“The European Union diplomat said early Monday that Cyprus’ second-largest bank, Laiki, will be restructured and holders of bank deposits of more than 100,000 euros will have to take losses.”
More recent news seems to confirm that earlier rumors that part of the European Union bailout package of Cyprus will involve confiscating money out of certain large bank accounts. Mind you, this is not a tax on any earnings, transactions, or gains, but a straight money transfer from a bank account to the government. Sounds a lot like stealing to me.
Perhaps the scarier part is that between the money transfer and the collapse of the banking system, the former may be the preferred option for Cypriots. There are important lessons here for the United States, and Wisconsin. First, government must plan ahead to build, fund, and support a realistic social safety net. Second, citizens should realize that government is the ultimate guarantor of a stable society.
Of course, government serves by the consent of the governed, and works in partnership with the private and non-profit sectors. But when it comes to the delivery of necessary public goods – security, sewer and water, universal education – we depend on and need a well-functioning government. If we don’t have one, a day of reckoning, like we are seeing in Cyprus, will come. Which brings me to Wisconsin.
Wisconsinites should be proud of the fact that our state pension system is in such good shape. This means we will avoid having to make the impossible choice states like Illinois and California are facing. Wisconsinites should also recognize that what Governor Walker did in his first budget, as well as Act 10, took courage. It wasn’t many people’s preferred approach but it was a way to make our public sector costs more sustainable long-term. At the very least it got us talking about making government more sustainable.
However, the ultimate legacy of Act 10 and Walker’s first budget remains to be seen. It is somewhat troubling that the state is borrowing again. The 2011-2013 budget was so difficult because it corrected decades of budget gimmicks, any return to such gimmicks means difficult budgets will be in our future. Also, it is too early to call Act 10 a success. The controversial law must be judged on whether it improves government performance long-term, not whether it creates a short-term fiscal benefit. There are many positive signs that local governments and schools districts are innovating in ways they could not before. Hopefully these innovations will improve local government performance, because if they don’t, it will be difficult to justify the political upheaval of Act 10.
What is happening in Cyprus is scary, but it is not evidence of the inherent evils of big government. Rather, it demonstrates the importance of realistic public budgeting to build sustainable governments that avoid days of reckoning.
The Journal Sentinelthis morning features a blurb where it praises State Superintendent Tony Evers’ position on school choice funding. Here’s the whole blurb:
“State Schools Superintendent Tony Evers is calling on the Legislature’s powerful Joint Finance Committee to reject Gov. Scott Walker‘s proposed expansion of voucher schools and give more money to public schools. We think Evers has a good point. Based on a Legislative Fiscal Bureau report, Evers said that the $129 million in new aid Walker says will go to schools in his two-year budget actually only amounts to $39.2 million after accounting for how part of that money would go to private and charter schools. And he points out, accurately, that the Walker budget essentially pits public schools against private schools. The voucher schools would get a huge boost while public schools would essentially see very little new money. “This has to stop. The state cannot continue to play favorites. We can and must meet our constitutional obligation to invest in all of our kids,” Evers said. He is right.”
Ok, I understand Evers’ position. Wisconsin school districts had a brutal budget in 2011-2013 and are in danger of having their revenue frozen in the 2013-2015 budget. Evers has a responsibility as the head of an agency that administers K-12 education in Wisconsin to seek more funding for public school districts. But I do not understand this line from the Journal Sentinel: “the Walker budget essentially pits public schools against private schools.”
My point is that the slight increase in per-pupil payments and the expansion of school vouchers are not the reasons public school districts are seeing no new revenue in the next budget. The problem for public school districts is that per-pupil revenue limits are frozen. I have argued and will continue to argue that freezing revenue limits is wrong. Public schools need and deserve an increase in their public revenue, and DPI’s Fair Funding plan is a realistic way to do that.
You don’t have to like voucher expansion. But don’t pretend it’s the reason public schools are not getting more funds under Walker’s proposed budget…because it’s not.
This is a little different than my usual focus on state and education policy, but I cannot help but reflect this week on the 10th anniversary of the start of the Iraq War. For many in my generation (I am 31), the run up to the Iraq War was a coming of age event.
