Thursday, January 31, 2013

School Funding Constitutionality

The case of DeRolph vs State of Ohio has been back in the news of late, no doubt connected to the fact that Governor Kasich is announcing his new design for public school funding today. Of course, there is zero chance that the Governor's new system will quiet those who believe Ohio's school funding needs a major overhaul.

The argument can be boiled down to a philosophical question: Who should have control over funding, and through that, control over spending as well?

One view is that the state government should have almost complete control, which primarily means the power to raise taxes as needed to fund whatever curricula and programs our state officials deem to be necessary. They deeply object to the need for school districts to periodically ask local voters for more money.

The other view is that the people of each local school district should have a direct vote on the funding they are asked to provide, and that it is a good thing that the local school district must go before their local community to justify the need for more money. Readers of this blog know that I land firmly in this camp.

The DeRolph case is the one in which the Ohio Supreme Court held that the funding system in place at that time (1997) was unconstitutional, in respect to the Constitution of the State of Ohio, which says:
The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state; but no religious or other sect, or sects, shall ever have any exclusive right to, or control of, any part of the school funds of this state. (Article 6, Section 2)
Many Ohioans mistakenly believe the Supreme Court declared property taxes to be unconstitutional. This is not correct. What the Court said was that an over-reliance on local property taxes is a symptom of an unconstitutional system.

The second mistake many make is the belief that our current funding system is unconstitutional. The DeRolph  ruling applied to the funding system which was in place in 1997, and that system has been replaced - twice - first by the so-called Evidence Based Model made law during the Strickland Adminstration, and then again by the temporary funding system enacted in the first Biennial Budget of the Kasich Administration.

Neither of those funding systems were challenged in the courts, so we don't know if they too would have been judged to be unconstitutional.

Soon, we'll have yet another funding scheme in place. Will it be challenged?

At the bottom of this is an argument as to what this section of the Constitution really means. Some believe it means that every school district in Ohio should receive sufficient funding from the State such that a "thorough and efficient" education can be delivered to every student without the need for augmentation by any local property taxes whatsoever.

To accomplish that, two things have to happen: a) someone needs to come up with a way to determine exactly how much money is required - per student - to deliver a thorough and efficient education; b) the state has to collect enough tax revenue in order to fund that amount, plus fund all the other programs the citizens of Ohio expect from their state government.

So what is the answer to the first question?  How do we determine what constitutes a "thorough and efficient" education?  Is it just the basic courses needed to enable a student to pass the Ohio Graduation Test?  Is it the Common Core Standards?  This can be reasonably debated, but there is no one right answer. The Ohio Department of Education could be given the responsibility of making recommendations, but ultimately, this is a political decision which falls on the shoulders of the Governor and the General Assembly. Of course, those change every couple of years.

Pretending that we can come to agreement on what the curriculum should be, how much will it cost to deliver it to the students?

According to the 2011 CUPP Report issued by the Ohio Department of Education, there were in 2011 a total of 86 school districts rated "Excellent with Distinction," the top rating awarded. In those districts, the per-student spending ranged from $7,182 in Avon Local Schools (Lorain County) to $21,459 in Orange City Schools (Cuyahoga). The median among these schools is $9,582 and the average is $10,262. It is reasonable to assume this amount - about $10,000/student/year - should be enough funding to deliver a 'thorough' education, if we can agree that an "Excellent" rating on the State Report Card indicates 'thoroughness.'

So let's pick $10,000 per student per year as the amount of funding which is required to deliver a 'thorough and efficient education.' With the statewide enrollment at 1.6 million students, this means the State would have to come up with $16 billion, just to fund the K-12 schools.

That's a tall order. The current state budget puts aside $6.5 billion for K-12 education, out of a total state operating budget of $27 billion. Increasing the K-12 budget to $16 billion would mean adding nearly $10 billion (54%) to this line item, or 37% to the overall state budget. Who is ready for their state income taxes to go up 37%?

The more likely approach to increasing the K-12 budget by $10 billion would be to take significant amounts of funding from other budget lines. Where should we start?  Medicaid?  Higher Education?  I know some of you are saying that there is all kinds of waste and unnecessary spending in our state government which we can eliminate before we make any cuts, and that may well be true. But remember, what is waste to you might be a lifeline to others.

