Education: The View From Parkrose

What I said at the Budget Meeting

2011-05-05T09:39:00.000-07:00

The second Parkrose Budget budget committee meeting was Wednesday night. The budget passed, 6-4. I voted against it with a few short statements:

The people that have made the greatest sacrifices were the students. Your sacrifice was minor compared to theirs.
Many of the people that spoke about the budget did not mention students or if they did they only mentioned them tangentially.
There is a trade-off between class size and days of school. I'm not sure we have the right balance of the two that is best for students.
The one teacher - one class model is broken. We need a system with very large classes, one teacher and several specialists. Some of those specialists can be educational assistants, some can be specialized teachers, but we have to stop with the one-size-fits-all approach to teaching.

Time to explain.

Last year our 3,500 students gave up five days of eduction each. That is 17,500 days of eduction that they will never get back. Staff gave up ten days of pay, 4,000 days. You can get that back by earning money elsewhere for ten days.

From what I see, the student sacrifice was greater by a factor of four.

I surprising number of speakers didn't mention students. Some of the people that didn't mention students should know better. Some have barely mentioned students in a year. Not talking about students misses the point of a school district. We provide education to students.

The school board and the district is not interested in anyone's job. We are interested in what is good for students and student performance. Jobs are a side-effect of achieving that goal. If you want to argue for a position, start by telling me about the incremental benefit to students of that position and how the incremental benefit is larger than another position.

You make your argument by talking about the incremental effects on students -- not fairness or your needs.

The big choices are class-size and school-year. With a fixed amount of money you can decrease class size by by shortening the school year and you can lengthen the school year by increasing the class size. It is a simple, mostly, linear relationship. That is the financial trade-off.

The performance trade-off is that student performance goes down as class size goes up and student performance goes up as school year increases.

With a fixed budget, increasing the school year results in better student performance from the school-year effect and at the same time larger class sizes result in worse student performance from the class-size effect. The trick is to find the combination of class size and school year, that you can afford, that maximizes student performance.

Those of you that have taken an economics class will see this as ac classic choice theory example. The two goods are class-size and school-year and your 'utility function' evaluates those two goods to give student performance. If we had the right information about that utility function, we could find the best combination.

There are a bunch of studies on that relationship, some are good, some are not science. From what I can see from the better ones, class size is not the end-all-be-all. It is frequently swamped by other factors, like teacher quality, and the changes in student performance are often lumpy. This means student performance is about the same for a wide range of class sizes and then will suddenly get worse or better.

School year tends to have a more uniform impact.

I think larger class sizes is better for our students than 20 cut days.

Finally, I am not an education traditionalist. Just because you have been doing the same thing for a very long time does not make it the right way or the best way. We thought that emptying our bed pans in the street, bleeding patients with fevers, and that the Earth was the center of the solar system were all good and true ideas.

The fact that idea has stuck around for a long time just means it hasn't yet killed you.

Our classrooms are for the most part, one-size fits all. If there is a performance problem, add a generalist teacher. You want PE, add a generalist teacher but make sure they have a certification.

Here is the rub, teachers do a lot of things, but there are some things ONLY a teacher can do. They spend relatively little time doing those things, like diagnosing a reading problem and putting together a plan to correct it, and a lot of time doing things that someone else could be doing, like implementing that plan.

We are missing teachers' productivity and loosing their most valuable contribution, that advanced training and knowledge.

We have been thinking of teachers as the line worker, rather than the planner and supervisor of educational assistants and the person that calls in specialists.

I'm not the first one to come up with the idea. There is a nice popular press article on the idea, "The Numbers Game: Why Class Size Mandates Miss the Point". In that piece, Frank introduces the idea of the No Max school. Please read it. As, Frank says,

Imagine a school with no maximum class sizes whatsoever. Let’s call it No Max School. No Max School breaks a lot of rules and does a lot of things that are considered difficult or even undesirable in a one-teacher classroom world. For example:

Students are organized into grade-level teams of the largest size feasible.
Student desk work lasting longer than 10 minutes is supervised by a Teaching Assistant (TA)—not a teacher—and in the largest workable grouping of students.
A TA proctors all tests and sits with students whenever they write an in-class essay; All lectures or explanations lasting more than 15 minutes are given only in the largest group size manageable.
No Max School has extensive computer and foreign language labs with the best available software where all students spend a portion of each day learning with no teachers whatsoever.
Every week, there are school-wide town meetings, field trips or performances lasting several hours; teachers are excused from attending these activities.

