I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Monday, July 27, 2015

Paul @Mulshine Digs Himself an Even Deeper Hole

As I blogged yesterday, the Star-Ledger's libertarian curmudgeon, Paul Mulshine, clearly misquoted Steve Wollmer, an NJEA spokesman, in a column about pension funding. Mulshine said he pressed Wollmer to name ways to raise the revenue needed for New Jersey to makes its pension payments. Here's how Mulshine characterized Wollmer's answer:
I asked Wollmer what level of new taxes or spending cuts could make this pig fly, or at least put lipstick on it.  
"Everyone talks about the millionaires'  tax," he said. "That's $700 million a year." 
Sounds good, but that's just a fraction of the $4.3  billion annual payment recommended by actuaries. 
Other than that, Wollmer couldn't come up with  any suggestions for big-ticket revenue-raisers. Instead he reiterated the line the union's been pushing to avoid that question. [all emphases following are mine]
Except this just wasn't true. Fellow teacher-blogger Ani McHugh recounted that Wollmer had, in fact, given several other ideas for raising revenue; Mulshine just chose to pretend that he hadn't. Further, when Mulshine was confronted on his omission in the comments under his piece at NJ.com, he all but admitted Wollmer had come up with other ideas, but Mulshine didn't report them because he thought they were "silly."

Mulshine can characterize Wollmer's ideas however he wants; what he's not allowed to do is say Wollmer didn't have any other ideas. He clearly mischaracterized Wollmer in his piece, and when caught tried to weasel out of issuing a correction.

Well, I guess Ani and I and the NJEA put enough heat on Mulshine that he had to admit he had not played it straight. Because Mulshine has a new piece out today where he once again all but admits he did not portray Wollmer's words accurately. But rather than step up and take responsibility like a professional journalist, it looks like Crazy Uncle Paul is, instead, doubling down on his teacher bashing rhetoric:
I invited Wollmer to give me a menu of tax hikes that could generate that $4.3 billion. Instead he gave me a quote about how the situation had been building up for a long time and could not be solved immediately. 
True enough. But that doesn't solve the problem of raising the revenue to fund pensions that the state plainly cannot afford. 
During the conversation we discussed raising the gas tax...
Oh, so once again Paul, you admit that Wollmer did come up with other suggestions! So where's your correction? Where's your apology to Wollmer? Where's your apology to your readers?

You know, I'm just a lowly blogger, but when I screw up, I man up. I keep my ego in check enough to admit I'm human and I make mistakes. But this never seems to happen at the Star-Ledger's op-ed page. Instead, columnists like Mulshine just dig in their heels and bring on the teacher hating:
During the conversation we discussed raising the gas tax, but I noted that the Transportation Trust Fund is broke.  Everyone familiar with the state budget knows that this and prior administrations  borrowed so much money for past transit projects that even a fairly large gas-tax hike, say 15 cents a gallon, would not be sufficient to bring the trust fund back into balance. 
Furthermore the gas tax is constitutionally dedicated to transportation. 
So I was shocked when I read that blog post and read this rather amazing assertion by Wollmer: 
The union wants to raise the gas tax to fund pensions. 
Seriously. I'm not kidding. 
Here's that pro-NJEA blogger's [Ani McHugh's] own account of the interview (italics mine): 
"During that conversation, when Mulshine asked how NJ could come up with the money to fund the pension system, Wollmer says he suggested a corporate excise tax, a gasoline tax, an end to Christie's muti-billion dollar tax credit giveaways for zero job creation, and a millionaire's tax–but It seems that Mulshine ignored all but Wollmer's final suggestion."
If, lord help you, you decide to click through and read Mulshine's screed, you'll notice he does not ever discuss that Wollmer also called for an end to Christie's tax giveaways and a corporate tax. By any reasonable journalistic standard, Mulshine did not accurately reflect Wollmer's words in his original column. Mulshine stills owes a correction, plain and simple, without all the anti-teacher garbage he flings around in this piece.

Before I get to that crap, let's talk a little about the gas tax. Yes, it's constitutionally dedicated to transportation -- but it's not the only tax that is. According to the NJ Transportation Trust Fund Authority, the constitution requires $200 million of the general sales tax also be dedicated to transportation.

Actually, in 2014, $354 million was allocated from the general sales tax to transportation, and $517 million is projected to be allocated in 2015. If we raised the gas tax so that it collected commensurate revenues, those general sales tax funds could, conceivably, be used to fund the pensions. Granted, that might take a constitutional amendment, but so what? It's still possible, and potentially a big chunk of change.

According to the Authority, $531 million was raised on a gas tax of 10.5 cents per gallon (13.5 cents for diesel). According to the T@x Foundation*, New Jersey has the 48th lowest state gas taxes in the nation. If we doubled the excise tax on gas to 21 cents, we would be right at the median for all states in total fuel taxes. That would mean more than half-a-billion dollars in extra revenue.

Now, you might disagree that any of this should go to pensions; that's fine. But you can't deny it is a significant source of revenue, and even if it required a constitutional amendment it is a viable idea. But Mulshine wants it off the table immediately. Why? Because, lord help us all, sometimes teachers move after they retire:
If we are to believe the author [McHugh], the union is actually suggesting that the revenue from a gas tax should go not to repair our roads, with their tire-swallowing potholes, or to help keep down NJ Transit fares, which were just raised once again. 
They don't want the revenue  to go to people here in the state who desperately need the services. 
They want it to go to people who may have retired to North Carolina and Florida.
What a stupid argument. Would it be better, Paul, if pensions only went to teachers who stay in New Jersey? Should we pass a law that requires teachers to stay here after they've worked for years, made their mandatory payments into the pension, and then retired?

Nobody denies this state needs to fund transportation. But since when has any state been able to back away from its debt payments simply because it has other spending priorities yet refuses to raise revenues to pay for them

Mulshine made a snarky comment below his previous column about retired teachers sitting by pools in Florida sipping margaritas. Guess what, doofus -- that's part of retirement, and there's nothing wrong with it. It's not like we can spend the day surfing and drinking beer and then write about it for a dying newspaper; we work, and our pensions are part of what we are paid for that work.

