Monday, February 14, 2011

Education cost top problem for local government

State and local governments face financial difficulties in 2011 and 2012 more severe than they have seen in generations. Pessimists predict major municipal or even state bankruptcies. Optimists insist that, while serious budget problems will increase rather than ease, governments will skirt default by sharply increasing taxes and cutting deeply into services.

Unfortunately, while the threat of increasing Medicaid costs has received significant attention, politicians, analysts, the media and the public seem largely to have missed the $600 billion elephant in the statehouse.

The key structural problem in state and local finances is education, not health care. And a fundamental shift in our K-12 investment strategy is the only way to avoid defaulting on the promise of a public education.

The proportion of resources devoted to education has ballooned over the past two decades. Education spending as a share of tax revenue jumped 90% from 1992 to 2011 at the state level and 73% at the local level. This means governments have few options in responding to our current fiscal crisis.

In 2011, state and local governments will spend 46 cents out of every tax dollar they raise on public K-12 education. Medicaid/ CHIP spending pales in comparison at just 17 cents of every tax dollar. Public education, in other words, consumes a shocking 2 1/2 times the resources devoted to Medicaid at the height of recession-driven health care increases.

Spending Surge

Add in payments needed to meet the approximately $800 billion in underfunded commitments to teacher pension plans over the next 30 years and K-12 education gobbles up 50% of all state and local tax revenue.

Compounding the problem, a massive surge in federal education spending (the "stimulus") will recede this year while the recession drags on. Troubled local governments and school districts will call for more state aid to fill their budget gaps, but it's unlikely states will be willing or able to rescue distressed municipalities as they have in the past. States face a huge reduction in the federal share of Medicaid funding while enrollment in the program expands.

If there is a spike in municipal bankruptcies in 2011 and 2012, a primary cause will be the massive costs public schooling was already imposing when the Great Recession hit.

We face a situation analogous to that of a large number of American families who have been struggling with unsustainable budgets: a house payment that was excessive even at the best of times, the loss of income when a spouse becomes unemployed and rising health care costs.

When a budget doesn't come close to adding up, the biggest expenditure usually has to give. That has meant foreclosure for many homeowners; and it means a serious restructuring of K-12 education spending for public officials. State and local governments need immediate relief from the financial demands of public schooling, and a long-term solution to the system's profligacy.

Teacher pension plans should be based on defined contributions rather than defined benefits to alleviate growing and unsustainable commitments. Public school employees must share a substantial portion of their own health-care costs. And school district finances must be made more transparent so waste can be identified and eliminated.

Tax Credits

While these measures would lessen the immediate pain, they would do nothing to reverse the system's propensity for increasing real spending over time. Inflation-adjusted expenditures per student have more than doubled to around $12,000 over the last three decades, about 50% more than the typical private school spends. The extra resources have delivered no increase in student achievement by the end of high school.

Nine states have begun using education tax credits to encourage more private spending in lieu of government funds we simply do not have. Unlike vouchers, tax credit programs encourage individuals and businesses to invest their own funds, rather than government money, in K-12 education.

Like all private-school choice programs, these tax credits save large sums — more than $500 million a year in Pennsylvania, up to $180 million in Arizona, and potentially billions of dollars over the first five years for many states if they adopt a broad-based education tax credit program. They are also a proven way to increase academic achievement in public schools.

Citizens and businesses want to invest directly in the effort to educate the public, and we should encourage them to do so through K-12 education tax credits. Given our state and local financial outlook, we have no promising alternative.


An Epic Failure: Detroit Public Schools

Few school districts in America rival the dire condition of Detroit Public Schools: staggering dropout rates, functionally-illiterate high school graduates, a dysfunctional school board and a sea of red ink.

Emergency Financial Manager Robert Bobb has been trying to fix the city’s public schools which are historically awful. At times, it seems that he is the only one trying to fix a school system that is failing its students.

The Detroit Federation of Teachers has consistently called for Bobb’s removal. The radical socialist group, By Any Means Necessary, makes every effort to stir up racial division and strife. One of BAMN’s leaders was nearly elected president of the teachers union, which shows how radical the union has become.

While making of this film series, we met a recent graduate of Detroit Public Schools who couldn't read. Sadly, he blamed himself. But we know that a whole lot of adults are to blame, too. There were dozens of teachers and administrators who moved him down the assembly line, and were happy to hand him a worthless diploma after he reached the end of the line. All the while, the adults collected their paychecks, enjoyed their generous benefit packages and took comfort knowing that tenure would keep them secure in their jobs.

Detroit’s education system perpetuates the cycle of misery that has gripped the city for years.

After watching these films, ask yourself if America can continue being a great nation when many of its schools and communities are rotting from within.


Pupils must not be forced to eat halal Church tells schools

The Church of England has told its schools to ensure they are serving non-halal food after concerns that a number are only providing meat slaughtered according to Islamic law. The official guidance was issued after Church members complained that the use of halal meat was effectively ‘spreading sharia law’ across Britain.

The Church’s financial arm has also come under pressure to withdraw its investments – worth millions of pounds – in supermarkets that do not clearly label halal food. The moves follow disclosures by The Mail on Sunday last year that halal products were widespread in schools, hospitals, pubs and sporting venues but members of the public were not informed.

More than 10,000 Christians, many of whom have reservations about eating meat from animals that are bled to death while an Islamic prayer is recited, have signed a petition calling for proper labelling. Animal rights campaigners have also expressed anger because animals are often not stunned before their throats are cut with a sharp knife.

Alison Ruoff, a long-standing member of the Church’s ‘parliament’, the General Synod, said: ‘The Church is only just waking up to this. We have been pathetic and mealy-mouthed but we should be really concerned about this. ‘There is a lot of fear about upsetting Muslims but as a Christian you have to stand up for Christian values. Because we are unwittingly eating halal meat, we are spreading the practice of sharia law.’

An influential official body representing both Muslim and Christian leaders also said non-Muslims should not be compelled to eat halal meat. The Christian Muslim Forum, set up by Archbishop of Canterbury Rowan Williams four years ago, said there were concerns about ‘some public authorities which provide only halal products in schools and other institutions’. It said in a statement: ‘We urge all food outlets, catering organisations and public authorities to label halal food properly, for the benefit of both non-Muslim and Muslim consumers.’

John Pritchard, the Bishop of Oxford and chair of the Board of Education, which runs more than 4,000 Church schools, told the General Synod in London last week that guidance had been sent across the country. The guidance said if halal meat was served in schools it should not be the only option and suppliers should be changed.

Mrs Ruoff has challenged the Church Commissioners, who manage the Church’s £4 billion assets, to sell its shares in supermarkets that did not clearly label halal food.

The Rev Patrick Sookhdeo, an Anglican cleric who runs the international Barnabas Fund charity for Christians facing persecution, said some extremist Muslims viewed the growing use of halal food as part of their efforts to ‘impose’ sharia law on the West.


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