A parent asked me at a recent house party about my vision for OUSD's future fiscal vitality, and so that is what this blog is about. Parents, principals and teachers are fed up with budget cuts and of having to scramble to adapt to them, and as a board member, I am tired of living like this as well. No one decides to run for School Board so that they can reduce funding for schools.
So I am going to lay out some of the puzzle pieces that I see as being critical to us getting out of the current cycle we are in, and I think it's also important for parents and community to understand that much (but by no means all) of what is happening in Oakland is a result of state-level decisions, and therefore state-level remedies are required. I look forward to working with all of you to win the structural change we need to better resource our schools.
My Vision for OUSD's Fiscal Future Involves:
1. More funding per student. As this article from EdSource details, prior to 1978's passage of Prop 13, California had some of the best-resourced public schools in the country. Over time, we have declined to one of the worst, when you factor in the cost of living in California. States like New York, Alaska and New Jersey literally have twice the funding per student that we have, which allows them to have better-paid teachers, lower class sizes, more counselors, nurses, more enrichment and simple things like transportation to school, which Oakland does not offer.
In 2020, we will have an opportunity to vote to approve the Schools and Local Communities Funding Act, which will reform Prop 13 to protect homeowners but require corporations to pay their fair share of property taxes to support schools and other public services. Passage will bring a lot of new, ongoing revenue to OUSD and other school districts, but still will not restore funding to the level it was at prior to the passage of Prop 13. Ultimately, we need to build the political will in our state to adequately fund public education, whether that be through higher income taxes or some other source of revenue. This is the most important investment we make as a state, and we need to fund it like it is.
I helped to collect signatures for the Schools and Local Communities Funding Act, and I look forward to working for its passage, and voting for it in 2020.
2. A change in the funding formula for Special Education. Local school districts currently pay 62% of the costs of providing Special Education services, a proportion that has shifted increasingly onto districts over time, and shows no signs of stopping. However, while the state recognizes that the number of students requiring Special Education services is growing, and that the severity of disabilities is growing, the state has not provided additional funding to reflect this. What is more, we are funded based on total enrollment, not on the number of students with disabilities.
This is done to remove incentives to overidentify students as having disabilities, but in our context of declining enrollment, it has been disastrous. We are getting a double hit in OUSD because at the same time that our enrollment is declining, our number of Special Education students is going up, because charter schools aren't serving their fair share of students with disabilities. A revised funding formula must account for the presence of charter schools in districts like Oakland, because it is well known that they do not serve special education students of the same severity, and usually, not in the same numbers either.
A revised formula must fund according to the number of SPED students (nearly 20% in OUSD), not the overall number of students, and account for the severity of disabilities, which varies across the state. In Oakland, we have a high rate of more severe disabilities like emotional disturbance, intellectual disability, autism and multiple disabilities.
My own feeling is that the current formula basically forces districts like OUSD, where there has been unchecked growth in charter schools, to subsidize charter schools that are refusing to serve high-needs students. It is very unfair for our high-needs students to be forced to live with less in order to subsidize the lower-needs students in charter schools. A revised funding formula for SPED could help to compensate for this.
This graph from PPIC shows how funding for SPED has fallen even as the number of students with disabilities has increased.
If you want to know more about how Special Education is funded in California, here is a good primer from the Public Policy Institute of CA.
3. Relief on the pensions front. Oakland and many other school districts and cities statewide are reeling from a state-imposed increase in pension fund contributions, from 8% to 22% of payroll, with no corresponding increase in funding to pay for the required increases. We must make reductions in other areas in order to be able to pay for the increased pension fund contributions.
The truth is that the state has a huge surplus right now, and some of that could be used to provide relief to local governments, and reduce the impact of the increase in pension contributions.
4. Local Control Over Charter School Growth. We need to be able to decide (without the possibility of being overturned at the county and state levels) how many schools, where, and of what type, will exist in Oakland. The state law does not allow that right now, and it is another factor undermining our fiscal vitality. Changing the state law to allow for real local control will allow us to focus on improving our schools without constant shocks to enrollment (and revenue) caused by new schools opening.
Those are some of the things that need to change at the state level. Now there are things that we need to do differently in OUSD to ensure a more stable and vibrant fiscal future.