Pensions are part of the total compensation owed to teachers for work they have already done. They aren't bonuses that can be taken away on a whim; they are payment for services already rendered. The notion that the taxpayer pays for public employee pensions is wrong: every public employee pays for 100 percent of his or her** pension, because it is compensation for work they have already done.

As wrong as the last NJ Supreme Court decision was, even they reaffirmed that the state will not be able to walk away from this obligation. But Mulshine wants to try to frame it like the pensions are some sort of a gift that was granted for political favors. That's why he's always going on about the political connections of the NJEA, or retirees living out of state, or some such similar nonsense.

That's why Mulshine avoids mentioning the average annual allowance on the pension is $40K, as if that is some outrageous sum. It's why he won't acknowledge that New Jersey's pensions are already some of the stingiest in the nation, or that teachers are modestly paid compared to similarly educated workers.

Mulshine dares the NJEA to push for a constitutional amendment to fund the pensions and use a higher gas tax to help pay for it. But I've got a dare for him: go ahead and continue to let the wealthy and the corporations enjoy their tax gifts, and let the pension funds run dry. See what happens then, Paul. See if anyone ever works as a public employee in this state again. See if Wall Street ever trusts this state. See if the federal courts let the state get away with reneging on its obligations.

Yahoos like Paul Mulshine are enabling a very dangerous mindset for this state. But what does he care? He'll probably move to Florida when things get rough.

Paul Mulshine (artist's conception)


* "T@x Foundation"? From the early days of this blog...

** As I've noted before: the War on Teacher Pensions is a War on Women.


Do you think that "sipping margaritas by the pool" comment was directed equally at men? If so, you're incredibly naive. Part of the War on Teachers has been an undercurrent notion that women don't really need stable retirements, because their men will take care of the little darlings. 

Back in the day, when a teacher dared to tell Chris Christie she wasn't making a lot of money, he told her "well, you know what, you don't have to do it." As if working was, for women, an option -- something fun to pass the time and make a little pocket change before getting back to the house and starting dinner before Daddy gets home.

Oh, yes, I know, I am so completely off the rails here. Obviously this obsession with "overpaid" teachers has nothing to do with the fact that three-quarters of the profession is women. It couldn't possibly be the case that tools like Mulshine and Christie feel free to take their swipes because, after all, it's only the gals...


State Standards, Mapping the NAEP, & Student Performance: Who's the "Liar"? Part I

Education Secretary Arne Duncan is sick and tired of all those states that "lie" to their students:
“The idea that the Common Core standards are nationally-imposed is a conspiracy theory in search of a conspiracy. The Common Core academic standards were both developed and adopted by the states, and they have widespread bipartisan support. GOP leaders like Jeb Bush and governors Mitch Daniels, Chris Christie, and Bill Haslam have supported the Common Core standards because they realize states must stop dummying down academic standards and lying about the performance of children and schools. In fact, South Carolina lowered the bar for proficiency in English and mathematics faster than any state in the country from 2005 to 2009, according to research by the National Center for Education Statistics.
“That’s not good for children, parents, or teachers. I hope South Carolina lawmakers will heed the voices of teachers who supported South Carolina’s decision to stop lowering academic standards and set a higher bar for success. And I hope lawmakers will continue to support the state’s decision to raise standards, with the goal of making every child college- and career-ready in today’s knowledge economy.” [emphasis mine]
Angry Arne's construction here is something I've heard echoed over and over again throughout Reformyland: we must set higher standards for our children if they are ever going to succeed in the real world of 21st century global competition knowledge-based competitive blah blah blah...

But is it true? Does setting higher standards lead to better performance?

Let's find out.

Every few years, the good folks at the National Center for Education Statistics put out a cool piece of research that attempts to shed light on how states judge their student to be "proficient." Earlier this month, NCES released "Mapping State Proficiency Standards Onto NAEP Scales: Results From the 2013 NAEP Reading and Mathematics Assessments." They even made a nice little video about the report:



There are some statistical tricks involved here, but the overall method is fairly simple. Let's say your state declared that 70 percent of its students were "proficient" in math when judged by their own state test. But only 60 percent of the kids in my state ranked as "proficient." It may sound like your state is doing better, but it's actually impossible to compare your state to my state: our kids took a different test, and we likely have a different definition of "proficient" than your state does.

How can we actually compare what you call proficient and what I call proficient? Luckily, kids in both states (not all of them, but a large enough sample that we can feel very confident about the results) took the same national achievement test: the National Assessment of Educational Progress, or NAEP, which assesses math and reading at Grade 4 and Grade 8.

Because we know the percentages of kids deemed "proficient" on each of our states' tests, we can look up that same percentage for both of our states on the NAEP. First, we look at the cut score for the 70th percentile of your kids on the NAEP; that is, the minimum score that would represent what 70 percent of your state's kids got on the national test. Then we'll do the same for my state's kids, but look at the 60th percentile. We can then compare the two NAPE scores and determine who has the higher bar for proficiency.

If your bar is higher... well, you're really kicking my state's butt. But if my bar is higher, I can point a finger at your state and say: "Aha! You're 'lying' to your kids, because you set your standards too low!"

When the NCES people released their study, they put out tables showing where these cut scores are for each state. And this led to the predictable wailing and gnashing of teeth that low expectations are holding our students back in states where proficiency standards are low.

But here's the thing: it's actually pretty easy to test this premise. If reformy types are correct and "high expectations" lead to better outcomes, the states with higher standards for proficiency should have higher NAEP scores.

So that's the hypothesis we'll test: do the states with higher proficiency rates actually do better on the NAEP? If they do, the reformy theory holds up, and we should set the bar higher for everyone. What would that look like?

I know the scatterplots make some of you nuts, but bear with me -- this is actually pretty simple. If high proficiency standards lead to higher test scores, we're going to see something like the graph above, which is a strong correlation between the two variables. As your proficiency standard goes up, your test scores goes up. But if the two aren't related, we'll get something like this:

See how all the points are in a cloud? There's no correlation; standards for proficiency don't have a relationship to how states actually do on tests. Got it? OK, let's go to the data; click on the pics to expand them.

All students, Grade 4 Reading:



All students, Grade 8 Reading:



Do you see a strong correlation, or do you see a cloud of points? 