In a school like that, teachers can focus on what has the largest impact on student achievement and students can get more personalized attention.

Transportation Block Grants for Oregon Schools

2011-03-21T09:29:00.000-07:00

One of the ideas on the table for reducing the costs of K12 education is changing the way we pay for transportation. I have written about these problems in the past and created a solution to the problem. The summary is that the current funding system, a cost sharing system, provides few incentives to reduce costs. The solution I provided was a way of inducing school districts to compete with each other through something called yardstick competition.

There is another alternative that has better political legs, block grants. Here is the way the implementation is working out -- you get what you get now. You will get a little more or a little less if your student population changes. There is no cost sharing. If you save a dollar you get to keep it; you don't have to give $0.70 back to the state.

It sounds like a great idea. All the incentives to save on costs are there, but there are a few catches.

First, you get what you get now. That means that places like Lake Oswego, that have a waiver to provide more transportation than the law allows, busing kids within a mile of school, will continue to get more per student. Districts like Portland Public Schools will continue to get less per student because Trimet service is so good, they have a waiver to not bus High School students .

Second, fuel increases and other uncontrollable expenses are all out of the district's pocket. That means you can get a surprise if fuel prices go up. This is pretty relevant give oil prices recently.

There is fix to some of this. What I have proposed is that the costs be recalculated and reset every five years. As you have come to expect, this is something right out of the economics of regulation. It used to get used in natural gas price regulation.

Here is why the reset is important. Since the districts get what they get now, they get to keep every dollar they save and use it in district programs. This provides great incentives to reduce costs and find cheaper ways to transport students. Every five years the state recalculates your costs over the last few years and changes the amount you receive to this new amount. The new amount should be lower since you have had the time, and the incentives to implement all those cost reductions. All those cost savings get dragged back into the state's general purpose fund and can be allocated to the other school districts. Over time, we get equalization.

So. the pattern is to freeze, give incentives to reduce costs, watch the costs get reduced, and then drag back the cost reductions after a few years to use them in other areas.

I'm for transportation block grants but only with a five-year reset.

Parkrose Dance #1 in State. Two Years in a Row

2011-03-19T13:25:00.000-07:00

In case you have not seen this. There is one hell of a volunteer organization behind this, fundraising, fabricating and transporting all that material.

Missed the Education Summit? Watch it here!

2011-03-09T19:15:00.000-08:00

I promised video of the Multnomah County Education Summit. Those videos are linked below. Watch that fishbowl! My daughter is in there and there is some feet to fire action.

Missed the Education Summit? Watch it here!

Education Summit 2011 - Fishbowl from Mayor Sam Adams on Vimeo.

Salman Khan: Let's use video to reinvent education

2011-03-09T16:26:00.000-08:00

This is an odd coincidence. I usually end my term teaching with a debrief of the class. I tell the students what didn't work from my point of view, tell them about the new ideas I tried out on them, get their feed back on what worked and didn't work from their point of view and collect ideas on how to fix it all.

I tried a bunch of things this term, like using youtube videos to give feedback on paper drafts and crazy stuff like that. By the way -- students loved that.

This term, students started giving me few lists of things they wanted me to make videos about. It was stuff like, how to read the results of a linear regression, how to interpret coefficients, all sorts of things. Their reason is that didn't want to waste class time on that kind of rote material but they wanted it in a verbal and visual form.

Khan gets this and explains why in the video.

Yes for Parkrose Promo

2011-03-02T09:05:00.000-08:00

This is the short version of the promo video.

K12 Funding Formulas: The Testimony that Didn't Happen

2011-02-22T11:28:00.000-08:00

Representative Betty Komp asked me to produce a quick video on K12 funding formulas. It turned out she didn't get a chance to use it -- but I hate to waste video.

Parkrose Work Session Feb 14, 2011

2011-02-13T10:17:00.000-08:00

I'm sick so I will be sitting at a separate table for this one. We will be getting some updates on the High School and Prescott. There isn't any material in the board packet on this, so I don't know what it is about.

