Thursday, April 16, 2009


Every once in a while, I cruise through the website of Olentangy Local Schools. One reason is that I find their website very well organized, visually appealing, and rich with all kinds of governance information, including timely posting of audio recordings of their Board of Education meetings. With their agenda, they also post the documents that support the discussion items. Our Board could learn a great deal from Olentangy in this regard.

That doesn't mean the Olentangy school board doesn't have its share of shenanigans. Board member Jennifer Smith is often the lone dissenting voice when questionable things come up, and I have much respect for her commitment to transparency and truthtelling.

I was very interested to find a flyer they had produced called "Ohio School Funding and Olentangy: The Answers to 5 Frequently Asked Questions." Some of the things written in this flyer are right on, and echo what has been communicated over the years in this blog:

  • Point #2: "… as Olentangy has grown, commercial property taxes provide a decreasing share of Olentangy's school funding. Commercial growth has not kept pace with our explosive residential growth"
  • Point #5: "… the school taxes from a typical home cover only a fraction of the cost to educate just one student"

But they also perpetuate the same myths I described in the prior post:

  • Point #4: "House Bill 920 prevents school districts from recouping inflation when property values rise as a result of reappraisals or updates."

    Arg!! Inflation is not what has been driving home values or operating costs. Home values have been increasing at a substantial rate over the past decades in spite of a long period of low inflation.

    And our operating costs have been going up at a high rate because nearly 90% of our operating costs is the salaries and benefits of our team of teachers, staff and administrators, which has been growing well in excess of inflation.

    This same mistaken claim is made as the first bullet in Point #3

The education community works very hard to distract our attention from the substantial growth of employee costs over the years.

And let me say this one more time – my concern is less that there has been this substantial growth than it is that the conversation is avoided, and even suppressed. It's the 'elephant in the room' during every financial discussion and levy campaign.

We can't allow that to continue to be the case.


  1. Paul,

    I'm trolling your site again looking for truth.

    You noted this as fact: Point #5: "… the school taxes from a typical home cover only a fraction of the cost to educate just one student"Have you ever run the numbers? Seems you are perpetuating a myth yourself.

    For Olentangy, at the margin, the district receives 90% of the break-even cost, even without including revenue from condos, commercial development, etc (when comparing property taxes and state revenue per additional pupil [based on new homes] with the operating cost per pupil).

    I'll challenge you to run the numbers yourself.

    Regardless, the whole proposition begs the question. The cost per pupil is inflated by ever-increasing salaries and benefits, so what's the point of looking to find additional revenue? Why not simply cut costs? Why not reduce expenditures by 10% and call it a day?

    But you won't like the truth that for many districts, growth is not a real cost center. Why not? It deflates your "not in my backyard" or "don't block my backyard view" agenda.

    The truth is out there ... you just have to look.

  2. Mr. Fedako uses an important term in his comment: "at the margin."

    For those not familiar with economics and finance, this is a technical concept which means to examine what happens if you add or subtract one more unit.

    I addressed this in one of my very first posts on this blog, back in December 2006. Here's a quick review.

    If one more house is built and one more kid is added to the classroom, then the parents will pay about $3,500 or so in new school taxes to the district. Meanwhile the cost created by that one more kid will be nearly zero.

    We won't need to build any new buildings, hire any new teachers, or buy any new school buses. Chances are that there is at least one empty desk in every classroom, and at least one of every needed textbook already in the supplies.

    On that basis, it almost sounds like that new student is a money-maker.

    But there is eventually a point when there are enough students that a new $65 million high school is needed, a new $50,000/yr teacher needs to be hired, etc. Do you pin all that cost on the one student that sends us over the tipping point?

    Of course not. Marginal analysis has value in some cases. But you also need to have a handle on what the numbers look like if you sum all costs and divide it by the number of students - the so-called "fully-loaded" cost. This gives you a picture of what happens if you add say 2,000 students.

    And in regard to his NIMBY assertion - I have never said that the construction of Bradley High School a few hundred yards from my home is a bad thing. We are now empty nesters, and are looking to downsize when the real estate market stabilizes. I suspect that the proximity of the schools will be a selling point.

    My problem with the Bradley construction process has been the back-room maneuvering by the developers, apparently with the assistance of the Hilliard City government.

    Mr. Fedako seems to have a particular problem with me. That's his perogative, and he can say what he wants on his blog.

