How New Jersey Senate bill S450 will Increase Administrative Costs and Property Taxes Statewide

March 15th, 2010

Passage of the pending New Jersey Senate bill, S450, would eliminate all local school administrators over the level of principal and establish the Executive County Superintendent as the official who will govern and operate all local public schools within each of the proposed consolidated countywide school districts.  When former Governor Corzine signed the CORE Act (Assembly Bill A4 and Senate Bill S19) into law, he transformed the role of county superintendents of education from mere disseminators of state educational policies into powerful Executive County Superintendents of Schools.  In so doing, the governor empowered each Executive County Superintendent to begin consolidating all schools into K to 12 districts and ultimately to consolidate all schools within one countywide organization. 

 

By creating the office of Executive County Superintendent of Schools, New Jersey is moving to replicate the state of Maryland’s consolidated county school system model.  First, the state of Maryland eliminated all local school officials beyond the level of principal.  It then consolidated all of its local schools serving less than one million students statewide within one of the 24 countywide school districts in each county under an Executive County Superintendent.

 

Although Maryland abolished all school administrators above the level of principal from its local schools in the name of saving money, cutting administrative expenses and cutting property taxes, these small savings were overwhelmed by the ongoing costs of the office of the Executive County Superintendent of Schools with its ever increasing bureaucracy.  The reason Maryland’s total statewide administrative costs increased rather than decreased as promised following the implementation of the consolidated county wide school district is that the Executive County Superintendent is not accountable to the voters and this enables him/her to increase staff largely without taxpayer input. 

 

In New Jersey, the Executive County Superintendent also is appointed by the governor.  He/she supervises, directs and manages the functions of the County Office of Education as a representative and subordinate of the New Jersey State Commissioner of Education.  The Executive County Superintendent oversees all public school districts within his/her county.  To accomplish these goals, each county superintendent is given a staff and a budget which are not subject to taxpayer input, approval or elections. 

 

In Maryland, for example, the Montgomery County Department of Education by itself has an annual operating budget of approximately $2 billion with nearly 22,000 employees despite having a total student enrollment of less than 138,000.  The office of the Executive County Superintendent of Schools for Montgomery County, therefore, employs roughly one administrator for every six of its students!  Furthermore, the Montgomery County consolidated school district has more than three times the number of administrators per student than it does teachers!  Contrary to what S450 purports, it will not provide for a more cost effective educational system rather it will increase costs especially administrative expenses.  Indeed, states that have adopted this model or a similar model such as California have increased costs. 

 

The implication behind Senate bill, S450, is that it would somehow save the taxpayers’ money and enable the state to have lower property taxes by eliminating administrators over the level of principal.  Proponents even a suggest savings of $553 million.  But Maryland’s total statewide administrative costs increased rather than decreased as promised following the implementation of its consolidated county wide school district.  Indeed, the experience of such a control model in the state of Maryland contradicts the assumptions inherent in S450 based on its consolidated county school district control model for New Jersey. 

 

Rather than add another bureaucracy, the most effective way to cut property taxes in New Jersey is to eliminate the tax burden imposed by county government.  County government places a tremendous burden on New Jersey’s taxpayers especially as compared to those in Connecticut where county government was eliminated in 1960.  New Jersey’s 21 counties combine to spend over $6.1 billion annually in property taxes, hold more than $5 billion in outstanding debt and have more than 44,000 employees.  Indeed, just the three New Jersey counties of Union, Essex and Bergen together levy approximately $1.6 billion in annual property taxes. 

 

The question facing New Jersey’s taxpayers is whether more money would be saved by eliminating county government or by adopting a consolidated county school district model as advocated by S450.  The answer is rather straight forward.  Saving $6.1 billion annually in property taxes by eliminating county government would be the best way to ease New Jersey’s tax burden rather than implementing S450 and hoping its unsubstantiated savings of approximately $553 million materialize.

 

Decentralization rather than centralization brings decision makers closer to the taxpayers and local priorities.  Taxpayers have more of a stake in the success of their local school district rather than county districts.  Indeed, separating the taxpayer from his/her ability to control and influence the operating budget and educational plan of his/her local school district cuts neither costs nor property taxes. 

 

In these challenging economic times, every home owner wants to make sure their property taxes are as low as possible and are put to use where they can do the most good.  Nowhere is this more necessary than in New Jersey, where it is imperative that all levels of government do not waste our scarce financial resources and cut taxes particularly property taxes.  To accomplish this goal, it is imperative that New Jersey does not add another unaccountable bureaucracy which will increase administrative expenses and property taxes statewide as would result under S450 should it become law. 

 

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Accountability: An Argument for Local School Districts

January 24th, 2010

During the past 40 years, the locus of school district control has gradually shifted from a tradition of home rule or local control to state control.  Control over the decisions governing such areas as funding, budgeting, human resources, standards, capital projects, operations, curriculum and assessment that were once the sole province of local boards of education has been superseded largely by the state.  Increased state control has reversed the traditional operating philosophy of school systems that was based on limiting the power of any centralized remote governmental entity could exert over local school districts.  Historically, Americans wanted school decision making to be as close as possible to those citizens who were most affected.  School district residents realized that by being able to control what and how their children were taught as well as how and who administered and governed their schools plus how their taxes were used that they were able to enjoy the maximum of democratic accountability. 

