor (along with his attorneys) already anticipate that. But for Jindal, the legal maneuvering, like his decision to oppose Common Core after first supporting it, isn’t based on any first principles legal or ideological. It is less about winning a legal victory than about convincing movement conservatives opposed to Common Core — especially those who wrongly believe that education is akin to indoctrination — that he is truly committed to opposing them After all, they know Jindal is engaged in flip-flopping on an epic scale just so he has a chance to win the Republican presidential nomination.

At the same time, the legal wrangling also gives Jindal the chance to further his scorched earth effort to ruin the reputation of Supt. White and muddy the future political aspirations of state board chair (and political scion) Chas Roemer for having the temerity to stand up against him on behalf of Louisiana’s children. By the time this battle is over, Jindal will have ruined his once-stellar reputation on systemic reform as well as limited his possibilities for higher political office. But he may not mind those losses so long as he also damages his foes.

But for reformers, the tactics Jindal is taking to halt Common Core implementation is a problem — and not just because he may actually succeed. It is also because his antics are giving traditionalists and others ammunition for opposing any overhaul of state education governance that involves placing decision-making solely in the hands of governors.

One of the reasons why systemic reform can be arduous to achieve is because of the byzantine structure of the districts, ed schools, and other clusters that make up public education within states. Most of the time, the governors who are the ones best-positioned to advance systemic reform have the least amount of power over it. Only 15 states allow for governors to appoint chief state school officers on their own or with consultation from state boards of education, while only 35 governors can appoint all or the majority of members on state boards of education. This means that in many cases, the governors must either hope for state boards to appoint reform-minded superintendents or can convince the public to care enough about education to elect the right people to oversee public education.

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Reform of state education governance would empower more state chief executives such as former Indiana Gov. Mitch Daniels to use more than their bully pulpits to transform education. But Jindal’s antics in opposing Common Core may make such overhauls impossible to undertake.

As a result, governors who who donā€™t have a governance structure that places education under their control will struggle to make things happen unless they either have the political capital (and leadership ability) to make reforms reality, or are in states where the conditions for overhauling public education are already in place. More importantly, byzantine education governance ends up becoming captured by the very politics the 20th century Progressive Era reformers who crafted these structures were trying to avoid. Competing bureaucracies end up in turf battles to justify their existence even when, as in the case of teacher licensing agencies, they shouldn’t exist independent of state education agencies in the first place. As seen in Indiana (where Supt. Glenda Ritz is battling with reformers who control the state board of education), policymaking can end up devolving into senseless sparring matches. And because of such diffusion of authority, no one can be held responsible for policies and practices that continue an education crisis that damages far too many kids.

Reformers have long ago recognized that moving away from byzantine education governance to structures under which the governor is solely in charge of policymaking would both help reform-minded chief executives advance their efforts and lead to coherent, unified decision-making. Most importantly, gubernatorial control means one person can be congratulated for smart decisions and held responsible for bad ones. Some good steps towards that have begun to happen. Last year, Wyoming Gov. Matt Mead succeeding in essentially taking over control of the state’s education bureaucracy, while once-and-future Oregon Gov. John Kitzhaber (a subject of a Dropout Nation profile three years ago) is essentially the state’s chief school officer. Last week, the Foundation for Excellence in Education, the outfit run by former Florida Gov. Jeb Bush, editorialized in favor of ending Arizona’s election of superintendents and making the top education post a gubernatorial appointment.

But citizens and policymakers are only willing to move to gubernatorial control if they can trust that the chief executive in office will behave properly. This means a governor can’t go around using his political office to wage vendettas against those who oppose his efforts;Ā  cannot engage in policymaking that is geared solely toward advancing aspirations for higher office; and cannot embrace Hofstadter-like paranoia when being a leader calls for cool, sensible, thoughtful decision-making. Governors who misbehave both lose the ability to make the case for greater control over education policymaking and hurt the efforts of the movement to advance governance reform in the rest of the nation.

Which is why Jindal’s antics in pushing for the halt of Common Core implementation are so troublesome for governance reform.Ā  By using state agencies and even the courts to engage in a witch hunt against White and his allies on the state board, Jindal has made it much more difficult for reformers in the Bayou State to make a compelling case for giving governors greater power over education policymaking. The fact that Jindal issued a legally-questionable executive order to halt Common Core implementation even after the state legislature rebuffed his legislative efforts promotes the old Progressive Era perception that governors will simply act as dictators (and ignore the separation of powers clauses in state constitutions) just to get their way.

It is hard for reformers to argue that governors should be in charge of education decisions when a currently-seated chief executive shows that he won’t respect either law or engage sensibly in the policymaking process. In the case of Jindal, his actions are undercutting his own demands through his opposition to Common Core that he, not the state board or White, should have the final say over state education decisions. In fact, Jindal’s misbehavior has given White more influence on education policymaking, both at the state and national levels (and thus more credit for the efforts undertaken over the past few years), while obscuring the strong and sensible leadership on systemic reform the governor has shown for most of his tenure.

