The cost equation for schools

The county school system’s plan for closing a projected $20 million shortfall for the 2009-2010 school year has been apparent for some time: cut several hundred teaching and administrative positions, close some schools, and defer needed expenditures on transportation, textbooks, building maintenance and other vital items. Superintendent Jim Scales and the school district’s chief financial officer, Tommy Kranz, have been making the case for such cuts for months, and they did so again before the school board Tuesday.

But so far their arguments are all about average cost ratios, not educational needs and the consequences to students of the cuts.

From a strict dollar-cost view, the superintendent and his CFO make their cost-cap argument appear reasonable. Their stated intent is to get the school system to a point where annual tax revenue growth for the school system matches its annual inflation-adjusted expenses.

Revenue lags costs

That presently is not the case, and hasn’t been for a long time. Mr. Kranz, and an outside committee, keep saying the cost vs. income equation is off the rails because the system has too many teachers relative to a lower statewide average pupil-teacher ratio, and too many small schools to allow maximum school-size efficiency relative to operational costs.

The system’s expenses are rising around 4 percent a year, or roughly $12 million, yet annual growth in the schools’ revenue base — from local and state taxes and federal appropriations — trails the growth in expenses. Additional pending expenses make next year’s budget even harder to meet. These costs include excessive inflation in employees’ health insurance, fuel and transportation budget, utilities, textbook and food costs; new staffing for new schools; step increases in teachers’ salaries; and critical but long-deferred maintenance needs, for example.

The missing BEP funds

A big chunk of the projected increased cost could be absorbed if the state were able to make good on the second installment of $12.5 million in new, annual Basic Education Program funding. That amount was promised by Gov. Phil Bredesen two years ago to close the yawning gap in inequitable funding from the state that made Hamilton County for years the most under-funded school system in Tennessee’s per-student BEP funding formula.

The state’s jaw-dropping plunge in tax revenue in the current recession had seemed to eliminate the possibility of that BEP cash infusion. The Obama stimulus plan’s appropriation for states’ K-12 education funding, however, may yet enable the state to deliver some of the promised BEP money if advocates can get to the governor.

Still, the system’s per-pupil spending levels, as computed by Mr. Kranz and an outside advisory committee headed by Unum’s chief financial officer, are said to be “excessive” in teaching positions and school buildings relative to other Tennessee school systems. But that may be due to two entirely reasonable factors.

One is that the system keeps more than a half-dozen smaller schools operating due to community support, leading to inherently higher teacher-pupil ratios as different classes are constituted from smaller base numbers of students. The other is that Hamilton County employs more teachers than the state BEP minimum- oriented plan covers, and does so for good reason.

That (wrongly classified) “excess” staff is necessary to meet the needs of a school population adversely effected by the movement of families from nearby counties to Hamilton County to enroll children with special needs in this county’s better schools. More than half the county’s students, moreover, come from economically-disadvantaged families under federal income guidelines. More teachers, and more intensive teaching, are required to meet their educational needs.

Numbers not ‘excessive’

Our so-called “excessive” number of teachers are also kept to ensure that Hamilton County’s students receive more than the minimal curriculum provided for under the state’s minimal BEP funding, which traditionally ranks near the bottom in national per-pupil spending by the 50 states. Even adjusted for Tennessee’s low-wage and cost-of-living status, Tennessee ranks 38th in per-pupil spending.

Simply put, Hamilton County’s school system has tried, despite grossly inequitable funding from the state, to put more and better-trained teachers in the classroom, to deliver a better-than-average curriculum, to improve achievement and raise value-added test scores, and to keep the neighborhood and magnet schools that Hamilton County residents have traditionally supported.

The wrong cost equation

To adopt school and teacher-pupil ratios, and strict per-pupil expenditures relative to state averages, that fall short of Hamilton County’s goals without making clear the nature and consequences of that choice is unfair. It certainly leaves students, their parents and our schools and teachers boxed in an equation that shortchanges their needs and options. It also neglects the value and contributions of teachers and their central office support.

The issue should not be how we rank against other Tennessee counties in low spending against minimal state standards and the state’s deeply unfair funding for Hamilton County. It should be how we can keep our schools strong enough to meet the standards we desire for our children — and our community’s future workers — to succeed in an increasingly competitive nation and world.

Dr. Scales, Mr. Kranz and their outside committees aren’t talking about this cost equation. Their argument for cuts won’t be adequate until they do.