Saturday, October 31, 2009

Cliff-Notes on the "One-Two Punch!" (Non-compliance Race to the Top)

'Funding Cliff' Looms Large for States



Premium article access courtesy of Edweek.org.
Amid a still-shaky economy, a troubling reality is starting to set in for states and school districts: The budget situation may get a lot worse when the federal economic-stimulus spigot runs dry.

The hope of the Obama administration and Democrats in Congress has been that the $787 billion in the American Recovery and Reinvestment Act—including some $100 billion for education—would soften the pain of the recession and help drive a recovery.

But as helpful as many state and local officials have found the once-only stimulus aid in coping with current and anticipated revenue shortfalls, it creates some awfully big holes to fill when the money begins to run out late next year in what’s widely known as the “funding cliff.”

Experts also caution that the recovery of state and local coffers is likely to significantly lag behind any progress in the national economy generally. For one thing, state budgets are largely supported by individual income and sales taxes, which will likely be slower to catch up.

“States are bracing themselves for prolonged fiscal difficulties,” said Todd Haggerty, a research analyst at the Denver-based National Conference of State Legislatures. “When you couple the absence of federal ARRA funds with still-declining revenues, it puts states in a difficult situation.”

An October report issued by the White HouseRequires Adobe Acrobat Reader in cooperation with the U.S. Department of Education highlighted the extent to which ARRA money in the $48.6 billion State Fiscal Stabilization Fund has already “restored” significant shares of K-12 education funding in states.

But a close look by Education Week at data submitted to the department by the states about how they planned to spend the money shows that 36 states will have to fill a collective gap of at least $16.5 billion to return to fiscal 2008 state spending levels for K-12 education.

And that figure does not reflect the more recent revenue shortfalls many states have since encountered.

The Education Department has urged states and districts to be careful to “minimize the funding cliff” when the stimulus aid ends by using the money for purposes “that do not result in unsustainable continuing commitments.”

But some analysts say that idea runs counter to the stimulus law’s emphasis on using the money to save and create jobs. Indeed, the White House announced Oct. 19 that states had already reported saving or creating at least 250,000 jobs in education with the federal aid.

“Saving and creating jobs implies expenditures on salaries, and salaries are inherently ongoing expenses,” said Jennifer S. Cohen, a policy analyst at the New America Foundation, a Washington think tank. “They create funding cliffs, because once the money runs out, you’ll have to continue funding them.”

Spending Pace Varies

The pace at which states are allocating money under the state-stabilization fund varies widely, Ms. Cohen noted.

“States that are in worse fiscal trouble are front-loading the spending,” she said, citing Arizona, California, and Illinois among those that planned to use all of the money to shore up their budgets for the current fiscal year and for the prior year.

In Alaska, meanwhile, none of that aid is expected to go out until fiscal 2011.

Illinois used about $1 billion in state-stabilization aid to bolster its budget for the fiscal year that ended June 30, and plans to use the remainder, approximately $1 billion, for the current budget year, fiscal 2010, according to Matthew E. Vanover, a spokesman for the Illinois state board of education.

“Certainly, there is some major concern at this point in time because next fiscal year, beginning July 1, in order to just remain the same, we have to come up with an additional $1 billion for education,” he said. That’s out of a total of more than $7 billion in state aid for schools, he said.

Benjamin S. Schwarm, an associate executive director of the Illinois Association of School Boards, said: “The question is, what happens after this, when you don’t have that [money] coming in. ... Everybody around here keeps referring to it as the ‘cliff,’ and I don’t think it’s good.”

By contrast, in South Carolina, the legislature opted not to release any of the state-stabilization money for last fiscal year. The state is allocating about half its expected total of $359 million in such funds this fiscal year, and the second half the following year, said Betsy Carpentier, a deputy superintendent in the South Carolina Department of Education.

At the same time, she said, virtually all of the additional dollars districts are getting in other parts of the stimulus package—such as from the Title I program for disadvantaged students and under the Individuals with Disabilities Education Act—are going out this fiscal year. In all, South Carolina districts are receiving $335 million in preK-12 stimulus support beyond the state-stabilization aid, Ms. Carpentier said.

Deborah L. Elmore, a spokeswoman for the South Carolina School Boards Association, said that while the stimulus aid has been a huge help, it has taken the state only so far, given that South Carolina has suffered through several recent rounds of midyear budget cuts.

“It helped to keep the hole in the bottom from being a lot wider,” she said. “Unless the economy turns around, we’re left with falling through the bottom again.”

Maryland state schools Superintendent Nancy S. Grasmick said that, in her state, the stabilization money is being used both for this fiscal year and the following one.

“I think we’ve tried to structure something that would prevent us from really experiencing this cliff that we know will ultimately occur when the money runs out,” she said. Ms. Grasmick said she and Gov. Martin O’Malley, a Democrat, have told districts, “Please do not use this money to hire new positions, because when the money runs out, we don’t want to be in a position of having to terminate people.”

Instead, they have urged districts to think of the funds as onetime expenses, she said, such as to investments in technology or new instructional materials “that will yield some long-term benefit.”

‘A Lagging Indicator’

Meanwhile, a new report from the American Association of School Administrators, based in Arlington, Va., suggests that in many school districts around the country, federal stimulus aid has not been able to avert cuts to programs and staffing levels.

The AASA surveyed 875 school administrators from 49 states and the District of Columbia. More than one-third of the respondents said they were unable to save any core teaching jobs as a result of the stimulus money.

In addition, the percentage of districts increasing class sizes grew almost sixfold between the 2008-09 academic year and the current school year, to 34 percent from 6 percent, the survey data showed. The percentage of districts reporting cuts to their school bus transportation routes and availability doubled to 20 percent this school year, from 10 percent last academic year.

The AASA reportRequires Adobe Acrobat Reader suggests the worst may still lie ahead for many districts.

“Unfortunately, school districts’ economic welfare appears to be a lagging indicator, even further behind the still less-than-stable remainder of the economy,” the report says. “There is an unmistakable ‘one-two punch’ school districts are bracing themselves for as they budget for the 2010-11 school year. Not only is that when the [stimulus] funds are expected to end, it is also the likely low point for state and local budgets.”

A new report from the NCSL offers some grim budget news, too. It says the “steep revenue falloff in FY 2009 will not be the bottom for many states.” More than half the states expect a further decline in fiscal 2010, the report says.

On top of that, Mr. Haggerty of the state legislatures’ group said, at least 21 states have already reported midyear budget gaps.

“So you’re looking at a good number of states [with] some pretty large and significant budget gaps just a few months into the new fiscal year,” he said.

Concerns about the looming end to the stimulus program have raised questions about whether there might be a second round of federal legislation to extend the aid. The White House has been careful to avoid any suggestions that it’s planning to seek additional assistance.

But Jack O’Connell, the state superintendent in California, suggested that more aid should be on the table.

“While we have been told, count on this as one-time money, ... I don’t think it’s inappropriate [to have a second round],” he said, “absent economic recovery.”

SYNCHRONICITY at Cobo Hall Monday November 2, 2009 4:00PM & 7:30PM

This event is free and open to the public!


"The Providence Effect" documents one of the great success stories in American education. Providence St. Mel School on Chicago's West Side which has, for 29 straight years, placed 100 percent of its high-school graduates in colleges. Please join us and see this inspiring documentary about closing the achievement gap in an urban environment through a "WHATEVER IT TAKES" approach to helping at-risk kids learn at very high levels. 