For both traditionalists and others who are concerned with expanding executive branch power, Jindal’s antics are the best argument against any reform of state education governance. This is a shame. Byzantine educational governance does nothing good either for kids, taxpayers, or even governors. But Jindal may have wrecked education governance reform for the next decade. Thanks for nothing, Bobby.

 

 

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Thoughts: Jindal and Ravitch Division

Bobby Jindal’s Politics of Personal Destruction: One of the less-settling themes of Louisiana Gov. Bobby Jindal’s tenure has been his penchant for being petty in dealing with his opponents and…

Bobby Jindal’s Politics of Personal Destruction: One of the less-settling themes of Louisiana Gov. Bobby Jindal’s tenure has been his penchant for being petty in dealing with his opponents and even otherwise allies. As I mentioned in yesterday’s piece on Jindal’s faltering anti-Common Core strategy for winning the Republican presidential nod, the Bayou State governor took aim at his lieutenant governor last year for his failure to adhere to his party line by cutting the $2 million budget used for promoting tourism. At the same time, Jindal also cut the budget of the state treasurer, John Kennedy, for opposing the governor’s use of one-shot revenues to balance the budget. A year before, Jindal successfully demanded his ally in the state legislature, House Speaker Charles Kleckley, to demote one member of the Republican caucus, Harold Ritchie, over his vote against one of Jindal’s proposed tax breaks.

wpid-threethoughslogoSo it isn’t shocking that Jindal is likely taking aim at Supt. John White over his efforts against the governor’s push to halt Common Core implementation. White sounded the alarm yesterday in a letter to the state board of education proclaiming that Jindal’s apparatchiks (including state board member and Jindal ally Jane Smith, along with Kristy Nichols, who runs Jindal’s Department of Administration) are insinuating that he and his staffers have been violating state ethics laws through the work on implementing the standards as well as in contributions made to the state by Teach For America. White also noted that one of his allies, state board chairman (and political scion) Chas Roemer, has also been hearing that Jindal’s apparatchiks are looking to find evidence of ethics violations.

Given Jindal’s endgame of kiboshing Common Core implementation — and White’s effort to keep it going — it is clear that the governor will do anything he can to force the superintendent out of office. If it means ruining White’s reputation, so be it. Put simply, Jindal is engaging in the same kind of politics of personal destruction that White’s colleague in Indiana, Glenda Ritz successfully deployed (with help from Associated Press write Tom LoBianco) against her predecessor, former Florida Supt. Tony Bennett, who is another Common Core supporter.

Just a few weeks earlier, Jindal issued another legally questionable executive order forcing the state department of education to seek the governor’s approval for contracts larger than $2,000. Under such an order, White and his staffers will have difficulty simply doing something as innocuous as ordering supplies from Staples without then being accused of some violation. As part of the earlier executive order Jindal issued kiboshing Common Core implementation, the governor demanded that White turn over any documents and contracts to see if the agency has been behaving according to his standards. Particularly at issue is the fact that the PARCC consortium that has developed Common Core-aligned tests that the Bayou State will use didn’t have its plan go through an RFP process the same as other contracting efforts. The fact that states don’t always have to use RFP processes to pick vendors for its offerings (along with the inconvenient reality that Jindal was all in on this before his political ambitions led his to oppose the standards) makes Jindal’s witch hunt desperate and vicious at once.

By accusing White of illegally using PARCC tests, Jindal is essentially setting up the possibility of eventually bringing the superintendent up on both ethics and even criminal charges. Just as importantly, through his insinuations that Common Core is just a federal takeover of education — and that White and his allies on the state board are part of it — Jindal has begun embracing the conspiracy-theorizing rhetoric of Gatesers such as once-respectable education historian Diane Ravitch and Pioneer Institute boss Jim Stergios. Certainly such paranoid rhetoric would make Richard Hofstadter leave his coffin and add a new chapter to his famed text. But Jindal’s entire act against White is intellectually indefensible, morally reprehensible, and unbefitting of a state chief executive. He should be forced out of office himself.

Sadly, such gamesmanship is to be expected. This is why reformers must always engage in conduct becoming. Hopefully, White hasn’t given Jindal any ammunition beyond honestly disagreeing with the governor on providing kids with high-quality education they deserve. But Jindal’s nastiness is another reminder that the reform of American public education is a war — and one reformers must be prepared to win.

ravitchrileyTurnabout is Ravitch Play: One of the more-interesting aspect of once-respectable education historian Diane Ravitch’s transformation from dilettantish school reformer to intellectually charlatan traditionalist is how willing so many defenders of failed policies have been willing to embrace her as their own. Perhaps it is because they lacked credible allies (especially those who weren’t National Education Association and American Federation of Teachers bosses), or it could be that they, like Ravitch, are already prone to racial myopia and logical fallacies. But traditionalists have been willing to stand by Ravitch even when her nastiness has cast even harsher light on their cause.

So it is a tad interesting to see that Ravitch is now being called out by some traditionalists for being, well, who she is. What happened? See, as part of a student privacy group emerging out of the opposition to Common Core reading and math standards called Parent Coalition for Student Privacy, Ravitch and her partner in crime, Leonie Haimson, sent a letter to Congress calling for restrictions on the use of student data for helping teachers and school operators improve learning for kids. Ravitch and Haimson, naturally, were signatories on the letter. But so was one of their allies in opposing Common Core, the conservative American Principles Project.