 

The rising power of the state (Fusarelli and Cooper, 2009) grew from the states’ increasing domination of school finance and, therefore, policy making because of the strings the states attached to funding.  Legal challenges to funding inequities and disparities led to court decisions such as Serrano v. Priest establishing financial neutrality as the basis for school funding.  States remedied the disparities among districts with the infusion of incremental state funds and regulation.  Subsequent rulings focused on adequacy and required state governments to provide resources to disadvantaged districts such that the provision of education adequately met their constitutional requirements.  New Jersey’s state constitution was deemed to go even further because of its provisions guaranteeing a thorough and efficient education or a “T&E” education as it became known and manifested in the Abbott v. Burke court decision. 

 

The No Child Left Behind Act (NCLB) accelerated the trend toward adequacy with its national educational standards. Under NCLB, the federal government holds states and school districts accountable for improving performance.  As a result, states are forced to define an adequate level of student and school achievement as well as the level of financial resources that would be constitutionally adequate.  NCLB, therefore, marked a pronounced policy making shift to an accountability model within which the allocation of school district financial and human resources was made largely at the state rather than the local level largely according to federal guidelines. 

 

But the consequences of centralizing most of the control over the allocation of a school district’s financial and human resources at the state level gave rise to many unintended obstacles to improving accountability. Chief among them was the contradictory challenge of trying to hold local school districts accountable to standards made remotely at the state level that did not reflect and often conflicted with unique local educational requirements and priorities. As a result, when states imposed a one-size-fits-all approach to local school district resource allocation, state funds were not used as efficiently as they could have been.  School systems would be more accountable if decision making over financial and human resources was made at the local district level. 

 

A local school district can improve student and school performance best when the district is empowered to allocate its financial and human resources according to its educational plan rather than being required to follow one-size-fits-all state directives. The local school district would have all the tools it would need to hold schools and students accountable because it could make real time decisions based on specific measurable performance goals for each school and student.  The local school district is the most qualified to continually calibrate local performance goals because only the local school district can combine a keen understanding of local educational necessities with the timely and specific assessment of individual school and student achievement. State control is too remote which causes not only inappropriate delays but also decisions that tend to be inconsistent with the district’s unique educational plan.  

 

State control especially over a district’s financial and human resource use creates barriers for achieving accountability. When a local school district is limited by the state’s one-size-fits-all approach, it is prevented from developing more innovative approaches to accountability.  In order for local school districts to innovate, they must be empowered to deploy more effective approaches for increasing accountability that are best suited to local needs. Improving accountability, therefore, requires the adaptation of new models for the control structure of local public schools that are largely free of state control. 

 

In response to the shortcomings of state dominated local school systems, communities need greater local control over their schools so that they can benefit from increased accountability.  Because a local school district’s control structure affects how all of the school system’s stakeholders combine to produce a quality education, school districts nationwide are searching for the most appropriate local control structure model that will provide the highest level of accountability.  As a result, local school districts are increasingly adapting a local control structure that provides the maximum accountability possible according to their unique characteristics.  What matters most in terms of maximizing accountability is that a school district employs the model that fosters the greatest public support for the maximum public funding of its public schools.  

 

 

References: 

Fusarelli, B. C., & Cooper, B. S., Editors.  (2009). The Rising State: How State Power is Transforming our Nation’s Schools, first edition, SUNY Press. 

 

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Posted in accountability, autonomy of schools, bigger is not better, Bruce Cooper, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, county run school districts, deregulation of schools, education, educational leadership, home rule, local schools, mandates, New Jersey, New Jersey Property taxes, No Child Left Behind (NCLB) Act, No Child Left Behind Act, property taxes, property values, public education, public finance, school finance, school funding, school governance, school reform, state financial aid, state mandates | No Comments »

Smaller Class Sizes Work Best to Close the Achievement Gap

January 11th, 2010

Research concentrating on class size not only has demonstrated that when qualified teachers teach students in smaller class sizes the students in the smaller classes learn more and these students retain this advantage over other students who attend larger classes but also has shown how smaller class sizes help to significantly close the achievement gap among minority and majority students.  Smaller class size not only increases achievement for all students but also seems to benefit most those students (Nye, Hedges, & Konstantopoulos, 2000a) who are minorities, eligible to receive free or reduced-price lunches, or attend urban schools in low income districts.  Krueger and Whitmore (2001) conclude that for these at-risk students, small class sizes narrow the achievement gap, reduce grade retention, decrease behavioral problems, reduce truancy and increase graduation rates.

 

One leading study is the longitudinal class size reduction initiative conducted over a number of years in Tennessee called the Student-Teacher Achievement Ratio (STAR) project.  Along with Wisconsin’s Student Achievement Guarantee in Education (SAGE) project, the STAR study is one of the few very large scale class size experiments making its conclusions some of the most credible.  Both standardized and curriculum based tests were employed to determine the performance of approximately 11,600 students in inner city, suburban, urban and rural school districts.  The tests assessed the students’ reading, mathematics and basic study skills. 