The run up for me actually started well before 2003. I remember, as an 8-year old, sitting in my grandparents’ living room in Alton, IL hearing my grandpa call to my dad to come watch CNN because Kuwait was being invaded. We all thought he was messing around; my dad had recently returned from a business trip in Kuwait City and such a joke was in my grandpa’s wheelhouse. But of course, he was serious.
Over the next few months I was glued to the story. Heck, I can still remember watching the tracer fire over Baghdad on my parent’s old Magnavox the night the air war began. My dad went back to Kuwait City after the first Gulf War ended and came back with stories of the brutality of Saddam’s forces.
Admittedly those stories stayed in my mind as the debate preceding the U.S. invasion of Iraq reached a fever pitch in 2002 and 2003. At the time I was a Political Science major at Marquette; seemingly the only one arguing that the war was justifiable. My argument, which I gave on a daily basis because the issue dominated classroom discussion, was that Saddam was a tyrant that we had the power to remove. Of course it was justifiable.
Just like in 1991, I was glued to the TV coverage of the invasion. When the statue of Saddam Hussein fell in Baghdad I turned to my roommate, a strong opponent of the war, and said, “you see.” His response? “This is just getting started.”
It was the bombing of the United Nations headquarters in August 2003 that made me realize how right he was. Over the next years I, like everyone else, watched, read, and tried to make sense of Fallujah, Mission Accomplished, Al-Zarqawi, Abu Grhaib, Muqtada al-Sadar, the surge, and the never-ending cycle of sectarian violence.
Now, ten years later, U.S. troops have left Iraq, Saddam Hussein is gone, and thousands of lives have been lost or forever changed. I am still struggling to make sense of it. Clearly, my thoughts and arguments in 2003 were far too simplistic and ignorant of the reality of war and occupation. I guess the only thing I do know is that the U.S. experience in Iraq will forever change the way I, and I imagine many in my generation, think about the consequences of a rush to war.
“If 200 students choose vouchers to attend private schools, it will cost Green Bay Area taxpayers an extra $1.2 million in the first year and, in addition, will decrease the funds available for each student choosing to stay in our district.”
The first problem with this statement is the math. The $1.2 million figure comes from multiplying the maximum voucher payment, $6,442 by 200. In fact, only 38.4% of the choice payment, or $2,474 per-pupil, would come from Green Bay taxpayers. $2,474 times 200 is $494,800, not $1.2 million.
Second, the accounting of the local taxpayer cost should consider the local taxpayer cost if the student would otherwise be in the Green Bay Area School District. This year the district’s general fund property tax levy per-pupil is $3,073, $599 dollars higher than the local per-pupil cost for a student in a choice program. In other words, Green Bay taxpayers would pay nearly $600 less for a student in the choice program than for a student in Green Bay’s public schools.
Finally, a choice program based off an expansion of the choice program currently operating in Racine would likely not “decrease the funds available for each student choosing to stay in our district.” Green Bay would, like the Racine Unified School District (RUSD), be empowered to levy, outside of revenue limits, to offset the aid reduction used to fund the local cost of the new choice program.
This means that if Green Bay continues to tax to their maximum allowable levy (which they have done in 2010, 2011, and 2012) public school students will not see a reduction in revenue because of the choice program. There will be a shift in where some of that money comes from, but the district will not lose money for students unless they leave the district.
Green Bay residents have many points to consider when deciding whether to support a new choice program, and they deserve a clear explanation of the likely fiscal impacts of such a program.
I was having a conversation Friday about school choice in Wisconsin and someone asked me a great question: Why are vouchers in Wisconsin funded the way they are? So often I (and others interested in school finance) get caught up in explanations of the funding flaw, discussions of what happens when students move around, the effect of school choice on public schools, and other specifics that the question of why the system looks like it does is ignored. Understanding the broad picture is important because, as many have pointed out recently, the Milwaukee Parental Choice Program currently enrolls more students than all but 3 Wisconsin school districts. How it is funded matters to policy makers across the state.
To answer my own question, in general funding for vouchers in Wisconsin looks like it does because of a mixture of practical necessity, political reality, and recent history.
