Reality must trump rhetoric when it comes to our schools

This letter also appears in the opinion section of AnnArbor.com, and can be found here.

An Open Letter to Mr. Albert Berriz and his campaign committee, the Citizens for a Responsible Washtenaw

Dear Mr. Berriz,

I read with interest the article you reprinted in a full page color advertisement in today’s print edition of AnnArbor.com. The article was written by Ron Steiger, assistant chief budget officer for the Miami-Dade County school system in Miami, Florida, and it describes his district’s experience in reevaluating central administration structure in an effort to protect classrooms from budget cuts.

(The article appeared in Education Week and can be found here, but unfortunately the full text is available only to subscribers.)

The author of the article describes how the Miami-Dade schools grappled with painful budget problems by examining their administrative structure and removing duplicate functions and inefficient procedures. In the article, Mr. Steiger writes that the budget crunch was caused by an increase in property tax revenues from the housing “bubble” which masked declining student enrollment. When the bubble popped, it left districts like his in dire trouble.

You, like Mr. Steiger, call for our school district’s budget to be examined by “respected chief financial officers and business leaders from around the state” in an effort to replicate Miami-Dade’s presumed success.

I welcome greater public attention to our schools’ budget, in the hope that it will engender a broader understanding of the functions performed by our district and the reasons behind them. As Mr. Steiger states in his article, the effort to improve efficiency is neither easy nor quick. As a community, we all need to understand what our schools do, and decide what our priorities are.

But I differ with you profoundly on what I believe is your underlying argument (as you have stated elsewhere in your “five point plan”). During the millage campaign, and still today, you have advocated the view that our school district’s problems can be solved simply with an increase in transparency and an aggressive review of administrative spending. I, too, believe in transparency, and I also believe that our district’s spending must pass muster with our community. However, unlike you, I do not believe that this will provide us with a simple and painless way of addressing our district’s budget problems.

Let’s inject a little reality here. The Miami-Dade County school district, which Mr. Steiger describes, is the fourth largest in the United States. In terms of student enrollment, at 340,000 students it is more than three times the size of Detroit Public Schools (Michigan’s largest) and more than 20 times as large as AAPS. Even their reduced budget is nearly 5 times as large as Detroit’s, and 25 times that of AAPS. Miami-Dade employs more than 50,000 people, compared to AAPS’s 3,000 full and part-time employees.

It is a simple economic fact that administration becomes more complex as an organization grows in size, and the larger the organization and the faster the growth, the more chance that administrative functions are not as efficient as they might be. I can well imagine that Miami-Dade could find some efficiencies in their administration and other non-instructional areas. And with an annual budget that had exceeded $5 billion, I can also imagine that it took a large and sustained effort to review how money was spent and how it might be made leaner. In short, no one should be surprised that Miami-Dade was able to make themselves more efficient once they started looking, or that in an organization that large that the gains could be substantial.

But is it reasonable to count on the same thing happening here?

One answer to that lies in the article itself. The author attributes his district’s problems to spending that was prompted by huge property tax revenue increases during the housing bubble, unaccompanied by a similar expansion of their student population.

I am sure that was the case in Florida. But to say that the same thing happened in Michigan is simply absurd. To begin with, the school funding system introduced by Proposal A in 1994 shifted the bulk of school funding away from property taxes to other revenue sources, primarily the increased sales tax. At the same time, increases in the taxable value of property were capped, which prevented property tax revenues from jumping during whatever “bubble” Michigan experienced. And as I am sure you know, Michigan’s economy has been wobbly for the last decade – the current recession simply capping off a very difficult period for our state.

There has been no “bubble” of revenue available for schools. The money available for each district to spend on its students is controlled by the State Legislature, and determined by a formula which they pass each year. AAPS’s share, the “foundation allowance,” has declined by 9% from 1994 through last year, once inflation is taken into account. Many districts in our state have barely kept up with inflation since 1994, and nearly all have seen their allocations lose value since 2000. At the same time, key costs like health care have risen many times the rate of inflation; this has forced our schools to choose between fiscal stability and offering decent health care for their employees, much the same choice other businesses have been facing.

Districts around Michigan have been paring back their costs for years; this is especially true here in Ann Arbor, where the “hold harmless” portion of AAPS’s allowed spending has not changed one penny since 1994. AAPS has cut $16 million from spending just in the last 4 years. They have left many staff and administrative positions unfilled, eliminated many positions that supported (but were not in) classrooms, pressed every employee group to take pay freezes one or more times over the last five years, and so on.

I have called publicly on my fellow members of the Ann Arbor community to get involved in the difficult choices that face our schools, and to educate ourselves about what our schools do and why. But I do not believe that we will find magical ways to reduce spending without significantly reducing the services offered by our schools. This is the very choice which the Washtenaw Schools Millage was designed to avoid. But now that we must come face to face with these hard choices, I call upon you, your company and your campaign committee to stop promoting wishful thinking and start facing up to the painful decisions which face our schools and our community.

Steven Norton
AAPS Parent
Small business owner, and Executive Director, Michigan Parents for Schools
Former volunteer campaign manager, Ann Arbor Citizens Millage Committee