Thursday, June 26, 2008

The Governor is Listening

The following was broadcasted via District's e-News mailing list

Ohio Fair Schools Campaign, The League of Education Voters, and ACT for Hilliard Schools will be hosting a Public Education Listening Forum on Wednesday, June 25th, from 7-8:30m at Scioto High School in Dublin. Legislators, policy makers, representatives from the Governor's Office, and members of the State Board of Education have been invited to hear your ideas and concerns regarding public education finance and education reform in Ohio. This is perfect timing for this event, as Governor Strickland is currently developing a proposal for education and school funding reform.

You are invited to attend this community discussion on what you want for the future of Ohio's schools. This event will give you the unique opportunity to have your voice heard by those creating the policies. A short video regarding the changing climate of Ohio schools will be shown followed by an open discussion of the public's ideas on education and school funding reform. The discussion will be structured and facilitated by Ohio Fair Schools staff. This event will serve to raise awareness of the needs in our public schools, and build support for a school funding system that provides educational opportunities to all Ohio children.

… and so I decided to attend. There wasn't much of a turnout – 30 to 35 people. The evening was opened with a viewing of the widely-distribution presentation called "Shift Happens." It's interesting viewing, if a little over-the-top on some of the points. For example, it talked about the volume of information being generated and how quickly knowledge goes out of date. One assertion is that half of all the information learned by a college freshman is obsolete by their junior year. That's meaningless hyperbole. I can't think of many things I learned (in class) my freshman year which are obsolete – and that was 30 years ago.

The moderator then asked the group a couple of questions, and recorded the responses on a flip chart pages. The first question was: "given the trends portrayed in the Shift Happens video, what do our kids need?" My answer was that they need a 'BS filter' so they could tell which of the gazillion things posted on the Internet are true and which are just drivel. Then she asked 'Five years from now, what will we say we got right in 2008?" I said that we will have eliminated local school districts and gone to a statewide public school system in which any kid is free to attend any school. There was one "yeah" from the audience on that one, but most I'm sure thought it was one of the most stupid things they heard that night.

Then we collected into small groups to make recommendations for improving Ohio schools. The group that included Superintendent Dale McVey had a predictable position: school funding needs to be a (they mean 'the') priority of state government, and HB920 needs to be repealed. I was happy to hear one of the Dublin administrators say that the State needs to figure out a way to protect the suburban districts, who seem to be getting the short end of all the various funding proposals.

Don Eckhart, a candidate for the US House of Representatives, 15th District (the seat currently held by Deborah Pryce), made the comment that "schools don't have a funding mechanism that grows with inflation – we need to repeal HB920." Groan… Mr. Eckhart is making the same mistake as our Superintendent and many other folks in thinking that home values and school expenses are somehow related to one another. If there had actually been much in the way of inflation over the past couple of decades that might be true. But then explain why home values have gone down (ans: weak housing market), and school expenses have gone up (ans: generous labor contracts).

I liked a comment made by Jodi Ransom from our ACT Committee: remember that it doesn't matter whether we're talking about property taxes, income taxes, or sales taxes – in all cases the people paying the taxes is us. Amen.

The moderator then asked us what we wanted to tell the Governor. I said to tell him that we need jobs in Ohio. If we don't find ways to bring more money into the state, then education will just be one more government program competing for a bigger share of a shrinking tax revenue pie. We can't tax ourselves to prosperity.

Who knows what will come from these meetings, especially since so few members of the general public show up. I have a feeling the Governor already has an idea what he wants to do. But at least he asked.


  1. I think you're spot on with the need is for jobs in Ohio, but I wonder if that is within any government's power. Hasn't Bob Byrd been trying to save West Virginia for 50 years? What really turns a state's economy around other than entreprenurial innovation and/or a lovely climate? The rush to the South is in part due to the invention of air conditioning, and I don't think it's surprising that the states with the worst economies tend to be northern.

    And on another subject, even if the district's revenues kept up with inflation, they'd fall further behind in debt because teacher pay/benefits are going up faster than the rate of inflation.

  2. A government can create a pro-business environment, which usually means trading direct taxes on the anchor companies for a piece of the revenue generated by all the ancillary companies. Give Honda Motors a break to get them to locate here, but collect taxes from the Honda employees as well as the supplier to Honda. Jim Rhodes understood that. We need more of that kind of thinking, and at that kind of scale.