Mathematically, a correlation just isn't there: that "Rsq" in the bottom left is a measure of how well the mapped proficiency standard scores (x-axis) can "explain" the actual test scores (y-axis). If Rsq is 0, there's not a correlation; if it's 1, the correlation is perfect. These rsq's are so low they are statistically insignificant (p < 0.05 for those of you who need to know).

Let me put it this way: West Virginia sets a higher bar for "proficient" than Ohio does on both Grade 4 and Grade 8 reading. You can see this because West Virginia is much further to the right than Ohio on the graph. But Ohio outperforms West Virginia in both tests; in fact, Ohio WAY outperforms on Grade 8 reading, because it is much higher up on the graph than West Virginia.

Yes, there are states that have high proficiency standards and high scores (Minnesota), but there are states with low proficiency standards and high scores (Idaho). There are states with low proficiency standards and low scores (Alabama); but there are states with high proficiency standards and low scores (Nevada). Proficiency standards in reading and actual achievement in reading are not related.

What about math? All students, Grade 4:


All students, Grade 8 Math:




So here we have a bit of a correlation, and it is statistically significant. But it's very weak: only 10 to 13 percent of the variation in test scores can be "explained" by the proficiency standard.

Why math and not reading? Two reasons: one for sure, one on which I'm simply conjecturing. First, most of the correlation comes from the lowest mapped proficiency scores. If you take those away, the correlation no longer exists. For Grade 4 math, for example, I'll remove the bottom 6 data points.



I'll do the same for Grade 8:



The correlations are no longer statistically significant.* But I think something else might be at play here. 

I'm not a math educator, so I'm going to go out on a limb, but I've seen some evidence of this before: outcomes on math assessments are a little more dependent on aligning instruction with the assessment than language arts assessments. In other words, if you taught everything else well on a math test but you missed, say, calculating a circle's circumference, your students are going to get dinged hard if that's on the test. But if you taught them a different list of vocabulary words than those used on the test, they're less likely to get dinged. Those of you with expertise, please weigh in and tell me if I'm blowing smoke or not.

In any case, even if we think there is a correlation between the proficiency standards in math and math outcomes, that correlation is very weak. And, again, in reading, it's not there at all.

What does all this mean -- that proficiency standards don't matter? No, of course not. If we're going to have meaningful assessments, we have to set the bar somewhere; we may as well do it right and set reasonably high standards for what our students should be able to do.

My point is this: the empirical evidence suggests that state proficiency standards have, at best, a minor effect on student outcomes. Angry Arne and many others have focused in on what is, in reality, a minor concern when it comes to helping statewide education systems improve.

Regular readers have undoubtedly already figured out where I think the SecEd's time and attention would be better spent.

There's a question I haven't yet addressed: even if higher proficiency standards don't make a big difference for all students, do they help children in economic disadvantage, or who are in historically underserved racial groups? 

Standby...

You mean there's more?


* In a linear model with p < 0.05. Which is the point.

Sunday, July 26, 2015

Paul @Mulshine Owes a Correction

Regular readers know how I feel about the low, low, low standards the Star-Ledger's op-ed page sets for its writers - particularly on the subjects of education policy and public employee pensions. This past week, however, the page sunk to new depths, courtesy of Paul Mulshine.

Mulshine is a self-styled libertarian curmudgeon who sees himself as a wonk, which means he likes to think he's arrived at his conclusions through careful and well-informed analysis, rather than cherry-picking facts and sophistry. In his latest column, he convinces himself he has such a fine grasp of the state's fiscal situation that those who insist on New Jersey making its pension payments are living in a fantasy world:
I didn't get a chance to ask [Assembly Speaker Vince] Prieto where he'd find room in the budget to make those payments because he's not returning calls from the press. So I did the next best thing. I called the NJEA. 
The New Jersey Education Association put out a press release the other day in which  president  Wendell Steinhauer said the state's largest teachers union is rejecting Christie's response to the Prieto plan. Christie called for the unions to negotiate pension and health benefit reductions to save the pensions. 
"We will continue to work with Speaker Prieto, Senate President Sweeney and any other responsible legislator to find an achievable, sustainable pension solution that ensures the state will meet its full pension obligations to our members and to all public employees," the statement read. 
That leaves unanswered the question of how  the state could  come up with the cash to make those payments. I put that question to NJEA communications director Steve Wollmer. 
"It's a daunting task, I think everyone admits that," said Wollmer.  "Bad decisions have been made for 20 years by everyone in the system." 
[...] 
I asked Wollmer what level of new taxes or spending cuts could make this pig fly, or at least put lipstick on it.  
"Everyone talks about the millionaires'  tax," he said. "That's $700 million a year." 
Sounds good, but that's just a fraction of the $4.3  billion annual payment recommended by actuaries. 
Other than that, Wollmer couldn't come up with  any suggestions for big-ticket revenue-raisers. Instead he reiterated the line the union's been pushing to avoid that question. 
"The teachers didn't create this problem and have been paying into  the fund," he said. [emphasis mine]
When I read that, I was surprised. Because I know Steve Wollmer; we see each other several times a year, at the NJEA convention and other union events. He reads this blog regularly, and he knows that I and many others have suggested many other streams of revenue and cost-cutting measures that could significantly help in pulling together the money needed for the state to make its payments. Why didn't he mention them?

It turns out he did. As Ani McHugh points out, Mulshine, according to Wollmer, completely misrepresented Wollmer's answer:
So how could it be possible that the Director of Communications of the New Jersey Education Association was unable to come up with any solutions–other than the millionaire’s tax–to the pension crisis? How could he have so little to offer in response to Mulshine’s question?
The answer, not surprisingly, is that NJEA Director of Communications Steve Wollmer had plenty to say to Paul Mulshine: but Paul Mulshine chose to ignore what likely amounts to 99% of what Wollmer described on the NJEA Facebook group thread as a 45-minute phone conversation the two had on Friday.
During that conversation, when Mulshine asked how NJ could come up with the money to fund the pension system, Wollmer says he suggested a corporate excise tax, a gasoline tax, an end to Christie’s muti-billion dollar tax credit giveaways for zero job creation, and a millionaire’s tax–but it seems that Mulshine ignored all but Wollmer’s final suggestion.
And then Mulshine accused Wollmer of reiterating the “line the union’s been pushing” (about teachers not creating the pension crisis) to “avoid” answering the question about funding.
Really?
Put simply, Mulshine’s claim that Wollmer “couldn’t come up with any suggestions for big-ticket revenue raisers” was a blatant lie. 
Union haters will, of course, present Mulshine’s column as concrete “I-told-you-so” evidence that unions have no solutions to the pension crisis. No surprise there. Also unfortunate is that people who don’t necessarily harbor ill-will towards public employees or their unions will infer, from Mulshine’s column, that the state does not have the money–and cannot find it–to fulfill its pension obligations.
But most unfortunate is that a columnist at the state’s largest newspaper would pose a very specific question to NJEA’s Director of Communications and then deliberately misrepresent and omit most of the answer he very specific answer received.
What kind of reporting is that?
It's crap reporting. The kind of crap reporting the Star-Ledger op-ed page engages in regularly.