First, how are vouchers funded? In Milwaukee, schools receive the lesser of a school’s actual per-pupil cost or $6,442 per-child. The $143.8 million dollars in program funding in 2011-2012 came from several sources:
55% came from state General Purpose Revenue (GPR). GPR is the pot of money the state uses to fund just about everything, including school aids.
34.4% came from a reduction to MPS school aids, which MPS replaced with taxpayer funding raised outside of revenue limits. So in reality, 34.4% came from Milwaukee property taxpayers.
6.6% came from a payment from DPI to the City of Milwaukee used to offset a portion of the local choice levy. The actual money came from general school aids.
4.0% came in the form of poverty aid specifically earmarked to offset a portion of the local choice levy. The actual money came from state GPR.
Now the more relevant question, why is choice funding set up like this? Several specific reasons:
Choice funding is patterned conceptually off of public school funding. Just like the funding of traditional school districts, local property taxpayers and the state share the total cost of the program. Because the MPCP has no taxing authority, the Milwaukee Public Schools (MPS) levy is used to raise the local funds for choice. This is a practical necessity.
Choice funding is designed not to reduce revenue to MPS (unless students leave MPS). That is why MPS is empowered to offset the school aid reduction that pays for part of the MPCP. This too is a practical necessity.
Choice funding is designed to minimize the impact on school districts outside of Milwaukee. This is, I’d argue, largely a political decision. In the past the funding mechanism for choice and independent charter schools has been a factor in campaigns across the state. The funding mechanism for choice now prevents the political argument that a political candidate is taking funding from local public schools to fund private schools in Milwaukee.
Historically the program was supported by some legislators only as long as it saved public money. Hence the per-pupil payment remains well behind public school funding. Payments were also cut several years ago, I’d argue for strictly political reasons, by school voucher opponents.
More recent changes in choice funding are due to piecemeal efforts to lower the voucher property tax burden for in Milwaukee. Both the poverty aid and payment to the City of Milwaukee provisions were designed to offset the MPS tax levy. Both were done to address the original funding flaw, then described as the discrepancy between the per-pupil local taxpayer contributions to the MPCP and MPS.
Second, who cares if they did? The white privilege wristband activity appears to me to be nothing more than a class activity that teaches students that we have not yet reached a place where we have equality of opportunity in this country. That’s not my fault, that’s not your fault, and that’s not the fault of any student who wore a wristband (assuming this activity actually occurred anywhere). Equality of opportunity is a goal that has not been reached because of our nation’s difficult racial history, the problem of entrenched poverty, an imperfect public education system, and million other reasons including the fact that true equality of opportunity is an almost utopian goal that is just plain difficult to create. If this activity is one way to teach this, so be it.
Third, why are people associated with conservatives making an issue of this? It’s no secret the Republican Party struggled to gain minority support in the 2012 election; making a racial issue over a public school lesson on power and privilege is strategically misguided. Yet, as I saw this morning, none other than Bill O’Reilly is running with the story tonight.
Excuse the rant, but focus on issues like this is one reason Conservatives get caricatured as out-of-touch.
None of these are bad ideas, and frankly, none of them are all that dramatic. On whole, DPI’s plan is more of an incremental approach to improving education finance than a radical shift in the way the state funds its public schools.
Consider the transfer of the School Levy Tax Credit funding to school aids. Currently the credit is paid directly to municipalities across Wisconsin for purposes of lowering local school property tax levies. It is calculated, according to the Legislative Fiscal Bureau, by taking the entire $747.4 million credit and giving each district a share equal to “each municipality’s share of statewide levies for school purposes during the three preceding years.” In other words, if a district’s levy makes up 5% of the sum of levies throughout the state, the district receives 5% of the tax credit.
Because wealthier communities tend to have higher education levies (which is by design in the equalization aid formula), wealthier districts are more likely to get a greater benefit from the School Levy Tax credit. This fact was the subject of a critical report by UW-Madison Professor Andrew Reschovsky. He found that “property owners in the property-wealthiest school districts are allocated school levy credits that are nearly seven times larger than those going to property owners in the poorest school districts.” Again, this is true, because it is by design.
