The Unknown History of the Mother of All K-12 Competitive Effects

May 24, 2016

(Guest Post by Matthew Ladner)

How did this happen?

NAEP Math Cohort gain 2015

As per usual, there is no one single simple answer, but the elephant sitting in Arizona’s K-12 room over the last decade has been abrupt and bracing change in a decades long trend of district enrollment growth and funding increases.  Arizona has experienced more than a century of population growth as the rest of you figured out that it was possible not to dig your car out from the snow, and even to play golf in February in Arizona. Arizona K-12 enrollment boomed for decades, with almost all of it going to the districts. In 1995 the first charter schools opened, but at first they were like little mammals scurrying around fearfully in the Age of Dinosaurs.

 

AZ enrollment growth

During the booming age of plenty, the districts were not only getting ever more students, but the spending per pupil steadily increased. Arizona has never been a wealthy state and has long had a relatively small working age population due to the presence of beaucoup retirees and children (relatively large LDS families, immigrants etc.) so this increase was even faster in most states, but was still very large in Arizona:

AZ spending

 

So in this sort of lost, antebellum Arizona of pre-2007, the school district folks would complain about more of these charter schools popping up, but really they were just whining- spending per pupil had been going up, and they had more pupils than they knew what to do with. Mind you the NAEP of 1992 showed that only 28% of Arizona Anglo students could read proficiently in “English” so a reasonable person could conclude that the districts and their swelling enrollment and growing funding could use a little competition.

As fate would have it, they got competition with both barrels after 2007. In fact, I will have to nominate Arizona as having gone through the mother of all competitive effects.

The Great Recession hit Arizona early and hard. Arizona’s general fund dropped 20% in a single year. When your main industry is building houses on golf courses and all of the sudden everyone nationwide has a difficult time selling their house, your economy takes a beating something like:

Great Recession SMASH AZ economy! Great Recession is the STRONGEST ONE THERE IS!!!!!

I…..wish…..I……could…………spend..more……on……..schools!

So the federal stimulus and a temporary sales tax increase engineered by former Governor Jan Brewer temporarily staved off cuts, but they were eventually necessary and they were not insignificant:

AZ spending

At the same time per pupil spending declined, enrollment growth came to a screeching halt in the districts, in part because of the continued growth of charter schools:

AZ enrollment

Now mind you that the absolute size of district enrollment was quite modest, but the normal experience for Arizona schools had been non-stop growth for decades.  That growth not only stops and reverses a bit, but state assistance per pupil declines as well. Thus at exactly the same time you might want to make up per pupil funding losses with more pupils, you suddenly stop getting as many pupils.

Now as I have written about before, the Newtonian model of K-12 mechanics would have concluded that Arizona’s NAEP scores would have declined under the weight of this pressure. (In fact, Mike Petrilli still owes LGK and I beers on that front….hmmmm….interest accruing daily btw.)

What actually happened during the Great Recession however is that while the economy was smashed, outcomes in schools continued to improve, even defying the national trend in the 2015 NAEP. As the first chart in this post shows, Arizona’s students made more math progress between their 4th grade scores in 2011 and the same age cohorts scores as 8th graders in 2015 than any other state. What gives?

While funding decreased, competition for students increased. An ever higher percentage of students continued to apply to attend charter schools and their waiting lists continued to swell.  Fancy Scottsdale Arizona somehow has a couple of empty schools. The state wisely moved to outlaw LIFO in school district layoffs, because layoffs were necessary. A skillful school leader would have taken the opportunity to preserve as many highly effective teachers as possible in this process.

In short, this was a productivity increase that you see in private industry on an ongoing basis. Arizona schools became less expensive and more effective. It is however at complete and utter variance with the state’s history of ever growing budgets and students along with relatively stagnant scores.  The Mother of All Competitive Effects (so far) was great for kids and taxpayers, tough on providers and it came about as a combination of deliberate policy and accidental economic catastrophe.

Where do we go from here? Proposition 123 will provide an extra $3.5 billion over the next 10 years, the baby boomer teacher cohort will continue to retire and need replacing, new charter schools will continue to open. Enrollment growth has already returned but the working age population will continue to shrink as a percentage of the total population.  The need for further academic gains remains acute. In short, the need for a less expensive and more effective education system is not going away, nor will the political battles surrounding the K-12 debate.

If however Arizona policymakers play their cards skillfully, the state can continue its ongoing move out of the NAEP cellar and towards a world class system of education. Some Arizona schools have already arrived at this enviable spot.

The challenges are very real, but the sky is the limit on our opportunity to improve.

 

 

 


NAEP Gains by Spending Trend- Some States are the Harlem Globetrotters, Others the Washington Generals

February 24, 2016

(Guest Post by Matthew Ladner)

Notice the large number of states on the negative side of zero on the spending bar. In the immortal words of Lee Ving it’s already started.

Winning

Once again let me note with insufferable state pride that Arizona is your ROI champion doing things that no one would have thought possible.