To be clear, I've been quoted several times by the S-L newsroom staff, and they have always been fair and accurate: former reporters Peggy McGlone and Jessica Calefati, and current reporter Adam Clark, are all professional journalists who write good stories about education. No, my problem has always been with the op-ed page, where crap like Mulshine's appears to be the standard.

Now, we could argue that this was a case of he-said/he-said. Except when readers started linking to Ani's blog under Mulshine's original post and began questioning his reporting, Mulshine all but admitted he had skipped over much of Wollmer's answer:




Paul Mulshine | The Star Ledger






Paul Mulshine | The Star Ledger
@billbrennan You guys have to be kidding. The NJEA wants to fund pensions with a gas tax? The gas tax is dedicated to transportation. But never mind. Raise those NJ Transit fares even higher so teachers can drink margaritas by the pool in Florida while they're still in their 50s. The rest of his suggestions are equally silly and add up to a fraction of the amount needed. 


I'd like to point out I'm in my 50s, but I don't have a pool in Florida (and I'd rather have a single malt on the rocks). This stupidity about greedy teachers leeching off the system is, of course, completely contradicted by the actual facts: teachers are not overpaid, even when taking into account benefits.

But Mulshine is entitled to his opinions, idiotic as they may be. He is also free to argue against Wollmer's suggestions for raising revenue.* What Paul Mulshine is not free to do is misrepresent an answer to his question and then, when caught, say the answer was "silly" anyway.

This one is really simple: Paul Mulshine owes his readers a correction. And the Star-Ledger needs to take a hard look at how the low standards of its op-ed page are unworthy of the largest newspaper in New Jersey.

Low standards? Where?


ADDING: John Reitmeyer, a real journalist, points out the obvious:
At stake in the ongoing debate are the retirements of an estimated 770,000 current and retired public workers who are relying on the $80 billion pension system to be there when their careers end. And for taxpayers, there are also enormous consequences because the court ruling reaffirmed that employees still have a right to receive their pensions, meaning the annual payouts will have to come out of the state budget if the pension system ultimately goes broke. [emphasis mine]
The folks like Mulshine, who continually tell us the state can't make its payments because it has no money, never seem to want to follow things through to their conclusion. Do they really think an entire state can go into default? That the state's own courts, let alone the federal courts, will allow that to happen? That the courts won't force the state to find the revenues later? That there won't be hell to pay even if the state constitution is rewritten to allow default?

This state must raise taxes. It must stop the corporate tax giveaways. It must get its pension costs under control. Wollmer and the NJEA understand this; Mulshine is the one who is "silly."

For myself: I'm all for getting health care costs under control and using the savings to help fund pension payments -- after the state reinstates the millionaire's tax, cuts corporate giveaways, reforms tax expenditures, and renegotiates its pension costs, which are outrageous.

Do that, and then we'll talk about health care. But not before.


*If we raise the gas tax, that may well free up other revenues going to fund transportation, like the general sales tax. Granted, changing this might take a constitutional amendment, but that doesn't mean it can't be done. Seems to me that these are the sort of discussions self-styled wonks like Mulshine should be having in their columns, rather than misrepresenting the people they interview.

Thursday, July 23, 2015

Charter Cheerleaders Can't Be Referees

Blogging's been light this past week, largely because I've been finishing a big project with Bruce Baker about charter schools that we hope to tell you more about later this year.

Let me state this one more time: I am not against charter schools. I started my K-12 teaching career in a charter. There is an appropriate place for "choice" and "innovation" within the public school system, and there is a good case to be made that charter schools can, when properly authorized and monitored, provide beneficial educational services to a community.

It's that "when" phrase, however, that seems to create all the problems:
The current uproar about the actions of David Hansen, the former Ohio Department of Education executive director and “charter czar” who rigged sponsor evaluation scores to allow more favorable ratings for the most politically favored authorizers, brings to light a perfect storm of factors that should have made his actions predictable at the time of his appointment two years ago.
Hansen, the husband of Beth Hansen, Governor John Kasich’s chief-of-staff, was put in place by the governor’s team to head the Office of Quality School Choice. His background, as head of the right-wing Buckeye Institute, famous for maintaining a database detailing the salaries for thousands of public school teachers and devoid of salary information for CEOs of national for-profit charter school chains and other privatizers, is now being examined by charter watchdogs as they discover a series of conflicts-of-interest that raise basic questions about his actions.
Here are a few morsels:
“Hansen and ODE were ignoring the big fish,” Stephen Dyer observed. “And that was, unfortunately, Hansen’s undoing. None of these crackdowns were against schools run by big Republican donors — David Brennan of White Hat Management or Bill Lager of the Electronic Classroom of Tomorrow — whose schools rate among the worst in the state and who educate about 20% of all Ohio charter school students.
Plunderbund readers, in fact, were informed several days ago that Hansen is a serial data offender.
“This isn’t the first time Hansen has been caught altering charter school data to improve the image of these charter school operators. Hansen was President of the Buckeye Institute in 2009 when they put out a report on Ohio’s dropout recover schools.  Similar to the current incident, Hansen’s group altered data to improve the apparent performance of the charter schools.  The shady data changes resulted in “a dramatic overstatement of the graduation rates at the charters.” Many of the schools in the 2009 report were owned and operated by White Hat Management.  Meanwhile, White Hat owner David Brennan was quietly contributing tens of thousands of dollars to the Buckeye Institute through his Brennan Family Foundation.”
Moral of the story: don’t bite the hand that feeds you – particularly from one job to the next. And if the numbers don’t come out right, make stuff up. Which is apparently what Hansen did.
This takes me back a couple of years to the shenanigans of Tony Bennett, formerly of Indiana's and Florida's education departments, who resigned in disgrace when accused of altering Indiana's school grading formula to favor the outcomes for a charter school whose founder was a big Republican donor (here's an update on Bennett).