Workforce preparedness and quality education for all is one of the most critical issues facing our region and country today. If we can duplicate programs being utilized by high-performing schools, we can increase the number of quality school options for all children in the region.
"The Providence Effect" at Cobo Hall with a community conversation immediately following the film with Providence Englewood's Principal, Angela Johnson-Williams, lead by Mike Tenbusch, VP Educational Preparedness, UWSEM.


4:00 pm, Monday, November 2, 2009 Oakland Room, Cobo Hall
(full-length showing of the movie at 7:30 pm in Room M2-29)


Click here for the Providence Effect movie website.  


The purpose of this event is to engage and deepen community understanding of what constitutes quality education and what the community can do to facilitate Detroit education improvement.    


This event is Free and Open to the Public.  Attendees can register at:  




Sponsored by:


United Way of Southeastern Michigan
Leadership Detroit Education Support Committee
Detroit Regional Chamber
21st Century Schools Project
DMC Sinai-Grace Hospital




Rachele J. Downs | Leadership Detroit XXX

Friday, October 23, 2009

Mid-Course SUMMARY of OUR Conversations and Intentions (The VALUE of the Self-Examined Life!)

Parker Palmer: Know Yourself, Change Your World

In the work you do each day, how do you distinguish truth from fraud, build community, and speak up for what’s right? 
 
by Sarah van Gelder

Why do bankers make unethical investments, and what makes teachers burn out after a year on the job? Acclaimed educator and author Parker J. Palmer says most of us lack an understanding of our inner lives. If we learned in school how to navigate the inner landscapes of our lives, we might gain the tools to make it through difficult times, and clarify and act on our deepest values. Palmer is the author of A Hidden Wholeness, Let Your Life Speak, and The Courage to Teach, and a founder of the Center for Courage and Renewal. YES! Executive Editor Sarah van Gelder spoke with him about why “reflection” should be the fourth “R” of education.



Parker-Palmer.jpg
Parker Palmer
Photo by Dan Kowalski
Sarah: Why does learning about the inner life make you a better teacher, or doctor, or carpenter, or citizen?

Parker: Every line of work is deepened by bringing all of our human capacities to bear on whatever we are doing, and that includes our inner sensibilities as well as our externally oriented knowledge and skill.

Doctors who are acquainted with their inner landscapes are better able to help their patients draw on the healing power of their own psyches and spirits. The relation between a doctor’s emotional self-awareness and a patient’s well-being is so well-grounded in clinical evidence that many medical schools are now making doctor-patient relationships a regular part of a physician’s preparation.

Sarah: What exactly do you mean by the inner life?

Parker: The inner landscape has at least three dimensions: a cognitive and intellectual dimension; an emotional, psychological dimension; and a spiritual dimension. My definition of spiritual is that it involves the eternal human yearning to be connected with something larger than my own ego.

Engaging the inner life also makes for a more ethical professional practice. As we look around the professions today—not least in the world of business and accounting—we see why we need people who have an examined inner life to strengthen the ethics of those professions.

So, for example, if you’re a great historian, you may be seeking to be connected with the massive story of human development over time, which rescues you from the smallness of your own story. An astronomer or a physicist may likewise find meaning and purpose in the larger story of their discipline’s contribution to human knowledge. If you’re a seeker on a more traditional religious path, you may find that larger connection beyond your own ego in Allah or Yahweh or God or in the void, in the Godhead, the Buddha, and so on.

My definition of spirituality doesn’t prescribe any particular path. Instead, it opens up an inquiry. We need such an inquiry in education because sometimes the answer people come up with in response to their spiritual yearning is the Third Reich, Aryan supremacy, or some other form of racism, sexism, or homophobia. We have all kinds of ways of saying, “My group is superior to your group,” and that’s the pathological way we get connected to something larger than our own egos.

So putting these questions on the table educationally is not only acceptable, it’s critical. When we leave them unexamined, we get a lot of darkness in the world as people fail to examine their underlying spiritual dynamics in relation to their work and other responsibilities.

You mentioned carpenters. My grandfather was a master carpenter. He had a sixth-grade education, but he had Einstein in his fingertips. His inner guidance was so strong that he could build a circular staircase in the middle of a house without using a miter box to cut the complex angles required. He’d cut them freehand and perfectly join that wood in a spiral.

My grandfather’s feeling for wood was parallel to the way geneticist Barbara McClintock worked with the biotic materials that led her to breakthrough discoveries in genetic transposition more than 50 years ago, long before we had the scientific instrumentation we have today. Of course, she had all the logical and observational powers you need to win a Nobel Prize in medicine. But she also had a relationship with the maize she studied that she called “a feeling for the organism.”

When we bring our inner lives into our work, whatever we’re working with ceases to be an object to be manipulated and becomes instead a partner to co-create with. That’s what good teachers do with students, good doctors do with patients, good writers do with words, good potters do with clay.

Sarah: What role does an inner practice have in educational settings?

Parker: For starters, if we helped would-be teachers understand their inner lives, we’d have less teacher burnout. Fifty percent of those who enter public school teaching will be gone at the end of five years. Schools are too often places that don’t sustain human growth and development. And if you’re not supporting that growth in teachers, then you’re not doing that for students, because adults who don’t develop their own inner lives can’t pass those capacities on to the young.

If you want evidence of the importance of the inner life in institutional reform, look at the study of school reform in Chicago in the 1990s, done by Anthony Bryk and Barbara Schneider. [1]

The study asked why some schools do better than others at teaching reading, writing, and math. They found that none of the “usual suspects” made much of a difference in improving kids’ learning: not money, models of governance, state-of-the-art curriculum, in-service training, or technology.

But one variable made a huge difference, a variable the researchers called “relational trust.” If your school had high levels of relational trust—among teachers and between teachers and administrators, and teachers and parents—and/or a leadership team that cared about trust, then over 10 years, your chance of raising student performance in basic skills was five out of seven. If not, your chances dropped to two out of seven.

So, what goes into relational trust? I’d argue that it relies on the capacity to do inner work, to go beyond the ego into something larger—in this case, into the shared desire to help children grow up in a way that will give them a chance at good lives.

Doing inner work means grappling with questions such as, “How do I get my own ego out of the way enough to regard you as a collaborator rather than as a competitor? If you step on my toes, how can I forgive you and move on? And if I step on your toes, how do I forgive myself and ask for your forgiveness so we can move on together?”

Engaging the inner life also makes for a more ethical professional practice. As we look around the professions today—not least in the world of business and accounting—we see why we need people who have an examined inner life to strengthen the ethics of those professions.

Socrates said, “The unexamined life is not worth living.” I’d add, if you choose to live an unexamined life, please do not take a job that involves other people! You’re likely to cause real damage if you do.

Sarah: When people get clear on their values, don’t they tend to change the institutions they work with?

Parker: Yes, the inner life is subversive! When you develop an awareness of your inner life, you became aware of the disparity between your integrity and the way the institutions around you operate. And you may become aware that you are part of the problem—that you live a divided life, that the actions your institutions demand of you conflict with your inner values.

Institutions are projections of our own inner lives. Yes, they appear to have superhuman powers. But we can call them back to some semblance of humanity by reinventing them, because we invented them in the first place.

For example, a doctor at one of our Center for Courage and Renewal retreats said that the HMO where he works has him on the edge of violating his Hippocratic Oath two or three times a week. And under No Child Left Behind, many teachers are struggling with the demands of a testing system that threatens their commitment to serve the best interests of kids.

At that point, you have to reach deep and ask yourself, “Am I going to continue to live a divided life? Am I going to tuck this under the rug and pretend that I don’t know what’s going on? Or am I going to become a moral change agent within my institution and rally like-minded people around me, coalescing our power to bring about institutional change?”