If the decision was made to radically alter our public school funding approach such that the state would provide this $10,000/student/year, and the extra $10 billion were raised via higher state taxes, then would it not be possible for many school districts to repeal most if not all of their local operating levies, offsetting most of the sting?

I absolutely would be willing to pay 37% more in state income taxes if it meant no local school property tax. After all, we're retired folks living off our retirement savings - meaning not much income - which makes our property taxes all the more daunting. My wife and I could save a ton of money if we shifted to a school funding system paid for with state income taxes.

Would it make much difference to a family in the prime of their earning years, which is usually when they also have kids in school?  Maybe not. There is a strong correlation between one's income and the value of one's real estate. It might be kind of a wash - that is, income taxes might go up about the same amount property taxes would go down.

How about the young adults just getting started in life, and who often live in apartments?  Certainly the amount of property taxes collected per occupant is much lower for apartments than for single-family homes. Changing the funding emphasis from property taxes to income taxes could really hurt these young folks, unless the income tax rates are progressive enough to prevent them from absorbing the full impact.

What about the wealthy districts which want to spend even more on their kids?

Of the 352 school districts rated Excellent or Excellent with Distinction, 119 of them - including Hilliard City Schools - spend more than $10,000/student/year. Seven of them spend more than $15,000/student/year.

Some argue that no district should get to spend more than any other district. They believe that if a community has the capacity to be taxed more, that 'excess' money should be drawn into the state coffers and redistributed to poorer districts. I think that's going a bit too far, and the Supreme Court said as much in the DeRolph opinion.

Stephen Dyer, one of the architects of Governor Strickland's Evidence Based Model and author of the blog 10th Period, echos the belief of many when he says dependence on local property taxes needs to be reduced because districts have to keep coming back to public with additional property tax levies. The concern of this camp is that the voters just might say "No!"  The world is much more manageable and predictable (to those with this perspective) if such matters are decided by elected officials who are responsive to lobbyists who write big campaign checks. I think the amount of money spent for lobbying at the Statehouse on education matters would astound most of us.

Why do school districts need more money every year anyway?  In a few cases, the reason is growth. As the student population increases, so does the need for more teachers and staff.

But for most school districts, the year to year growth in costs is driven by compensation and benefits increases. If you are not familiar with the way teachers are compensated in Ohio, this article may help.

I'm not trying to start a debate about whether teachers are underpaid or overpaid - please don't make vitriolic comments about that subject (they'll get deleted). All I'm saying is that school funding is spent almost entirely on compensation and benefits, and that any discussion about revenue needs to recognize that this is where the money gets spent.

So here's the point: The debate over who controls funding is a really a debate over who controls compensation - how many teachers, staff members, and administrators get employed, and how much they get paid.

Six years ago, a mighty effort was made to add a school funding amendment to the Constitution by referendum - that is, bypassing the Governor and the General Assembly. The campaign was called "Getting it Right for Ohio's Future."  This amendment would have given the State Board of Education the power to set the cost of a 'thorough and efficient education,' and would have required the General Assembly to allocate whatever money was needed to fund it. The amendment was supported by virtually all of the public education community, including the teachers' unions and many school boards - including Hilliard's. Our school board even authorized employees to serve (in their off-duty hours) as solicitors in the effort to get the 400,000 petition signatures needed to get the issue on the ballot.

Fortunately, this referendum effort was withdrawn before it went before the voters. I'm quite sure the primary message from the amendment campaign would have been to imply that a vote for this amendment would be a vote to reduce property taxes, and on that basis, it stood a good chance of getting passed and made law. I'm still not sure why the petition was withdrawn - maybe one of you know.

I'm eager to see what Governor Kasich brings to the table. I'm not eager to hear the bickering and propaganda that will follow.

Mostly I want to know what it means to Hilliard City Schools. I'll let you know what I find out.

Friday, January 25, 2013

Supplemental Materials for Jan 28, 2013 School Board Meeting

Here are the supplemental materials for the regular meeting of the Hilliard school board, to be held at 7pm in the Media Center at Davidson High School.

