Wednesday, January 28, 2009

Governor’s New Plan

Governor Strickland revealed the high level elements of his new education plan today as part of his State of the State address. These seem to be the key points:

  • Universal all-day kindergarten: I didn't know that we were shortchanging our kids by having them in kindergarten for only a half-day. It seems that one impact of this change will be to double the number of kindergarten teachers a school district must employ. Win for the OEA.
  • Addition of 20 school days, to a total of 200: This adds an entire month to the school schedule. I expect we will hear the unions demand another 10% in salary for the additional days.
  • Encourage the creation school district sponsored charter schools: This sounds promising, but we'll have to pay attention to the details.

    In particular, how will kids be selected to attend these schools? How much budget control will the charter school administrators have to fund unique programs (eg taking the portion of money that would have otherwise gone to athletics and reallocate it to science lab materials)? Note that this means that charter schools will be staffed by union teachers. Score another one for the OEA.
  • At least one Licensed Practical Nurse in each school building: If we don't meet that standard, we'll need to hire more nurses. Nurses are members of OEA as well. Another win.
  • New Licensure system: Teachers can qualify for four professional license levels: Resident Educator (analogous to a medical resident – ie one just out of school); Professional Educator; Senior Professional Educator; Lead Professional Educator. Advancement through the levels will be based on credentials (ie degree), experience and student progress.

    It will be interesting to see how student progress is measured. I expect that we'll see these license levels come into play in teacher pay grids. We'll have to see the details, but it could be a good thing.
  • New Teacher Tenure Requirements: Teachers must complete the four year Resident Educator program and serve as a Professional Educator for five more years to achieve tenure. Currently tenure can be offered in as few as three years. Seems like a good thing.
  • Alternative Licensure Program: Folks without an education degree but relevant subject knowledge can do a six-week boot camp (my term), then enter the Residency Program. This seems like a very good thing.
  • Increase the Authority of the School Board to dismiss teachers for good cause. This sounds promising, but we'll see what happens when this is tested the first couple of times.
  • Establish higher standards of mastery in both education and management for superintendents and treasurers. This seems like a very good move. I hope strategic planning and communications are at the top of the list.
  • Use the ACT as the standard of measurement: Seems like a good idea. More parents know what the results mean at least.
  • Require better budgeting and reporting, to be evaluated via an annual fiscal and operational report card. This sounds good as well. As a financial-savvy professional, I've always found the district's reporting to be difficult to use for decision making. Financial accounting and management (operational) accounting are two different things. I'm looking forward to this.

And now for the meat of the Governor's plan, his adjustments to the funding system:

  • Elimination of the so-called Phantom Revenue: The first step of the current state funding algorithm is to multiply the number of students in the district by a "formula amount," which is currently just under $6,000. So in round numbers, our starting number is about 15,000 students times $6,000 per student, or $90 million.

    From that, the state deducts an amount equal to 23 mills applied to all the taxable real estate in the school district. The total assessed value of that real estate is about $2.4 billion, resulting in a "charge-off" of $56 million. That means, without other correcting factors, that the state would send about $43 million per year to us.

    The catch is that there is state law (commonly called HB920) which causes a 'reduction factor' to be applied to the assessed value of a piece of property such that the amount of money collected on that property by a particular levy never changes (e.g. as when property values increase). When the 23 mill charge-off is calculated, the full, pre-reduction assessed value is used.

    Educators have long complained that this short-changes districts because it deducts more than is actually collected. In reality, it's a technical nit that gets largely offset by other aspects of the school funding algorithm. It seems like all the Governor has done to address this is to lower the charge-off from 23 mills to 20 mills. We'll see if it makes any difference to the bottom line after all the other adjustments are applied.
  • Allowing districts to pass levies that neutralize HB920: The selling point here would be to convince the voters of a school district that if they let their property taxes change with assessed property values, there would be no need for frequent levies. The trouble is, that's not true.

    There is no direct connection between year-to-year changes in the value of your real estate and the year-to-year changes in the cost of employee compensation, which is 90% of our operational budget.

    For example, the current teacher contract calls for 7% annual raises for at least 70% of the teachers. Do you expect your home value to go up 7% per year for the next three years?

    Actually, I'd like to call this bluff. For the next three years, teacher compensation should be tied to County Auditor's just-completed triennial assessment – which was that property values had not changed at all. No change in property value, no raises. Works for me.
  • Gradually raising the state's share of district funding to 59%: I think this is one of those great big averages that sounds good in principle, but will not necessarily be good for us. There are already districts in this state which receive nearly all their funding from the State. Certainly this plan won't fund them any less. I don't see how the Governor can not raise taxes, increase the fraction of the state budget allocated to school funding, and raise the fraction of funding all districts get from the state.

I have always suspected that any new scheme any new Governor might come up with would do two things: a) improve the level of income and income security for the members of OEA and OAPSE by reducing the level of local control; and, b) find a way to divert more money from the suburban districts to the urban and rural districts. This plan is nowhere near as radical as it could have been, but is nuanced in such a way that I think my suspicions will ultimately come true.

We'll see what actually gets enacted into law.


  1. I pretty much agree with all of Paul'suspicions. Sounds like more of the same - unfunded mandates. The governor cannot pull off hardly any of his plan at even the current tax rates, and given the current economy, tax revenue will be falling even more before it gets better. Residential property taxes in Franklin County remained flat this year due to the Auditors decision to not change property values; so much for addressing "phantom revenue". Now, commercial property did NOT receive the same treatment, which lends even more importance to the city pursuing commercial development. Then again, you can only tax the commercial base so much before they will start looking elsewhere.
    The state of Ohio has already lost
    business development due to the high taxes and difficulty of doing business and this is not going to get better any time soon. I see nothing in his plan that will help the HCSD, with possibly the exception of the tenure issue, and that will be an interesting battle between the districts and the respective unions.

  2. I was surprised Hilliard got as much as it did under the plan.