Part of our problem is that our major institutions are often so complex that outsiders who want to hold them accountable have little access. Wall Street is a horrific example. We all know what happened when so very few insiders were willing to say what they knew—that our markets and financial system had become a house of cards. We need people within these institutions to act as moral agents, watching out for the best interests of those who are supposed to be served and of society at large.

In a recent article I wrote for Change Magazine [2], I argued that professional education must include the competencies individuals need to work toward change in our very dysfunctional institutions. In other words, all professionals ought to have some of the skills of a community organizer.

Sarah: In the new edition of your book, The Courage to Teach, you talk about debunking the myth that institutions possess autonomous power over our lives.

Parker: I tell a true story in The Courage to Teach about a medical resident who was given an impossible load of critical care patients to look after all by herself. She was unable to cope, and one of her patients died.

What do medical schools teach would-be doctors about their responsibilities and powers when they are asked to participate in wrongdoing? Do they teach them to blow the whistle on a system that puts them in an impossible situation? Or do they condition them to avoid getting crosswise with their superiors, and to just hope they make it through the day without anyone dying?

Institutions are projections of our own inner lives. Yes, they get large and complicated and appear to have superhuman powers. But we can call them back to some semblance of humanity by reinventing them, because we invented them in the first place. I think students don’t understand this. They believe that institutions have slots that you must fit into. But those slots are malleable, and those institutions can be rearranged. We have to help empower students to learn how to do that.

Sarah: Successful students are often the ones who did fit themselves into the slots within the educational institution that they graduated from.

Parker: That’s an important point. For generations, our schools have replicated the problems of our institutions. If you drive around small towns that haven’t rebuilt their high schools for the last 80 or 90 years, you see schools that were built to look like the factories that their graduates were going to work in. A lot of them look like those deadening assembly plant buildings that General Motors used to have, because the whole idea was to condition people to live and work under those circumstances.

But clearly that’s not education. Education was meant to be liberating for free men and women, which is where the name “liberal education” comes from.

Sarah: In Change Magazine, you proposed that we teach students how to “mine their emotions for knowledge.” What does that mean?

Parker: Fear can be like the canary in the mine. It’s trying to tell us that danger is coming and we need to do something about it. But people need help discerning their emotions, just as they need help discerning facts. We need to help students understand that some emotions come out of neurotic fears that can and must be overcome. But other emotions are pointing them toward external problems that they need to confront.

More from Parker J. Palmer

Now I Become Myself

How do you find the right work, the work that you alone are called to do? The first step is to ask a different question...

Integral Life, Integral Teacher
How can an inner decision to live and work with integrity spark a social movement?

We do our best discernment in community, where many eyes, ears, sets of experiences, and voices can sort out the wheat from the chaff. That’s how every mode of human knowing proceeds, including science. All of us together are smarter than any one of us alone—especially if we listen to the dissenters and to the people raising critical questions.

When students work together, they can learn how to move toward provisional conclusions about what’s true and false, what’s right and wrong, which leads are worth following, and which of them can be laid down and forgotten. If our schools would do that, we would have more community in our lives, better results in the world of work, and deeper discernment by citizens in our political life.

Likewise, institutional change doesn’t come about simply through the actions of courageous whistle-blowers. It happens through the formation of communities of people who have a shared moral concern and who can provide encouragement, resources, and protection for each other. That way, the whistle-blower isn’t so easily picked off and hung out to dry.

I don’t know of any great movement that hasn’t depended on base communities to sustain individuals in the demanding work of social change.

Sarah: You ended your new edition of The Courage to Teach by saying, “Let us resist the temptation to respond with a fearful ‘no’ or an elusive ‘maybe,’ and allow our lives to speak a clear and heartfelt ‘yes.’” What does it mean to do that in the times we’re in today?

Parker: For the past eight years, we had political leaders who lied to us. They pumped up our fear of terrorism to persuade us to agree to subverting our Constitution and disempowering citizens—strategies that we’ve seen before in fascist and totalitarian societies.

Now, of course, we have the fear that the American economy has been, and continues to be, a house of cards. A lot of people are suffering, and there is more suffering to come.

Rebuilding is going to require lots of Americans to re-envision what abundance means. I experienced more abundance in the Quaker community called Pendle Hill—where I spent 11 years living on $2,400 a year (beginning in 1975) plus room and board—than I have at many other times of my life. This abundance comes from knowing that we’re there for one another. If the bottom falls out of my life, I have a support net, and if the bottom falls out of your life, I can be part of the support net for you. That’s abundance.

There are not many Americans who live in that kind of milieu, so we’re surrounded by fear. And yet, I don’t think there’s any more important time than this to say a heartfelt “yes” to the human possibility. That sense of possibility disappears when we say “no” or “If I can’t have my illusions about the economy and about America’s inherent greatness, then I’ll give up. I’ll hunker down, get what I can for me and my kind, and let the devil take the hindmost.” That can very quickly become a self-fulfilling prophecy.

So, we need to make “yes” a self-­fulfilling prophecy. But it has to be a “yes” tempered by a clear-eyed knowledge of both what is going on and what we know to be possible.

The challenge is to stand and act in what I call “the tragic gap.” This is the gap between the hard facts that surround us and what we know to be possible—not our dreams or fantasies, but what we know to be possible because we’ve seen the evidence with our own eyes, just as I saw evidence of communal abundance during my years at Pendle Hill.

It’s an ongoing journey to stand in the tragic gap and keep acting in hopeful ways, holding the tension between what is and what could be. It’s so easy to flip out either into cynicism—­because the latest wave of bad news has just washed over you—or into a kind of idealism, because something has gone well and you allow yourself to imagine that it will be this way forever. A good example might be the people who thought Barack Obama would get everything right, who are now tempted to drop out of the political process as Obama proves to have feet of clay, the kind that come with being human.

When I think of the great leaders whom I admire—whether it’s Nelson Mandela, or Dorothy Day, who started the Catholic worker movement, or Martin Luther King, Jr., or Aung San Suu Kyi in Myanmar—I think of people who stood in the tragic gap for a long, long time, people who kept moving forward saying “yes” in full awareness of the hard realities around them while never abandoning their vision of possibility.

If more and more of us can hold that tension and keep moving forward by saying “yes, yes, yes” to each incremental step toward the possible, no matter how small, then I think all kinds of good things can happen.

AFTER the STIMULUS (Beware Bubbles and Sharp Objects)

TIME MAGAZINE

Can the World Agree on a Stimulus Exit Plan?
By Michael Schuman / Hong Kong Thursday, Oct. 22, 2009

During the dark days of the global credit crunch a year ago, policymakers around the world had a generally easy time coordinating decisions. As asset prices tanked, lending dried up and growth shriveled, governments and central banks were forced to take similar steps — pump up fiscal spending and slash interest rates to support growth and unfreeze financial markets. Now, as an economic recovery emerges, governments are hoping for another coordinated effort to exit from their massive stimulus plans, including near-zero interest rates. That intention was clearly laid out during the September G-20 summit in Pittsburgh, Pa. The leaders of the world's 20 most influential economies pledged to "withdraw our extraordinary policy support in a cooperative and coordinated way."

Yet what sounds so simple on paper will be far more complicated in the real world of economic policymaking. The problem is that the upturn isn't as synchronized as the downturn. Countries are emerging from recession at different speeds, with each facing its own special mix of inflationary pressures and unemployment — both of which affect decisions for monetary and fiscal policy. "We won't get the kind of coordinated response that is the rhetoric of the G-20," says Paul De Grauwe, professor of economics at the University of Leuven in Belgium. "Each country is going to look at its own interests."
(See TIME's special "Out of Work in America.")