 

The STAR study was conducted in three phases.  The first phase, following a similar study conducted on a much smaller scale in Indiana called Project Prime Time, was performed over four years.  In Project Prime Time, Bain and Achilles (1986) found that students in smaller classes scored higher on standardized tests and had fewer behavioral problems than those in larger classes.  The STAR project showed that after four years, students in smaller class sizes demonstrated significantly improved achievement as compared to those in larger classes.

 

The STAR project demonstrated that students, who were enrolled in small classes beginning with kindergarten and continuing through third grade, were significantly more likely than their counterparts who attended larger classes, to: 

  • Demonstrate better reading and mathematics skills
  • Complete more advanced mathematics, science and English courses
  • Complete high school 
  • Graduate high school on time 
  • Graduate with honors

 

Moreover, the STAR study showed (Word, Johnston, Bain & Fulton, 1990) that minority students gained more than other students, demonstrated an improvement rate almost double that of majority students over the first two years and showed improvement comparable to majority students during the second two years. 

 

STAR’s second phase, called the Lasting Benefits Study, confirmed that the benefits of smaller class sizes continued into the later grades.  The study (Achilles, Nye, Zaharias & Fulton, 1993) found that even after the students returned to larger classes in the fourth through eighth grades those students who had attended smaller class sizes for their first three or four years maintained an advantage over students who had attended the larger classes from kindergarten through third grade.  The students who attended smaller class sizes in Kindergarten through third grade, therefore, continued to outperform those who had attended larger classes.  The Lasting Benefits Study (Nye, Hedges, & Konstantopoulos, 2000b; Finn & Achilles, 1999) supported STAR’s earlier findings that minority students benefited the most from having smaller class sizes. 

 

STAR’s third phase, called Project Challenge, was conducted over three years and placed all of the kindergarten through third grade students of Tennessee’s 17 most economically challenged school districts into small classes.  As a result of having smaller class sizes, (Nye, Achilles, Zaharias & Fulton, 1993) these 17 districts raised their performance levels for reading and mathematics from well below average to above average.  

 

The findings of the STAR project are echoed by other studies such as Wisconsin’s Student Achievement Guarantee in Education (SAGE) project, which was a statewide initiative that increased student achievement.  The SAGE project (Molnar, Smith, Zahorik, Palmer, Halbach & Ehrle, 1999) found that students who attended small classes beginning with kindergarten and continuing through third grade significantly improved their academic achievement and that the benefits were greater for students from low income or poverty level families.  In Colorado, Sherry (2005) reported that African American and Latino students in the Denver schools dedicated to small class sizes were closing the achievement gap, “All students, no matter their ethnicity, are learning to read, computing math problems and writing essays at the same level.”

 

The research demonstrates that having a smaller class size not only increases student achievement but also helps to significantly minimize the achievement gap among different groups of students.  But it should not be surprising that smaller class sizes raise student performance.  Having fewer students in the classroom enables the teacher to dedicate more time to each child.  Consequently, students pay more attention to class work and participate more in academics.  Because the students are more involved with their studies they learn more and behave better.  Is it any wonder then that test scores are significantly higher for students who attend small classes?  Based upon the findings of the STAR project and other studies there is little doubt that students taught in small classes enjoy significant and lasting educational advantages especially minority and low income students. 

 

 

References

 

Achilles, C. M., Nye, B. A., Zaharias, J. B., & Fulton, B. D. (1993). Paper, The Lasting Benefits Study (LBS) in grades 4 and 5 (1990-1991):  A legacy from Tennessee’s four-year (K-3) class-size study (1985-1989), Project Star.  Paper presented at the North Carolina Association for Research in Education. Greensboro, North Carolina, January 14, 1993.  

 

Bain, H. P. & Achilles, C. M. (1986). Interesting Developments in Class Size, Phi Delta Kappan, 67:662-65.

 

Finn, J. D. & Achilles, C. M. (1999). Tennessee’s Class Size Study: findings, implications, misconceptions, Educational Evaluation and Policy Analysis, 21(2): 97-109.

 

Krueger, A. B. & Whitmore, D. M. (2001). Would Smaller Classes Help Close the Black-White Achievement Gap? Princeton, New Jersey:  Princeton University Press.

 

Molnar, A., Smith, P., Zahorik, J., Palmer, A., Halbach, A., & Ehrle, K. (1999). Evaluating the SAGE program: A pilot program in targeted pupil-teacher reduction in Wisconsin, Educational Evaluation and Policy Analysis, 21(2): 167-77.

 

Nye, B. A., Achilles, C. M., Zaharias, J. B., & Fulton, B. D. (1993). Project Challenge third-year summary report: An initial evaluation of the Tennessee Department of Education “At Risk” Student-Teacher Ratio Reduction Project in seventeen counties 1989-90 through 1991-92, Nashville: Center of Excellence for Research in Basic Skills, College of Education, Tennessee State University: Tennessee State University Press.

                                                                                       

Nye, B. A., Hedges, L. V., & Konstantopoulos, S. (2000a). Do Minorities and the Disadvantaged Benefit More from Small Classes? Evidence from the Tennessee Class Size Experiment, American Journal of Education, 109: 1-26.

 

Nye, B. A., Hedges, L. V., & Konstantopoulos, S. (2000b). The Effects of Small Classes on Academic Achievement: The results of the Tennessee Class Size Experiment, The American Educational Research Journal, 37(1): 123-51.

