Memphis Commercial-Appeal Continues to Ignore Reasons Behind Projected School Budget Deficit

Today the Memphis Commercial-Appeal has a big story on the 80-90 million dollar hole in next year's school budget for the new "unified" Shelby County Schools.  Reporter Michael Kelly manages to point to a number of reasons for the shortfall without ever mentioning the primary reason, charter schools, the expansion of which creates inefficiencies throughout the system that will cost taxpayers hundreds of millions over the next decade if current charter plans continue.  

Has Kelly not bothered to read the transition plan ( it is available on the Web), which spelled out these facts in a report from last summer?  

Or is the Commerical-Appeal to beholden to oligarchs like Bill Gates to carry out the responsibilities of a free press to inform the public on civic issues? 

Some of Report presented below from an earlier post at SM:

Here below are some choice tidbits with a few of my own comments.  (My bolds within the text)

Overall Shelby County public school enrollment is projected to decline 3% from FY2012 to FY2016, resulting in approximately 147,400 students enrolled in Shelby County public schools by FY2016. The enrollment mix is expected to shift to non-district operators (including charter schools and the ASD), from 4% of total public school enrollment in FY2012 to 19% in FY2016, resulting in approximately 118,700 students enrolled in district-operated schools by FY2016 (p. 13).

The Committee developed these priorities and recommendations with the understanding that Shelby County Schools will not be structured like a traditional school district in 2013–14. With the growth of the Achievement School District (ASD), the Innovation Zone, and charter schools, the district will be a mix of school operators and types. The TPC recognizes that the district does not, and should not, have the authority to mandate some of the recommendations below in charter schools and the ASD (p. 31).

The details on the Achievement School District are not complete, but it will essentially operate without local control or oversight.  It will be run out of Nashville, and it will replace the lowest scoring (poorest) public schools in the state with corporate charters.

Some details on the cost of the new Gates-Walton-Edelman Plan:

Cost Management of Enrollment Shifts

Summary

A system with multiple school operators (e.g. District, ASD and charter schools) inherently costs more to operate due to loss of scale with fixed costs being allocated across a smaller volume of students. This multi-operator environment is in place today and is projected to expand irrespective of the merger. To date, the districts have found creative ways to manage the increased costs of the existing multi-operator system (e.g. cutting or shifting 400+ positions out of the General Fund to right-size staff). However, with the projected share of students in non-district operated schools expandingrapidly in the next few years—from approximately 4% in FY2012 to 19% by FY2016 (equivalent to approximately $212M of revenues shifted to charter schools and the ASD in FY2016)—it is critical to implement strategic cost management to ensure each pathway in the Multiple Achievement Paths model is financially equitable to students. The majority of these enrollment shifts are projected to happen irrespective of the merger, and the increased cost of the system is not the “fault” of the district or charter schools. Although merged SCS will continue to be responsible for managing most of these costs, other operators will also contribute as participants who benefit from this overall system (p. 168).

Here are some specifics from the Plan with details about what they mean.  Note that almost 400 public school teachers will be lost in the first 3 years, and the Stand on Children folks are planning to make sure that these teachers lose the opportunity to transfer to the charter system being planned for urban Memphis.  One of the new priorities for the ALEC owned State Legislature will be  “Repealing TCA § 49-5-511 which requires districts to place tenured teachers on a preferred reemployment list if they lose their jobs due to a reduction in force”(p. 195):

• From FY2012 to FY2014, the shift of an estimated 9,500 students from district-operated schools to other operators (e.g. charter schools, ASD) will result in a shift of approximately $70M in revenues. Charter school revenue share will continue to be a pass-through to the district and ASD revenue share is expected to be directly provided by the State.

• If the merged SCS aggressively implements a set of management practices to manage its school and staffing footprint, it can recover an estimated $58M. This assumes 85% of step-variable costs can be recovered with the district pursuing regular staff right-sizing and active management to hold student-teacher ratios constant. For example, with an estimated decline or shift of 9,500 students from FY2012 to Fy2014, the district will have to make the following types of approximate reductions—390 general education teachers, 60 elective and vocational teachers, 50 clerks, and 15 central office positions—keeping in mind that new teaching and other employment opportunities would be created in the ASD and charter schools.