That possibility is already becoming a reality, as signs appear that central-bank policies are beginning to diverge. On Oct. 6, Australia became the first G-20 nation to raise interest rates, hiking its key rate by a quarter of a percentage point, to 3.25%. With "inflation close to target and the risk of serious economic contraction in Australia now having passed," Reserve Bank of Australia Governor Glenn Stevens said in a statement, the central bank decided that it was now "prudent to begin gradually lessening the stimulus provided by monetary policy." Meanwhile, in other industrialized nations still suffering from high unemployment and yawning excess capacity, policymakers are in no hurry to tighten. In the U.S., the Federal Reserve has indicated that it won't act aggressively anytime soon on its key interest rate, which remains in a zero to 0.25% range. "It seems likely that the recovery will be less robust than desired," William Dudley, president of the Federal Reserve Bank of New York, said in an early October speech. "This means that the economy has significant excess slack and implies that we face meaningful downside risks to inflation over the next year or two." The Fed's key interest-rate target, he added, "is likely to remain exceptionally low for 'an extended period.' "

A haphazard exit from stimulus measures, with countries going their separate ways, could pose its own set of problems. In this era of globalization what one government does in one corner of the world can have a knock-off effect on economies in another corner. For example, countries that raise interest rates ahead of others could end up attracting money from foreign investors seeking a higher return, potentially draining funds away from economies that are still badly in need of investment. Or if too many governments turn off the stimulus tap too quickly, global demand could fall sharply. "An unruly rush to the exits is no better in a global financial crisis than in a crowded theater," wrote Adam Posen, a member of the Bank of England's Monetary Policy Committee, in the Financial Times in September.
(See pictures of retailers that have gone out of business.)



Though governments are aware of the dangers of an uncoordinated exit, they prefer to keep their options open, since they must also address domestic political concerns. That means clearly defined time frames or targets for any exit could prove hard to achieve. The financial crisis "is affecting differently every country. Every country will have to define its exit strategy in its own time," Portugal's Finance Minister, Fernando Teixeira dos Santos, reportedly said at a conference of European Union ministers earlier this month in Sweden. "I don't think that we can have a precise, or a common, schedule. In my perspective, we need a flexible approach," he said.

Nowhere is the policy challenge bigger than in Asia. With the region's recovery gaining pace more quickly than elsewhere, it could be the first region to face inflation pressures. In China, growth is rapidly returning to pre-crisis levels. On Oct. 22, China reported that its gross domestic product grew by a healthy 8.9% in the third quarter, from the same period a year earlier. Inflation in China "will rise faster than in most other major economies and will therefore justify earlier and stronger-than-expected rate hikes," wrote Jun Ma, an economist at Deutsche Bank in Hong Kong, in a September note. Concerns are also mounting that continued loose monetary policy in Asia could fuel dangerous and unstable asset price bubbles, especially in property. There has been some speculation in financial markets that South Korea's central bank could raise interest rates in the coming months to cool a roaring housing market. Frederic Neumann, an economist at HSBC in Hong Kong, says Asian central bankers might need to hike rates by four percentage points over the next year — much more than is expected from the Fed — in order to quash inflation and asset bubbles. "This is the real test for Asia: the region's central banks have to hike earlier and far more aggressively than the Federal Reserve," Neumann says.

However, Neumann and other economists question if Asia will take such action, even if it does prove necessary. By raising rates ahead of the rest of the world, Asia could attract capital flows and put pressure on its currencies to appreciate. Stronger currencies would make Asian exports more expensive — a consequence policymakers in the region's trade-dependent economies might wish to avoid. "Unless you are really forced to do something independent of the Federal Reserve, you are probably not going to go that route," says Duncan Wooldridge, an economist at UBS in Hong Kong.

In the end, some economists believe that a coordinated global exit strategy, especially in regard to monetary policy, will ultimately happen, but by default. The Federal Reserve holds so much influence in the world economy that other central banks might be wary of deviating too far from its policy. "The nature of the coordination is not that bankers sit around a table and do things together," says the University of Leuven's De Grauwe. "The nature is that some of the big guys make a move and force everyone to move." In the global recovery, as in the downturn, everyone may sink or swim together.

Wednesday, October 21, 2009

THINK "The New Untouchables" STIMULUS!

 NEW YORK TIMES

October 21, 2009
Op-Ed Columnist

The New Untouchables


Last summer I attended a talk by Michelle Rhee, the dynamic chancellor of public schools in Washington. Just before the session began, a man came up, introduced himself as Todd Martin and whispered to me that what Rhee was about to speak about — our struggling public schools — was actually a critical, but unspoken, reason for the Great Recession.

There’s something to that. While the subprime mortgage mess involved a huge ethical breakdown on Wall Street, it coincided with an education breakdown on Main Street — precisely when technology and open borders were enabling so many more people to compete with Americans for middle-class jobs.

In our subprime era, we thought we could have the American dream — a house and yard — with nothing down. This version of the American dream was delivered not by improving education, productivity and savings, but by Wall Street alchemy and borrowed money from Asia.

A year ago, it all exploded. Now that we are picking up the pieces, we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.

“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”

This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.

A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.

That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive.

Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.

As the Harvard University labor expert Lawrence Katz explains it: “If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”

Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”

Just being an average accountant, lawyer, contractor or assembly-line worker is not the ticket it used to be.

As Daniel Pink, the author of “A Whole New Mind,” puts it: In a world in which more and more average work can be done by a computer, robot or talented foreigner faster, cheaper “and just as well,” vanilla doesn’t cut it anymore. It’s all about what chocolate sauce, whipped cream and cherry you can put on top. So our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.

Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.

THINK Mayoral "BIG PICTURE" Education STIMULUS!

An Education Stimulus for the Nation's Cities

Given the beating that city and state budgets have taken in recent months, America’s mayors have come under tremendous pressure to scale back all but the most critical investments in public safety, infrastructure, transportation, and other core services.

But for the nation’s big cities, there can be no true, long-term economic recovery without adequately educating far greater numbers of young people. No matter how steep the fiscal downturn, mayors must redouble local efforts to improve graduation rates and—no less important—to create meaningful educational options for the staggering numbers of adolescents who have been pushed aside or have given up on school altogether.

We therefore argue that one aspect of school reform—expanding high school options and alternatives—deserves to be ranked as a top priority for the nation’s mayors and school superintendents. A new generation of innovative high school models offers rigorous academic coursework, supports for students who face personal challenges outside of school, and opportunities for returning students to both catch up on what they have missed and prepare themselves for college and careers. For students who have not been well served by traditional “one size fits all” high schools, these programs offer a second chance to realize their full potential.
—Jonathan Bouw

In each of our three midsize cities, the schools lose roughly 4,000 students every year. Over their lifetimes, these students each earn about $260,000 less than high school graduates, pay about $60,000 less in taxes, and put an enormous strain on our health-care, criminal-justice, and social-welfare systems. They represent yet another generation that could have contributed to the civic and cultural life of our communities.

We are convinced that even a modest investment in well-designed alternative high schools can have a major impact on the dropout problem, and, by extension, the economic and social burdens dropouts place on our communities. Indeed, we see a movement to provide much broader high school options for all students as an essential piece of any long-term strategy for the economic, civic, and cultural recovery of our cities.