Students, parents and district employees might be interested in the options being presented by the Administration in regard to the school calendars for the 2014-15 and 2015-16 school years. These are accompanied by a memo from Assistant Superintendent Leslie McNaughton explaining the differences, which mainly have to do with start dates and end dates. Feedback is appreciated - to me, other Board members, or to the Administration.

We'll also be receiving an update from Dr. Bill Reimer from the ESC, who is leading our Superintendent search process.

The other significant, albeit routine action to be taken by the school board is the adoption of an appropriations resolution. This is largely a formality required by law, authorizing the Franklin County Auditor to collect the local property taxes approved by the voters, and to transfer that money to our Treasurer.

As I understand it, the law allows a school board to appropriate less money than the full voted millage, although I find it hard to imagine a scenario in which a school board might actually do that. But lowering taxes doesn't require a levy repeal effort like the one attempted in Westerville last year - it can be done by electing a school board willing to reduce spending, and therefore the amount of funding required.

Tuesday, January 22, 2013

Consequences - Intended or Otherwise

The State Teachers Retirement System (STRS) recently conducted a survey of its members, and found that among other things, about half the working teachers reported that "they plan to teach longer than they originally thought, and the most common reason cited for this was pension reform legislation."

How does this jive with the story Charlie Boss wrote for the January 20, 2013 issue of the Dispatch, where she reported on the large number of teachers that seem poised to retire this year?

I've been writing for several years about the solvency of the State Teachers Retirement System (STRS), hoping to alert both teachers and community members to the need to reform the structure of this system if it is to survive. Mostly my objective has been to point that most of the fiscal problems troubling STRS is of their own doing, and to object to any move to have taxpayers bail them out. But there is also the reality that the poor decisions that benefit one generation - mostly mine, the Boomers - get paid for by the following generations - our children.

There is no safety net for the teachers should STRS go bust. The teachers do not participate in Social Security, nor does the school district make Social Security contributions on their behalf. STRS is it for them. So if STRS becomes unable to pay the benefits promised, the teachers are in a lot of trouble.

Pension funds are a pretty simple concept:  a member, and usually the employer, make contributions to the fund while the member is working. Then the fund managers invest the contributions in hope of boosting the amount of money in the fund. When the worker retires, contributions by that worker stop, and benefits begin being paid to the worker, usually to the end of life.

That sounds a little like an IRA or a 401(k) account any one of us might have. We put money in those accounts, and sometimes the employer kicks in a little too. We invest it to earn some extra money. Then at some point we stop putting money in, and start taking money out.

But there's a big difference: a retirement fund is a pool, with all the working members contributing to a common fund. All that combined money gets managed and invested as a huge portfolio. All the while some members have retired, and switched from contributors to beneficiaries. There is money going in, money being invested, and money being paid out - all at the same time.

With an IRA/401(k) plan, you can start withdrawing money at age 59 1/2, and take it out at whatever rate you want. But when the money is gone, it's gone. If you don't put enough in over your lifetime, don't earn enough on your investments (eg - like in our current interest rate environment, where CDs and other 'safe' investments earn nearly zero interest), or withdraw too much too soon, you can run out of money. Tough luck if that happens.

That's a lot less likely with a retirement system like STRS. It's not just you putting money into the system, it's all the members and all the employers. There are currently about 75,000 active public school teachers in Ohio, plus all the administrators and other professions who are members of the system. Since 2003, teachers have been contributing 10% of their salary to STRS, and the school district (ie the taxpayers) another 14%. With the statewide average teacher salary of about $58,000 (from the Ohio Dept of Ed CUPP report), this means the average teacher contributes $5,800/yr from their own paycheck, while the school district contributes another $8,120, or $13,920/yr. Multiply that by 75,000 teachers you get about $1 BILLION in new contributions each year.

That's a lot of money. As teacher salaries accelerated dramatically in the past couple of decades, the pension fund grew to be quite sizeable - about $80 billion by 2007. While the rising levels of contributions had a lot to do with the fund growth - including the teacher contribution increasing steadily from 8.5% in 1978 to the current 10% rate starting in 2003 - a good part of it was due to some extraordinary luck the investment managers at STRS had as well. They caught a kind of perfect storm, where contribution levels were high, the investment markets in which they participated (primarily common stocks and real estate) were booming, and the benefits being paid out were relatively low, because their retired members we getting benefits based on past salaries, which were much lower than today.