This rankled some traditionalists — most-notably Melinda Anderson (who writes the speeches given by NEA President Lily Eskelsen Garcia and predecessor Dennis Van Roekel) — because American Principles Project also opposes the defined-benefit pensions that traditionalists also defend as well as fights against efforts to legalize gay marriage (which progressives within the traditionalist camp support). [The fact that another movement conservative opposed to Common Core, the usually-sensible Joy Pullman of the Heartland Institute’s School Reform News, signed onto the document, also likely set these traditionalists on edge.] As a result of this apostasy, Anderson and others railed against Ravitch on Twitter and other social media forums.

This, in turn, led those long skeptical of Ravitch (including centrist Democrat reformers such as former StudentsFirst operating chief Dmitri Melhorn) to note that others have begun looking askance at Ravitch’s perfidy, intellectual and otherwise. For example, the fact that two years ago, Ravitch was paid by Pearson (yes, the textbook and testing giant she rails against on a constant basis) to give a speech before the National Association of School Psychologists. Oh, and the fact that she gave a speech last year to a convention hosted by Teacher Union Reform Network, an NEA and AFT sock-puppet that is also funded by outfits such as the Bill and Melinda Gates Foundation, an outfit that traditionalists strongly oppose. In short, Ravitch is, in the minds of some traditionalists, is a traitor to their cause.

[Just wait till they remember that this is the same Ravitch who railed against black parents in Ocean Hill-Brownsville in her first book, The Great School Wars: A history of New York City schools, and who made her bones battling another academic demagogue, Leonard Jeffries, over incorporating black history into school curricula.]

Given the prominence of some of Ravitch’s traditionalist critics, expect thisĀ Ā  drama to be a C-grade version of Stalinist purging and Reign of Terror guillotining. Sure, your editor can’t look down on Ravitch for taking a single-issue approach to advancing her cause. But she should have known that allying herself with the likes of American Principles (which, from the perspective of this conservative, shouldn’t even be embraced by other conservatives) wasn’t going to end well for her.

As my mother would say: Pack some meals. This is going to be fun.

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Jindal’s Faltering Anti-Common Core Gamble

When Louisiana Gov. Bobby Jindal issued an executive order last month attempting to end implementation of Common Core reading and math standards, he probably thought it was a good idea….

When Louisiana Gov. Bobby Jindal issued an executive order last month attempting to end implementation of Common Core reading and math standards, he probably thought it was a good idea. Even when the preponderance of the evidence showed this wasn’t so.

statelogoSure, Jindal knew that the public knew that he was opposing the standards after he enthusiastically supported them. Yes, his executive order ending Common Core implementation was opposed by his allies in the state legislature, friends at the state board of education, and even Supt. John White, who have previously backed his efforts on the education front. Jindal even understood that the executive order itself was legally questionable because in the absence of state legislation, only the state board of education and education department (which he did not control) could end implementation.

But as far as Jindal was concerned, it was all worth it. After all, by opposing Common Core implementation, he thought he would win support for his run for the Republican presidential nomination from movement conservatives who oppose the standards. Jindal also thought that by abandoning the standards, his allies among school choice activists within the reform movement (many of whom oppose Common Core out of a misguided fear that the standards would hamstring their ability to provide high-quality education in ways they see fit) would also rally around him; since a large portion of the school choice activist community vote Republican, opposing implementation would also win him some votes.

But as both opinion polls and a lawsuit supporting Common Core implementation filed yesterday by a group of seven families (along with two charter school teachers) along with the Choice Foundation (with help from Black Alliance for Educational Options), Jindal was clearly mistaken. Which should be a lesson to all politicians with aspirations for higher office (especially Wisconsin Gov. Scott Walker, who is looking to kibosh the Badger State’s implementation of the standards). Abandoning systemic reform and damaging the futures of children are not strategies for electoral success.

Even before the move to stop Common Core implementation, Jindal wasn’t exactly best-positioned for the Republican presidential nod. This past February, polling outfit Public Policy Polling determined that Jindal was the nation’s least-popular governor, with just a 32 percent approval rating after nearly seven years in office. Certainly the Indian emigre’s son is unpopular with traditionalists within the Bayou State, who opposed his sensible efforts to overhaul teacher evaluations and expand school choice. But Jindal’s penchant for high-handed behavior and viciously settling scores with rivals through the use of his line-item veto powers, along with a fecklessness on state finances that makes California Gov. Jerry Brown look like an old-school fiscal conservative, has also hurt him at home.

Meanwhile on the national level, Jindal finds himself in a crowded field of Republicans who either have stronger movement conservative profiles or better records on both school reform and government reform. This includes Texas U.S. Sen. Ted Cruz (whose instigation of last fall’s government shutdown has won him support from the rabble), his colleague in the federal upper house, Rand Paul (who has bolstered his prominence over the past two years with his opposition to further military efforts in the Middle East, as well as taking strong stances on sentencing reform), former Florida Gov. Jeb Bush (whose record as a strong reformer cannot be questioned), and the aforementioned Walker (who will likely win a second term despite being dogged by a corruption probe).

