School Budgeting For The Future

Recently our budget committee met to approve the Hillsboro School District budget proposal for the next school year. I provided the sole vote against the budget proposal, believing it irresponsible in light of our current financial situation. As it turns out, my concerns may be moot, since in the past week an amended forecast came out that will leave our schools with significantly more money than we thought. But I think there are some important principles here we still need to think about.

Some background: the original budget proposal calculated that we would have enough money to essentially provide the current service level, expand (as the state has mandated) kindergarten to all-day, and provide an additional $720K in targeted investments in areas such as athletics and activities.  But then the state Supreme Court threw in a monkey wrench, by ruling that recent PERS (Public Employee Retirement System) reforms were unconstitutional, creating a major new expense for the schools. Due to the oddities of Oregon's PERS accounting process, HSD would not be charged any money this year or next year, but two years from now would be facing a shortfall of around $3.5 million. The amount isn't exact-- there are a lot of other factors involved, including market performance and potential changes to the law-- but that was our CFO's best estimate.

It seemed to me that in light of this new informaton, we should be banking some money every year to prepare against this expected shortfall. Sure, it would be disappointing to have to cancel the majority of this $720K investment. But shouldn't we plan prudently for the long-term health of the district by preparing for the upcoming financial cliff, instead of just spending as originally planned in the hopes that luck or the state legislature will bail us out?

One argument in favor of the spending was that HSD needs it in order to be a top-tier district. Of course I'm not unsympathetic to this claim: surely with all other things being equal, spending more money wisely should allow improvements vs not spending the money. However, if you've been reading my blog, you know that I don't believe this dependence is absolute: many private and charter schools are successful with much smaller budgets than our traditional schools. I also believe we have put way too much effort into finding ways to spend money on new programs, rather than finding ways to improve our district's cost-effectiveness in educational delivery.  In any case, we need to face the fact that we may not have the money in the long term. Spending for today without regard for the future will just make it more painful a few years from now, when we have to face a massive cut to fill in the shortfall. I think many members of our community are growing cynical of the district for creating these kinds of situations on purpose-- that's one major reason the recent bond initiative failed. The best way for HSD to gain the public's confidence in its financial management is to refuse to particpate in the bureaucratic government tradition of continually increasing spending, to maximize the size of the "shortfall" caused by future expenses or general losses, and then demanding more money to compensate.

The other major argument  was that this year's money is there for this year's kids, and we are somehow cheating them if we don't spend it directly on them. If we had a pay-as-you-go system where every student was specifically paying their own tuition each year, this argument might hold water. But the entire public education system is based on redistribution: retirees, childless singles, local businesses, and others all pay tax money that is used to educate the majority of children, in theory serving the common good.  If we can redistribute across populations for the common good, why can't we distribute across time for the common good as well? If we can provide the best education to the most children in the long term by saving money this year, how can that be considered immoral? Aside from that basic observation, the truth is that we already are dealing with plenty of expenditures whose costs and benefits are unevenly distributed across time: long-term planning, investing in new equipment, building mainenance, and of course the notorious PERS, an insanely expensive burden foisted on us by our predecessors. So the argument that we are somehow morally bound to fully expend each year's budget, rather than prudently banking money when we see a huge expense looming, simply doesn't make sense.

So, in short, it seemed to me that our budget should include direct consideration of how we will cover for the looming PERS shortfall created by the Supreme Court decision, even though we technically are not forced to pay for it yet. As I mentioned above, it looks like we will have more money than expected, so perhaps this will become less of a concern. But be sure to watch how HSD is planning its spending, and pay close attention to how much (or how little) is being done to reduce long-term costs. When tax debates or ballot initiatives come up, do not reward the school district for overspending to maximize future "shortfalls": reward it for prudent actions taken to save money and reduce long-term expenses. Remember a fundamental rule of economics: we will almost always get more of the behaviors we reward.

Vote Clift, Rask, Honl for Hillsboro School Board

Hopefully, you are getting ready to fill out your ballots for school board.   If you are in our district, I strongly urge you to vote for Wayne Clift, Bart Rask, and Christian Honl.

I've known Wayne Clift, our current vice-chair, for over 15 years now, first as a colleague at Intel, then on the school board.  He has been a soft-spoken but consistent voice for common sense and careful consideration of all viewpoints, and deserves re-election.   His patience and excellent skills at listening and mediation have led to endorsements from members of both the liberal and conservative wings of the board.   However, if you look at the contested votes the board has had over the past two years on various issues,  you will find that Wayne and I are almost always on the same page.

Bart Rask is a newcomer with a truly impressive resume.   His successful orthopedic practice and background including a Harvard fellowship would alone put him among the leaders of our community. But on top of that he has served on the state level board of athletic trainers, appointed and reappointed by two previous governors.  Aside from his exceptional personal qualifications, his experience dealing with government regulations and tightening insurance budgets, while running his medical practice, are excellent preparation to manage the Hillsboro schools in these challenging times.   I believe he is by far the most deserving candidate for our open seat.

Christian Honl is an Intel manager with a strong track record overseeing large teams during periods of financial stress.    Christian has the insight to know what needs to be done, the vision to develop realistic goals, and the work ethic to make good and necessary changes happen without backing down under pressure.  This is the kind of experience we need more of on the school board, and is a key reason why we should elect him to replace our current chair.

As a parting note, I want to remind you that all the candidates and members of the board are generous, dedicated people who truly care about Hillsboro's kids.    But where your choice of members becomes critical is in the cases where there are disagreements, and conflicting visions of how to run our district.    So please do not vote based on personal connections or friendship, but on who you really want making these hard choices.   If you like the outlook on school issues that you have been reading in my blog, the candidates most likely to have similar views on many issues are the ones I recommend.

So please remember to turn in your ballot, and cast your votes for Wayne Clift, Bart Rask, and Christian Honl for the Hillsboro school board.  

Sex Ed: Opt Out or Opt In?

At last Tuesday's board meeting, Hillsboro resident Kathy Mikitka proposed a change in how we notify parents about the sex ed curriculum. Currently we have an opt-out policy: parents are informed about what the curriculum contains, and they have the option to contact the school if they want their child excused from that class. Kathy proposed changing it to an opt-in policy, where the default would be for children to be excused, and parents would have to officially approve their child's inclusion in the sex ed class. While this proposal would involve a bit more paperwork for the teachers, Kathy made some convincing arguments for why it would be an improvement:

• Sex ed is fundamentally different from other curriculum areas. I think we can all agree that this topic touches on morality, religion, and personal privacy in a unique way. So the argument "if we do it for this, we need to do it for everything" doesn't carry much weight, as I see it.
• Parents may miss or overlook the opt-out opportunity. Many parents are buried in various forms of paperwork and junk mail these days. And of course, there is a big peer pressure factor here: kids may fear the stigma of being opted out of sex ed, and thus intentionally hide information or fail to inform their parents. Since opt-out does not require any feedback from parents back to the school, the teacher will never know if they really received and were able to act upon the information.
• Young children may be upset or disturbed by aspects of the sex ed curriculum. With various theorists promoting detailed information to be given at younger and younger ages, this seems like a legitimate concern. There also may be times when highly inappropriate information sneaks in unexpectedly: while the coastal conference that encouraged illegal activities was an extreme case, the same state bodies and officials that oversaw that conference have been in charge of developing K-12 curricula.

It looks to me like these are pretty good arguments, and I am inclined to believe we should seriously consider Kathy's proposal. What do you think? Please email me, or the whole board, if you have an opinion in this area. And of course, remember to carefully fill out your May school board election ballot, if you want board members who are likely to support such a proposal. (My next blog post will discuss who I endorse).