Go majority-minority, cut funding and improve scores? No problem-nothing but net!

So it is tough to pick a Washington Generals, but I’ve got mine narrowed down between Alaska, New York and Wyoming.

 


Policymakers are Doing their Part to Kill Private Education in DC

December 30, 2015

(Guest Post by Matthew Ladner)

I’ve been taking a close look at DC education, and I must say I’ve learned a lot- both good and bad. One of the bad things would be these charts from the Urban Institute showing that private schools are going the way of the Dodo in the District of Columbia. K-5 is above and grades 6-8 below:

 

A couple of notes: we’ve known for some time that charter schools hit private schools harder than districts- and well here you have it again. Also note that the collapse comes in spite of the DC Opportunity Scholarship Program starting in 2004. DC’s charter school law effectively operates as a universal school choice program that reliably delivers more than $14k in funding to all comers, but limits the universe of schools to young and/or startup schools.

Now mind you, this is less than half the revenue per pupil in the District of Columbia Public Schools (traditional district-see Census Bureau second bullet Tab 11) and they get better academic results than the district at this lower cost. Bully for them. The law of unintended consequences however is a cruel mistress and she has been whipping DC private schools with a bloody cat o’nine tails.

No but you can have this…

The DC Opportunity Scholarship program meanwhile only offers a maximum of $8,381 per child for students in K-8, and unless it is both reauthorized and redesigned one cannot help but wonder if there will be many private schools for these students to attend in the years ahead. Please someone explain to me how it makes sense for a charter school law to operate as a defacto universal choice program at $14k per child, while the private choice program offers substantially less per child and only to poor children. The Urban Institute data clearly indicates that this is a recipe for extinction of the private school sector outside of elite institutions. To put matters bluntly- who in their right mind would seek to open a private school in preference to a charter school in DC under this system of finance? Did you miss the part where private schools have been dropping like flies while charter schools proliferate? The funding for charters is large, universally available and reliable. The funding for DC Opportunity Scholarships is small, restricted and uncertain.

It’s little wonder why a number of D.C. Catholic schools gave up the ghost a few years ago and converted into charter schools. The school financing system practically clubbed them over the head. I’d like to invite my friends from the pro-means testing wing of the private choice movement to reflect upon the viability of supporting DC style scholarship programs when those programs must compete with defacto universal choice programs with far greater funding. Who wins that battle? Sadly the universal program restricts eligibility to young/startup schools with limited curricular diversity- how does this make sense? If parents decide to extinguish private schools as a result of a remotely equitable competition, you won’t see me shedding any tears. Our currently policies however make it look like we are out to quash private schools kind of like, well, this:

 

 


Raising the Bar on the Forster-Mathews Bet

April 1, 2015

(Guest Post by Matthew Ladner)

Thus far I am aware of a tax-credit improvements in Alabama and Arizona, new special education scholarship programs in Arkansas and Mississippi, and many other measures pending in many other states. I think it is safe to say that Greg will once again defeat Jay Mathews in the over/under of 7 enactments.

WSJ choice

 

While we celebrate yet another Greg victory, it may be a good time to pose a different question for ourselves: how many states have enacted a choice program or a combination of choice programs sufficiently robust to see a growth in private education in the face of a strong charter school law? A Rand Corp study found private schools will lose one student for every three gained by charter schools in Michigan.  We would not expect to find an exact match for this nationwide, but charter schools do by definition draw upon the universe of would-be choosers: parents who are looking for alternatives outside of their zoned district school. It makes sense that they would have a larger impact on private education.

If we assume the Michigan finding to be roughly equivalent to a national average, then we can proceed to check the tape. First charter school enrollment by state:

Charters school enrollment

Next private choice program enrollment by state (from the Alliance for School Choice Yearbook):

Private choice students 1

 

And…

Private choice students 2

So how many states have one-third or more as many private choice students as charter school students? Indiana is matching private choice students with charter school students despite a strong charter law thus far, and so is the leader in the clubhouse. Florida barely met the 1 private choice for 3 charter school students standard between the combination of the corporate tax credit program and the McKay Scholarship program. Without new revenue sources however growth in the Florida tax credit will stall in the next few years even as statewide student growth continues. Moreover Florida charter schools have almost certainly drawn a relatively advantaged group of students from private schools (charter schools have universal eligibility). The private choice programs have been aiding only low-income and children with disabilities and providing significantly fewer resources than those students receive in public schools (smaller tax credit scholarships in the case of low-income children, no local top-up funds in the case of McKay students).

Florida lawmakers have been busy improving the ability for high quality charter operators to open new schools (as they should) but balked last year at providing new tax credit revenue sources. Absent some large policy changes Florida will soon slip below the 1 to 3 ratio.

Iowa met the standard because of a healthy and growing tax credit program and a weak charter school law (3 total schools), so give them an *. Wisconsin meets the bar with the combination of private choice programs and a charter school program that (last I heard) is still bottled up in Milwaukee, so kind of an * too.