    However, it's my choice whether or not to continue to let him derail the central messages I'm trying to get across in these postings. If it's okay with the rest of you, I'll use my judgement to decide whether further comments by Mr. Fedako will be released for public consumption...


  3. Paul wrote: "And our operating costs have been going up at a high rate because nearly 90% of our operating costs is the salaries and benefits of our team of teachers, staff and administrators, which has been growing well in excess of inflation."

    Paul, hasn't EVERYTHING gone up? State/Federal budgets? Insurance costs? Minimum wage? Salaries/ticket prices in professional sports? Gas prices? Everything costs astronomically more now than it did even 10 years ago. Not debating your point at all, just that it isn't the only fish in the pond.

    As for your view on Mr. Fedako, I say let him speak his peace. Censoring unwanted opinions is what many have accused our district of doing. I personally read right through his diatribes and see the truth, when it's there, and the need for someone be told how superior they are to the rest of us. I would imagine most do the same...

  4. As a matter of fact, no - not everything has gone up astronomically.

    The price of consumer electronics has dropped significantly, for example. What did a flat screen TV cost five years ago compared to now? How about notebook computers? Or Apple iPhones?

    Or take aluminum, which has dropped from $1.50/lb to $0.50/lb in the past year. By the way, one impact of that is that the largest employer - an aluminum smelter - in the school district where my brother-in-law is superintendent recently shut down, putting hundreds out of work, and collapsing local property values. Their school system is going to take it on the chin when all that industrial property is devalued.

    How about Home values? Stock prices? Interest rates?

    Or salaries and benefits in the private sector?

    But my point isn't that the salaries and benefits of school employees are going up - it's that the school leadership won't talk about it, or facilitate a discussion about it.

    They'll spend a significant amount of time and resources trying to save a relatively few bucks on diesel fuel by cutting back on bus service, which is a false economy if there ever was one. How many more car trips are going to be made by the people of the community who don't want their little kids walking two miles to school?

    The ever rising cost of salaries and benefits is squeezing everything else in the budget. In better economic times, the people of our community have been willing to pass levy after levy in order to allow the budget to grow.

    I think we've entered a different economic time, and the folks of our community may not feel quite so generous next year when the union contracts expire, and they are asked to pass yet another permanent operating levy to cover the raises that end up in that contract - especially if the school leaders try to fool the community with a "no base pay increase" sales pitch which ignores the step increases.

    So let's start talking openly about this stuff now, not with under the threat of a teacher strike a year from now.

    That's my point.


  5. Just an FYI, the step raises and their amounts will be filed as a
    a specific information request
    as soon as the contract nears.

    The percentages and average amounts per step also will be requested formally.

    IE for example purposes only

    Step 12 60,000 4% step 2400
    Step 13 62,400 4% ste[ 2496
    total after two years
    Two year raise 4896
    Final salar 64,896

    This has nothing to do with hurting the kids,
    It has to do with slowing our growth of spending, not cutting it.

  6. Paul,

    Again, dismissing the gesture of base pay freezes as trying to "fool the community" makes it seem as if the savings isn't wanted by the community. I offer you something, and you say "You should have offered more." I say "Buzz off, see if I try to do something to help you in the future."

    As for costs, my point was the cost of everything is way more than it was 10 years ago. You know why electronics cost less, Paul, it is because the technology has gotten cheaper to produce, and the companies are better at producing it. Home values/Stock, etc..., WERE going up until a couple of years ago. MY only point was that everything costs more, it isn't just schools.

    I agree that salaries/benefits should be revisited. I STILL don't agree that we should raise our nose to ANY kind of giveback from a school or union. ANY progress is good progress. Attempts to belittle these gestures only further the chasm you appear to be trying to bridge.

    If you are waiting for a giant leap, I fear you may end up waiting a LONG time. Imagine if we cheered these small steps, praising hardworking teachers for sacrificing money, which is what they are doing (in many districts at least).

    I also don't think the dialogue you wish for, WITH the people you wish to have it, will ever happen as long as unions are in place, as unfortunate as that may be.

  7. Musicman:

    It's the purposeful misdirection I object to in this case. When you were a kid, did you ever have an experience like this: "Here," your playmate says, "you can play with my favorite toy today, the one I've never let you play with before." You first feel good, maybe even honored that your friend would you play with one of his favorite toys." Then you find out that it was because your friend had a new better toy that he didn't want to share.