 

Sherry, A. (2005). Schools that Erase the Gap say Key is Never to Settle, Denver Post, October 4, 2005. http://www.denverpost.com/news/ci_3084628.   

 

Word, E. R., Johnston, J., Bain, H. P. & Fulton, B. D. (1990). The State of Tennessee’s Student-Teacher Achievement Ratio (STAR) Project: Technical Report 1985-90, Nashville, Tennessee State University: Tennessee State University Press.

 

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Leveling Down to the Lowest Common Denominator is Math Education’s Major Problem

December 23rd, 2009

To solve the challenges confronting our nation so that we can continue to improve our quality of life, we must improve mathematics education, because mathematics is the cornerstone of our civilization.  But our schools must provide more challenge for students in all mathematics classes to improve math education.  State mandated restrictions and school district imposed curriculum limitations must be lifted to empower teachers to teach more and better math classes as well as for students to have the opportunity to learn as much math as they possibly can. 

 

Listen to students discussing the perceived shortcomings in the quality of their education and the most commonly heard complaint is the lack of challenge especially in seventh and eighth grade math classes.  While their parents readily agree, students feel as if their classes too often level down to the lowest common denominator.  Students report that teachers spend too much time trying to raise the performance of the lowest common denominator while the more talented students as well as those most in need of instruction languish. 

 

But the key causal factor for the lack of challenge is heterogeneous grouping within each class.  Heterogeneous grouping is the inclusion of students of all levels of ability in the same classroom with the same teacher at the same time.  No matter how well qualified is the teacher; however, not even a teacher highly trained in differentiated instruction can overcome the problems of heterogeneous grouping.  Indeed, it is profoundly difficult to differentiate instruction well enough within a classroom of 20 or so students so that all students benefit equally.  This forces the top students to enroll in Advanced Placement or Honors courses so that their skill levels can be stretched while those students at the other end of the continuum seek remedial assistance. 

 

Tracking, on the other hand, is the grouping of students according to their level of ability in the same classroom with the same teacher at the same time.  Tracking reflects the reality that students are not all alike.  On the contrary, each student is unique and he/she learns in different ways, at different rates and performs best at varying degrees of course content difficulty.  Grouping classes according to ability enables teachers to customize instruction so that the entire class not only learns more but also performs at a higher level of achievement.  Those students at the polar opposite ends of the ability continuum are not disenfranchised.  All students in every grade are able to raise their achievement levels. 

 

But no student should be locked into any track especially one that is lacking in proper mathematics content and challenge for that student.  Indeed, all students must be given the opportunity not only to improve their ability in mathematics but also to advance to a higher track level when they have demonstrated such improvement.  Tracking is most effective because it enables students to benefit from the rigorous teaching of mathematics.

 

Why do American students especially those in seventh and eighth grade seem to lag behind those of other nations in mathematics?  Perhaps it is because American students may not learn as much mathematics as do their international counterparts.  Compared to other nations where mathematics proficiency is rather high such as Japan and Germany, American students do not seem to study the same amount of geometry, algebra and trigonometry in the seventh and eighth grades.  Because the students of other nations attend more higher level math classes earlier in their school life, they are also able to study more and achieve greater proficiency in science courses especially physics including Advanced Placement physics.  When these factors are combined with the fact that most American school districts have dropped tracking in favor of heterogeneous grouping, the mathematics education gap widens.   

The one size fits all approach of heterogeneous grouping penalizes the students particularly at the upper and lower achievement levels while focusing a disproportionate amount of time on the lowest common denominator.  As a result, all students suffer and do not learn as much as they possibly can.  This leads to the dumbing down of mathematics education.  Because learning mathematics is essential for all students, tracking provides perhaps the best way for all students to become highly proficient in mathematics based on the understanding that every student is unique in how he/she learns. 

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Posted in academic performance, Advanced Placement, Advanced Placement (AP), Annual Yearly Progress (AYP), curriculum, differentiated instruction, dumbing down, education, education gap, Hetergeneous Grouping, Honors, Honors courses, learning, leveling down, lowest common denominator, Math instruction, Mathemtics education, Physics, public education, Tracking, Uncategorized | No Comments »

Accountability: The Taxpayers’ Return on Investment

December 10th, 2009

Democratic accountability is achieved through the electoral process by enabling the local taxpayers to elect their local board of education and to vote whether to accept or reject the local school annual operating budget.  This electoral process enables taxpayers to control the stewards of their local schools, the members of the board of education, and through this process the level of property taxes levied and how these tax revenues are allocated.  It helps to assure taxpayers that their duly elected representatives, the members of the board of education, will allocate their school district’s financial and human resources according to local priorities.  The locally elected board of education, in turn, makes sure that the local schools meet or exceed local needs and priorities.

 

Accountability is the means by which taxpayers can determine whether they are getting a proper return on investment from their investment in public education, their property taxes, by exercising local control.  Taxpayers benefit from having input into determining those educational programs and services on which their money is spent.  They are more strongly committed to and involved with their neighborhood schools because their children as well as those of potential buyers of their homes can also attend the local school within the district.  The process of enabling taxpayers to control local school funding, governance and educational content increases their willingness to fund their local schools because they can see and influence how their money is spent.  Based on these concepts, home rule or local control was established and has thrived.