Our three cities are place-based partners in the Alternative High School Initiative that has been managed by Big Picture Learning and the National League of Cities under a grant from the Bill & Melinda Gates Foundation. Through this initiative, our cities are beginning to make strong, systemic efforts to reach out to young people who have left school or have begun to drift away. We are in the midst of opening an array of high-quality high school options, so that all our young people can achieve academic proficiency, earn a high school diploma, and be prepared to pursue postsecondary education. Launching and expanding these alternatives, we have found, requires that city and school leaders be receptive to schools that are innovative, often started from scratch, and sometimes managed by entities other than local districts.

Newark, N.J., for example, has introduced what amounts to an education stimulus package to reclaim its dropouts. Through a partnership that includes the Newark public school system, Essex County College, and nonprofit organizations such as Gateway to College, Diploma Plus, Communities in Schools, and Big Picture Learning, the city will have launched eight new alternative schools and programs focused on dropout prevention and recovery during the 2008-09 and 2009-10 school years. These efforts eventually will serve between 1,000 and 2,000 young people—a sizable portion of those who have left the system.

Indianapolis and Nashville, Tenn., are continuing their successful partnerships with Big Picture Learning. Its alternative school model created in Providence, R.I.—the Metropolitan Regional Career and Technical Center, known as the Met—combines demanding academic work and experiential learning, boasts a national graduation rate of 92 percent, and regularly meets adequate-yearly-progress goals in all of its schools nationwide.

In addition, Indianapolis has already opened four new Diploma Plus schools, a model that targets students who are overage and undercredited, and a YouthBuild program that blends construction training with a return to school for dropouts. Next year, Nashville also plans to open a Diploma Plus school, and will launch a Gateway to College program, which provides high school dropouts between the ages of 16 and 20 with a means to complete their diplomas while also earning significant college credits. The city also plans to start a new YouthBuild program.


What have we learned from these efforts? We have come to understand that for alternative programs to flourish, mayors must work closely with school leaders and play an ongoing, hands-on role, going well beyond their customary involvement in education.

Specifically, to the extent that it is possible, mayors can identify and offer available space within their cities to house alternative high schools. Further, they can lead the reform of municipal policies, such as zoning restrictions or rules governing access to public transportation, that might prevent local alternative schools from finding homes or attracting students from other parts of their cities.

Mayors also can champion increased front-end investment for principals and teachers to be trained in new approaches to teaching and learning that work with students who have had bad experiences in traditional high school environments. It is rare that a school district has funding to pay the professional-development costs for launching many new schools at once. In our cities, we have combined public and private money with the help of a broad range of community funders and partners, including philanthropic foundations, higher education institutions, and nonprofit organizations.

Equally significant, launching these efforts requires true leadership from the city agencies that support young people. Students leave school for many reasons—health challenges, problems in the justice or foster-care system, family conflicts, and so on. We therefore need to be sure that city departments are providing or are forging strong collaborations with relevant county and state agencies to provide all the necessary support services for young people and their families. In our cities, we have convened meetings of the heads of various city agencies to brainstorm new ways to collaborate on education and youth development and to create interagency agreements and realign services when necessary.

Many of our alternative high schools are operated and managed by groups outside the local school district. Indianapolis was the first city in the nation to be granted chartering authority by the state legislature. As a result, Mayor Gregory Ballard’s office is able to tap per-pupil funding for new alternative high schools opening as charters.


Other cities and school districts can learn from our efforts. It is possible to hold students to high standards while also allowing them to learn at their own pace and in ways that respect their singular talents, interests, and learning styles. Reclaiming students who have left or are drifting away requires a broad array of interventions and innovations, as well as flexibility in regulation, which requires municipal leadership at the highest level.

Regardless of the size of the nation’s cities or the economic troubles they face, urban dropout rates are too sizable to overlook. As civic leaders across America explore ways to stimulate their economies, we urge them to spark the growth of alternative high schools and dropout-recovery programs in their communities. The development and expansion of these student-focused, project-based schools can change the odds for the most underserved students. And they have the power to transform the dynamic of leaving school early into a culture of graduating from high school ready for college and work.

But it will take leadership from mayors, who, as our experience illustrates, can be catalysts for change, ensuring adequate resources and buildings, appropriately trained staffs, flexibility, and expanded options—crucial elements of the education stimulus America’s cities so desperately need.

THINK "DIGITAL STIMULUS!"

In some classrooms, books are a thing of the past

Digital texts gaining favor, but critics question quality

By Ashley Surdin
Monday, October 19, 2009


AGOURA HILLS, CALIF. -- The dread of high school algebra is lost here amid the blue glow of computer screens and the clickety-clack of keyboards.

A fanfare plays from a speaker as a student passes a chapter test. Nearby, a classmate watches a video lecture on ratios. Another works out an equation in her notebook before clicking on a multiple-choice answer on her screen.

Their teacher at Agoura High School, Russell Stephans, sits at the back of the room, watching as scores pop up in real time on his computer grade sheet. One student has passed a level, the data shows; another is retaking a quiz.

"Whoever thought this up makes life so much easier," Stephans says with a chuckle.

This textbook-free classroom is by no means the norm, but it may be someday. Slowly, but in increasing numbers, grade schools across the country are supplementing or substituting the heavy, expensive and indelible hardbound book with its lighter, cheaper and changeable cousin: the digital textbook.

Also known as a flexbook because of its adaptability, a digital textbook can be downloaded, projected and printed, and can range from simple text to a Web-based curriculum embedded with multimedia and links to Internet content. Some versions must be purchased; others are "open source" -- free and available online to anyone.

Some praise the technology as a way to save schools money, replace outdated books and better engage tech-savvy students. Others say most schools don't have the resources to join the digital drift, or they question the quality of open-source content.

Hardbound books still dominate the $7 billion U.S. textbook market, with digital textbooks making up less than 5 percent, according to analyst Kathy Mickey of Simba Information, a market research group.

But that is changing, as K-12 schools follow the lead of U.S. universities and schools in other countries, including South Korea and Turkey. In Florida's Broward County, students and teachers log online to access digital versions of their Spanish, math and reading books. In Arizona, classes at one Vail School District high school are conducted entirely with laptops instead of textbooks. And in Virginia this year, state officials and educators unveiled a free physics flexbook to complement textbooks.

California's experiment


California made the largest embrace of digital textbooks this summer when it approved 10 free high school math and science titles developed by college professors and the CK-12 Foundation, a Palo Alto-based nonprofit aimed at lowering the cost of educational materials. The titles were approved as meeting at least 90 percent of California's academic standards, with the state leaving the choice to use them up to individual schools.

Gov. Arnold Schwarzenegger (R) hopes they will. His digital textbook initiative is meant to cut costs in the severely cash-strapped state. (Given that the average textbook costs $100, he argued, the state could save $400 million if its 2 million high school students used digital math and science texts.) The initiative also aims to replace aging hardbound books that don't teach students about the Iraq war, the country's first black president or the Human Genome Project.

"The textbooks are outdated, as far as I'm concerned, and there's no reason why our schools should have our students lug around these antiquated and heavy and expensive books," Schwarzenegger said this summer. "Digital textbooks are good not only for the students' achievement, but they're also good for the schools' bottom line."

California public and private schools spent more than $633 million on textbooks in 2007, making the state the biggest spender nationwide, according to the latest data from the Association of American Publishers. Schools in Texas spent $375 million; in New York, $264 million. The District spent $13.9 million.

Controlling costs?


Concerns over costs prompted Congress to pass legislation last year that requires publishers to disclose the price of textbooks when they sell them to teachers. It also ends a practice in which publishers sell books and supplemental materials together, driving up costs. Several states have passed similar legislation.

But some dispute the idea that digital textbooks -- even open-source versions -- will be cheaper for states, at least right away, or improve education quality.