    The economic trade zone at Rickenbacker is another good example. I was on the Board of Directors of a company which relocated there vs somewhere else primarily to lower their inventory carrying costs. There are millions of square feet of warehouses down there for that very reason. Of course that advantage for Rickenbacker was wiped out with the elimination of the tangible personal property tax by Bob Taft (which is also costing our school district about $12 million/yr in funding).

    The education community has a interesting perspective on their pay grid. The annual step increases of 4.15% are seen as their reward for longevity, and the 3% base increase the adjustment for inflation, and the two are not really connected in their minds. The fact that it adds up to 7.27% is not seen to be relevant.

    I think we've reached a tipping point with the all-in look at teacher compensation, which includes pay, benefits, workday/workyear considerations, and a very lucrative defined benefits retirement program. The public sentiment has changed from "wow, those folks work for peanuts" to "Hey, they have a better deal than me."

    And I think the leaders of the education community know that, and it's the reason they're so desperate to shift school funding over to the political arena at the state level, where their substantial campaign contributions can influence politicians to direct tax money their way. They really want to take the local voters out of the picture.

    But Governor Strickland isn't moving fast enough, so they tried to dupe the public into supporting the Getting It Right For Ohio's Future amendment via a direct ballot initiative. That didn't work out either.

    As is the case with so much in America, a good intention has been ruined by politicization into a zero-sum game. In the case of schools, I think the people have had enough and are going to let the education community know it by voting down levies until satisfied that reason has returned.

    Sadly, we have reached this explosion point as a direct result of the failure to develop effective programs to continuously educate and communicate with the public. School officials will say it's a waste of time because the public doesn't care. Doesn't matter - you have to keep after it anyway.

    School funding is NOT hard to understand in principle. You just have to be willing to be honest about who's pulling the strings.

  3. Very well-said on the point about the tipping point. I think we've reached it. To just about anyone in the private sector, it's odd to think that longevity seems to deserve its own component of a teacher's compensation. More surprising is how it merits so little discussion.

    Your endorsement of Jim Rhodes is surprising. He's the one who got us in this mess, or at least he's the one who morphed Ohio from one of the lowest-taxed states in the nation to one of the highest. (According to the Dispatch.)

    You make a distinction between personal and business taxes, but high performers who drive businesses also pay personal taxes, and so surely they are sensitive to personal tax increases and that must influence where they do business.

  4. I'm not endorsing Jim Rhodes so much as saying that he knew that offering concessions to Honda was good business because at the macro level there would be significant positive ROI for the region.

    Many folks don't know that Jim Rhodes was once the Mayor of the City of Columbus, and in that role was the instigator of the policy of using Columbus' control of the regional water/sewer system to dictate how development occurs. That policy has had a direct effect on the way school districts evolved in central Ohio as well, including the negotiation of the Win-Win Agreement for example.

    I don't think we can blame Jim Rhodes for all the taxes in Ohio though - I'm pretty sure the state personal income tax was initiated during John Gilligan's term in office.

    On your point about business taxes - it's not necessarily true that a business owner in the district also lives in the school district. That happens to be my situation, so I know that an increase in school property tax millage will hit me two ways.

    A business has to locate somewhere and that somewhere will be in some school district. As I said in an earlier post, around here you'd prefer that school district to be Dublin because there is such a concentration of businesses there that the tax burden on any given business is lower.

    I also know one business owner who lives in the school district, but recently moved his business out of both our school district and the City of Hilliard and is now saving a boatload in business and personal taxes (his residence and business are now both in townships without personal income taxes). More businesses will do that if the property tax rates keep going up. The solution is twofold - recruit more business to spread out the burden, as did Dublin; and lower the need for more money, which means doing something about rate in which personnel costs increase.

    So why did BMW Financial move from Dublin to Hilliard?

    I can't say I know all the facts. My understanding is that it is the policy of the City of Dublin to not grant tax abatements. Nonetheless, they must offer other incentives that make it attractive to locate there, otherwise they wouldn't have all those businesses. Lower net tax burden is part of it, but I expect the prestige component is important too.