 

The tradition of local control not only is rooted in our democratic principles but also symbolizes our democracy in action.  Local control enables our schools to be self-governing instead of being controlled remotely by a governmental entity that imposes its political agenda rather than supporting local priorities and needs.  Remote governing bodies, therefore, are not accountable to the standards necessary for local schools to provide quality education.

 

A top-down, state dominated educational system is contrary to our democratic principles.  Increased control by the state whether directly or indirectly through state politically appointed county departments of education such as in New Jersey means less local control because control is a zero sum game.  As such, every increase in state power can only result from a corresponding loss at the local level. 

 

A governance model based on state control results in a traditional military-type command-and-control decision-making process.  This is contrary to a true democratic process that supports local school districts and fosters the active participation of parents with their willingness to fund public education.  In a command-and-control model, state level policy makers develop the strategy for policy implementation and combine this strategy with their political directives to determine the priorities and budgetary process for each school district. 

 

The typical one-size-fits-all approach removes decision making authority from those most affected by educational policy decisions:  the students, parents, taxpayers, administrators, teachers, school and district.  It also concentrates policy formulation and decision making at a centralized level where special interest groups have greater leverage over the policy makers and, as a result, greater control over legislation affecting education including school budgets and funding as well as programs and services.  A school’s annual operating budget is the financial representation of the school’s educational plan.  State control of the local school budgetary process, particularly the allocation of financial and human resources, means that the state can impose its own agenda and prevent local districts from acting according to local educational needs.

 

In a typical centralized state model local taxpayers lose control over how their money is allocated because decisions are made remotely and without local input.  In addition, local boards of education even though they serve as unpaid volunteers are often abolished or rendered virtual rubber stamps of the state department of education under the guise of saving money and increasing accountability.  Special interest groups have a disproportionate say in the local allocation of educational funds distributed by the state.  Indeed, the allocation process seems to be based more on special interest group political calculus than on local educational needs.  Because the approval and allocation process at the state level tends to be much more convoluted than those at the local level and more powerful special interests are involved, significant amounts of aid authorized for education seemingly do not make it ultimately to the local level.

 

Concentrating decision-making power at the local district level rather than at the state level enables more resources to be focused on those most affected by education and enables those most involved in providing education to provide better instruction.  State control causes local school districts to spend less time on students as well as parents because more time is required to be spent on state imposed bureaucratic obligations and requirements.  As a result, parental engagement decreases which harms student achievement because parental involvement is a key component supporting student performance.  The local school district not only is closest to the students, parents, teachers, and taxpayers but also has the necessary expertise to most effectively decide how to provide a quality education and to generate the necessary local taxpayer support for the public funding of public education.

 

 

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CEIFA’s Impact

December 10th, 2009

The rising power of state government (Fusarelli and Cooper, 2009) has grown from the states’ increasing domination of school finance and, therefore, policy making because of the strings the states attached to funding.  Legal challenges to funding inequities and disparities led to court decisions such as Serrano v. Priest establishing financial neutrality as the basis for school funding.  States remedied the disparities among districts with the infusion of incremental state funds and regulation.  Subsequent rulings focused on adequacy and required state governments to provide resources to disadvantaged districts such that the provision of education adequately met their constitutional requirements.  New Jersey’s state constitution was deemed to go even further because of its provisions guaranteeing a thorough and efficient education especially in the Abbott v. Burke court decision. 

 

Although the state’s flawed approach to education is exemplified by the new funding formula contained in the New Jersey School Funding Reform Act (SFRA) of 2008, it is manifested in its predecessor, the Comprehensive Education Improvement and Financing Act of 1996 (CEIFA.)  Dr. Reock studied the financial impact on school districts of the state’s failure not only to not fully enact CEIFA but also to freeze most CEIFA funding beginning with the 2002-03 school year (Reock, 2007.)  Based on his study (Sciarra, 2008), Dr. Reock found that “the state aid freeze caused massive under-funding of many school districts throughout the state, especially poor non-Abbott districts, and contributed to the property tax problem in the state.” 

 

Instead of fully funding CEIFA’s school funding formula as required by law, the state froze financial aid to schools at their 2001-02 school year levels regardless of any increases in enrollment, rising costs as well as state and federal unfunded mandates.  The shortfall was hardest on those districts that were most dependent upon state aid.  During the 2005-06 school year the statewide shortfall amounted to $846 million which translated into per pupil shortfalls of $1,627 in non-Abbott DFG A and B districts, $758 in DFG C through H districts, $386 DFG I and J districts and $188 in Abbott districts.  

 

The impact of the CEIFA funding shortfall was minimized on the Abbott districts largely due to their “parity-plus” court mandated protection.  State law forbids the budget of an Abbott district from falling below its level of the prior school year (Hu, 2006.)  Furthermore, under state law, if an Abbott district increases local property taxes without a state directive to do so, it will lose a similar amount of state aid. 