The STRS Board looked at all that cash building up, and decided they could increase the benefits they paid out to members. Existing members were given a "13th paycheck" each year - essentially an 8.3% increase in their annual pension. And for members yet to retire, the real bonanza was put in place.

Prior 1989, STRS members received 2.0% of their "Final Average Salary" (the average of the salaries of their final three years of employment) times the number of years of service. In other words, a teacher who was paid $50,000/yr for the last three years, and who retired with 35 years of service, would receive an annual pension of $50,000 x 35 x 2.0% = $35,000.

In 1999, the percentage was increased to 2.2%, meaning that a teacher with an FAS of $50,000 and 35 years of service would receive a pension of $38,500. But during those 10 years, the FAS would likely have increased from $50,000 to something around $67,000 (assuming 3% annual raises). That would make the pension be $67,000 x 35 x 2.2% = $51,600, or more than the final working salary of the teacher who retired just ten years earlier.

But that's not all. Also included in the 1999 modification was a 'kicker' which awards a teacher completing 35 or more years of service a multiplier of 2.5%, rather than 2.2%. This means the teacher retiring in 1999 would receive $67,000 x 35 x 2.5% = $58,600.

The good days ended in 2007 when both the stock market and the real estate market tanked. The size of the STRS retirement fund dropped from $80 billion to $47 billion in a matter of months - a loss of 41%. In other words, money equal to 33 years worth of contributions just evaporated. The fund managers would need to increase the size of the now shrunken fund by 70% just to get back to were they were (chart from Kathy Bracy's blog).

click to enlarge
Meanwhile, STRS continued on as though nothing had happened. Contribution rates remained the same, as did benefit payouts.

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Fast forward to 2013, and a Hilliard teacher retiring at $90,000/yr - which most do - will receive an annual pension benefit of $90,000 x 35 x 2.5% = $78,750. It is unlikely that the contributions made by the teacher, plus the contributions by the school district, plus the earning on those contributions over the teacher's career, is anywhere near enough to fund this level of benefits to a teacher who is likely to collect these benefits for another 20+ years. By the way, the Present Value of $78,750/yr paid out over 20 years, using the current 2.63% rate on 20 year Treasury Bills is $1.5 million.

So something had to change, and finally it has. Last year, the STRS Board and the General Assembly enacted changes to the rate of contributions (for the teacher, not the taxpayers) and the number of years service required to retire. The 35 year kicker was eliminated for those who retire after July 1, 2015. This is why any teacher who will reach 35 years of service before that date will almost certainly retire by the 2014-2015 school year. Here in Hilliard, we gave our teachers a little extra incentive, with a one-time $40,000 bonus for retiring last school year or this school year.

So how do we reconcile the STRS Survey saying teachers think they'll be working longer than they had planned, and Charlie Boss' story saying that they will be retiring in droves?

It all depends on which side of that July 1, 2015 date one plans to retire. If you had always planned to retire before 2015, little has changed. If you had planned to retire after 2015, but will reach 35 years of service by then, you pretty much have to retire before 2015, or you'll leave too much money on the table. That's certainly a significant component in Superintendent Dale McVey's decision to retire this year.

But if your retirement date is after 2015, it's a different world. You're going to pay more into the system, and get less out. Consequently those teachers are expecting that they'll have to work longer to earn enough benefits to afford retirement.

We Boomers are coming to a time when we have to face up to this. We've largely been a 'consumption generation.'  We live in a world where our parents paid the price to win World War II, then came home to build most of the infrastructure we count on for every day life. Our generation has built our wealth by consuming that infrastructure, and not doing nearly enough to maintain it, or replace it when it reaches the end of its design life.