"Keep in mind that with open-source materials, you have to ask, 'Where are they coming from?' " said Jay Diskey, executive director of the Association of American Publishers' school division. "Is it a trusted source? Is it aligned to state standards? Is it based on real research?"

Diskey said traditional textbooks offer a comprehensive curriculum, while some open-source texts provide only bits and pieces. "There can be quite a difference of content and accuracy," he said. "In many cases, you get what you pay for."

Textbook publishers face losing business as free Internet content expands. But Diskey blames the recession, not free digital books, for any fiscal hardships facing the industry. "We don't think budgets are being cut because of open-source materials," he said.

A lack of digital resources


Schools using digital texts say it's too soon to tell how much money they may be saving. As critics point out, long-term fiscal benefits require upfront resources that many schools lack: money, teacher training, bandwidth to support Internet multimedia and, most critically, computers.

The majority of households have personal computers and Internet access, according to a 2005 report from the Census Bureau, but access declines with income. And U.S. schools on average have roughly one computer for every four students, according to 2005 data from the National Center for Education Statistics.

"It's going to be a bit of a challenge for schools throughout the country to implement this new technology," said David Sanchez, president of the California Teachers Association. "How do you guarantee all children have access to that kind of textbook?"

Glen Thomas, California's education secretary, questions whether digital textbooks require a computer for every child. "This initiative is not about hardware," he said. "I visited a classroom where there were a couple kids using laptops, several had textbooks, some had a couple chapters printed out, and the lesson was displayed on a screen in front of the class."

For now, it appears that digital textbooks are largely a school-by-school, teacher-by-teacher choice. But converts such as Stephans of Agoura High School are quick to encourage more.

"If there was a list of math teachers who would have signed up for this, I would have been at the bottom," said Stephans, who hesitantly agreed to pilot the textbook-free class this year. To educators considering the digital possibilities, he now says: "What are you waiting for?"

WHAT a DIFFERENCE a DAY MAKES!

BUDGET CLASHES

As they bicker, strife grows


GRANHOLM SAYS SHE HAD TO VETO; BISHOP CALLS IT ‘EXTORTION’


By CHRIS CHRISTOFF


FREE PRESS LANSING BUREAU CHIEF

LANSING — The Capitol crackled with defi­ance, dismay and doctors in white smocks Tues­day, as new skirmishes in the state budget war erupted on several fronts.

Outside, hundreds of doctors with signs and bullhorns rallied for and against legislation to impose a 3% tax on all physicians.

Inside, Gov. Jennifer Granholm defended her Monday veto of $51.5 million for 39 of the state’s highest-spending school districts, including 26 in suburban Detroit. She said she had no choice because the school budget the Legislature sent her was unbalanced.

“There will be additional cuts, perhaps soon,” she warned, as state economists met to assess the state’s worsening finances.

Senate Majority Leader Mike Bishop, R­Rochester, denied Granholm’s charge that $60 million in revenue was missing to pay for a near­ly $11-billion school budget. He called Gran­holm’s veto “extortion” but pledged not to raise taxes.

Clearly, the gulf between the two most im­portant people in the process was deeper by day’s end.

School officials caught in the middle com­plained that students were being held hostage and blamed both the governor and Legislature. Meanwhile, Bishop sent Granholm six more budget bills with a warning not to veto any items in the bills. But Granholm hinted that she would and said more money is needed to fund college scholarships, help cities and support Medicaid.








Veto threats loom for budgets

Granholm presses for new taxes, fees

By CHRIS CHRISTOFF and KATHLEEN GRAY

FREE PRESS STAFF WRITERS

LANSING — The ink from Gov. Jennifer Granholm’s veto of $51.5 million for 39 school districts was barely dry Tues­day when she received six more budget bills, and hinted that more vetoes are coming.

State budget director Bob Emerson cautioned that all school districts may face more cuts of as much as $120 per pu­pil this year, as tax revenues continue to weaken.

Granholm’s veto sent shock waves through the Legisla­ture. She laid blame on Senate Majority Leader Mike Bishop, R-Rochester, and pressured lawmakers to approve more revenue to fund schools and other programs that were slashed in the new budget bills she received Tuesday — col­lege scholarships, revenue sharing to local governments and Medicaid payments to doctors, hospitals and nursing homes.

Bishop released the six bud­get bills Tuesday after holding them for more than two weeks after the Legislature approved them. He warned Granholm not to veto line items, saying Senate Republicans would not restore them.

Granholm, surrounded by 18 of the state’s top education lobbyists, said that without more money, many school dis­tricts face insolvency. She called for a public campaign to urge the Legislature to ap­prove new taxes and fees that she and House Democrats sup­port.

Among them: a freeze in the personal income tax exemp­tion (which is scheduled to get an inflationary increase); a re­duction in tax credits for busi­nesses; an increase in the tax on non-cigarette tobacco prod­ucts; a cut in tax credits for filmmakers, and new liquor li­cense fees for bars to remain open after 2 a.m. and on Sun­day mornings.

Granholm said the state needs to make systemic re­forms for the short and long term. On Tuesday, the short­term impact put many law­makers face-to-face with fiscal crisis in their local school dis­tricts.

“In a panic, hysterical about what these cuts mean. That was my phone call from my su­perintendents,” said Rep. Le­sia Liss, D-Warren, whose main school district, Center Line, stands to lose $570,000.

Rep. Marie Donigan, D-Roy­al Oak, said she was frustrated that legislators can’t compro­mise, as sales tax revenues de­cline and leave even less mon­ey for schools and other essen­tial services. The Royal Oak school district stands to lose $1.5 million under Granholm’s veto.

“This is scary stuff,” Doni­gan said.

Rep. Hugh Crawford, R-No­vi, represents three school dis­tricts — Northville, Novi and Walled Lake — that would lose more than $8.3 million in state funding because of Granholm’s veto.

“She’s playing games and didn’t have to do that,” he said. “I’ve never been exposed to do­ing business this way.”

Crawford said he has no plans to vote for new taxes but would be willing to look at a freeze on the Earned Income Tax Credit, which is used by low-income taxpayers.

“I have a granddaughter who is going to college, and I wasn’t happy about taking away her scholarship,” he said, referring to the $4,000 Prom­ise Scholarship eliminated by the Legislature. “But it’s going to be incumbent on schools and cities to restructure.”

Three districts in state Rep. Chuck Moss’ district — Bir­mingham, Bloomfield and West Bloomfield — all suffer deep cuts under the veto.

“It’s getting more … difficult to watch these desperate, cyn­ical measures to get more tax­es,” said Moss, R-Birmingham, instead suggesting eliminating the 1% pay increase scheduled for state employees and reduc­ing their benefits.

The easiest short-term so­lution wasn’t mentioned Tues­day: another dip into $184 mil­lion in remaining federal stim­ulus money lawmakers were hoping to save for next year.


Schools frustrated with funding veto

By LORI HIGGINS

FREE PRESS EDUCATION WRITER

Gov. Jennifer Granholm’s veto of $51.5 million in funding for select districts means some school employees will lose their jobs, some districts will deplete their savings and oth­ers will find themselves head­ing quicker into a deficit.

The veto — and the subse­quent finger-pointing that took place Tuesday in Lansing — al­so produced harsh comments for Granholm and the Legisla­ture.

“It’s frustrating and disap­pointing that we’re playing pol­itics with kids,” said Brian Whiston, Dearborn Public Schools superintendent, whose district is to lose $5 mil­lion. “I’ve got to educate these kids this year, right now.”

Dearborn and 38 other dis­tricts statewide — 26 of them in metro Detroit — are among the state’s highest funded. They have been allowed to re­ceive the special money to maintain their high funding levels since Proposal A was en­acted in 1994 with the intent to equalize funding for districts.