Bennett's actions, like Hansen's in Ohio, were extreme, and it was appropriate in both cases to drum them out of office. However, as I pointed out about Bennett in real time, the issue wasn't simply that he had gamed the system; it was the system itself. In effect, Bennett was comparing schools that should not have been compared, and that gave his favored charter an advantage. Even if he hadn't interfered directly, his department had set up an oversight regime that inherently favored charters.

I've seen this same behavior here in New Jersey. When the Newark Public Schools went to a universal enrollment system, they published school ratings on the registration form that were clearly biased towards charters with no regard for how student demographics might impact test-based outcomes.

This shouldn't be a surprise in a state-run district like Newark; after all, as we learned this week, the NJDOE does not use the same accountability measures for charter schools that it does for district schools. And, as I pointed out years ago, the state makes no effort to hold charters accountable for the differing student populations they enroll compared to their host districts.

How could this be? Maybe it's because Chris Cerf -- the guy who ran the NJDOE for years and has now taken over NPS -- is a huge proponent of charter schools and worked for many years at Edison Learning, a high-profile school management company.

He's not alone. John King, New York's reformy former education commissioner, headed up the Uncommon Schools charter chain before taking his job with the state. He then proceeded to give them a pass on using the teacher evaluation system district schools had to use. Kevin Huffman, Tennessee's reformy former commissioner, basically turned a blind eye toward the infiltration of for-profit charter management groups into his state. Hanna Skandera, New Mexico's reformy current commissioner and a protege of privatization guru Jeb! Bush, overruled her own Public Education Commission to allow three low-performing charter schools to continue operating.

Of course, public officials should be free to pursue the policies they believe are in the best interest of their constituents. But putting charter school ideologues, many with connections to the school privatization industry, in charge of regulating charters is just asking for trouble. These people have sold a tale of district school "failure" as a way of allowing charter schools to flourish; does anyone really think they are going to easily change their minds when confronted with evidence that some of their beloved charters just aren't cutting it?

Putting foxes in charge of henhouses hasn't worked out well for other areas of public life, and it's certainly not going to help education. I'm not sure what the exact answer is here, but giving ideologically biased state education departments carte blanche to oversee charter schools is clearly not working out.

Don't worry, I got this...

Wednesday, July 15, 2015

NJ Pension "Reform" Is Still a Lousy Deal for Local Governments & Employees

Now that Chris Christie has officially declared that he is no longer going to govern New Jersey, it looks like someone else is going to have to pretend to have an answer to the pension mess that doesn't involve raising taxes. Republican Assemblyman Declan O'Scanlon is answering the call:
Now that the 2016 budget debate is over, we must get back to the most pressing state issue of our time. The suggestion of some in the public worker sector that those of us who voted against the budget are abandoning our commitment to ensuring their pensions is completely false. Any responsible elected official knows it is imperative that we meet our commitments in a way that protects our pubic workers and the N.J. economy at the same time.
Gosh, sounds great... until we get to the pesky details:
It is also true that the $1.3 billion – while one of the largest contributions ever – doesn't meet the level we promised in the 2011 reforms. No one is happy about that, but the recovery we have experienced nationally hasn't met the reasonable expectations we had relied on here in New Jersey. But rather than point fingers, let's understand that the growth projections came from unbiased actuaries that relied on data from previous recoveries over 75 years. Gov. Christie and Senate President Steve Sweeney (D-Gloucester) relied on those projections in good faith. There is no nefarious plot here: You cannot blame Christie administration policies for the low growth in N.J. The governor has consistently argued for more pro-growth policies. [emphasis mine]
No, you can't blame Chris Christie for being a failure at growing the economy. After all, he only canceled the ARC tunnel, and backed the failed Revel casino and American Dream mall, and reneged on previous pension payments causing our bond rating to drop, and cut public employee pay, and urged cutting teacher pay, and froze homestead rebates, and gave away billions in tax breaks that have lead to anemic job growth, and jacked up NJ Transit fees, and neglected infrastructure, and made bad tourism promotion ads featuring himself, and gave away most of the Exxon settlement, and has been incompetent at managing Sandy relief aid...**

The notion that there was a plan to fund the 2011 pension "reforms," and that plan was undermined by poor economic growth, does not stand up to the most basic scrutiny. Wall Street knew Christie's economic projections were way too optimistic. In early 2012, the Star-Ledger noted that Christie's forecast of economic growth was twice the average of other states'. And guess who agreed with those projections:
State legislators will scrutinize the contrasting fiscal outlooks when they hold budget hearings this month. 
"I believe we’re going to see growth next year, but with the unemployment numbers lagging behind other states, the numbers appear overly optimistic," state Sen. Paul Sarlo (D-Bergen), the chairman of the budget committee, said. 
But Assemblyman Declan O’Scanlon (R-Monmouth), a member of the Assembly Budget Committee, said Christie has a solid track record on revenue estimates. 
"Is the administration projecting a healthy recovery? Absolutely," O’Scanlon said. "Should we question their credibility in making that projection? I don’t think so. They have earned credibility because their projections have been spot on thus far." [emphasis mine]
Declan O'Scanlon should be apologizing for swallowing those revenue estimates whole; instead he makes excuses. Worse, he pretends that there is still a viable solution to the pension crisis that doesn't involve raising taxes:
They exist within the data provided by the Pension And Health Benefits Commission Report, which is an extraordinary, comprehensive document. The commission comprises a bipartisan group of the dedicated public servants, including Tom Byrne, the former Democratic State Chairman and an expert on government finance. His presence at the head of the table with commission coordinator Tom Healey is proof the governor did not stack the commission. Among their proposals are the enshrinement of a payment schedule in the state Constitution – which should allay the lingering trust issue – and they will not cut accrued pensions. Their health plan suggestion is to reduce "platinum" policies to something north of "gold," which is not an outrageous sacrifice for workers. 
Now, that is a very limited reading of the commission's report. If Assemblyman O'Scanlon wants to really come up with a solution, he should start by being straight with public employees and taxpayers about what the commission's plan really calls for:

- The commission wants a constitutional amendment not just to ensure pension payments; they want an amendment that would allow the state to cut existing pension benefits.