The roads and electrical power systems are two glaring examples. We've created a regulatory environment where heavy trucks tear up our highways, when lots of that freight should be carried on the railroads (the railroads themselves carry their share of the blame as well). On those occasions when I choose to ride my motorcycle on a freeway, I have to make sure to preserve a sight line far enough ahead to detect and avoid potholes that could easily knock me off the bike. That's the reason I much prefer the back roads for short distances, and little used US highways for longer ones (US 89 is a favorite).

We generate 20% of our total electrical demand with nuclear power plants, many of which are operating well past their planned life. Not that I'm opposed to nuclear power - as long as our appetite for electricity keeps growing, nuclear power is absolutely necessary, and new plant designs are much safer than those now in operation.

But we Boomers won't be paying for the road reconstruction, new nuclear power plants, or a smart power grid. Our time to generate that kind of funding has largely passed. It is our children who will bear this burden. Nor will we have fully paid for all the retirement benefits we'll consume, be it private pension benefits, Social Security, or Medicare/Medicaid. They'll being contributing to that as well.

The least we can do is get out of the way and let all these unemployed and underemployed young people with huge student loans get a toehold on life...

... anyone remember Logan's Run?

Saturday, January 12, 2013

Supplemental Materials for the January 14 School Board Meeting, and Some Important Stuff about Bond Refinancing

Here are the supplemental documents for the School Board meetings to be held on Monday, January 14, 2013 at Washington Elementary School. The annual Organizational Meeting will start at 6:45pm, followed by the regular Board meeting at 7pm.

The Organizational meeting is used to elect the Board's officers for the year, as well as to pass pass resolutions setting the dates for the Board meetings in 2013, to authorize the Superintendent and Treasurer to take certain actions, and to appoint Board members to various committees of the Board.

This meeting is typically very brief, as Lisa, Andy and Doug have already decided who the officers will be, and since they constitute a majority, it's a done deal. Same for the committee appointments.

As was the case last year, I will be making a motion to amend Item 11J to remove the National School Boards Association (NSBA) from the substantial list of organizations to which our school district belongs.

It's not that I don't believe any of these associations have value. Our state and national governments are constantly tinkering with the laws, regulations, and policies governing the ways in which we must operate our schools, so an organization like the Ohio School Boards Association provides value by doing analysis of these requirements and figuring out what it means to a local school district. One of the items on the regular meeting agenda is the adoption of changes to our district's body of policies, taken mostly from recommendations we received from OSBA. It would be challenging and time-consuming to do all this work inhouse, and expensive to use independent legal counsel.

Of course, OSBA is also a lobbying organization, focused on the Ohio General Assembly. OSBA has a substantial legislative platform, ratified by the member school districts (including Hilliard City Schools), which is used to guide its lobbyists in their efforts. I don't personally agree with every plank in the platform, but it is developed via a democratic process, with each member school board allowed one vote.

I asked our Treasurer for a list of all associations to which we belong, what our membership fees are for each, and how much we spend to send people to their conferences. He provided this:

That's a lot of associations, and a fair chunk of money - about $55,000 in total for membership and conference fees. But it's also important that the leaders of our school district have access to a community of professionals in their specific field. This was certainly true in my profession - computing and telecommunications - and we would regularly attend certain professional conferences to learn about new things taking place in both the academic and commercial development centers, and to see what our colleagues (and competitors!) were up to.

So while I see the Ohio School Boards Association as being a valuable provider of information and training for our district, the National School Boards Association seems redundant. Virtually everything that happens at the national level that affects the way we run our school district filters down to us through state agencies, which are well-monitored by OSBA. A few respected school districts in our area agree with that perspective - Worthington, Olentangy, Marysville and South-Western are four that I know of. Upper Arlington remains an NSBA member, but decided this year to not send anyone to the annual conference.

You may also note that more than half of the cost associated with our NSBA membership is connected with this annual conference. This year the annual conference is being held in San Diego, the second time it has been there in the four years I've been on the school board. Last year it was in Boston, as I recall, and Chicago before that.

While the other board member have chosen to attend these conferences every year, I have declined each time. I haven't seen any value in spending the taxpayers' money or my time: I have not perceived one thing that has been added to our agenda or our discussions as a result of having people attend this particular conference.

It just seems to me that there are many better ways to spend $20,000.