In Dearborn, the loss of $5 million is on top of the $165­per-pupil cut all districts in Michigan must deal with and another $1.5 million Dearborn is to lose in funding for at-risk students. Whiston said layoffs are a certainty, though he’ll be soliciting input from employ­ees on how to make up the loss. Whiston said as many as 150 jobs could be on the line.

The West Bloomfield School District already was to end the school year with a def­icit. The loss of $1.5 million will speed that along, said Joey Spano, district spokeswoman. She and others say Granholm and the Legislature are equally to blame for the situation.

“Every parent and every citizen in the state of Michigan should be outraged at this. It’s a dysfunctional system,” Spa­no said.

Superintendents in Livonia Public Schools, which is to lose nearly $5 million, and Royal Oak Neighborhood Schools, which is to lose $1.5 million, an­ticipate they’ll have to dig deep into their reserve funds to cov­er the loss. Livonia Superin­tendent Randy Liepa said he welcomes Granholm to come to his district, review his bud­get and tell him how he can make cuts.

“There has to be some ex­planation to the parents in my community,” Liepa said.


Editorial

Lansing’s failure of leadership reaches the schoolhouse door

As Michigan’s elected leaders continue their diatribes over the state budget, now 10 days away from the next deadline, the dire consequences have begun to hit home.

On Monday, Gov. Jennifer Gran­holm vetoed nearly $60 million of spending in the School Aid Fund bud­get. Senate Majority Leader Mike Bishop immediately denounced the cuts, which fall disproportionately on the state’s most affluent school dis­tricts, but vowed to let them take effect before he and his Republican Senate colleagues authorize a penny of the additional revenue Granholm insists is required to restore them.

What is coming into view now is the sort of state you get when leaders attempt to fix a long-term budget imbalance with short-term changes in only one side of the ledger — a. state that trashes schools, cripples hospi­tals and doctors who treat Medicaid patients, jeopardizes local police and fire services, and breaks promises made to its college students.

The funds Granholm vetoed yester­day are only the leading edge of more wide­spread cuts in K-12 aid. Because tax reve­nues continue to fall short of previous esti­mates, the governor warned that another $120 per pupil may need to be cut, starting perhaps as early as next month. That’s on top of the $165 per-pupil cut included in the budget bill Granholm signed.

Now you can argue, and many people will, about Granholm’s chief line-item veto tar­get: the extra payment that some of the higher-spending school districts have gotten for the last 10 years, an adjustment that was made when the state had ample dollars and which those schools had every right to as­sume had become a permanent part of their annual grants. But nothing is guaranteed in a budget this devastated, and Granholm had few other places to turn.

Those who insist Michigan cannot afford any new taxes may well get their wish. The House has appropriately thumbed its nose at an irresponsible, Senate-produced package to raise roughly $100 million this year.

Meanwhile, the Senate will not act on any House-produced tax increases. So these cuts Granholm ordered Monday look likely to stand.

That’s brutal news to Michiganders, who have long identified K-12 educa­tion as a top priority. With 24 school districts already on the financial edge, the state may not have enough emer­gency financial managers to go around. Outright closures may occur.

Without some additional taxes — or a slowdown in some programmed tax breaks — the news will get worse, and not just for schools. The Senate has sent Granholm the final six budget bills she needs to sign to prevent a state shutdown Nov. 1, along with a message from Bishop that any line­item vetoes she makes will not be vot­ed on again.

That’s fine. The more the governor saves now with line-item vetoes, the fewer cuts will have to be made later.

Granholm noted Tuesday that freez­ing the personal deduction on the state in­come tax could yield $55 million. Other stop­gap measures could produce significant dollars without increasing the general bur­den on hard-pressed taxpayers.

But Michiganders would be better off now if both sides turned their full attention to long-term changes in the way our state rais­es and spends money, such as containing employee benefit costs and adopting a tax regime that captures revenues from every segment of the state’s changing economy.

Even the best long-term reform package — and no one’s holding their breath on that — may not be able to repair the wounds occur­ring right now.

STATUS-QUO INSURED! (At least for another day or so)

Politics K12

Politics K-12

Your education road map to state and federal politics

Michele McNeil covered education and state government in Indiana for a decade before joining Education Week as a state policy reporter in June 2006. Alyson Klein, who reports on federal education policy, joined the staff in February 2006 after nearly two years at Congress Daily.

White House: Stimulus Saved 250,000 Education Jobs So Far

A new report out from the White House Domestic Policy Council estimates that the stimulus package has saved or created 250,000 education jobs so far—most of them probably teachers. (UPDATE: And a good chunk of them are from California. Gov. Arnold Schwarzenegger reported today that 62,204 of these education jobs, or nearly 25 percent of the estimated total, were saved or created in his state.)
The White House has the distinct advantage of being able to look at the first quarterly stimulus reports that states and other recipients of stimulus funds filed with the federal government before anyone else. The rest of us get to look at the reports when they're made public on Recovery.gov Oct. 30.
Even so, much of the 23-page report rehashes data from the already public applications states submitted to gain access to their stabilization funds—data that shows most states said they would use the money to backfill cuts they made, or were going to make, to K-12 education. The White House also drew on anecdotal reports from the media to highlight jobs that were saved in specific school districts. In a press release, the White House says that the stimulus package has enabled states to restore nearly all of their projected education budget shortfalls for fiscal 2009 and 2010. Of course, things are still projected to get much worse for states, based on latest tax collections data.
In the press release, Education Secretary Arne Duncan says: "Early feedback from states also tells us that many districts are using stimulus dollars in ways that will move us beyond the status quo."
Given that most of the money has so far been used to get state K-12 funding levels up to the status quo, it will be most interesting to see what states and school districts report spending their money on. (UPDATE 2: Read Andy Smarick's take on this issue, too.)

STIMULUS FUNDING in JEOPARDY! (NO-Not the GAME but because of it)

State examines whether waiver is needed to keep K-12 stimulus funding

Granholm administration officials are looking at whether Michigan may need to seek a waiver enabling it to keep federal stimulus funds for K-12 education.

The possibility is being considered as state officials examinewhether state funding levels for K-12 education are likely to drop below the “maintenance of effort” compliance levels required by the federal stimulus package, or the American Recovery and Reinvestment Act.

State Budget Director Robert Emerson said at a press conference on Tuesday that any further reductions, beyond those in the school aid budget signed by Gov. Jennifer Granholm on Monday, could jeopardize the federal stimulus funding.

Michigan used about $600 million in federal stimulus funds as part of the fiscal 2009 school aid budget and has allocated an additional $450 million as part of the current-year school budget, leaving about $183 million reserved for use in fiscal 2011.

If Michigan were to be out of compliance with the ARRA, it could potentially have to repay the money. A waiver, however, would avert that and other states have sought and received such waivers.

Emerson and Granholm said there is the potential that Michigan will need to enact additional per-pupil cuts, beyond the $165 per-pupil reductions in the just-signed budget.

Emerson said state Treasurer Robert Kleine and officials at the House Fiscal Agency and Senate Fiscal Agency were meeting on Tuesday to determine the state's current revenue outlook.

He and Granholm said the current school aid budget was underfunded by $60 million, based on May revenue estimates. But the state Treasurer has also indicated that, based on the latest revenue data, the shortfall in the school aid fund could be as high as $264 million.

Granholm on Monday vetoed $54 million in spending measures in the $12.9 billion K-12 budget, including $51.5 million in supplemental payments to districts that get among the highest per-pupil payments statewide.