    As I said, I'd be inclined to support an offer from the union if they said: "We'll forgo the 3% base pay raises, but want to keep the 4% step increases."

    But instead, they want to count on the fact that very few people even know step increases exist, meaning that when they say "we'll forego our 3% raises" and leave it at that, it sounds like they're taking no raises at all. And that's exactly what they want to have happen. It's the trying 'to put one over on us' that I object to, and write this blog explicitly to counter.

    The reason electronics cost so much less today than a decade ago is that they are being assembled in China where the labor costs are a tiny fraction of those here in the US.

    There are millions of Americans who have lost their jobs to overseas outsourcing. You and I and everyone else who buys a foreign-made piece of consumer electronics has contributed to that job loss.

    Those were jobs that American high school graduates without the aptitude or desire for a college education could have taken and made a darn nice living, like my father did when I was a kid. What does our economy have to offer those kids today? "Would you like to supersize that?"

    But that's what happens in a free market - workers in Columbus OH end up competing for jobs with people in Bangalore India.

    Except in jobs like schoolteaching. Our technology is not quite to the point where online education works as well as the classroom experience (although it certainly does for some). But those days will come.

    You know those surgical 'robots' which are used for more and more surgeries these days? Turns out that it doesn't matter whether the surgeon is at a console in the next room, or the next state. The Canadians have already experimented with remote robotic surgery for folks who live in the arctic provinces - with the surgeon sitting in Toronto. It is easy to foresee a time when the insurance companies dictate that certain procedures be performed robotically by surgeons based in India or China.

    The education industry has a little of that cockiness that existed in heavy manufacturing 40 years ago. They couldn't imagine Japanese cars having much of a market share in the US.

    Then there was a tipping point - the 1970s fuel crisis and rampant inflation (remember when the prime rate was 18%?). The Japanese had the cars Americans wanted in that situation, and the US auto industry has been playing catch up ever since. It's beginning to look like game over, and our guys lost.

    If professional educators continue to dismiss the growing burden its labor costs put on our society, then they will be blindsided when the inevitable change occurs. I don't know what the tipping point will be. No one does. But happen it will.


  8. Your district will never, ever give up their goodies. The first thing they'll do is threaten residents with drastically reduced programming and services like Olentangy did. And your community will blink. Rather, they'll weigh the incremental cost of the levy against the costs of losing something like busing.

    The other night Olentangy began extending Medicare tax reimbursement to assistant principals, which is then factored into the base that their 25.5% retirement benefit is calculated from. The company I work for suspended raises, bonuses and matching 401K contributions for 2009. These people are so disconnected from reality it is frightening to think that they're teaching our kids. I will not support our districts next levy. No way, no how.

  9. While I indeed chose not to publish Jim Fedako's last comment on this posting, you are welcome to read the response he posted on his own blog.


  10. Ah, such a nasty tone taken on Mr. Fedako's blog. Paul, I for one, have learned a lot from you and the many posters on this site (from Rick to Musicman and everyone in between). I do not agree with everything anyone has posted but appreciate this venue to follow as one source to make decisions regarding Hilliard Schools.

    I have to say that the last few posts of Mr. Fedako's has turned me off. I think he has definately made his point and, now, I will take it for what I have decided it is worth. To me, that's not much so, if you continue to allow his posts, I will not read them.

    Thanks Again,

  11. Mom:

    Thanks for the feedback.


  12. Ben Marrison in the Sunday Dispatch warned us about what would happen if the May school levies (outside Hilliard) fail - teachers laid off, buildings not built. But that almost perfectly represents bias by virtue of omission.

    He mentioned the negative repercussions if levies fail but didn't mention the negative repercussions if they pass: more straining of family finances and perhaps even more foreclosures for those living on the edge. He might say that the results of higher taxes are obvious, but they are hardly more obvious than what happens when levies fail (i.e. less teachers, less buildings). But "it's all about the kids" (really teachers and administrators) means it's not about those struggling to make a living in an era when raises and jobs are scarce. What the district blindly ignores is that it's a zero-sum game.

  13. Paul wrote:

    Thanks for the feedback.


    Aww jeez Paul, I coulda done without you bringing your mom on here to speak on your behalf!!

  14. ok, THAT was funny Musicman! LOL