5. Improving Our Schools. Enrollment is the key driver of revenue for any school district, and the key driver of enrollment is school quality. This is the goal of the Blueprint for Quality Schools. I understand that people are fearful about the possibility of school closures, but our responsibility is to educate students. We need to expand or create schools that are doing that well, and phase out or merge schools that aren't, so that students get the education they deserve. That is the long-term way that we are going to bring enrollment, and thus fiscal vitality, back to OUSD. Our plan is a long-term plan that we expect will take 10-15 years to fully implement, and the reason to go slowly is to mitigate negative impacts on students, families and teachers.
6. Building Our Reserves. This one is really very simple. Things happen unexpectedly, and we need to have a reserve fund in order to be able to respond timely. One example was finding lead in some of our older buildings' fixtures and faucets this year. We don't have a reserve fund, and have not had a routine maintenance fund since I've been on the board. Therefore responding took longer than it should have. We have passed a Fiscal Reserves policy with the goal of building a reserve of 10%, however, it is going to take a great deal of discipline to monitor and enforce this policy. Policy monitoring and enforcement are not strengths of our board.
7. Long-Term Planning. As long as I have been on the board, OUSD has budgeted in one-year cycles, and staff have provided very little by way of forecasting to the board. This has not served us well, as it has neglected long-term planning. We need to know and plan for the expiration of union contracts and parcel taxes, replacement of capital purchases like computers, the expenses of elections and other major purchases. The need for more long term planning came up recently during a board discussion of text book replacement. This is something we have not planned for, which is why so many of our textbooks are in shambles. I will be bringing the board a Long-Term Planning Policy for consideration this year. If it is adopted, it will also require discipline to enforce.
8. Improving Internal Controls. We have a very capable new Chief Business Officer, and our outgoing Interim CFO has provided us with a long list of avenues to pursue to improve internal controls so that we can better forecast revenue and especially expenses, and prevent misuse of resources and abuse of poor internal controls, for example, the hiring of people that were not budgeted for. We also have a new financial system which should make it easier to prevent errors, but ultimately, this is about creating a culture of fiscal discipline, which doesn't exist yet.
We can't say yes to things if we don't have the money, and this message has to come from the top, from the School Board and the Superintendent, from Network Superintendents to Principals. Ultimately we all want to provide students with what they need, but saying yes to something always means saying no to something else, and in this case, what we have said no to is fiscal sustainability, and the certainty that we will be able to maintain local control of the School District.
9. Being Relentless About Getting Good Value for Student Money. One of the things that has been persistently alarming and frustrating for me on the board has been the cavalier way that OUSD uses large sums of money without sufficient evidence that we are getting a good value for students. There is no way of knowing because large sums are regularly awarded without competitive bidding, without information about whether previous contracts were executed faithfully (whether deliverables were completed), and without any evidence that students are benefitting from any given investment. Since our primary mission is student achievement, this (the impact on student achievement) should be the focus of all our investments, and while this will feel new and threatening to some in OUSD, it is necessary, whether we are in a time of resource scarcity or not.
10. Board and Staff Capacity Building. We have underinvested in the capacity of both the board and the staff to capably oversee and manage the budget of the district. Board members are essentially volunteers, with no paid staff, but we are ultimately responsible for the fiscal stability of the district. This takes time and training. Bringing back a standing Budget & Finance Committee is an important step, and I am definitely more skilled in budget monitoring and oversight than I was when I joined the board, but we need to invest more in training board members and staff in this area, especially given our high rate of staff turnover, especially on the Finance team.
11. Narrowing Our Focus and Stabilizing Our Leadership. Having too many priorities is the same as having no priorities, and I would argue that this is our chief problem in OUSD. If you were to ask 12 different OUSD staff what the focus of the district is, you would get 12 different answers. In successful school districts, everyone can tell you what the priorities are.
This is partly due to the frequent leadership changes in OUSD, but it's also related to the issue I mentioned earlier about saying yes to everything. We need to move from being like McDonald's (having an extensive menu with a lot of unappealing options) to In-N-Out, where we do just a few things, but we do them really well. In my vision, we will have fewer central departments, fewer schools, but more focus and quality as a result.
We also need stable leadership, so that we can sustain our focus on our priorities, but also to create a desperately-needed culture of accountability. The frequent leadership changes in OUSD have led to a culture in which some staff have become accustomed to doing their own thing, whether in alignment with district goals or not, and whether aligned to better outcomes for students or not. When staff believe that another Superintendent will be along any day now, there is no accountability and little incentive to conduct themselves in the best interest of students.
So there you have it. Fiscal vitality for OUSD will require some major changes at the state level, and a lot of focus and stability in OUSD, on the part of the board and the Superintendent and her staff. It's a tall order, but I'm up for it, if re-elected.