We do have some extensive information on the regional soccer center. We should have:

Dave Carboneau – President of Portland City United and Board Member – PGE Foundation
Rod Huschka – Project Manager – St. Johns - Theodore Roosevelt Athletic Complex Stadium Field
Dick Spies – Principle – Group McKenzie Design
Nick Fish – Portland City Commissioner and Soccer Fanatic
Antonio Zea – VP of Soccer Division – Adidas America

There for an extended discussion on how to get the fields funded and set up. This represents a significant increase in recreation opportunity for the area East of 82nd. In honor of the Timbers donation. Here is the sunflower goal, last goal, last game, a win for the USL-1 Timbers.

Education Summit

2011-02-12T16:26:00.000-08:00

This was THE education event in Portland last week. If you missed it, you can catch it on cable or wait for the link to go up on the Mayor's website. I won't go over the main results or what happened. These are just my comments, my reactions and my rants. Lots of good things happened, but you know me, I focus on the dark side.

We need more things like the fishbowl. Kids have a habit of telling the truth and they feel pretty good about holding an elected officials feet to the fire. Hats off to Joshua Todd for making this happen.
My daughter was in the fishbowl. She took names and kicked butt. She said some things that she will probably catch some heat for, including teachers that insist on teaching one way only, teachers that send their kids to private school and college councilors that don't council. I asked if she was worried about catching heat for her comments and she told me, "Those people are so disinterested they will never find out."
The Chief of Police, Mike Reese pays attention to data, reacts to it and made me very happy for doing so.
Everything is still too PPS specific.

I'm going to focus on that last one.

There were four superintendents there. The Parkrose superintendent was asked to do an introduction at the last minute and the PPS superintendent was up on stage twice.

They did have a Reynolds principal up there, I give them credit for that. Sam Adams also said he supported the Parkrose Capital bond. I wish I recorded that.

There were lots of school board members from Reynolds, David Douglas, Parkrose and Centennial. There was one from PPS. Guess who ends up on stage to talk about "The Portland School District" and, "The Portland School Board". Guess who was in the audience grinding their teeth every time someone said those phrases.

Folks, 25 years ago there was a "Portland School District" and "Portland School Board". Put the shoulder pads and cassette tapes away -- this is 2011.

They also had a bunch of people that talked about, the work they have done with, "The District", PPS, because they are loosing kids to the suburbs --meaning us. They also had people that did some good work with, "The Foundation", meaning the Portland Schools Foundation. And there was a guy from Northwest Natural that just donated 25K to help, "The District" pass a capital bond.

In all fairness, under Dan Ryan the Portland Schools Foundation is changing its name and focus away from PPS only issues. I like that and I like Dan Ryan a lot.

Portland Public Schools needs to change its name to something less confusing, like "Two Rivers". It would save me from having to explain that:

"Portland Public Schools" means the school district with a little more than half the kids in Portland.
"Portland's Public Schools" means all the kids in all the districts.
"Portland public schools" means all the districts.

I never thought an apostrophe, an s, and a few capital letters could be so important.

SB250 Why I Have Problem

2011-02-12T15:48:00.000-08:00

I just love it when people get hot and heavy about things that start with SB and HB followed by numbers. Everyone seems like part of the in-crowd. Mostly, I can't remember the numbers and have to ask, "Is that the one that kills Educational Service Districts or is that that one were people don't understand the funding formula?"

This is the one that kills Educational Service Districts (ESDs).

Here is how it works. ESDs get 4.75% of the state education funding. 90% is supposed to pass through to the member school districts so they can spend it on things the ESDs provide. For the most part they provide things that only the largest school districts can do on their own cost effectively. So they, for example, hire and audiologist, and Parkrose buys 200 hours, Reynolds buys 600 hour, David Douglas buys 600 hours and so on. They specialize in what an economist would describe as things with fixed and sunk costs.

Their pricing system is pretty easy -- cover costs. So if they provide a service that costs the ESD $100 a day and sell 100 slices to school districts, they charge $1 per slice. This looks great until you realize that the fixed costs don't shrink when school districts don't buy the service. The upshot is that if only 10 slices are sold, the prices goes up to $10 a slice or they cut the service. Scale is very important to ESDs.