The Illinois and PA programs would require some sort of estimate regarding the price elasticity of demand for private schooling, but I’ll just heroically guess that charter schools have the better end of the deal in those states. Arizona and Ohio have more than three charter students for every private choice student. Other states like California, Michigan, New York and Texas seem content to watch their charter school sector batter their private school sectors into gravel.

Bear in mind that this comparison would look even more lopsided if we counted dollars rather than students. For instance the average tax credit scholarship in Arizona runs around $2,000 while the average charter school receives around $7,000 per pupil. Very few of the private choice programs come near to matching the per pupil level of subsidy provided to charter, much less district schools. Emblematic of this failure was the choice of 12 Catholic schools in Washington D.C. to give up the ghost and convert to charter schools after a (poorly designed) voucher bill had passed.

The goal of the private choice movement should not be to preserve a preexisting stock of private schools per se, but rather to allow parental demand to drive the supply of school seats. Those District of Columbia Catholic schools did not convert to charters because the parents were clamoring for it, but rather because the Congress had offered almost twice as much money per pupil to do it. States like Texas invest hundreds of millions of dollars per year into a charter sector that draws disproportionately from private schools while providing parents who would prefer a private education for their child nothing but the prospect of struggling to pay their school taxes and private school costs simultaneously.

Seen in this context, many private choice victories seem worthy but incremental. Incremental change is the equilibrium point of American politics, but the choice movement needs more Indiana style successes. Once more unto the breach dear friends…


Alaska on top (for now) while the Euro Zone, Alabama, Britain and Mississippi bring up the rear

August 27, 2014

GDP

(Guest Post by Matthew Ladner)

Readers of a certain age will recall the days when European films got over 10% of the American box office. I recall being told that this was the thing to do, but being fairly consistently disappointed with the products. European governments are apparently willing to subsidize bad films on an ongoing basis, but I was not. Eventually the American public also found better ways to spend their entertainment dollars, and European film-going shrank in America.

It looks to me like the devotion of some Americans to European economic policies deserve the same fate. Even our versions of small population/big oil territories (Alaska and North Dakota) beat the stuffing out of their version (Norway). Germany is the economic titan of Europe but finds itself sandwiched between Montana and Arizona. Move an American state with a large population and high-end GDP per capita to Europe (say New York or Texas) and there would be a new sheriff in town.

Read the WaPo for more.  Someone explain to me again why the PISA rankings would look so much different than the economic rankings. Don’t bother trying to say that there is poverty in Alabama but none in the Euro zone because I’m not buying it. The last per student spending rankings I saw had Alaska (the top state at GDP per head) at $18,000 per year per kid and NAEP says 42% of the 4th graders score below basic in reading. It would be a great idea to concentrate on getting bigger bang for the buck because, ahem, well…


Bustin’ Makes Butcher Feel Good

August 24, 2014

ghostbusters butcher

(Guest Post by Matthew Ladner)

So if the above picture looks like a sloppy attempt at photo editing by someone goofing around with a program for the first time, it is only because it is in fact just such an attempt.

So Arizona voters passed an initiative long ago that provided for inflation adjustments to K-12 spending. During the bubble years spending went up faster than inflation, but during the catastrophic collapse of the economy it went down less. The AZ school district non-profit industrial complex eventually sued to get the funding restored, and they recently won, sticking lawmakers with a $317,000,000 bill. Arizona is broke and unlikely to find that sort of change in the sofa, and requires a 2/3 vote of each chamber to raise taxes. So, what happens next?

The Goldwater Institute’s Jonathan Butcher went to the pages of the Arizona Republic to suggest a couple of ways to recoup the money. First- stop funding ghost students. Districts get paid on last year’s student count, charter schools on this year’s count. Ergo every time a child transfers from a district to a charter school the state pays for them twice for a year. This is a pure waste of money that will continue to grow with Arizona’s charter school sector. Butcher estimates this could gain the state $125m of the needed $317m. If I were Arizona’s higher education community I would jump on the Ghostbuster bandwagon because otherwise that $125m is likely to come out of higher education spending sooner rather than later.

Second Butcher proposes that some of the base funding for schools be conditioned on kids actually learning something. With half the high-schools in the state having 5% or less of the graduating Class of 2006 finish a Bachelor’s degree in six years, this sounds like a promising if tricky idea.  The taxpayers ought to be getting an ROI from Arizona public school spending dominated by student learning, not by mere babysitting.


U.S. K-12 spending drops for the first time in 35 years

May 29, 2014

(Guest Post by Matthew Ladner)

Mmmkay, well, this sort of thing is going to happen when your labor participation rate hits 1978 levels.  With tens of millions of Baby Boomers reaching retirement age, it looks like it will be much easier to increase K-12 flexibility than funding going forward. Ah for the halcyon days of 2008 when the AFT dreamed of putting dentists and personal trainers in the public school system for transparently self-interested reasons the vague promise of creating a 21st Century utopia.

 


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