Importantly, shifting funding for the School Levy Tax Credit into school aids does not mean that the money behind the tax credit will be used to increase public school spending. In general, it would still be used for property tax relief. Though DPI’s plan, unlike Walker’s budget, increases per-pupil revenue limits, it still caps the amount of state aid and local property tax districts can raise. This means increases in school aids will still reduce the property tax ley. The only way school districts get to increase their spending above revenue limits is by going to referendum.
So what does the shifting of the money behind the School Levy Tax Credit to school aids actually accomplish? First, putting the money into the equalization aid formula will create a redistribution of school aids (this is why DPI’s plan includes hold-harmless money for the 5% of districts negatively impacted). Second, it ends the political optics of having a sizable pot of education funds explicitly set aside for property tax relief…which is probably why the School Levy Tax Credit will never go away. In a political argument of direct property tax relief vs. more indirect property tax relief the latter loses.
Why am I writing about this now? Well it sure seems like the Governor’s education proposals are going to be modified by the Republican controlled Joint Committee on Finance. It makes sense for DPI’s proposal, as well as the status of the School Levy Tax Credit, to be part of the ongoing budget discussion.
In 2005 Jim Doyle signed legislation that, among other things, authorized a five-year longitudinal study of the Milwaukee voucher program conducted by the School Choice Demonstration Project (SCDP). The study was designed as a program accountability measure to answer some fairly large questions: Was the Milwaukee voucher program improving achievement in Milwaukee? What were the other impacts of school voucher reform on Milwaukee?
Ignoring the study’s findings is a missed opportunity for policy makers and citizens, especially in the areas targeted for choice expansion, to learn from the Milwaukee experience. After five years, the SCDP team found:
Statistically significant gains for voucher users in reading compared to matched Milwaukee Public School (MPS) pupils (with the important caveat that the introduction of program wide WKCE testing in the final year of the evaluation could be responsible for some of the gains);
Statistically similar impacts on math test scores for matched MPS and MPCP users;
A modest positive impact on public school tests scores as more private schools participated in the MPCP;
Statewide taxpayer savings, though not in Milwaukee;
Higher graduation rates for voucher users compared to MPS;
Higher rates of four-year college enrollment for voucher users;
Evidence that closed schools in both MPS and the MPCP were the lower performers;
High levels of parental satisfaction;
No impact on housing prices or racial integration;
High rates of school switching;
Wide variation in achievement levels between schools; and
Much much more.
So what are the practical lessons from the SCDP for other communities considering vouchers? Don’t expect the introduction of a voucher program to sizably increase test scores across the board for voucher users, or students in public schools. It’s safe to expect no negative impact on test scores, but any gains will likely be substantively small. So if the primary consideration in a community is raising test scores, a voucher program like Milwaukee’s may not be wise.
However, if you are a community struggling with high school graduation rates, particularly for low-income pupils (like Madison and Green Bay), a Milwaukee style voucher program could be a viable strategy to raise attainment. Incidentally, maximizing the number of high school seats in part by increase funding for voucher high school users is a no-brainer given the SCDP findings.
I think the most important lesson from the SCDP evaluation is that the school level matters more than the program level. I continue to support the Milwaukee voucher program because it has created many high-quality schools in Milwaukee that simply would not exist if the voucher program did not begin. But it also allowed some lemons. It follows that any expansion of a school voucher program should work to maximize the number of high-performing schools (and also empower them), while minimizing the impact of low-performers. Below are six ways to do that:
Don’t limit a program to failing schools. Limiting the pool of eligible students makes it difficult for schools to recruit, creates an unstable applicant pool, and virtually ensures new potentially high-performing schools will not open.
Continue high levels of fiscal accountability. Obviously the use of taxpayer funds demands high accountability, but fiscal duress has also proved a good proxy for academic duress in MPCP schools. The beefing up of MPCP fiscal regulation in 2003 has done more to eliminate low-performing schools in the MPCP than any other policy intervention.
Continue smart input accountability. There are certain things, like the use of qualified teachers and the release of standardized test scores, that the public has a right to expect of a voucher program. These things should continue.
Don’t be afraid of authorizer-based accountability. The backbone of charter school policy, it is a way to minimize problematic input regulation while allowing a broad spectrum of schools to operate.
Improved testing. Hopefully the replacement to the WKCE combined with an improved state data system will enable a true understanding of the impact of individual publicly funded schools on student achievement.