Also of note are items F2 and F3 on the regular meeting agenda, which authorize the issue of $74 million of bonds. The items as they appear in the agenda are severely abridged versions of the full resolutions. I've posted the full text of the resolutions with the other supplemental materials, should you wish to read them.

You might ask why we're authorizing the Treasurer to issue these bonds when there hasn't been a bond levy passed for a while. The answer is that these issues will be used to refinance bonds that have already been issued and sold, but carry an interest rate which is well above current market rates. In other words, we're refinancing our mortgage while rates are at historic lows.

There's a right way to do this, and a wrong way. The folks over at New Albany Schools decided to refinance their bonds with an exotic financial technique called 'synthetic refunding' which involved the use of derivatives. Essentially they bet that interest rates would go higher, and when they didn't, it cost them a fair amount of money to get out of the deal.

So I want to be sure I understand what Mr. Wilson is proposing before I vote on the resolutions, and have had a detailed dialog with him about it. I'm satisfied that his approach adds no risk. Here's how it works:

The bonds we issued in 2005 and 2006 are 'callable,' meaning that at our option, we can redeem those bonds early. Think of it as paying off your mortgage early. However, we can't redeem them just any time we want - the bonds were sold with specified 'call dates,' so that buyers would know how much investment return they could count on even if the bonds are called in early. These bonds are callable in 2015 and 2016, ten years after their original issue.

So what we're going to do is borrow money at today's rates, and hold the proceeds until the 2005 and 2006 bonds can be called. However, the IRS has rules which prevent state and local governments from engaging in what could be called arbitrage, but there is a way around that: the US Treasury sells a special kind of bond called "State and Local Government Series" (SLGS). We will be using the proceeds of this bond sale to buy short-term SLGSs, and when the SLGSs mature, they will be used to redeem the 2005/2006 bonds. Because the SLGSs are 'risk free' securities issued by the federal government, we are allowed to zero both the 2005/2006 bonds and the SLGSs from our balance sheet, essentially pretending that they don't exist.

Nothing tricky here, and we aren't betting that interest rates will go up, down or sideways. The only question is whether the legal and consulting fees we'll incur are more than offset by the future interest payment savings. That is determined by what interest rate we'll have to agree to pay on the new bonds in order to find buyers. If that rate isn't low enough to actually save money, we won't do the deal. But those rates do appear to be low enough, and it doesn't matter what happens to interest rates after that - our savings would be locked in.

Okay, so what's in it for you and me - the taxpayers of our school district?  Will our property taxes go down?  Yes, a little now, more later. Here is a chart Mr. Wilson provided to me, showing our projected debt service requirements for the next eight years, given our current debt structure:
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The column labeled "Current Debt Service" is the amount of money the district will have to pay out each year to fund the principal and interest payments on all of our outstanding bonds, and the "Gross Requirement Millage" is the amount of property tax millage that will be collected from all of us in order to make those payments. Note that one mill collects a little more than $2.3 million/yr, whether for a bond levy (ie debt service) or for an operating levy.

If this refinancing works out as planned, and other assumptions hold true, we could see the millage necessary in 2014 to 2019 be closer to 7 mills, saving us each about $15/yr for each $100,000 of home valuation.

The big news is that in 2020, a substantial portion of our bonds will have been paid off, and the millage necessary will drop by another 2 mills, or about $60/yr per $100,000 of value. And if we don't decide to build more school buildings or do any big renovations, the portion of our tax bill associated with bond levies could by 2029 drop to 0.4 mills - nearly 7 mills less than now, or around $200/yr per $100,000 of value.

Key to that of course is keeping new home development in our school district in check, or at least offset by new commercial development (with judicious use of TIFs!). Remember, the new residents in those homes don't bear the most of the cost of new buildings, new teachers and new buses - we who are already here carry most of that burden. If you don't want to see that happen, you need to talk to Mayor Schonhardt and the Hilliard City Council.

Happy New Year!

Friday, January 4, 2013

Fiscal Cliff, Line in the Sand, Brick Wall, Compromise, etc, etc

Many lament that our Congress has become dysfunctional: that its members are so polarized by their idealism that Congress is unable to reach a compromise without first bringing the country to the brink of disaster.