 

The CEIFA funding shortfall caused serious imbalances between local school districts.  During the 2005-06 school year, Abbott districts received approximately 58% of all state financial aid while educating only 23% of New Jersey’s K to 12 student enrollment.  This meant non-Abbott districts were educating 77% of New Jersey’s students with only 42% of state aid.  This imbalance has continued to widen under SFRA with Abbott aid increasing to approximately 60% of all state aid or $4.64 billion.  State aid reductions and the ever increasing unfunded state mandates force non-Abbott districts to balance their budgets by raising property taxes, increasing class sizes as well as cutting regular education programs and services.   

 

As part of his statement of New Jersey Supreme Court certification in support of the Plaintiffs’ opposition to the School Funding Reform Act (SFRA) of 2008, Dr. Reock concluded (Sciarra, 2008) that “the State’s failure to fund CEIFA for the past six years directly resulted in an enormous shortfall of funding in districts across New Jersey.”  He went further to state, “By 2007-08, the sixth year of the CEIFA “freeze,” the total under-funding of state aid had reached $1.326 billion annually, despite the introduction of several new, smaller aid programs.”  The result was a state-driven increase in local property taxes within non-Abbott districts to make up for the shortfall. 

 

By passing through the majority of the cost of state mandates to local school districts, the State of New Jersey forces local schools to divert resources to bureaucratic regulatory compliance.  As a result, disproportionate amounts of a typical school district’s scarce financial and human resources are not invested in the classroom where they are needed most.  Local school districts would be able to operate more cost-effectively, earn a higher rate of return on their educational investment and provide greater accountability if they were free to concentrate on improving every student’s performance with the maximum possible level of local public support for the public funding of its public schools.

 

 

References

 

Fusarelli, B. C., & Cooper, B. S., Editors.  (2009) The Rising State: How State Power is Transforming our Nation’s Schools, Albany, New York: SUNY Press. 

Hu, W. (2008) In New Jersey, System to help Poorest Schools Faces Criticism, New York Times, October 30, 2006. 

Reock, E. C. Jr., (2007) Paper, Estimated Financial Impact of the ‘Freeze’ of State Aid on New Jersey School Districts, 2002-03 to 2005-06, Institute on Education Law and Policy, Rutgers University, Newark, http:// ielp.rutgers.edu/docs/CEIFA_Reock_Final.pdf.  

Sciarra, D. G., (2008) Certification of Dr. Ernest C. Reock, Jr. for the Supreme Court of New Jersey in support of the Plaintiffs’ opposition to the School Funding Reform Act of 2008, Education Law Center, Newark New Jersey, http://www.edlawcenter.org/ELCPublic/elcnews_080521_ReockCertification.pdf  

 

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Posted in accountability, autonomy of schools, bigger is not better, board of education, Bruce Baker, Bruce Cooper, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, data-based decision making, decision making, education, educational leadership, federal financial aid, home rule, local property taxes, local schools, mandates, New Jersey, New Jersey Property taxes, property taxes, property values, public education, public finance, school finance, school funding, school governance, school law, self-funding school districts, self-governance | No Comments »

Self-governance

December 10th, 2009

Locality is crucial for accountability.  Because the greater is the distance between the policy maker or the policy making body and those most affected by the policy, the students, teachers and schools, the more adverse is the policy’s impact on a public school district’s finances and ultimately upon the quality of education it provides.  Our public schools, therefore, must be given the choice of becoming self-governing, self-funding, autonomous, local public school districts free from state and federal mandates so that they can be liberated to provide a top quality education while held being accountable to this standard by those who are the most capable of doing so, the local school district’s taxpayers.

 

A self-governing public school district would be free of state and federal mandates but would abide by all other state and federal laws.  It would remain a public school district rather than become a charter school.  It would continue to serve the same local community with the same regular and special education students.  While public school districts could elect to stay within the state system and continue to abide by all mandates, all districts would be given the opportunity to legally opt out. 

 

Self-governance is the alternative to a state dominated educational system that could provide public schools with the authority necessary to improve educational accountability consistent with the priorities of their local school communities.  It would also provide school districts with the flexibility to innovate rather than be forced to march in lock step to the state’s one-size-fits-all mandates which fit no district.  Because decisions guiding the operations of self-governing schools would no longer be determined at the state level, parents, teachers, school administrators, boards of education and local taxpayers would be better able to shape the quality of education which students receive in their local schools. 

 

Self-governance would eliminate the excessive financial and administrative burdens imposed by state mandates.  The ever increasing cost of the state’s unfunded and under funded mandates is forcing school districts not only to cut non-mandate protected education programs but also to increase property taxes.  For example, New Jersey’s public school districts can no longer afford to pay for these unfunded and under funded mandates because most school districts are forced to spend disproportionately more to meet the requirements of these mandates than these districts receive in total state and federal financial aid.  Self-governance would increase the financial resources available for the classroom because the funds that are currently used for compliance with state mandates could be redirected to improving student learning and achievement, which after all is the real mission of our schools.

 

How do we restructure our educational system such that we not only enable our schools to increase the property taxpayers’ return on their investment but also greatly improve the quality of education while holding schools accountable to this standard?  The answer is to give our public schools the choice of becoming self-governing, self-funding, autonomous local public school districts free from state and federal mandates.  This would empower public schools to improve the quality of education consistent with the priorities of their local communities as well as the flexibility to innovate.  Legally opting out of the state system through a state-wide voter approved referendum would restore decision-making to the local school district level.  Because decisions guiding the operations of self-governing schools would no longer be made largely at the state level, parents, teachers, school administrators, boards of education and local taxpayers would be better able not only to shape the quality of education provided in their local schools but also to hold their local schools accountable for this outcome.