With low popularity numbers at home and unable to stand out in a crowded field of candidates, Jindal had to do something. So he seized on the opposition to Common Core among the motley crew of movement conservatives, hardcore progressive traditionalists, conservative-leaning school choice activists within the overall school reform movement, and teachers’ union bosses opposed to the use of standards-aligned tests in teacher evaluations. Betting that movement conservatives and choice advocates would rally around his cause (and bolster his presidential aspirations), Jindal reversed his support for Common Core and became part of the opposition.

Over the past few months, Jindal unsuccessfully pushed more-sensible state legislators to pass legislation to end implementation, and even vetoed a measure that would have kept the Bayou Stateā€™s Common Core implementation efforts in place while slightly amending the standards as Massachusetts and other states have done. Having failed by June to get his way, Jindal went nuclear. He issued the executive order canceling the stateā€™s memorandum of understanding with the Council of Chief State School Officers and the National Governors Association to implement the standards, as well as demanding White and his staff at the state education department account for every dollar spent on implementation.

Jindal probably figured that White would continue implementing Common Core implementation — and even file suit against the governor for overstepping the limits placed on his role overseeing education policy. He also likely knew that both state legislators and the board of education would also visibly oppose him. Jindal even anticipated that one of his foes, Lt. Gov. Jay Dardenne a strong Common Core backer who was already sore with Jindal over his high-handedness (especially in stripping out of the budget $2 million in state tourism funding Dardenne oversaw) would also come out swinging. But Jindal figured that it would all work out to the benefit of his ambitions.

This hasn’t happened. Public Policy Polling’s latest survey of Bayou State preferences in presidential aspirants ranks Jindal in fourth place. Not only does Jindal’s 12 percent rating, trail Cruz (who gets 19 percent of voters surveyed) and Bush (with 17 percent), he even trails former Arkansas Gov. Mike Huckabee, who isn’t even likely to run for the Republican nomination. Jindal likely couldn’t even carry his own state in a Republican primary. It’s no better on the national level: Jindal trailed eight other aspirants — including Paul, scandal-tarnished New Jersey Gov. Chris Christie (a Common Core supporter who has been a strong leader on the reform front), and Bush — garnering just four percent of prospective New Hampshire voters in an NBC-Marist College poll. In Iowa, Jindal came in dead last.

All of Jindal’s grand-standing against Common Core has done nothing to win him support. Movement conservatives, who know that Jindal has flip-flopped his position on the standards, see him as just another cheap-suit politician, while moderate Republicans (who are divided over implementation) just don’t see him as a compelling representative of the party.

Even those movement conservatives who are also Jindal fans thought he overstepped his legal authority. DeclaredĀ American SpectatorĀ writer Quin Hillyer in theĀ Advocate: “[Jindal’s] unilateral abridgement of Common Core runs roughshod over Madisonian principles of executive restraint.” Especially for these conservatives, the goal of quashing Common Core implementation doesn’t justify the means. And for the more-principle minded within the conservative movement, Jindal becomes even more unattractive as a candidate because he is acting like their bete noir, President Barack Obama, who they loathe in part because of his penchant for using executive orders to go around Congressional opposition

Meanwhile Jindal hasn’t exactly won over school choice activists (along with Parent Power advocates) in his own state. In fact, they have thoroughly embarrassed Jindal over the past month by calling him out for opposing standards that can help provide Bayou State children — especially those from poor and minority backgrounds — with the comprehensive college-preparatory learning they deserve. Particularly for charter school operators such as the Choice Foundation as well as school choice advocates such as BAEO, implementing Common Core (and ensuring high-quality education for the vast majority of kids attending traditional district schools) is as important as expanding high-quality options so that families can escape failure mills.

Now, comes Navis Hill v. Jindal, the tort filed yesterday by the sevenBayou State families (along with Choice Foundation with help from BAEO) against Jindal and his staff to stop the governor’s effort to halt Common Core implementation. By working so hard to oppose the standards, Jindal has found himself opposing the very school activists and families (including those from poor and minority households) on whose behalf he has claimed to be working in his more-sensible school reform initiatives. Jindal has essentially turned his allies into opponents — and that won’t bode well for him politically.

But for Jindal, the problem isn’t just that choice advocates are opposing him on an issue on which he thought they would back him. The plaintiffs legitimately argue that Jindal’s executive order and efforts to quash contracts the state education department has already struck to roll out Common Core-aligned tests violate the state constitution, and that his decision has created chaos within the state’s public education system. Because Bayou State legislators have opposed Jindal’s efforts to quash Common Core implementation (and, in fact, have supported the standards), Jindal can’t even claim to be faithfully executing state law. As a result, the Navis Hill families likely have a far stronger shot of halting Jindal’s effort to quash Common Core than their allies in Oklahoma, whose similar suit against the halting of Common Core implementation was unsuccessful because that state’s supreme court ruled that they couldn’t legally question the policymaking privileges of the legislative branch.