Relax, it's nothing new. The art of negotiation involves using whatever leverage one can muster, and often times one of the most powerful levers is the clock. Even little kids learn to use deadlines to their advantage, knowing that throwing a tantrum during the morning getting-ready-to-leave ritual is a great strategy for forcing the parents to give in.

Congress is all about leverage. This last-minute deal to supposedly avert the so-called Fiscal Cliff was really a concoction of little deals, each one trading a Representative's vote for some small victory. Maybe the leadership promised to bring forward a piece of legislation the Representative had introduced, but was going nowhere. Maybe it's a small earmark in the Appropriations Bill, scoring the Representative a few points in his/her home district. It could be a promise to help campaign and raise funds in the next election, the lifeblood of every politician who hopes to stay in office. This is a delicate and complex game which successful politicians learn to play pretty quickly.

This is the main storyline of the recent movie about Abraham Lincoln, which portrays how the President had to wheel and deal to get enough votes to pass his beloved 13th Amendment. He too had a clock to beat - he wanted to get the Amendment enacted during the Lame Duck session, while he had the ability to buy votes by promising defeated Congressmen a future job in the Federal government. That leverage would be lost once the new Congress is sworn in. We deservedly call Lincoln one of our greatest Presidents, and he was that because he was a master of negotiation and leverage.

Another reality of the political process is the propensity of politicians to kick the can down the road. The President has a definite term in office: a maximum of eight years. That puts some urgency in their actions, especially when a President wins a second term - their last chance to accomplish anything as an elected leader.

But there are no term limits on members of Congress. They can serve until they die, and some do, gaining more power the longer they serve. This in turn makes them more likely to be re-elected, simply because they - from their seats of power - can bestow great rewards upon their constituents. 

Few understood this better than the late Sen. Robert Byrd, of my home state of West Virginia. He unabashedly ran on the claim that he was the number one economic engine for the State, and he was right. That's the reason there are many many things in West Virginia named after him, and that he was the only living person to have a stature erected of him in the West Virginia state capitol. During his tenure, the federal government built in West Virginia the National Computer Center for the IRS, the National Fingerprint Center for the FBI, the National Radio Astronomy Observatory (home of the Robert C. Byrd telescope), and I'm sure many other facilities. He was never seriously challenged for his last several terms. His death is a great economic blow for the state.

Most folks in Congress never have that kind of power. For them, the path to re-election is to play along with the powerful few in Congress, to be subservient to the big campaign contributors, and to pander to his/her constituents, even when another course of action would be better for the country as a whole.

And so we get these deals which alleviate the immediate pain, but do nothing to cure the disease. Some will think we've avoided the cliff, but we're really just joining Wile E. Coyote in his temporary respite from gravity...

Someday our nation will have to deal with spending which is wildly out of whack with any reasonable projection of revenue. Many programs and services are going to have to be dialed back so we can concentrate our resources on those things which are truly important. Of course, deciding what's important is an extremely individual and subjective exercise. Negotiating a broadly acceptable solution won't be without pain, but we voters need to signal our elected officials that we're ready for them to start the dialog, and that we won't punish them for making hard decisions.

The deal worked out by Congress this week didn't cure anything, but that wasn't their goal. Their mission was to avoid taking too much political risk right now by kicking the can down the road, leaving the hard issues for the future.

This is true at all levels of government, including Hilliard City Schools. The spending trajectory our district is on cannot be supported without larger and more frequent local tax levies, in my opinion. Nor do I see the State or Federal government bailing us out. That's the reason why, at our Oct 22, 2012 School Board Meeting, I voted against approval of our latest Five Year Forecast, and will continue to do so until we engage in meaningful dialog about shrinking the nearly $30 million cumulative cash shortfall projected by the end of FY2017. The sooner we start that dialog, the more time we have to explore options, and the sooner we can put the adjustments into place. 

Others seem to prefer kicking the can down the road until we reach our next Fiscal Cliff - probably in 2014. This has been the modus operandi for a long time:  things are great, things are great, things are great - WE NEED TO PASS A LEVY OR BAD THINGS WILL HAPPEN!

What do you want?  What will you do to motivate the School Board to carry out your wishes?