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Posted in decision making, deregulation of schools, disaggregation, education, educational leadership, home rule, local schools, New Jersey, property taxes, property values, public education, public finance, school finance, school funding, school governance, school law, school reform, self-funding school districts, self-governance, state financial aid, state mandates | No Comments »

The Tieboutian Choice

December 5th, 2009

Tiebout’s (1956) conceptual breakthrough was that taxpayers are mobile and as a result will choose the municipality that best meets their needs by moving to that location.  His model successfully addressed the free rider problem that plagues governmental entities providing public goods and services such as public education.  Indeed, taxpayers seem to decide where to live based largely on the quality of the local school district.

 

According to Tiebout (1956,) taxpayers reveal their preferences for their desired level of public goods and services by the decision they make concerning where they choose to live.  Through such a decision making process (Baker, Green and Richards, 2008,) Tiebout’s model “could lead to an optimal allocation of public services where no one person in the system could be made better off without making someone else worse off.”  According to Tiebout (1956,) “The greater the number of communities and the greater the variance among them, the closer the consumer will come to fully realizing his preference position.”

 

Tiebout (1956) concluded that a taxpayer’s choice of municipalities and, therefore, school districts, reflects a private sector competitive market model.  In discussing this model for school choice, Baker, Green and Richards (2008) report “Tiebout proposes that local, rather than centralized, government financing of public services could result in a form of competitive marketplace that would yield more optimal pricing of public goods through local tax policy and more appropriate alignment of consumer preferences and the quality of public goods.”  Tiebout (1956) explains this difference, “At the central level the preferences of the consumer-voter are given, and the government tries to adjust to the pattern of these preferences, whereas at the local level various governments have their revenue and expenditure patterns more or less set.” Taxpayers, therefore, will choose the district that best meets their needs when choosing among school districts of varying levels of educational quality.

 

Today, the Tieboutian choice is manifested in the difference between local funding versus state or federal funding and the corresponding state or federal control that comes along with it.  The fundamental problem with centralized funding, whether state or federal is that it leads to a one-size-fits-all approach for education but one that fits no district.  Baker, Green and Richards (2008) explain, “The local property tax empowers local voters to express what they want for their local public schools.”  But “when property taxes become statewide taxes, the political advantages of empowering local citizens and promoting competition and sorting among jurisdictions is lost.”  This mass standardization of policy often leads to state and federal funding guidelines that are incongruous with the needs and priorities of local school districts.

 

The specific needs of individual school districts vary to such a large degree that they render uniform state and federal policy formulas inadequate.  Instead, public school districts need a mass customization of educational funding, control and policy that can only derive from local funding and governance.  Oates (1972) supports the notion that public education should be provided at the lowest level.  Kenny (1982) also argues for the provision of public education by local school districts.  Because there is no reliable connection between state and federal policy makers and the local provision of education, accountability requires local decision making.

 

A reduction in local school district control over the levying and allocating of property taxes decreases accountability and adversely affects public school quality.  Because reductions of property tax revenues whether through state imposed limitations or via the substitution of state or federal funds reduces the level of local investment in the school district, the stake held by local taxpayers is similarly reduced.  Fischel (2001) explains this using taxpayers without children in the public schools, “At the local level, they are willing to support, or at least not oppose, high levels of spending because better schools add to the value of their homes.  At the state level, voters without children do not perceive such an offsetting benefit to their taxes.”  Having a lowered sense of ownership in their schools, taxpayers become more complacent as the proportion of state and federal funding increases.  This causes a corresponding reduction in the level of accountability required by the stakeholders and the quality of their public schools’ education declines as a result.

 

Fischel (2001) explains that taxpayers resemble investors as they want their major asset, their home, to appreciate in value.  Home owners have a vested interest in the success of their local schools because the credit rating of a school district’s host municipality is largely dependent on the financial soundness and credit worthiness of its schools.  Indeed, the higher is a municipality’s credit rating the lower is its debt service expense. 

 

Taxpayers hold local schools accountable not just to improve the quality of education but more importantly to offset risks to their property’s value which can not be easily diversified.  The more accountability a local school district provides, the more local taxpayers support the public funding of public education.  Local school districts, therefore, will efficiently provide public education as a result of taxpayers’ exercising their Tieboutian choice.

References

Baker, B. D., Green, P., & Richards, C. E.  (2008). Financing Education Systems, Upper Saddle River, New Jersey:  Pearson Education, Inc. 

Fischel, W., (2001) The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies, Cambridge, Massachusetts: Harvard University Press.  

Kenny, L. W., (1982) Economies of scale in schooling, Economics of Education Review, 2:1-24. 

Oates, W. E., (1972) Fiscal Federalism, New York: Harcourt Brace Jovanovich.