    The City of Hilliard uses tax abatements and Tax Increment Financing deals aggressively. This whole notion of a municipality being able to give away another government entities' (e.g. schools) revenue stream while preserving their own income tax stream (from the jobs created) is bizarre. But the tradition in Hilliard has been that abatement deals are structured so that the school district is kept whole, which is what I understand the BMW deal to be. Just because this is tradition doesn't mean this will always be the case going forward however - unless the voters make it clear to the Mayor and City Council that the schools need to be taken care of.

    After all, our school economics are screwed up primarily because the Hilliard Mayor and City Council allowed developers to build houses by the thousands, damaging the residential/business/state funding balance. They could have issued building permits in pace with business growth, but chose not to.

    I'm not so sure the Mayor feels he has to answer to the public when the public lets him run unopposed.

  5. "I said that we will have eliminated local school districts and gone to a statewide public school system in which any kid is free to attend any school."

    Paul, I think this is an interesting point. Why not a statewide system? Every school in Ohio would have the same curriculum, use the same books, and on and on. It would resolve inequality of education between rich and poor districts. The savings would have to be tremendous. Not only from the "economies of scale" of purchasing books and supplies in large quantities. Most importantly, layers of administration bureacracy required for all the individual school districts would be eliminated. With school choice, there would be competition for students. I like this idea very much.

  6. What I'd really like is a pure voucher system as envisioned by Milton Friedman. In such a system, every kid gets a voucher and can use it to pay 100% of the tuition at any accredited and licensed school. There would be no public school system, but rather a public funding system.

    To be accredited, a school would have to hire accredited teachers, use the state-mandated curriculum for core subjects and demonstrate effectiveness via standardized testing.

    It's all about decoupling school choices from real estate choices. Segregation is not over in America - we've just replaced racial segregation with economic segregation. In many cases, they're the same thing.

    Unfortunately, the politicians of Ohio have bungled the voucher/charter experiment so much that there's not much chance of a Friedman system developing here. So a statewide system is probably the closest analog.

  7. It looks like there might be some merit to a statewide public system, but I think that it would face some opposition, too. Can you imagine UA, Bexley, etc. being OK with this?

    In the meantime, we have a major decision on our hands. While I agree that there has been some lack of communication by the BOE and too much development allowed by the 'powers that be', I can't really see the wisdom in continuing to vote "NO" on the upcoming levies. It will have a devastating impact on the school district and the community. The damage just might be irreversible or at least very long-term.

    A tough spot...

  8. BTW, Paul... My post was not specifically in response to you. I know that you agree that the district does need a levy to pass soon to supply operating revenue.

  9. You're right - the people of UA, Bexley, New Albany and even Hilliard would fight vigorously to preserve their school enclaves - look how hard the people of Ballantrae fought to keep their kids in Davidson and the immigrant kids out. It's as though an invisible fence is thrown up around these districts, and the only way to get through is to have a good credit score.

    A Harvard professor named Elizabeth Warren has developed an interesting, and I think very valid thesis on this. Because of the way schools are organized (territorially) and funded, we have made the cost of our homes the price of admission to good school districts. That demand for housing has driven up prices and put the American middle-class in the position of being in debt to their eyeballs - just to get into a good school system.

    And while times were good we - through our collective apathy - allowed the personnel cost side of our operation get a little out of control.

    I believe we need to pass the Nov levy because it's the only action we can take in the short term to buy us time to collectively work on more permanent solutions.

    But sadly, our leadership is once again letting valuable time slip away that could have been used getting this message across to folks.

    It is now only 93 days until early/absentee voting begins.

  10. Paul,

    Anon 5:06/5:13 here...

    I agree with your previous post. I will vote 'yes' in November, but I completely agree that more permanent situation needs to be put in place.

  11. My wife and I will be both be voting no on the levy.

    I would vote yes if I had high confidence that the district was serious about long term solutions. If the levy passes, it will be back to business as usual for another 2-1/2 years until they come crying to Joe Homeowner again with the same old song and dance. The line needs to be drawn. Our district has proven that they do not "get it" with regards to the majority of their constituency. It will be sad to see teachers laid off, but this situation is the districts fault, not the taxpayers.

  12. I have no argument with much of what you said. In survey performed by the Board a couple of years ago, they got high marks for telling, but low marks for listening. This failure of the school leadership to build a trusting relationship with the community will bring out district to its knees...