Taking into account Granholm's veto, that could leave a current-year shortfall as high as $210 million, which could translate to additional, across-the-board cuts of as high as $120 per pupil, unless the Legislature provides additional funding, Emerson said.

At the Capitol press conference, Granholm and an array of education officials from across the state urged lawmakers to pass additional sources of revenue.

Granholm said education is the “thing most important for our economic recovery” and warned of “additional cuts, potentially soon.”

Also on Tuesday, the Senate sent Granholm six remaining budget bills that include controversial cuts like an 11.1 percent reduction in state revenue sharing and an 8 percent cut in Medicaid providers' reimbursement rates.

In a letter accompanying the bills, Senate Majority Leader Mike Bishop, R-Rochester, warned Granholm against vetoing items in the bills with the expectation that the Legislature would pass new sources of revenue to reinstate the vetoed items.

“Please remember that any line item veto you exercise will result in the total elimination of those programs,” Bishop wrote. “Do not veto portions of these budgets with the expectation that money will be reappropriated at a later date to fund the vetoed programs.

“There is not sufficient support in the Senate Republican caucus for tax increases and for you to think otherwise is a mistake.”

Bishop said the final fiscal 2010 budget represents a “bipartisan and bicameral effort that was achieved after months of tough negotiations.”

Sunday, October 18, 2009

"WOW, YOU mean we've used ALL of the Federal STIMULUS Monies to merely perpetuate the STATUS-QUO?"

States Feeling Fiscal Squeeze Despite Stimulus

Premium article access courtesy of Edweek.org.
Despite the nearly $40 billion infused into state coffers to help steady state education budgets under the federal economic-stimulus package, some states remain in dismal fiscal straits, forcing further cuts to K-12 programs.
States such as Pennsylvania that recently wrapped up protracted legislative sessions were forced to make sometimes-painful adjustments to cope with declining revenues, despite the unprecedented aid under the American Recovery and Reinvestment Act, the stimulus law.
Lawmakers in other states, including New Mexico, are heading back for special sessions to consider further reductions to their budgets for the current fiscal year.
And many states are looking ahead to a time in the federal 2011 fiscal year when money from the State Fiscal Stabilization Fund, a key part of the stimulus program, will no longer be available. That funding, which was intended primarily to backfill cuts that states had already made to education programs, is spread out over two years. In some cases, states have diverted resources from K-12 programs and replaced their own dollars with stabilization funding from the federal government. ("States Stung by Criticism on Use of Stimulus Aid," October 12, 2009.)
“K-12 education has come under pressure that it has not seen in decades,” said Arturo Perez, a fiscal analyst for the National Conference of State Legislatures, based in Denver. “The only bright note is the money provided under the ARRA.”
That cloudy fiscal forecast appears unlikely to brighten any time soon. A report released Oct. 15 by the Nelson A. Rockeller Institute of Government, the public-policy-research arm of the State University of New York, shows that state revenues are faltering and are likely to remain shaky for the next several years.
The study found that those revenues nationwide dropped a record $63 billion in the fiscal year ending June 2009, or roughly twice the amount of money states have gained from the stimulus program so far.
That may help explain why, even with the extra cash, some states still have reduced or eliminated education programs.
For instance, this week Michigan Gov. Jennifer Granholm, a Democrat, was expected to sign the state’s K-12 budget for this fiscal year by Oct. 20, in time for payments to school districts to be doled out. The budget came after lawmakers had passed a continuing resolution to keep programs afloat while the legislature hashed out its spending bills. The budget includes a cut of $165 per pupil in grants to school districts for K-12 students.
In Michigan, the governor has line-item veto power, and it is still unclear whether Gov. Granholm planned to use it on any portion of the education spending bill.
Although state lawmakers sought to give districts flexibility in determining how to find the savings, school officials are struggling to figure out what to trim next, said Brad Biladeau, the associate executive for government relations at the Michigan Association of School Administrators.
“We’ve been cutting administrative expenses and support services to school districts,” he said. “Now school districts are faced with significant cuts that could impact the classroom."

Cuts to Programs

Pennsylvania wrapped up an exhausting legislative session when Gov. Edward G. Rendell, a Democrat, signed the final budget Oct. 9. The measure, which came in more than 100 days behind schedule, offered a mixed picture for K-12 education, said Ronald Cowell, the president of the Education Policy and Leadership Center, a nonprofit organization in Harrisburg, Pa.
“The good news is that there is a $300 million increase,” to $5.5 billion, for basic education funding, which provides the largest amount of aid for school districts, Mr. Cowell said. That amount represents a 5.7 percent increase over last year.
The move was in keeping with a plan, enacted in 2007, to overhaul Pennsylvania’s school finance system. But it will be tough to keep up that level of funding once the state-stabilization dollars provided under the recovery act are gone, Mr. Cowell said.
And other programs that school districts depend on saw substantial reductions, he said. For instance, a $44.7 million program called Classrooms for the Future, which provides technology to schools, was eliminated. A high school reform program was reduced to $3.7 million, from $10.7 million.
“There’s a story to be told about each one of these program cuts,” Mr. Cowell said.
This week, New Mexico is slated to hold a special session to address its budget issues. Lawmakers will work to resolve a deficit of at least $400 million in a budget of $5.5 billion.
Gov. Bill Richardson, a Democrat, has suggested a 3 percent across-the-board reduction in government programs, except for K-12 education.
But some New Mexico legislative leaders say cuts to schools might be unavoidable. K-12 education is receiving $2.4 billion this fiscal year.
“To sit there and say we’re not going to have any cuts in education—60 percent of the budget—is that a realistic proposal or is that just political rhetoric?” said Sen. Tim Jennings, a Democrat. “There ought to be meaningful solutions.”
But districts are going to have a tough time weathering further cuts, said Tom Sullivan, the executive director of the New Mexico Coalition of School Administrators.
“We have some superintendents who may be hanging by a thread who see this as the straw that’s going to break the camel’s back,” Mr. Sullivan said.
And he sees further trouble ahead, particularly if the state doesn’t find a new revenue source for education. Lawmakers in New Mexico used about $165 million in stimulus money to help balance school districts’ books in the current fiscal year, he said, but revenue forecasts have been even cloudier than expected.
That might force the state to tap the remaining $90 million in stimulus funding that so far hasn’t been allocated—leaving much less of a federal cushion to help finance schools in the next fiscal year.
“If that money is held back and used in building [next year’s] budget, then ... we’re not falling off the cliff yet,” Mr. Sullivan said. But, he added, “I’m not sure if they can make it through [this fiscal year] without using some or all of the $90 million sooner than they had hoped.”

‘Funding Cliff’ Coming

Other states are bracing for tough choices in the coming legislative sessions.
Florida has been hit particularly hard with the national downturn in the housing market, and that’s likely to lead to a structural deficit in the years ahead, said Wayne Blanton, the executive director of the Florida School Boards Association.
“We’re sort of at a crossroads,” Mr. Blanton said. He said state-financed programs, including K-12 education, have always benefited from the revenue bump created by an influx of new residents.
But Florida recently lost nearly 60,000 people, the first population drain in decades. “We’re going to take a 15 to 20 percent cut in state services” in the coming years, Mr. Blanton said, if there isn’t a major change in the state’s tax structure.
Right now, K-12 education in Florida is facing a $1 billion budget deficit, but Mr. Blanton said that amount would be closer to $2 billion without the federal help. The total budget for K-12, not including capital costs, was $15.9 billion.
He’s hoping that in the next legislative session, state lawmakers will start thinking about how to finance education after the stimulus money is no longer available.