The flow through funding is how the ESDs guarantee scale.

What SB250 does is allow school districts to opt out and bring their flow-through funding with them.

Great you say, if they can find the services for cheaper let them find them. Actually that is a great idea but this isn't the way to do it. Most ESDs do provide services the school districts want and at prices cheaper than they could elsewhere. Why else would Parkrose spend all its $1.2M in flow through funding plus an extra 250K? We get good prices! There are a few rogue ESDs that seem to provide services that the districts don't want and others at higher prices and then force them to buy the services with those flow through dollars.

To me, that is a governance problem that can be solved by having the school districts elect the ESD boards. You can read more about these and other reforms here.

Here is how I think SB250 would function. Some of the larger school districts are large enough to do things on ESD scale and sometimes they can do them cheaper, because they negotiated a good contract or have some vacant property. If the large district can do this for enough things -- they could then opt-out of the ESD and take their pass-through funds with them.

Once the large district isn't buying services the ESD has two choices, raise prices or cut services for the remaining districts. That is a consequence of focusing on things with fixed costs. What happens then? Well, the slightly smaller districts now start having a good shot at being better off on their own and the cycle of service cuts and price increases continues. Pretty soon, we manage to wipe out all the scale economies and made the smaller districts worse off.

That is why I went to Salem.

Going to Salem to Speak Against SB250

2011-02-10T07:35:00.000-08:00

First my superintendent asked me. Then the Senate Education Committee asked me. Then I had to ask my class if it was ok. I was worried about the last step since I told them that the decision to cancel class had to be unanimous.

Time to gather my notes.

SB250 Small District Killer

2011-02-08T20:18:00.000-08:00

I'm starting to get a little worried that all the governor's education reforms are operating under the assumption that if you are not one of the largest school districts in the state -- you don't matter.

The optimal district size for costs in 10k-15k -- David Douglas sized. Educational service districts help make that optimal size a little more elastic by allowing smaller districts to get services on a larger scale. SB250 makes it so the larger districts can just pull out, and take their scale economies with them. I am particularly pissed that Nancy Golden is supporting this.

I wrote about my ESD reform ideas a few months ago. Some ESDs don't work so well, but with those small changes, they will work a lot better.

I have an email in to the Senate Eduction Committee.

First Oregon School Boards Association (OSBA) Meeting

2011-01-23T17:02:00.000-08:00

The Oregon School Boards Association (OSBA) provides a lot of services to school districts in Oregon, lobbies the state and federal government on our behalf and helps with school board training. The districts in Multnomah county elected me to represent them on the board and I had my first two day meeting on Friday and Saturday.

First, they gave me one of those six-inch thick binders with way more information than I needed.

Then there was a board packet that was only a couple of hundred pages long. I should point out that this is on top of the Parkrose board packet for Monday. That was only 196 pages.

After all of this reading I felt completely prepared to be slack-jawed and silent for two days. I failed miserably. I ended up asking a lot of questions, getting a little sharp with someone, creating some laughter (everyone loves the "only my ex-wife calls me that" joke) and receiving a few nice complements.

The best complement was, "Those were some great questions. How long have you been on the board?"

My answer, "Since this afternoon."

Here are some snippets and my reactions to the meeting

Confederation of Oregon School Administrators (COSA) had a representative there. The COSA folks always talk good game. It is usually internally consistent, and, while that comforts me, I feel compelled to fact check and do some outside BS detection. Highlights were:

There are national standard coming down the pike.
There is a bill, SB 290, that puts student outcomes in teacher evaluations.
Talked about money but says we shouldn't talk so much about it and just focus on the trade-offs we make.
Brought some nice handouts of the budget.
Talked as if all-day kindergarten would not happen, even when it may be one of the most cost effective things we do -- which puzzles me.
Talked about the value of partnerships with parents and businesses, but didn't seem to get that until you find a way of accounting for that, counting an hour of volunteering as $10 you didn't have to spend, districts would not invest heavily in partnerships.
Had the best line of the morning, "We can't use lack of funding as an excuse for not doing our job." and then pointed out we are still making improvements in student performance in spite of decreased funding. Clear evidence we are still finding efficiencies.