• Other operators’ paying for benefits received (e.g. utilities and maintenance in shared facilities, shared staff, shared services) can help contribute approximately $3M (seeOperations Plan chapter for more details on shared services). [Presently, TN state law requires charter operators to pay nothing for these services provided by local districts]

• A modest and differentiated contribution from other operators of an estimated 4% (blended average across operator types ranging from 0% to 7% depending on specific choices made by the operators, e.g. full conversion of existing attendance zone in existing facilities contribute 0%, lottery system in existing facilities contribute 5% if choose to share school-level costs) can help recover a further approximately $3M. Enforcing contributions will require a legislative change as current Tennessee law does not allow charter school authorizers to require charter schools to contribute to district overhead. Note that benchmarks of other large urban districts show contributions to range from 2% (Denver) up to 20% (Chicago) (p. 171).

Even if all the cost savings can be implemented, including privatizing custodial and transportation operations and turning over the keys of 21 public schools to charter school operators, the TPC still projects a $57 million deficit in FY 2016.  Below is the wish list that the TPC has developed to try to close the gap created by the drain of education dollars into the corporate charter schools and ASD charter schools.  Note that there is presently no state law requiring charter operators to pay for any shared services, either utility bills, transportation costs, or shared librarians, for instance.

City, county, and state action

There are a number of outstanding issues that require city council, county commission, or state action.

These include:

• Securing the $55M in funding from the City of Memphis

• Waiving the Shelby County residency requirement for all SCS employees, given the number of current MCS employees who do not reside in Shelby County

• Ensuring that all operators (e.g. district, charter schools, ASD) receive state and local funds in the same timeframe

• Seeking definitive clarity from the state on to whom the "leveling up" requirement of the Norris Todd Act applies, and securing an agreement on that definition

• Advocating for the legislature to implement the approved changes to BEP funding, and for the proposed changes made by the BEP Review Committee. There are reforms passed in the State BEP 2.0 formula that are pending funding for full implementation. Some of these reforms, including an increase in the State share for instructional components in the formula from 70%to 75%, could yield as much as $30M in incremental revenue.

• Advocating for the state to provide funding during the merger transition period, per TCA § 49-2-1207 (5), and/or TCA § 49-2-1262

• Advocating for the legislature to approve a charter school and ASD holdback, and charter school attendance zones

• Repealing TCA § 49-5-511 which requires districts to place tenured teachers on a preferred reemployment list if they lose their jobs due to a reduction in force.

• Exploring options to recover the education portion of Payment in Lieu of Taxes (PILOTs) (p. 195).

Now if the wish list does not lead to the desired funds, then the TPC has a contingency plan to pay for the ridiculous and needless and expensive turnover of 20 percent of Memphis schools to charter operators.  Here it is:

Contingency Plan

If all four recommendations for additional funding have been exhausted and a budget deficit remains, the TPC has identified potential incremental cost reductions worth $48M as a reluctant contingency plan. This contingency plan is not a recommendation of the TPC. The TPC believes that these types of reductions, which would increase class size and reduce school-level staff, undermine the potential of the Plan to create a world-class educational system, and should only be pursued as an absolute last resort.

The exact initiatives would need to be identified by the district-led working committee; however, some illustrative examples are detailed below. These examples total $48M in annual savings.

• Shifting to State minimum ratio of librarians which would result in a $5.5 additional annual savings from about 115 fewer librarians

• Retracting investment in additional Assistant Principals and shifting toward a 'SCS minus one' staffing model which would provide an additional $11.4M in annual savings from eliminating close to 100 AP positions

• 15% reduction in other school staff positions (e.g., clerks, educational assistants, therapists) for an annual savings of $10.5M

• Moving to a student-teacher ratio of 'MCS plus one' for an annual savings of $20M resulting from eliminating 280 teachers (p. 177).