Tiebout, C. M., (1956) A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

Posted in Bruce Baker, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, homeownership, local property taxes, local schools, New Jersey Property taxes, property taxes, property values, public education, public finance, school finance, school funding, school governance, Wallace Oates, William Fischel | No Comments »

The Capitalization of Local School District Quality

December 5th, 2009

The benefits that taxpayers derive form their local school district quality and property taxes are capitalized in their property values.  Because taxpayers strive to protect and improve their property values, they constantly evaluate the quality of their school district so as to maximize their property values.  If their school district’s quality deteriorates or is expected to decline, typical Tieboutian taxpayers will “vote with their feet.” 

 

By voting with their feet taxpayers choose the local school district that best meets their needs and one that will contribute to their property values.  But taxpayers vote not only with their feet but also on school district operating budgets, capital projects and board of education members.  Through the exercise of these votes, taxpayers control the quality of education provided by their local schools as well as the level of property taxes levied.  Their collective decisions lead to a Pareto efficient allocation of local public education.  In this context, Baker, Green and Richards (2008) state that the “Tiebout model represents the most basic form of school choice.” 

 

But states tend to make educational policies especially school finance regulations that are too uniform for the wide variety of school districts with their wide disparities in needs and priorities.  It is decentralized or local control rather than centralized or state control over public education, therefore, that causes, supports and sustains the efficient allocation of a school district’s financial and human resources.  Local control leads to the provision of the maximum level of educational quality and accountability. 

 

California exemplifies the downside of state control.  Fishel (2001) argues that the Serrano v. Priest ruling destroyed the connection among local control, property taxes and school district quality because California taxpayers essentially lost their ability to hold local school districts accountable.  Furthermore, Fishel (2001) contends that the Serrano decision not only lead to the passage of Proposition 13 but also to the centralization of school finance in California.  The adverse impact on local school districts of California’s centralization of school finance has never been as clear as it is today while the state faces bankruptcy.  Because the state forced local school districts to be overly dependent on unsustainable state funding, the state’s fiscal crisis has brought many districts to the brink of financial collapse. 

 

Tiebout (1956) argues that because crowding and congestion affect the provision of public goods and services, it is inefficient to provide public education at a centralized level whether state or federal.  Public education is more efficiently provided at the local level.  Fischel (2001) agrees with his assessment of school finance in California in which taxpayers lost control over local schools and property taxes which led to reduced levels of taxpayer involvement in and support for public education.  Fischel (2001) concludes “the apparent quality of public education has declined nationwide as the states’ share of funding for it has risen.”  It is essential that taxpayers have control over their local schools so they will be motivated to properly fund, support and improve public education. 

 

 

References

Baker, B. D., Green, P., & Richards, C. E.  (2008). Financing Education Systems, Upper Saddle River, New Jersey:  Pearson Education, Inc. 

Fischel, W., (2001) The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies, Cambridge, Massachusetts: Harvard University Press.  

Tiebout, C. M., (1956) A Pure Theory of Local Expenditures, The Journal of Political Economy, 64, 416-424.

 

Posted in Bruce Baker, Bruce Cooper, Capitalization of property taxes, Capitalization of school district quality, Charles Tiebout, home values, homeownership, local property taxes, local schools, New Jersey Property taxes, property taxes, property values, public finance, school finance, school funding, William Fischel | No Comments »

The Property Tax Burden of County Government in New Jersey

October 9th, 2009

In these challenging economic times, every home owner wants to make sure their property taxes are as low as possible and are put to use where they can do the most good.  Nowhere is this more necessary than in New Jersey, where it is imperative that all levels of government do not waste our scarce financial resources and cut taxes particularly property taxes. 

 

Perhaps the most effective way to cut property taxes in New Jersey is to eliminate the tax burden imposed by county government.  The three New Jersey counties of Union, Essex and Bergen together levy approximately $1.7 billion in annual property taxes.  While states such as Connecticut eliminated county government in the 1960’s and, therefore, its home owners are free of county property taxes, all 21 of New Jersey’s counties combine to collect approximately $6.0 billion in property taxes annually. 

 

Union County, for example, spends approximately $450 million annually, of which the City of Summit pays $26.4 million in property taxes or approximately 24% of every property tax dollar in Summit.  But the City of Summit receives less than ten cents for every dollar of County services in return.  In addition, the County percentage is artificially low because the Freeholders took another pension payment holiday.  While almost all of Summit’s property tax payment to Union County is redistributed to other towns within the county, the property tax dollars for Summit’s schools stay in Summit and help to support local property values.  If we can significantly reduce or ultimately eliminate county government to significantly lower our property tax burden, then the value of every New Jersey home owner’s principal asset, his/her home, will rise correspondingly. 

 

New Jersey taxpayers must be vigilant in regard to any potential risks to their homes and businesses such as the unnecessary tax burden of county government and the degradation of the quality of education in their local schools.  In addition, the credit rating of every municipal government depends largely upon the quality and financial soundness of its local schools.  Therefore, significant risks to the quality and funding of a municipality’s local public schools or its disproportionately high level of county property taxes would most likely adversely impact its credit rating and increase its debt service expense as a result.  Taxpayers must work together to counteract these risks because these risks can not be diversified. 

 

 

Posted in accountability, assessment of property, county government, County Property taxes, education, local property taxes, local schools, mandates, New Jersey Property taxes, property taxes, public finance, school finance, school funding, school governance | No Comments »

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