Then there’s the hit Jindal has taken to his reputation as a strong leader on advancing systemic reform. Certainly Jindal’s high-handedness has won him foes. But until recently, he deserved credit for standing up and taking action to transform public education for Bayou State kids. It was his strong stance against the state’s educational ancien regime — going so far as to call out the executive director of the NEA affiliate for declaring that poor and minority families are too incompetent to make smart school choices — along with the strong lobbying of Parent Power and school reform groups, that led to the expansion of the state’s voucher program. He also proved himself ready to do the right thing. This included defending his reforms against lawsuits by the American Federation of Teachers and National Education Association branches there, to finding funding for the voucher program once a state court judge invalidated the use of dollars from the state’s school funding formula for the purpose.

But by reversing himself on Common Core in the hopes of winning higher office, Jindal has tossed his entire legacy into the trash. By acting as a political opportunist instead of as a strong defender of high-quality standards, Jindal has made a mockery of every word he has spoken and every action he has taken against traditionalists. Even worse, by joining Common Cause with the likes of talk show host Glenn Beck and columnist Michelle Malkin (along with those who should know better such as Jim Stergios and Sandra Stotsky of the Pioneer Institute), he has also embraced the worst of their rhetoric.

Simply put, Jindal has behaved shamefully, and exemplifies perfidy instead of leadership. For that, he doesn’t deserve to be president, much less chief executive of a state in need of strong leadership to address its woeful performance in improving student achievement .

Within just one month, thanks to his opposition to Common Core, Jindal managed two spectacular feats: Further weakening his political aspirations, and losing the few allies he had left. Which, in turn, led to a third: Weakening his once-stellar legacy on advancing systemic reform for all kids. Walker and other politicos should think twice before following Jindal’s example.

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Pennsylvania’s Exploding Teachers’ Pension Crisis

As you may remember, Dropout Nation gave a preview of its analysis of the financial condition of Pennsylvania’s virtually-insolvent pension during Saturday’s report on the School District of Philadelphia. Since…

As you may remember, Dropout Nation gave a preview of its analysis of the financial condition of Pennsylvania’s virtually-insolvent pension during Saturday’s report on the School District of Philadelphia. Since then, Keystone State Gov. Tom Corbett has failed to convince Keystone State legislators to pass his plan to increase contributions to the Public School Employees’ Retirement System. On Tuesday, the state’s lower house voted to effectively kill debate on the plan by steering the legislation into a committee chaired by one of Corbett’s fellow Republicans, Eugene DiGirolamo, who collected $19,750 in political contributions from public-sector unions (including $2,750 from the American Federation of Teachers affiliate there, and $1,000 from the National Education Association’s state unit) during the 2012 election cycle, according to data from the National Institute on Money in State Politics. With DiGirolamo proclaiming that he will not hold any hearings on Corbett’s plan, and with the governor himself likely to lose the state’s top executive spot in November, there is no chance that the state government will address PSERS’ insolvency until after the new year begins.

statelogoRegardless of DiGirolamo’s unwillingness or that of Democrats in the Keystone State to take action, and no matter what happens to Corbett (whose tenure as governor has been weak, especially on systemically reforming public education), PSERS is still virtually busted. And based on Dropout Nation‘s analysis, the underfunding is increasing at alarming levels.

PSERS officially reports a pension deficit of $30 billion for 2012, the latest year available. That is an 11.4 percent increase over its officially-reported underfunding for the previous fiscal year. But as your editor pointed out in last year’s analysis, the Keystone State pension’s official numbers are not to be trusted. This is because it assumes an investment rate of return of 7.5 percent, which is far higher than the 5.3 percent five-year return rate experienced on the market, according to Wilshire Associates, and much higher than the 2.5 percent five-year return rate PSERS has actually experienced. Thanks to an inflated rate of return, the Keystone State teachers’ pension is understating its virtual insolvency.

Another problem lies with Act 120, the pension law passed four years ago that has exacerbated the pension’s insolvency with such moves as boosting annuities collected by teachers to equal 75 percent of final year’s salary. The law mandates that PSERS recognizes its gains and losses over a 10-year period, instead of an already-ridiculous five years. Because this approach, called smoothing, allows for the pension to not immediately account for losses or gains, it gives the false impression that its financial condition is in good shape.

To get to the heart of matters, Dropout Nation uses a version of a method developed by Moody’s Investors Service that uses a more-realistic 5.5 percent rate of return on investments. [Moody’s uses a rolling rate based on the return on a long-term bond index; Dropout Nation uses the 5.5 percent rate Moody’s originally used in its preliminary analyses for the sake of consistency.] The result? DN determines that PSERS is underfunded to the tune of $37 billion, a 10.4 percent increase over the pension’s $33.5 billion insolvency as figured out by this publication in last year’s analysis. The $37 billion underfunding is 27 percent higher than PSERS’ officially-reported unfunded liability.

Based on a 17-year amortization rate, Pennsylvania taxpayers will have to shell out an additional $2.1 billion a year, 90 percent more than the $2.4 billion in contributions made in 2013. The Keystone State government’s plan to contribute an additional $600 million into the pension this year will do nothing to address the shortfall.