This is also the season for audit reports. You can find the audits here. Mostly I was just dealing with the differences. OSBA is quasi-governmental and is grandfathered into a lot of old law. That is why it is not a 501c(3) or 501c(4). It is an association.

That said, the audit had a very clean management letter. One of the cool things is that the auditor talked to OSBA about what was in the letter before the wrote it. So, in the letter they reported on the progress the organization made on the the weak points. That was pretty cool. I would like to do this in Parkrose.

The remaining discussion was financial, what the revenue and expenditure streams look like, and where are the possibilities for growth. Kevin focused on the endowment as being the main source but I still see other services, like the old insurance functions, as a possibility.

Thus ended the first day.

My general assessment is that these are some pretty impressive people.

Changed the Title of the Blog

2011-01-23T16:16:00.000-08:00

It was time to generalize. I finally figured out that I spend a lot of time dealing with issues that are not just Parkrose but that important to the families east of 82nd avenue and in Oregon generally.

I'm still Parkrose-centric and things get my attention because of where I live, where my kids go to school and the district I serve, so don't expect that much of a change.

Please Fix Our Neighborhood Associations

2011-01-16T12:37:00.000-08:00

Geography is Destiny.

That should go in bold. Political boundaries may just look like lines on a map, but they can hamper economic development and cause conflict when they are poorly drawn and don't reflect the interests of the people living there. There are plenty of examples in history. Stalin drew his lines in the USSR, Radcliffe drew his lines in the Indian subcontinent and the European colonists drew theirs in Africa. Those lines are still there and they are still causing trouble.

We kind of made our own bed with our neighborhood association lines. We have the largest and smallest associations in the city. It keeps us weak. It keeps us disorganized and it keeps us from having a voice in city government.

Last week I was visiting my Oregon House Representative Jefferson Smith and popped in on the end of a meeting with a few city people and passed along my remarks to the Office of Neighborhood Involvement. Here is what they sent me.

Dan Eisenbeis from the City of Portland Office of Government Relations let us know that you have some ideas about how Portland's neighborhood system could be more effective. I'm happy to talk with you about your ideas.

Dan let us know that you've suggested that neighborhood association boundaries east of 82nd Ave should be redrawn to better focus on commercial corridors.

It's important to known the Portland has a decentralized neighborhood system--the City supports the system, it doesn't control the system. Portland's neighborhood associations are independent and self-created, and they establish their own boundaries.

I've pasted in below the section from the City of Portland "Standards for Neighborhood Associations..." that describes the neighborhood boundary guidelines.

Here are links to:

--ONI Standards for the Neighborhood System: http://www.portlandonline.com/shared/cfm/image.cfm?id=97870

--1975 Report on first year of ONA: http://www.portlandonline.com/oni/index.cfm?c=38588&a=81715 (this document gives some insights into how neighborhood boundaries were set--a decision was made to have neighborhood boundaries divide up some commercial streets when two neighborhoods both had an interest in the commercial district)

My response is below:

Thank you. My suggestion and observations were a bit different.

I understand that the Neighborhood associations are self-organized, have the ability to set their own boundaries and can even have overlapping boundaries.

My concern is that geography is destiny. The associations east of 82nd reflected our pre-annexation development. Some of the largest and smallest neighborhood associations are in this area. I think if you review your records on meeting participation, your observations from your periodic outreach, and the number of policy and budget recommendations that have been filed (Functions 1 and 2 of 3.96.030 B) you will see that the most active organizations are in the population midrange.

There is a sweet spot, in terms of population, for participation in these organizations. We have few districts in that sweet spot.

My other concern is about commercial development along boundaries. When there is overlapping interest there are two general results -- you fight over the area or you ignore the area. The east side neighborhood associations seem to have taken the path of ignoring commercial interest more often than not.

I believe that both of these problems are of concern to you since under 3.96.060 you shall:

Support and promote public involvement within the Neighborhood Association framework; and,

Adopt and revise such Standards as are deemed necessary for the implementation of this Chapter and for orderly public involvement in City government through Neighborhood Associations and District Coalitions.

My suggestion is that ONI offer to act as facilitator to help redraw the boundaries east of 82nd avenue with the goals of increasing public involvement and increasing our voice in city government. 3.96.060 gives you both the power and the responsibility.