From the report (p. 12):
Because of claims of constitutional protection, the ability of the Legislature to reduce pension benefits for individuals claiming nonforfeitable rights protection has been questioned. As a result, the Commission believes that the best means of ensuring the freedom to effect meaningful reform would be to amend the State Constitution to confirm, notwithstanding anything in the Constitution or laws of the State of New Jersey to the contrary, the power of the State to reduce existing pension and health benefits. If sufficient health benefits savings can be achieved to permit funding of the reduced pension obligations, it would be possible to include in the amendment a guarantee of the pension funding specified in the payment schedule. [emphasis mine]
A fair reading of this paragraph is that the primary goal of a constitutional amendment would be to allow the state to cut pension benefits. If some more money can be found to guarantee payments, sure, they'll include that too. But the objective is to cut benefits -- don't let anyone tell you otherwise.

Of course, if the commission and O'Scanlon think this is viable, why not go all the way? Write into the constitution that the state can renege on any of its obligations -- we'll make the Greeks look like pikers!

The problem with this plan is that even the NJ Supreme Court, in its latest (flawed) decision, admitted the state has to meet its obligations to public employees. What the court ruled it couldn't do was force the state to be responsible and make payments in advance. If the state wants to cause a train wreck and fund its pension obligations out of the general fund, the court can't tell them no -- but that doesn't mean the state doesn't still have to pay up.

Some have fantasized that the state would declare bankruptcy in that case. It's impossible to imagine this happening to an entire state; however, it's easy to see a non-governmental entity or a local government going into default. Which brings us to...

- The commission wants to transfer pension obligations -- especially teacher pensions -- over to local entities, even though these entities are arguably much more likely to go into default than the entire state.

For years, the state has refused to pay its share of the pension revenues, even as public employees have been forced to contribute. Now, after decades of neglect, the state wants to "solve" the problem by making local governments clean up the state's mess. The leaders of these counties and towns and school boards are rightly questioning why this burden falls on them, and not the state:
And John Donnadio, executive director of the New Jersey Association of Counties, raised concerns about what the roadmap could do to the overall health of the local pension funds, which actuarial records show will last decades longer than the state funds. That’s because unlike the state, which is allowed to skip or make only partial employer pension contributions, the county and municipal governments cannot. 
“NJAC’s position on the roadmap is that we object to any initiative that would affect, alter, comingle, or integrate the local pension systems, as counties and municipalities have met their obligations as employers and the local pension systems are fiscally sound as a result,” Donnadio said. 
The scheme concocted by the commission involves finding savings in health care benefits (more in a sec) and transferring those savings into pension revenues. Were I a mayor or school board president, however, I'd wonder why I couldn't use the savings I found to improve my town's services or reduce my town's taxes. Why should local governments have to fix a problem the state created?

And if I were a teacher (oh, wait...), I'd be wondering what would happen if my school district decided to renege on funding my retirement. If the constitution said my rights to my pension were now forfeitable, who's to say my school board couldn't cut my benefits whenever they wanted? Who's to say they couldn't simply declare bankruptcy and walk away from their obligations to me?

- The commission wants to find the revenues for pension obligations by forcing employees to pay even more in health benefits.

Remember: the 2011 "reforms" jacked up health benefits costs across the state. Now the commission wants to find savings... but it also wants to make employee contributions even higher than they are now.

Look, I'm all for finding savings in health care; the plain truth is this country's insistence on not moving to a single-payer-ish system is costing us billions more than countries that have that sort of health insurance. But making employees bear more of the burden does nothing to rein in the outrageous costs of drugs and services. Where is any suggestion from the commission that it's time for the state to start getting tough with insurers and providers as a way to cut health costs without cutting quality?

As to cost-savings through employee incentives: again, I think that's a good idea in general. People should be incentivized to take better care of themselves... but they should be the ones to earn at least some of the savings from their improved behavior. Why would I be motivated to lose weight as a cost-cutting measure if I don't get at least some of the financial benefits of going on a diet?*

I suspect the idea for incentives was added to the commission's report to soften a hard truth: the "savings" from health benefits will come from demanding more contributions from employees. Which the commission actually thinks is justifiable, because...

- The commission justifies its plan to slash public employee health and retirement benefits by claiming they are more lavish than those found in the private sector. What they neglect to mention is that public employee pay is lower than private sector pay for highly credentialed and experienced workers -- like teachers.

We've been through this I don't know how many times on this blog: New Jersey public employees who have a college degree, like teachers, make less than comparably educated private sector employees. Teachers in particular suffer a pay penalty for working in schools. The weak attempts to explain this away are undermined by cutting benefits without raising salaries; in other words, you can't argue teachers will still be compensated fairly if you cut their health care and retirement benefits without raising their pay.

The commission thinks it's just fine to put all the fixes for the state's decades of neglect on local governments and public workers. They moan that raising taxes on the wealthy is inadequate to the task without acknowledging that those same wealthy are the ones who have benefitted the most from New Jersey's failure to raise the revenues needed to meet its obligations.



No credible plan to resolve New Jersey's pension crisis leaves out the necessary action of collecting more revenues from the wealthiest residents of this state. It's ridiculous that the commission won't demand an increase in the millionaires tax on the basis that it's only a partial fix, even as it frets about the "symbolic" effects of double-dipping (p.31). The millionaires tax isn't close to a total solution, but it would have far more impact than going after a few retirees who return to public employment.

Further, the commission doesn't even bother to investigate whether the state has overpaid its pension fund managers, who by all accounts have done a mediocre job.

The bottom line here is that Declan O'Scanlon and the other cheerleaders for the commission's plan are not to be taken seriously unless and until they start talking about real increases in revenue. This state's teachers and other public employees have already made big sacrifices under the 2011 "reforms": we pay more in pension contributions, we pay more in health care premiums, and we are getting less for these payments than our fellow public employees in other states.