As with other teachers’ pensions, addressing PSERS’ insolvency is critical for Pennsylvania largely because of the number of Baby Boomers retiring from the teaching ranks. The number of retirees (net of deaths and other removals) added to PSERS’ rolls increased by 20 percent (fromĀ 168,026 annuitants to 202,015) between 2007 and 2012, while the payouts increased by 38 percent in that same period. Based on the pace of increases in annuitants in that six-year period, the pension will likely add 12,438 new annuitants (excluding deathsĀ  and other removals) to the rolls ever year for the next decade before retirements. With each retiree likely collecting at least $28,501 a year, PSERS will have to pay out at least $354.5 million more in annuities every year, further increasing its insolvency.

politicspa_corbett

Pennsylvania Gov. Tom Corbett will likely end his rather weak tenure without addressing another key aspect of the nation’s education crisis. Photo courtesy of PoliticsPA.com.

Keep in mind that the numbers only cover the pension’s underfunding alone. There’s also PSERS’s unfunded retired teacher healthcare costs with which the state must also contend. PSERS officially reports unfunded liabilities of $1.2 billion. But hold on: Unlike most pensions, PSERS uses the same inflated rate of return for the investments used to cover those costs as it uses for the pension. Using the same method applied to the pension, Dropout Nation determines that the true unfunded liability is $1.6 billion, 27 percent higher than PSERS officially reports. Based on a 17-year amortization rate, Keystone State taxpayers will have to pay $95 million more a year to pay down that shortfall, almost double the $109 million paid out last year.

At some point, given the increasing liabilities, Pennsylvania will have to deal realistically with PSERS’ insolvency. This must start with increasing contributions. But more-aggressive action must be taken.

While teachers officially pay 41 cents out of every dollar contributed last year. But as in most states, it is likely that districts are actually the ones covering the share of contributions teachers are supposed to make (on top of their own payouts to the pension). Embracing the approach taken by Detroit’s main city government to freeze the existing pension (save for paying out remaining contributions to retirees and whatever currently-working teachers are owed), and move current and new teachers to a hybrid pension. This would include a defined-contribution plan to which teachers can contribute as much toward their retirement as they so choose (with a five percent match from districts) along with a smooth accrual defined-benefit element similar to an approach advocated by Josh McGee of the John and Laura Arnold Foundation and Marcus Winters of the Manhattan Institute in a report released last month. As for PSERS itself? The state must end any cost-of-living increases for current retirees as well as reduce promised final-year salary payout percentages in order to get the pension’s financial house in order.

This move would help taxpayers and teachers by ending increases in PSERS’ unfunded liabilities as well as making the pension solvent. These moves woud also be helpful to younger teachers who are often the ones who bear the brunt of most pension reform plans. Given that defined-benefit pensions such as PSERS already do little for younger teachers because half of them are likely to leave classrooms within five years (and thus, unlikely to fully vest in the plans), moving away from the current pension would actually make teaching more attractive, both to those already working in the profession as well as to talented collegians who would otherwise look to gigs in the private sector.

But such a reform can only happen if Pennsylvania’s legislators and other political leaders actually address the long-term burdens facing the taxpayers and children they are supposed to represent. Sadly for the Keystone State, such action won’t happen anytime soon.

Featured photo courtesy of paindependent.com.

 

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Lawsuits May Drive CALSTRS Reform

For the moment, once-and-future Gov. Jerry Brown can claim that he has taken some sensible steps in addressing the California State Teachers’ Retirement System’s massive virtual insolvency. Last week, legislators…

For the moment, once-and-future Gov. Jerry Brown can claim that he has taken some sensible steps in addressing the California State Teachers’ Retirement System’s massive virtual insolvency. Last week, legislators backed Brown’s plan to increase contributions to the pensions by $5.5 billion (from the current $2.2 billion) over the next seven years. [Brown signed the legislation yesterday.] This is an important (if still less-than-satisfactory) step toward addressing CALSTRS’ officially-reported underfunding of $74 billion, which is more likely $93 billion based on aĀ Dropout Nation analysis of the pension’s financial using a formula developed by Moody’s Investors Service.

statelogoWhether or not Brown’s plan will survive beyond legislative approval and his signature on the dotted line is another question entirely. Why? Because school districts are none too happy about the move, and they can easily claim that state law is on their side.

As your editor pointed out last month, Under Brownā€™s plan, districts bear most of the burden of increased contributions, paying 75 percent of the increased contributions (along with the nine percent that teachers are supposed to pay themselves, but in most cases, will actually be covered by the districts as part of collective bargaining agreements with NEA and AFT locals); this is greater than the 38 percent districts currently contribute (along with the 39 percent that they often pay on behalf of teachers). This certainly makes sense. After all, Brown’s move last year to end full state funding of education and place the bulk of school subsidizing onto local property taxes effectively makes districts responsible for their fiscal affairs. There’s also the fact that the fiscal fecklessness of districts is a key reason for CalSTRS’ virtual insolvency; this includes the penchant to engage in spiking, or ratcheting up the salaries of teachers and school leaders during their last five years on the job in order to boost annuity payouts upon retirement.