This is not deck chair issue and it will not be easy. The problem is that we are unlikely to be able to make these changes on our own with bilateral negotiations and we are unlikely to produce strong local leaders without first fixing this fundamental issue. If you doubt this is true, take a look at the political map of Africa.

Lets talk. Here is a link to my calendar http://tungle.me/woodsjam . Pick a time that works for you.

What do you think?

Boys Again

2011-01-15T16:06:00.000-08:00

I'm back on this topic after my rant last summer where I noted that the decrease in test scores you see from being a boy is about that of being special ed. Ali Carr-Chellman hits the nail on the head -- boy interests get you sent to the school councilor.

What is a "Policy Oriented Economist"?

2011-01-05T20:38:00.000-08:00

My dander is up, which is pretty bad given that I am wearing a black shirt. So, I will let you know what I think makes a policy oriented economist.

Publishing a paper about policy in a refereed journal does not make you a policy oriented economist, even if it is a highly ranked journal.

To be a policy oriented economist you must either:

Be a policy maker;
Regularly advise a policy maker;
Make regular contacts with people who can implement policies you have analysed and written about, i.e, try to get your ideas implemented;
Had policy that you have analysed and written about implemented.

I don't care how many people have cited your work. I don't care where you have published. Unless you have been willing to put your work out in the real market for ideas and get your ideas moving in the real world you are at best a coffee klatcher that couldn't hack it doing basic research or pure theory.

So, how about we stop talking about the refereed journal article as the end product of research. Lets stop thinking of that peer reviewed article and scholarly work as being synonymous.

Great engineers make products. Great lawyers win cases. Great doctors cure real people.

Can we get some policy oriented economists that do something other than write papers for each other?

"Doesn't Act Russian" What?

2010-12-29T16:33:00.000-08:00

I want you to watch this video. It is Woody Allen in 1965. The punch line is great, "The joke is on them because they don't allow Jews." The joke makes sense to people 20 years older than me and no sense to people 20 years younger than me.

Why is this so important? Because patterns of discrimination and prejudice change over time. To a lot of young people, that punch line makes no sense, because it is not part of their experience.

People my age, middle-aged, like Sam Adams and the others in local government, grew up when discrimination was about the color of your skin. You can see it in the language that permeates the city, "people of color". This is why when people my age, and a little older, talk about discrimination and representativeness of boards and town halls we tend to focus on South East Asian, Sub-Saharan African, Hispanic, African-American peoples... You get the idea.

But forms of discrimination and prejudice change over time. That Woody Allen punch line makes no sense to a lot of people because there is no context. It makes no sense in the same way those Irish and Italian ethnic jokes from the 1930s don't make sense.

Does this one make sense to you, "He is Russian but doesn't act it."? How about this one, "Looks Russian but isn't"? If it makes sense, you probably live east of 82nd avenue and are in high school. We have a large Eastern European population -- not just Russian. We have Ukrainians, Romanians, Moldavians too. They are about 16% of our high school kids. They are a large fraction of our dropouts, but they are lost in our ethnic categories, our special drop out prevention programs. Most importantly, they don't fit in the preconceptions of people my age on what kinds of discrimination are important.

I've heard the story, "it is hard to track", I have also heard, "it is not in the census data". Neither one of those arguments make sense. We ask people ethnicity questions all the time and people answer them. Census categories change quite frequently. Wikipedia has a nice history. Admittedly, the 1980 and 1990 census didn't make a lot of changes, but look at the 1890 categories. They had, "White," "Black," "Mulatto," "Quadroon," and "Octoroon". You can tell they were very interested in the consequences of the end of slavery.

What do we do? Do we ignore it because it is not the discrimination of our youth or do we do something about it?

I just want the school districts and the cities to take this seriously; there is something there. There is a new kind of discrimination rising and we need to react before the problem and consequences are larger.

Speaking about Math

2010-12-23T20:38:00.000-08:00

The last few posts were a little math heavy. There were only math heavy in the sense that I spent a lot of words explaining math and then advocating using a computer to get the intuition on how the math works to solve a very practical problem.

Conrad Wolfram is a big on this approach. So, what do you think? Is math about computation or is it something else?

