Educational Insolvency:What do we need to know?

John W. Sipple, PhDAssociate ProfessorCornell University

CaRDI, NYS Center for Rural Schools NYRuralSchools.org @jsipple

CCSB Dinner, Jamestown, NY

Key Themes

1. Caught between constraints in state aid and property tax cap

2. Variation across state in need and impact of state aid and tax cap

3. Regional response and shared services

4. Programmatic vs. Financial insolvency

A Preview•No flurry of tables and charts detailing

flaws in state aid. Others have & will do this.

•Problems are more political than technical.

•The imperative is not to find more money in the state, but to better allocate and use what we have (e.g., Formula, GEA, STAR, local decisions).

“Educational Insolvency”

•A relative term…depending on what we are trying to accomplish.

Forgive me... A bit of history about WHY we educate?•Jefferson's Plan – Public Schooling in VA 1817

(Identifier)

•Mann's Plan – Common schools in MA 1849 (Equalizer)

•Conant's Plan – Comprehensive High School 1959 (Stratifier)

•Clinton/Bush/Obama/Tisch/King Plan – Standards & Choice (??)

Thomas Jefferson’s Plan•“Twenty of the best geniuses will be raked

from the rubbish annually.”

•“We hope to avail the state of those talents which nature has sown as liberally among the poor as the rich.”

School as sorter and identifier of select talent… but not just from wealthy communities/neighborhoods.

Horace Mann’s plan•“The Common School...may become the most

effective and benignant of all the forces of civilization.”

•“The materials upon which it operates are so pliant and ductile... Inherent advantages of the Common School.”

School as societal change agent - Actively shaping all youth and community

Conant’s High School Plan (1959)•School serves community– all kids go to same

Comprehensive High School

•Multiple paths to different outcomes

•“What will make the schools democratic is to provide opportunity for all to receive such education as will fit them equally well for their particular work life.” Boston Superintendent, 1908

School as Stratifier - all-things-to-all-people

Clinton/Bush/Obama/King

•All children can and should achieve

•Market forces shape and motivate success

•Dramatic lack of trust in the educators and system

Schools caught between consumerism and Egalitarian ideals

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

-

2,000

4,000

6,000

8,000

10,000

12,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Number of NYS and U.S. School Districts

NYSUS

# o

f N

YS

Dis

tric

ts

Equilibrium

The Big SqueezePopulation/Enrollment decline• Increased unit cost

Demographic change

• Poorer• Minority growth• ESL• Special Education

Revenue constraints

• Tax cap

• State aid cap & GEA

• Property wealth concentration

• Income concentration

• RTT Funding and now Fed sequester & cuts

38%

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

2011

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Assessed Property Value/Pupil

NYC Big 4 Small CityHN Rural Ave Need Low Need

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

2011

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Assessed Property Value/Pupil

NYC Big 4 Small CityHN Rural Ave Need Low Need

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

2011

$0$200$400$600$800

$1,000$1,200$1,400$1,600$1,800$2,000

Unrestricted Fund Balance/Pupil for School Districts

Small City HN Rural Ave Need Low Need

Need•Let’s watch together… http://pad.human.cornell.edu

•What causes this?

•What are the cost implications?

•What are the implications of insolvency?

•Causal Inference – schools impact poverty || poverty impacts schools

Insolvency

•Financial Insolvency

•Fund Balance gone

•Obligations exceed revenues

•Educational Insolvency

•Quality of educational opportunity and outcomes legally/socially/technically unacceptable.

We thought this would happen

We fear this is happening

Shared Services Study

Fiscal Insolvency?

Educational Insolvency?

Result•Slow to restructure contracts

•Most scaled back or cut courses/programs

•Most cut staff

•Many shared services

•Fund balance squeezed but not exhausted

•Spike in merger discussions, but still few mergers (see NYASBO Study)

In short…•If the aim was to squeeze the districts into

merger and Financial insolvency… it failed (thus far)

•Rather, school districts have gutted program & teachers resulting in what we might call educational insolvency.

So how bad is it?

•I don’t know – across the state.

•You might know in your home district

•But we will…

How can I measure Educational Insolvency?•New NYSED data system will allow us to peak inside any classroom.

•What course? Who is taking the course? Who is teaching the course? Performance in the course?

Chemistry CalculusRemedial

Eng.

A B C

This becomes possible

School A School B

% Minority 18% 18%

% Poor 37% 37%

Physics Global Physics Global

N 21 27 6 11

% Minority 16% 18% 0% 12%

% Poor 31% 37% 2% 9%

%CCR 83% 81% 92% 85%

Options to Avoid Insolvency•Merger

• “Fundamental financial reform.”

• I disagree. Indeed a good option in some places, but…

•High Tax, Low performance metric – Forced closure ?

•Regional High Schools – Enrich academic program for small schools

•Shared Services – much going on.

•Technology – Reduce isolation, enrich program, lower cost

No guessing about impact

•Measurable

•Detailed Data – Access, Performance, Productivity

•We can assess Educational Insolvency based on our expectations of what our schools are for. Identifier? Stratifier? Equalizer?