It's time for the state to stop making excuses. Local governments and public employees have done more than their share. Now it's the state's turn: raise taxes on the wealthy and start hacking away at the billions in tax expenditures and corporate tax subsidies this state gives away to special interests. Get the fees for pension managers under control and start demanding better performance or they will lose our business. Negotiate hard with health insurance companies and health care providers, including hospitals and pharmaceutical companies.

If that's not enough, then we'll talk. But not before.

We're waiting...


 * The obvious answer, of course, is that it's good for my health, and I should lose weight anyway. But if that's true, why have any incentives at all? And, therefore, why expect any savings to materialize?

** Thanks to you-know-who for help with this list.

Monday, July 13, 2015

Why U-Ark's Charter School Philanthropy Study Is Just Wrong

One of the more annoying things about discussing and debating education policy is seeing how misconceptions are born. You can often trace an incorrect notion from a think tank's brief to a reformy "analyst" who only read the press release and wouldn't understand the methods section (if there is one) anyway. That supposed "expert" than passes it to the larger punditocracy, who think it's a good idea to write about many things shallowly, rather than regularly inviting actual experts to opine in their stead.

People like me then bang our heads against our keyboards when we read something in the media that's just not true. If we're obsessive (*ahem*), we trace the idea back to its origin (which often requires detective work, as pundits love to spew "facts" without actually saying where they came from), where it's either found to be the product of misinterpretation, or just plain wrong at the source.

Case in point:

We got a few stories last month about how charter schools don't really get all that much philanthropic revenue. "Analysts" tell their readers that people like me are just blowing smoke when we point out that philanthropic giving is a great help to certain charter operators and should be taken into account when ill-informed pundits decide to write stories about those charters' jewel-like shine.

The genesis of this notion that charitable giving to charters doesn't matter is a report by the University of Arkansas's Department of Education Reform (yes, there really is such a thing, I swear). "Buckets of Water Into The Ocean: Non-Public Revenue in Public Charter and Traditional Public Schools" is the latest in a series of briefs from U-Ark that purport to show that, compared to public district schools, charters are barely scratching by on a fraction of the revenue their host districts rake in.

When U-Ark released an updated report on this topic in 2014, Bruce Baker* took it apart in a definitive brief for the National Education Policy Center. Baker's work speaks for itself, and I won't try to encapsulate it all. But there are, according to his brief, at least three big problems with U-Ark's methods:

1) U-Ark compares per pupil revenue in charters with per pupil revenue in districts -- statewide. This is just plain old dumb. Charters are largely clustered in urban areas, and schools there should not be compared to schools across an entire state, including suburban and rural schools. The student populations are not the same, and the revenues are not the same. It's just a totally meaningless comparison.

2) The report is "alarmingly vague" in describing its methods and data sources. But that's pretty much the standard these days for reformy research.

3) U-Ark only looks at revenue without taking into account where it is spent and on whose behalf. This is a huge, huge flaw. Let me ask Bruce's indulgence here a bit and try to state the problem in layman's terms:

For this example, we'll talk about transportation. In many states (including New Jersey), school districts that host charter students must provide transportation for those students attending those charters. This saves the charter from having to worry about getting their students to school, both financially and logistically, as the entire burden is on the local district.



Here we see the taxpayers giving money to the local district for transporting all of the district's resident students, whether they attend a charter or a district school. The charter school gets none of it... but then again, they don't have to transport any kids! But U-Ark doesn't appear to care at all about this:



Instead, because they are focusing only on revenues, they look at the extra money the districts get without thinking about the extra obligations the district has. Obviously, this makes no sense; there has to be some way to account for the difference if we're going to make a useful comparison. Unfortunately, as Bruce points out, there is no evidence U-Ark ever attempted to do just this.


So here's the funny thing about this latest report: rather than show that they did make adjustments and just didn't document them, or adjust their methods to correct their previous mistake, U-Ark instead revels in their lack of appropriate methodology:
Other critics of our report counter that our methodology is flawed because we count as district revenue the funds received by districts that pass through the district to area charters. Traditional public schools often receive funds that are, in turn, given to charter schools. Failing to account for this funding mechanism would overstate the amount of revenue TPS receive. Critics also argue that charters might enroll a higher proportion of reduced-price lunch students than TPS but that TPS enroll a higher proportion of the very poor students who qualify for free lunch (Baker 2014). This charge that we count pass-through charter revenue as district revenue is false. We count all revenue based on where it ultimately ended up, as documented in audited originally (see our methodology section below). The claim that charters enroll a lower proportion of free-lunch eligible students than TPS is also incorrect based on NCES data (Wolf et al., 2014).

Some researchers have additionally criticized our school revenue study for not focusing on school expenditures (Baker 2014). We maintain that a revenue study should focus on revenue, as the total revenue that an educational organization receives represents the actual amount of resources that are committed to that organization, regardless of how those resources are subsequently spent.* If one were interested in the total amount of federal taxes paid by Americans in a given year, one should not look at the total amount of federal government expenditures in that year because revenues are not the same as expenditures. [emphasis mine]
That is a preposterous analogy. U-Ark isn't looking at total revenues in all publicly-funded schools; it's dividing up the schools into groups that do different jobs. What they're actually doing is more like counting up the revenues that flow to the Defense Department and the Department of the Interior, than bemoaning the fact that one gets less -- without acknowledging that they don't have the same function!

Here's another example:



This time, the taxpayers are funding free and reduced-price lunches (FRPL). But let's suppose the charter school is contracting out its lunch service to its host district (from what I can tell, this seems to be a fairly standard practice, particularly in co-located charters). It passes through its federal lunch subsidy to the district, which, in turn, provides the charter students with their meals.



But did U-Ark count that pass-through as revenue for the district? It sure seems like they did (again, the methods are so poorly documented it's hard to be sure), and that would be a mistake. The district is providing a service to the charter students for those funds, not the district students. Yes, it's extra revenue, but it's also extra responsibility.




So this is the fundamental problem with U-Ark's research, even before we get into the topic of non-public revenue -- which, contrary to the apparent limited understanding of our reformy "analysts," is not defined by U-Ark as solely as philanthropic giving. In fact, the largest source of non-public funds for district schools, aside from "miscellaneous" funds, is food service.