Oregon K12 Funding Formulas: General Purpose Grant Solution

2010-12-23T16:44:00.000-08:00

Here is the biggie. The general purpose grant has the opposite problem of the transportation grant. In the transportation grant, there are a lot of similarities in costs across the state. It was just a matter of finding the point of view that made them look similar, the SMT volume index.

With the general purpose grant there are huge differences in salaries, and the funding formula needs to compensate for those differences. The ability to do this may be limited by the Oregon Constitution VIII.8(2).

(2) Consistent with such legal obligation as it may have to maintain substantial equity in state funding, the Legislative Assembly shall establish a system of Equalization Grants to eligible districts for each year in which the voters of such districts approve local option taxes as described in Article XI, section 11 (4)(a)(B) of this Constitution. The amount of such Grants and eligibility criteria shall be determined by the Legislative Assembly.

The current practice of providing additional funds if the average teaching experience in the district is longer than the state average fits within "substantial equity".

What is funny is that the solution to the transportation grant was to make it look more like the general purpose grant. The solution to the general purpose grant is to make it look more like the transportation grant.

Instead of

Funding Percentage * ($4,500 + $25(Average Teacher Experience- State Average)) * ADMw

Turn the formula into

Funding Percentage * ADMw (Year Base + (Day Base + State Share/ Class Size (Average Daily Cost Fully Loaded Certified FTE) )(Student Days) )

This does a lot of things:

Includes cost differences through the inclusion of "Average Daily Cost Fully Loaded Certified FTE"
Allows the legislature to specify what it thinks they are funding in terms of class size through the "Class Size" term
Gives districts with more student contact days more money because of the "Student Days" term and
If "Year Base", the amount the district receives per student for the school year regardless of contact days, is negative, and "Day Base", the amount the district receives for each day the student in class, is positive, districts will have an incentive to increase the school year when under financial stress.
The extent that the legislature reacts to changes in costs between the districts depends on what it decides for the relative size of "Day Base" and "State Share", the fraction of the salary that is passed through to the state.

I'm reticent to even propose this because I have had the current formula explained to me over and over again. Each time they explain it they tell me how hard it is to understand, but it is just a linear equation.

Lets do a couple of examples to show how it works. To keep things simple I will not use the Funding Percentage to true up to the budget and I will assume a class size of one and one ADMw. So, we will have school districts with just one student and one teacher

First, lets look at how the formula helps with the school year. For convenience sake, assume that the Year Base is -$50, the Day Base is $1 and teachers the district cost $1 per day and the State Share is 1/2. The legislature gets to pick Year Base, Day Base, and State Share. This makes it so we have this formula for the district.

-$50 + ($1 + $1 * .5) * Student Days

If this district operates for 100 student contact days it would get $100 revenue from the state which would just cover the cost of paying the teachers a dollar a day. How does the district pay for everything else? In the current system they would do that by cutting days and cutting teacher costs. Given that the revenue stays the same they can apply the savings from cut days to other things -- like maintenance.

With this formula if they cut one day, revenue would fall by $1.50 and costs would only fall by $1. They make themselves worse off. To fill the budget hole, they should increase Student Days. Increasing the school year by one day makes the revenue go up by $1.50 but the costs only go up by $1. They are $0.50 to the good.

This makes the process of figuring out the funding percentage a whole lot more difficult and it will bounce around more because the districts will have to report the anticipated number of student days to the Oregon Department of Education.

Next lets show how the formula reacts to cost differences between districts. Lets make another school district just like the first, with a single student and a single teacher, but this teacher gets paid $1.5 a day instead of $1. The funding formula for this district is:

-$50 + ($1 + $1.5 * .5) * Student Days

Our low paying school district receives $100 revenue, which just covers the teacher salary. The high paying school district would get $125 and still be short $25 on the teacher's pay.

The legislature can make the formula a little more sensitive to the salary differences by changing the State Share from 0.5 to 0.75. This means the low paying district would have a formula that looks like this

-$50 + ($1 + $1 * .75) * Student Days

If you calculate the revenues and costs, the high paying district would have $12.50 after salary to spend on maintenance while the low paying district would have $25.

There are still advantages to negotiating salary. Districts with high salary costs get more money to pay those costs but will not be immune to wage changes.