The problem? California’s state constitution bars the state from forcing districts and other local governments to bear what they may consider to be unfunded mandates. This provision, which has been an obstacle to other statewide reform efforts — including the development of longitudinal data systems needed to improve student and school achievement — will also likely prove to be a stumbling block to Brown’s pension plan. Given that districts are up in arms over the contribution increases (and angered at Brown’s teachers’ union-driven plan to limit their ability to build substantial financial reserves), expect districts and their lobbying groups to proceed with litigation to stave off the hikes.

Litigation isn’t the only obstacle to the success of Brown’s plan. As Dropout Nation noted last month, the plan is based on faulty numbers that don’t fully reflect the true extent of CalSTRS’ virtual insolvency. Because CalSTRS assumes a 7.5 percent rate of return on its investments, a rate far higher thanĀ the 5.2 percent five-year rate experienced in the market and the pensionā€™s own actual five-year rate of return of 3.7 percent, the teachers’ pension is understating its level of unfunded liabilities. The fact that CalSTRS also engages in actuarial tricks such as smoothing of investment losses and gains means that Brown’s plan is not based on a realistic picture of the pension’s financial condition.

Then there is the fact that Brown’s plan for reducing CalSTRS’ insolvency is based on a way-too-long 30-year timeline. For one, given that CalSTRS will likely addĀ 13,398 new annuitants (excluding deaths and other removals) to its rolls every year for at least the next decade before retirements slow down, and will have to pay out at least $611 million more in annuities every year, a 30-year payment plan will not fully address those growing liabilities. At the same time, by using a 30-year timeline instead of a 17-year plan as originally recommended by Moody’s, the state isn’t being aggressive enough in getting CalSTRS’ financial condition — and that of the entire state — in order.

Finally, there is the fact that Brown’s plan doesn’t reduce the growth in unfunded liabilities at all. That can only happen by moving existing and new teachers out of the defined-benefit pension and putting them into a hybrid plan that features a defined-contribution element into which they can save as much as they choose for retirement. This is a step being taken by Detroit next week as part of its effort to emerge from bankruptcy. For the state, districts, and ultimately, taxpayers and children, this move would immediately slow the growth in liabilities. It is also beneficial for teachers. Particularly for younger teachers, half of whom are likely to leave the profession within their first five years, such a move would actually allow them to reap the full rewards of their work by having a portable retirement savings plan.

Neither Brown nor the state legislature were willing to take any of these steps. But districts may be able to do so, especially if a court ruling next month in the bankruptcy proceedings for Stockton, Calif.’s main city government end up reflecting that handed down in December by the judge overseeing Detroit’s Chapter 9 filing.

Earlier this month, one of the creditors in Stockton’s bankruptcy, Franklin Templeton Resources, challenged the city’s proposed plan to exit Chapter 9. The money manager argues that no proposal can be valid unless CalSTRS’ sister pension, the State Employees Retirement System, is treated like a contractor or creditor under the U.S. Constitution’s Supremacy Clause, superseding the state constitution’s provision treating pensions as a vested right that cannot be tinkered with under any circumstances. Essentially, bankrupt municipalities can voluntarily (or be forced by creditors) to slash annuity payments for retirees, restructure defined-benefit pensions, and even replace traditional pensions with defined-contribution plans. And it is a position already validated by the federal bankruptcy court in Detroit’s case.

Whether or not the judge in Stockton’s case will go along with Franklin Templeton’s argument is an open question, and one that won’t be known until he hands down his ruling on July 7. But given that the judge has already allowed Stockton to slash its unfunded retiree healthcare benefits from $544 million to $5.4 million using the same reasoning, you can bet that he may likely rule the same way on how Stockton’s obligations to CaLPERS. If it happens, it could lead to other financially-strapped municipalities in California (and even in the rest of the country) taking much-needed steps toward addressing their pension insolvencies. And given that CalSTRS is similar in structure to CALPERS, equally cash-strapped districts may force pension reforms that neither Brown nor legislators want to do.

The future of CalSTRS may end up being a matter decided by the courts and not by Sacramento’s mandarins.

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Tennessee’s Teachers’ Pension Challenge

When Dropout Nation last looked at Tennessee’s defined-benefit pension for teachers, the State Employees, Teachers, Higher Education Employees, it noted that its overly-inflated assumed rate of return on investments had…

When Dropout Nation last looked at Tennessee’s defined-benefit pension for teachers, the State Employees, Teachers, Higher Education Employees, it noted that its overly-inflated assumed rate of return on investments had hidden the true size of its virtual insolvency by 27 percent. Volunteer State taxpayers essentially would have to take on a true pension deficit of $3.3 billion, which would require contributing an additional $328 million annually over 17 years (or 45 percent more than the $731 million paid out in 2012) to bring the pension back to solvency.

statelogoSince then, the Volunteer State under the leadership of Treasurer David Lillard and Gov. Bill Haslam, has taken some important steps toward addressing its pension woes. This is good news. Yet the Volunteer State still understates the actual size of the teachers’ pension’s insolvency, meaning that the solutions aren’t fully addressing the long-term problem at hand.

