Brown’s Budget Shuffle: Something From Nothing is Still Nothing

"Equal treatment for children in unequal situations is not justice"—Gov. Jerry Brown, California (quoted in the San Francisco Chronicle)

Gov. Brown is correct—funding poor schools the same as affluent schools is not only unjust, it is pedagogically irrational.  Poor children have greater educational needs, while their parents have far less to donate to school fundraisers. Funding them equally only guarantees unequal outcomes. Yet his solution—reallocating revenues from wealthier schools to poorer school—is neither just nor rational.

None of California’s schools currently receives adequate funding. The state has slashed over $20 billion from K-12 education over the past five years and none of this will be restored under the state’s new “millionaire’s” tax. Furthermore, basic aid school districts (the so-called affluent districts that receive only the “basic” aid from the state because they have higher than average property tax bases) have already lost 90% of the funding they once received from the state. Therefore, taking away scarce resources from these schools only serves to make them more like the state’s low income schools.

While it is true that affluent schools have fewer needs than lower income schools, they were not receiving sufficient funding from the state or local property taxes even before the economic meltdown and draconian budget cuts that followed. Consequently, they have relied on fundraising to make up some of the difference, something they can do with greater ease and success than lower income schools, since the parents tend to be wealthier and have more disposable income. Yet even this hasn’t prevented basic aid schools from losing counselors, librarians and nurses; increasing class sizes to 35 students per teacher (or higher); imposing out-of-pocket fees on teachers for health insurance; and freezing or cutting wages. Furthermore, even within basic aid districts there are often low income schools with student demographics similar to poor, inner city schools. Reducing their funding because they happen to be in an “affluent” basic aid district would end up harming the lower income students Brown’s plan is intended to help.

Of course it is important to provide low income schools with additional funding, over and above what the affluent ones receive, because of their greater needs. However, this must be accomplished through increased tax revenues, not by ripping off other schools. Yet increased school funding, alone, will not solve the myriad ways in which poverty impacts educational outcomes. To really close the achievement gap, poor kids in poor schools need relief from their poverty so they aren’t coming to school hungry and suffering from stress and untreated medical conditions. Their parents need relief from poverty before they even have children, since poverty increases the chances children will be born premature, with low birth weight, and suffer from stress, malnutrition and environmental toxins, each of which contribute to cognitive impairment and learning disabilities.

Short of this, low income schools need large infusions of cash—far more than they would receive under the Brown plan. They need enough revenue to lower class sizes and hire extra teachers and reading specialists. Low income schools need full-time nurses or on-site clinics to care for uninsured children and reduce the amount of class time lost to treatable and preventable illnesses. Low income schools need staff and resources to provide adult education and English language support for parents. They need extra funding for after school programs so that children aren’t watching television or getting into trouble or hurt when classes end. They need mental health specialists to help students suffering from stress, anxiety and other common mental health problems that often go undiagnosed or treated in poor children.

If the schools truly are public, then parents should not have to pay more out of pocket for fundraisers and benefits, in addition to what they contribute through their taxes. If they were adequately funded, there would be much less need for this.

This is another major problem with school finance. Affluent families are affluent, in part, because they can shelter much of their income from taxation (e.g., deductions and write-offs) and many do not want to pay a penny for the education of other people’s children. By maintaining tax rates at their current levels (which are far lower than they were during the Reagan era and earlier), the affluent can continue amass great quantities of wealth, while getting an excellent free education for their children at the exclusive public schools in their wealthy enclaves. They can then supplement their schools’ mediocre budgets with tax deductible donations that further lower their tax liabilities, while increasing the education quality gap to the benefit of their own children. Thus, they (and their legislators) are unlikely to accept Brown’s proposal (or the tax increases necessary to put a serious dent in the problem).

Paying to Play: How Financial Institutions Rip Off School Districts

Huck/Konopacki Labor Cartoons

The left has criticized attempts to privatize public education for years now, especially since No Child Left Behind took privatization to new heights. (See my own No Capitalist Left Behind and NCLB’s Biggest Winners).

During the last 10 years, we’ve seen an escalation in the number of for-profit charter schools. Obama’s Race to the Top required states to transfer billions of tax dollars to textbook publishers and open their doors to more charter schools. Cafeteria services are now dominated by just a few large corporations like Sodexo that rip off school districts and abuse their workers (see here, here and here).

No Capitalist Left Behind (The Prequel)

Yet corporate raiders have had their eyes on the public trough well before NCLB and they had numerous tricks up their sleeves for obtaining public education tax dollars. One of these has been to constantly lobby for lower taxes for the wealthy and their corporations, which keeps money in the pockets of the ruling elite and decreases revenues available for schools.

In addition to the direct benefit to the wealthy, this also provides lucrative opportunities for financial institutions to take advantage of school districts as they increasingly rely on bonds to finance their operations. According to a California Watch report (covered in the San Francisco Chronicle), financial firms donated $1.8 million to school bond measures in California over the past five years. In nearly every case, school district officials turned around and hired those same underwriters to sell the bonds for a profit.

The practice occurs nationwide and probably occurred well before the current financial crisis and even before the passage of NCLB. However, it is especially distinct in California, where underwriters gave 155 political contributions since 2007 to successful school bond campaigns. They have been so successful that only 5 donors (out of 111 successful bond measures) failed to receive a bond-selling contract from the school district (and in 4 of these cases, a competitor that also donated to the campaign did win the contract).

This is a clear cut case of “paying to play.” You donate a modest amount of money to get the bond measure passed and a virtual guarantee of being able to profit handsomely from it once it does pass. However, it is legal and all parties seem to be content with the arrangement.

School districts are forbidden from using their own resources to promote a bond measure, so they rely heavily on outsiders (including unions, parents, developers and construction companies) to do the promotion for them. Since they are almost always desperate for the funds provided by the bond, any help getting it passed is considered a blessing. Yet having prearranged contracts with underwriters eliminates competitive bidding and makes it unlikely that districts are getting the best deal available.