Archive for August, 2021

Wall Street Pockets Loans Money, Pockets Fees, Gets a Tax Break. Schools Spend More on Debt Service than Textbooks. What is Wrong With This Picture?

August 28, 2021 Comments off

The headline of this post captures the essence of this NYTimes article by Eleni Shirmer, a research associate with The Future of Finance Initiative at U.C.L.A.’s Luskin Institute on Inequality and Democracy, an article that opens with a description of the financing methods forced upon the Philadelphia School district and contains some stunning national data like this:

In 2012, state and local governments across the country paid an estimated $3.8 billion just in bond issuance fees — more than twice the amount used to fund pre-K education across New York State in 2014. In 2021, the Philadelphia School District paid $311.5 million to service its debt. More than half — $162 million — went to Wall Street creditors as interest payments.

The problem is only getting bigger. In 2019, K-12 school debt across the country nearly reached $500 billion, a 118 percent increase from 2002.

The bottom line?

As long as bond markets finance so many of our country’s public schools, dreams of education equality will remain thwarted. The bloodless logic of credit and debt markets ensures that those with the least pay the most.

Imagine if we funded schools through interest-free loans from our own central bank or by taxing rich residents and corporations, instead of borrowing from them and paying for the privilege of using their money. “We really can do this without Wall Street,” ACRE’s deputy research director, Britt Alston, told me. “We have the tools. Our public systems, while flawed, have the ability to serve our communities beyond what Wall Street could ever imagine.”

The money exists to transform this corrosive financial architecture; does the political will?

As one who prepared budgets for public school systems for nearly three decades I doubt that we do. In order to REALLY realize the dreams of education equality a complete overhaul of the STATE taxing systems would be needed, an overhaul that would eliminate over-reliance on property taxes and (gasp) require the redistribution of broad-based tax revenues. Early in my career in New Hampshire, I thought that such a transformation in that state was plausible and possible…. over 30 years later, I’m discouraged.

A PANDEMIC is NOT a Local Problem… Yet School Boards and Superintendents are Asked to Make Literal Life-and-Death Decisions Because Former President Trump Politicized It and the GOP Jumped on the Bandwagon

August 27, 2021 Comments off

A recent NPR report describes where we are today, a place where the son of a current school board president, who is a former teacher and Principal in the district she now leads, recommended she keep a baseball bat by her door for protection. The politicization of local school boards is the result of President Trump’s decision to make vaccinations and masks a political issue and the GOP’s decision to jump on the bandwagon to do the same. In all cases, even those where the GOP Governors mandated NO masks, the result is that local school board members are increasingly dealing with NATIONAL issues instead of LOCAL ones… and despite the fact that many local boards are authorized to make spending decisions (see my previous post), there is no amount of funding that can compensate for the political pressure local boards are facing. Here’s the reaction of an Ohio school board member: 

Many school board members like Charlie Wilson in Worthington, Ohio, question why public health officials are not making these decisions to protect school children in the middle of a resurging global pandemic.

Wilson says he is all for local control of schools, but the situation with the pandemic is different and it wouldn’t set precedence for federal or state institutions to step in.

“This is a situation where it’s outside of two things: it’s outside our area of expertise. And secondly, viruses do not confine themselves to a school district,” he says.

“I hope I don’t come across as a hypocrite, but I really believe this is one time where state governors, and frankly, the federal government needs to step up and decide what is in the best interests of either our state or the country.”

Wilson is the past president of the National School Boards Association and a school board member since 2007. He says the job has changed a lot. It’s become so partisan that any decision he takes is deemed political and that’s driving many people out.

“I’m just surprised at how many people I hear from, who have been board members for a long time, who said it’s not worth it, I’m going to either resign or not run again this fall,” he says.

Wilson, who is also a law professor, says school boards are made up of people who are largely volunteers or who get paid negligible amounts. They joined to do their civic duty — politics and ideology are not top of mind for most of them. But this seems to be changing.

Now, Wilson says, he sees more candidates than ever who are single-issue focused or openly partisan running for the coming school board elections across the country.

Wilson himself doesn’t plan to run for office again. He says he wants to spend more time with his grandchildren. And the past several months have made forgoing the position an easy decision.

Over the past year, he had trouble sleeping. He would sometimes dream of a student losing a parent or a grandparent from a virus they caught at school because of a decision Wilson took. Still, that’s not the worst part.

“Literally daily, getting hate emails and sometimes phone calls. And, frankly, occasionally people knocking on my door and threatening to do all kinds of things,” he says.

By driving out the Charlie Wilson’s of this world and replacing them with “single-issue focused or openly partisan” members, the GOP is on a course to destroy the last bastion of democracy. 

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A Good Problem for Public Schools: How to Spend Federal Windfall Funds Without Setting Up a Cliff

August 27, 2021 Comments off

As a result of the funds the federal government offered to school districts in response to the pandemic, school districts across America are faced with an unusual problem: they have more money than they ever expected.  AP writer Holly Ramer offers a good description of the various stratagems being used by New Hampshire school districts but does a poor job of explaining WHY there are disparities in the funding. She opens her article with this:

Dan Donovan sounds a bit sheepish when he describes his monthly Zoom calls with fellow school district business administrators. While they all are figuring out how to spend their share of federal pandemic aid, he’s aware that his allocation far exceeds many of the others.

“When I talk about the money I have versus what they get, I have an embarrassment of riches here,” said Donovan, chief operating officer of the Nashua School District, the state’s second-largest.

Either Mr. Donovan is oblivious to the funding formula that offered more money to districts serving children raised in poverty or Ms. Ramer did not ask the obvious follow up question: “Why do you think that is the case?” In either case, it is a crucial piece of information that would provide readers and voters with a better understanding of the thought that went into the bills passed by Congress. And, based on how cash-strapped and tax-poor Stratford NH handled the funds, it is evident that NH Superintendents and school boards appreciate the reality that this level of funding should be targeted with the idea that it can only be spent once: 

Ronna Cadarette, the superintendent who oversees schools in Stratford and two other communities, said the majority of the money has gone directly to programs that support students’ safety and their physical, social, emotional and academic well-being.

Among other things, the district provided devices to each student, installed new communication systems for remote instruction, provided wireless access to families, replaced exhaust fans, and bought additional supplies so students didn’t have to share textbooks and materials. It also purchased a social and emotional guidance curriculum, added an elementary teacher and offered summer school for all students, she said.

And though Mr. Donovan may not be aware of the funding formula used to allocate federal money, he DOES understand the best use of the funds— and the practical reality that districts are not at all accustomed to spending— they are used to scrimping:

In Nashua, Donovan said much of that money likely will be spent on construction and renovation projects.

“We’re just not built to spend that much money that quickly,” he said.

Nashua spent about $1.7 million from the first round of funding on technology for remote learning and about $500,000 on personal protective equipment, and it plans to upgrade heating and air quality systems at three elementary schools, he said. It has asked the state for approval to spend another $7.4 million for staff and services aimed at helping students recover from learning setbacks.

The good news (so far) is that local school boards are effectively being rewarded with the trust of the federal government to make sound financial decisions despite their lack of experience at spending. Here’s hoping that they continue to do so going forward. 

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