At least the good news is that Tennessee is slowly moving new teachers and other employees into a hybrid pension plan. Starting this month, newly-hired teachers would still get a defined-benefit pension. Unlike colleagues currently on payrolls, who can retire at age 60, new teachers can only collect a full pension once they either reach age 65. New hires would also be required to contribute at least percent of salary to a defined-contribution plan, to which a district or local government will match dollar for dollar up to a maximum of five percent of salary. Theoretically, the plan should save Volunteer State taxpayers

Another change, signed into law last week by Gov. Haslam, requires districts and other local governments to fully pay required contributions to the pension. Under the state’s new Public Employee Defined Benefit Financial Security Act, districts and local governments that aren’t fully paying their contributions must submit plans to do so by 2020 and it must meet a formula prescribed by the Government Accounting Standards Board. If they don’t, the state will divert subsidies from its coffers to SETHEEPP in order to make up the shortfall.

Yet it isn’t all good news for Tennessee taxpayers and children on the pension front. For one, under the new hybrid pension, retiring teachers will still be eligible for cost-of-living increases that can range from one-half of one percent to three percent; those increases, by the way, compound annually. This means that the Volunteer State’s pension insolvency can continue to grow because of generous annuity hikes. There’s also the fact that all pensioners are getting a 1.5 percent cost-of-living hike this year, which further exacerbates the pension’s insolvency.

The defined-benefit part of the hybrid pension also doesn’t have a guaranteed saving rate, an important feature because it actually ensures teachers that they will actually be able to collect some money instead of a promise to be paid 30 percent of final year’s salary, as the current defined-benefit pension currently does. In fact, new teachers are still guaranteed to get annuity payments equal to 30 percent of the salary earned before retirement. Again, this only adds to Tennessee’s burdens, not alleviates them.

Then there’s the fact that the pension reforms undertaken by the state really haven’t dealt with the underlying issues driving the teachers’ pension’s virtual insolvency.

SETHEEP still assumes a rate of return of 7.5 percent on its investments, according to its 2013 annual report. This is an inflated number that doesnā€™t square with theĀ 5.2 percent five-year return rate experienced in the market (according to Wilshire Associates). In fact, the 7.5 percent assumed rate of return is higher than the five-year return rate of 5.3 percent experienced by both the teachers’ pension and the rest of the Volunteer State’s Consolidated Retirement System. Requiring districts and other local governments to fully pay their contributions to the pension doesn’t mean much if they are still paying far less than they should to cover the insolvency. The state should immediately adopt a more-realistic assumed rate of return, around 5.5 percent as used by Dropout Nation in its analysis (and originally used by Moody’s Investors Service in the development of its pension analysis formula), and adjust contribution levels accordingly.

Another problem that went unaddressed: The fact that SETHEEPP, along with the rest of the state’s pension system, only conducts actuarial analysis of its financial condition. In fact, none of Tennessee’s pensions have provided up-to-date data on their fiscal conditions since 2011. As a result of this data lag, the officially-reported pension deficit of $2.6 billion (and more-likely $3.3 billion because of its overly-inflated assumed rates of return on investments) is likely even higher. Considering that the pension’s annuity payouts have increased by 8.5 percent within the last year (from $1.5 billion in 2012 to $1.6 billion in 2013) — and has increased more than a two-fold (from $827 million to $1.6 billion) between 2004 and 2013 — the Tennessee teachers’ pension isn’t providing policymakers or taxpayers the knowledge they need to assess its actual financial position.

Meanwhile none of Tennessee’s pensions have addressed their unfunded commitments, or obligations to invest in hedge funds and other risky private equity investments. These unfunded commitments can wreck havoc on the balance sheets of pensions because the money managers running hedge funds and other alternative investment vehicles can issue capital calls at any given moment — even if private equity investments account for a smidgeon of an overall portfolio. By 2013, SETHEEPP, along with the rest of the state’s Consolidated Retirement System, still had $774 millionĀ  in unfunded commitments it had to meet. If forced to pay up right now, SETHEEPP would likely have to bear $564 million of that burden, wiping out 60 percent of the $932 million contributed to the pension in 2013. This reality is one reason why pensions, which are geared toward providing safe long-term income to its annuitants, should not be investing in any form of alternative investment vehicle in the first place.

Finally, while the pension reforms did not address the fact that veteran teachers and other employees are still not contributing enough to their own retirements. Teachers contribute just 21 cents out of every dollar put into SETHEEPP in 2013, unchanged from the previous year; given that collective bargaining agreements often end up giving districts full responsibility for both employeeĀ andĀ employer contributions, teachers aren’t likely putting in that much. Placing the onus of addressing the pension’s insolvency on districts and other local governments isn’t a sensible solution.

Dropout Nation will take a further look at Tennessee’s teachers’ pension numbers once the state issues its annual report. But it is clear that while the Volunteer State has taken some steps towards addressing its teachers’ pension’s insolvency, it hasn’t done enough to address its woes for the long haul.

Photo courtesy of Nashville Public Radio.

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