Here we see the flow of non-public funds into and out of schools for paid lunches -- including the suburban schools (we'll see why this is important in a minute). If the charter contracts out with the district for its food service, the charter students who pay for lunch will actually be paying the district. As regular readers here know, charter school students are less likely to qualify for free lunch than students in their host district schools, which means the urban school is getting proportionally more of its non-public lunch revenue from charter students than from its own students.

Maybe the charter student pays the charter, and it passes through the funds. Does U-Ark double count this? They say they don't: "We count all revenue based on where it ultimately ended up." OK... but then, once again: the district school does get more revenue, but it also has more responsibilities. It has to make extra grilled cheese and tomato soup for the charter kids -- that's why it got the money!

In addition: out in the suburbs, very few kids are getting free lunches. Those districts are also making lunches, but the revenue to make those meals is coming from non-public sources, not the feds. And here's where U-Ark's bad habit of aggregating all districts in a state screws up their analysis.



All of a sudden, all the urban and suburban districts are lumped together and compared to the charters. As I've said many times, the charters don't have as many free lunch kids as their urban hosts -- but they still have way more than suburban schools. So comparing urban charters with suburban district schools makes it look as if all district schools are swimming in non-public lunch money!



This is just nuts. The suburban schools are providing a service for all this non-public revenue, yet U-Ark pretends as if they are getting extra revenue, even though that brings with it extra responsibilities. Worse, the urban schools get dinged, even though they only have a small number of students who pay for their lunches!

But hang on -- it gets even more ridiculous. Because the U-Ark folks have decided to treat lunch revenue and tuition revenue and rental revenue and all sorts of other sources of funds as equivalent to philanthropic giving; they're all just different sources of non-public revenue.

But they aren't equivalent. When a school receives a charitable donation, there is no obligation to provide a direct service in exchange for that money. If a kid buys a lunch from a school, the school gives that kid a lunch. If a theater company rents the school auditorium over the weekend, the school keeps the lights on and pays its custodian to clean up the mess. 

A philanthropic donation is not the same sort of transaction. Yes, the donation may be earmarked for a particular item, but that item is helping the school in its primary mission; it's not an "extra" outside of what the school is set up to do. So the aggregation of philanthropy with things like lunch revenues is not in any way useful.

But even when U-Ark does separate out philanthropy, the way they do it makes no sense.



Suburban charitable giving for schools is rarely in the form of direct cash grants to districts. Local residents will instead set up "education foundations," which can be a big source of support for district schools. The foundation has its various fundraising activities -- much of it giving from parents whose children are enrolled in the schools -- and then gives grants directly to teachers for various educational items like smart boards.

As far as I can see, U-Ark entirely ignored this giving. I say this because in Table 5 (p.19), it lists New Jersey district schools as receiving a mere $19,922 in total revenue from philanthropic sources. But the Millburn-Short Hills Education Foundation -- just one suburban district -- gave over $204,000 dollars to its schools just last year. (Didn't any of the study's five authors stop and say, "Uh, guys, this figure just doesn't seem right..."?)

Conceivably, this actually supports U-Ark's contention that the charters are falling behind on non-public revenue. But not so fast: some charters have organizations that assist them in gathering extra revenue, just like the suburban education foundations. You can find the tax statements for many of these "Friends of..." groups on Guidestar. I've been looking at them here in New Jersey (more on this later), and some of the amounts are eye-opening. The Princeton Charter School actually has two organizations supporting it, and the amounts involved are very, very significant.

In addition, some groups like Friends of TEAM (KIPP) Academy Charter School appear to rent facilities to their affiliated school at a loss, a form of non-public subsidy. According to their 2012 Form 990, FOT took a rental loss of $1.8 million (Form 990, Part VIII, line 6c). That's a big chuck of change by any measure. But U-Ark doesn't appear to have included this form of subsidy (again, who can tell?). Instead, their analysis looks like this:



"Buckets in an ocean," huh? Looks like maybe you skipped a few:



Again: conflating suburban and urban districts obscures what's really going on. We could use some more research on the impact of these education foundations; however, it's safe to say that the per pupil charitable giving in an affluent town like Millburn is going to be much higher than the giving in a less wealthy place like Newark. But the charters are in Newark, not Millburn (for now). It pointless to conflate the two, just as it's pointless to conflate lunch revenues with charitable donations.

To be fair: one point that U-Ark does make that bears repeating is that charter philanthropy is not spread evenly across the sector. A few big-name charters appear to get most of the charitable giving; that lines up with previous research, which does not lump together all charter schools. But U-Ark does not make this distinction in their executive summary:
Although charitable funds from philanthropies make up almost half of the non-public revenue in the charter sector, they account for only 2.5% of total charter revenues nationally and therefore cannot be expected to close the 21.7% total funding gap between charters and TPS in these 15 states.
Well, sure -- across the sector. But does philanthropic giving help specific charters pull even when compared to their host districts, accounting for differences in student populations and responsibilities? That is the relevant question -- and the one U-Ark does not ask.

Think tanks (and let's face it, that's what U-Ark's Department of Education Reform is) have got to start doing better. People who push reformy lines have shown themselves time and again incapable of understanding the nuances of issues like school finance and charter school proliferation. They continue to be lead astray by reports like this one from U-Ark, which takes a complex issue and oversimplifies it to the point where the conclusions drawn are simply wrong.

Simply saying: "This is a revenue report!" isn't going to cut it. Raise your game, folks.



Go hogs!

ADDING: There's a truly bizarre footnote in this report that pretty much sums up its major flaw (p. 8):
The one source of funds that we excluded from the total for both charters and TPS is revenue from bond issuances, since those funds have to be repaid. We also excluded revenues for adult and preschool education because our study focused on revenues for K-12 education only. [emphasis mine]
But why would you? You include transportation revenues, even though the districts have to pay for those costs for both charter and district students while the charters are exempt. You include non-public food service revenues, even though, once again, many districts are likely providing a service charters are not.

Why would U-Ark arbitrarily decide that pre-K revenues are not part of a district's total revenue stream? Why exclude this but not transportation? If you take out one, you have to take out the other.

Right?


* As always: Bruce is my advisor at Rutgers GSE in the PhD program in Education Theory, Organization, and Policy.