In California, Education Just Doesn't Pay

The first thing you have to understand about California is the number of governments that operate here. Besides the federal government and the state government, there are 58 county governments, and below those counties—except for a few entities that are both city and county—are municipalities, each with their own government. All of them have a role in funding education. Add to that the school districts themselves and you can see that there is no simple way to write about, let alone do anything about, the parlous situation that California’s education system is in.

The Feds

Under the US Constitution, education comes under the purview of each state. There wasn’t even a cabinet-level Department of Education until 1980. The official mission of today’s federal Education Dept is ‘to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.’

On a recent visit to San Francisco, where he was received like King Tut’s emissary, Education Secretary Arne Duncan stressed that the Obama Administration was committed to supporting programs that fitted with that mission. At an event billed as a conversation between Duncan and Marian Wright Edelman, president of the Children’s Defense Fund, he told the invited guests, “I want you to understand the magnitude of the opportunity” now afforded by the “north of 10 billion dollars” he has at his disposal.

“Amen to that!” you could almost hear the collected heads of nonprofits and educational institutions gathered in that room at the UC San Francisco’s Mission Bay campus say under their breath. Perhaps they didn’t quite understand what Duncan meant when he also said, “We’re going to invest in people who are walking the walk.” Just a couple of weeks earlier he’d announced 500 million dollars worth of cuts to programs that apparently didn’t “walk the walk.”

The endurance walker

An example of the kind of person the Obama Administration is going to invest in is Alan Khazei, who co-founded a nonprofit called City Year in 1988. In an article in Fast Company magazine a campaign stop at City Year’s annual convention in 1998 is credited with inspiring Bill Clinton to create the volunteer service organization AmeriCorps. Khazei left City Year in 2007 to found Be The Change—understandably, this is a darling nonprofit of the Obama generation.

According to City Year’s IRS tax report, in 2007 Khazei was paid $315k plus $47k in benefits—figures that included a “Departure Benefit” of $200k, vacation pay of $20k, and additional performance-based compensation of $39k. Not bad! On top of that, no doubt, his work-related expenses were reimbursed. And you have to wonder if in previous years, he claimed expenses for the layovers he chose to take so that he could meet up with his girlfriend, now his wife, as is also reported in the Fast Company article.

What did City Year do in 200t ? Besides, that is, compensating its top five employees with six-figure sums, throw away half-a-million dollars on lavish fundraising events that don’t turn a profit, spend $1.25 million on lobbying, $700k on professional services (such as architectural design, marketing/branding, accounting/tax consulting, and evaluation research), and paying $2.9m to a construction company in order to build a flash headquarters in Boston? (City Year’s IRS Form 990 is available here.

Well, it did spend the princely sum of $9.25m of its $47m revenues (which are made up of $30m from the public and $17m from government sources) to pay stipends to “young adults 17-24 [who] perform 10-12 months of full-time community service.” In FY07, that community service took the form of “43,666 children [being] served by having tutoring, mentoring, special curricula, enrichment programming, service-learning activities, and teacher support”.

The 1,135 recruits, or “corps members,” were paid a stipend ranging from $140-$300 a week during the program year, and some of them also received a $4,725 award that was paid directly to educational institutions to cover part of their higher education costs. Talk about milkcows! And such a cozy little arrangement - so, what possible incentive is there for state and local governments to fully fund education when there’s an army of nonprofits out there, busily lobbying politicians and businesses to get on the feel-good bandwagon ?

Meanwhile, back at the jungle gym

One of City Year’s “signature partners” is another nationwide nonprofit called KaBOOM! - "whose vision is a great place to play within walking distance of every child in America.” Its scheduled playground build next door to Bret Harte Elementary School in San Francisco on June 22 turned into a media melee when not only California First Lady Maria Shriver turned up to help, but also US First Lady Michelle Obama. The slideshow of this event, from the San Francisco School Volunteers website can be seen here

San Francisco Unified School District, like most across the nation, has to depend heavily on volunteers and donors to make up for what its funding doesn’t cover. This shortfall extends beyond mentors and tutors for those students who are falling behind ( as class sizes get larger, because of the budget cuts and teacher layoffs) but also to the basic necessities for books and classroom materials. Which brings us back to the parlous situation of education in California. It was once a leader in the national rankings, but is now down at number 48. Of all the states in the US, California—with its history of innovation and entrepreneurship—must surely know the value of investment in education. So why is its education system failing?

Two fat ladies ‘n 1D

The answer is the one branch of government I didn’t mention in the opening paragraph. Direct democracy, as expressed through initiatives and propositions put on the ballot at municipal, county, and state levels has either drained the pool of tax revenue, or imposed restrictions on how the money is spent.Plus, there has been an over-reliance on raising money for education by floating bonds. ( Although parcel taxes at a municipal level sometimes pass, they’re not so successful at the state level.) . Bond measures—which, instead of costing money now like taxes do, cost a great deal more money later when they have to be repaid—are more likely to pass.

In 2006, Proposition 88 proposed levying an annual $50 tax on each parcel of property in California. “The revenues from the tax would be used to provide additional K-12 public school funding. [ In New Zealand terms, K-12 means all pre-school, primary school and secondary school education, from kindergarten to tertiary level.) Class size expansion, instructional materials, grants to facilities upgrades, and other examples of educational needs would receive the funds. Critics believe the proposition is flawed, creating an unfair tax that landowners will have to pay without end. Proponents believe that education is deeply underfunded in the state, and that Proposition 88 will fund major improvements.” (The summary that contains this quote is available here.

The Yes on 88 campaign was funded by Taxpayers for Better Schools and Smaller Classes. It gave up the ghost part-way through the campaign, which may or may not have been the reason that it was trounced 77 percent to 23 percent. “Tax” might be only a three-letter word, but it might as well have four, Unless of course, it is being imposed on something like cigarettes or alcohol, or—as in this month’s Oakland mail-in ballot, is being imposed on medical marijuana. That wasn’t all. Another proposition was on the ballot in California in November 2006, called Proposition 1D.

This proposed floating a north-of-$10billion bond issue ‘to provide needed funding to relieve public school overcrowding and to repair older schools,’ as well as providing money for new buildings at community colleges and campuses, in the two state-funded university systems. Despite the incredible debt that such legislative bond measures incur, they require only a simple majority to pass, which this one did : 56 percent of voters said Yes.

In contrast, the California budget must have a 2/3 majority to be passed and even then it can be vetoed by the Governor. Which explains why the state is now forever without a budget, as of the deadline date of June 30. California has had to issue IOUs to pay counties, municipalities, companies, nonprofits, and individuals who have contracts with the state, and borrow money at huge rates of interest, thereby getting downgraded by Standard and Poors—and even then, it can’t find any buyers for its bonds.

As you might imagine, small nonprofits don’t weather IOUs very well. So — as with the commercial sector—the nonprofit sector inevitably gets whittled down to the ones with the most money and the most lobbying power. ( Lobbying at the grassroots, by the way, is as expensive in California as lobbying government.) It also comes down to who has the most friends, in high places.

What a crock!

Resources

Fiscal, demographic, and performance data on California schools is here. The basics of California’s school finance system is summarized in a 2-page pdf from 2006 that is available here. A useful summary on “Why School Finance Matters” can be accessed here.

The federal role in education is summarised here.

ENDS

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