Continue program-level accountability. When I say program accountability I do not mean school-level accountability, I mean having a thorough understanding of what a large public policy program does, and does not, accomplish. Hopefully any new program will attract evaluators like the SCDP.
Thanks to the SCDP a great deal is known about how Milwaukee’s voucher program impacts students and schools in the city. Ignoring these findings in the current debate on voucher expansion is nonsensical.
The Governor’s budget earmarks $500,000 in each year of the biennium for Teach for America to recruit teachers to low-income communities in Wisconsin. As written the appropriation is pretty much a no-strings attached payment to the organization. Below is the exact wording of the bill:
“Distribute the amounts appropriated under s. 20.255 (3) (cm) to Teach for America, Inc., to recruit and prepare individuals to teach in low?income or urban school districts.”
Currently Teach for America’s only Wisconsin presence is in Milwaukee. This money likely means the non-profit will significantly expand in Milwaukee, and perhaps elsewhere.
The budget bill also changes the rules for instrumentality charter schools in Wisconsin. Instrumentality generally refers to a district-authorized charter school staffed by district employees. This type of school constitutes the vast majority of charter schools in the state. There is a fairly strong debate, particularly in Milwaukee, over whether these schools are actually “real” charter schools. Apparently the Governor wants to help end that debate. His budget gives the “school operator sole discretion over budget, curriculum, professional development and personnel” and prohibits “a school board from imposing on a charter school any requirement from which the charter school would otherwise be exempt.” If this passes as written it will be interesting to see if many instrumentality charters convert to traditional public schools.
Finally, three of the Department of Public Instruction (DPI) agency requests that the Governor recommends fully funding are a potential huge step forward for the state. The first is funding for universal ACT testing and use of the ACT suite of tests. I am a broken record on this; universal ACT testing is all upside. Teachers will get useful usable information on their students’ strengths and weaknesses, and the public will get a better idea of how college-ready Wisconsin students actually are. Kudos to DPI for proposing this and to Walker for funding it.
The second request is for “GPR funding to assist school districts in implementing the state’s educator effectiveness system.” The new system, which uses value-added test score data as well as various measures of best practices to evaluate teachers, is a dramatic change for districts and funding its implementation is logical.
The third request is for “the continued procurement, implementation and support of the statewide student information system.” This is another place I’ve been a broken record. Data can be a powerful tool to raise academic achievement; a necessary prerequisite to getting the most out of data is having a strong data system in place.
There is whole lot more than this that will impact education in the budget of course, but these are the smaller items that I am surprised are not being discussed. Though something tells when the Joint Finance road shows begin these topics will get their due.
If you are following the state budget process, chances are you’ve seen this juxtaposition on education funding in Governor’s Walker’s budget many times. You read this and you might think it a smoking gun showing the Governor cares about school vouchers, but not public schools.
To be fair, the state budget is all about priorities, and the global numbers say something about Walker’s priorities. Clearly he wants to increase the scope of school choice in Wisconsin, as well as provide more per-pupil support for alternatives to traditional public schools. It is also clear that the Governor ranks property tax relief as a high-priority; demonstrated by his increasing equalization aid while freezing revenue limits. It is also clear the Governor wants to tie any new revenue for schools to performance.
However, the modest increase in per-pupil funding for choice and charter needs to be put into the proper context. Such context, unfortunately, has been lacking in much of the budget debate thus far.
Between 2000 and 2012 per-pupil funding for the Milwaukee Parental Choice Program increased by 26%, while per-pupil funding for independent charter schools increased by 24%. Over the same time period, the average per-pupil revenue limit for Wisconsin public schools increased by 37%.
Keep in mind that choice and charter also receive less state and local revenue for each pupil than public schools. In 2012 the average public school per-pupil revenue limit was $9,809, while the choice and charter payments were $6,442 and $7,775 per-pupil respectively.
In other words, not only does Wisconsin not fund all of our students equitably, the inequity is growing.
But choice and charter badly need increases as well.
Funding of different types of public education should not and need not be a battle of us v. them. The bickering over funding of different schools is a seemingly never-ending distraction that sucks time and energy away from the infinitely more important battle to improve outcomes for all Wisconsin students.