This proposed formula would change the behavior of school districts when budgets are tight. Right now the most common response for school districts when state revenue is down is to cut school days. That requires negotiation with the unions. I hate this response because what it means is that the children are the ones making the contribution to teacher salaries that the state is not.

Under the new system there would be negotiation will be to add school days and to cut per-day salaries.

There are plenty of kinks to work out. The best place to start is to see how general purpose grants would have been different under this new formula. The Oregon Department of Education has years of records on ADMw, Student Days, and the Average Certified FTE Cost by school district. We also know the budget. We can easily try out different parameters and calculate the Funding Percentage to make the totals add up to the final budget and compare what the school districts would have received.

What do you think?

Oregon K12 Funding Formulas: Transportation Solution

2010-12-23T13:18:00.000-08:00

Improving the provision of student transportation requires two changes, a better volume index than Average Daily Membership Weighted (ADMw) and a dynamic compensation method that rewards and encourages intelligent cost reductions.

There are a lot of criteria for a good volume index. The statistical ones end up being some kind of regression diagnostic. Essentially you make a scatter plot with the volume index on the horizontal axis and the costs on the vertical. If they form a tight line, you have a good index. You need to make changes if the relationship is not tight or if there is a relationship that does not form a line. Once you get the indexes forming lines you can compare two indexes with the R squared statistic.

If you do this for the current funding formula and plot total transportation costs against ADMw, my guess is that you are going to see a big mess. The Oregon Department of Education has this data. They produce payment letters like this every year and both the ADMw and transportation grant are sitting in a database. Making a scatter plot should take less than 2 hours.

The volume index I am proposing, Student Miles Traveled (SMT), requires a bit more work but it is not a year-long project. What you are doing with student miles traveled is just adding up how many miles each student travels travels to get to school. There is more than one definition you can use, it could be bus miles, but this is simplest.

All you need is the address of every student in every school district, what school they go to and the address of the school. Each district has this directory information and they will have a policy about releasing it. Once the database is constructed and cleaned, a competent GIS programmer can have your graphic and analysis in just a few hours. My bet is that this is index better than ADMw.

Now what do you do with it? Well, we are going to use yardstick regulation. Yardstick regulation is a way of regulating a monopoly and figuring out a fair price or fair cost recovery. It is used for rail, electricity, gas and water all over the world.

What we use right now is a simple cost sharing contract. There is little incentive to reduce costs. The example that I used before is that spending a dollar to save two, leaves you sixty cents worse off. Cost sharing contracts are most often used in high-risk RD&D projects like developing weapons systems for the military. Transporting kids to and from school is nothing like that.

The trick to producing good cost reduction incentives is to disentangle what a district does from their compensation. Yardstick regulation ties compensation to what the other districts are doing.

My proposal is that each year, districts are compensated X dollars per SMT. The compensation per SMT will be determined by the 70th percentile of the costs per SMT reported by the districts. The 70th percentile is just a guess on a good number. It is one of the parameters you can use to increase or decrease the speed of cost reductions.

Here is how it helps reduce costs over time. Suppose you are a school district and you are paid $1 per SMT and you figure out how to get costs down to $0.90 per SMT. You get to keep the extra ten cents and put it into educational programs. Everyone now has an incentive to do this because now they get to keep their cost savings.

Now look what happens the next year, everyone figured out ways of saving money, so the 70th percentile of costs falls, to say, $0.95 per SMT. That school district that figured out how to save ten cents a mile still keeps part of the benefit and the whole transportation system has gotten much less expensive in the process.

Eventually, cost reductions will stop happening so frequently and the rate per SMT will stop falling. The other beauty of the system is that if something systemic happens, like increases in gas prices, the payment per SMT will increase but with a one year lag.

Can I provide you with cost savings estimates? Nope. It is a game changer. But think about all the cost savings practices spreading to all the districts in the state. Maybe an Educational Service District figures out that they can make less expensive bulk fuel purchases or that they can insure fuel prices with a futures contract, or they figure out a better route schedule system. Ideas are out there. There are just no rewards for implementing them.

Now on to the other formula.

Oregon K12 Funding Formulas: The Problem

2010-12-23T10:21:00.000-08:00

Ready for some boring old economics? I mean dry -- bone dry. Are you sure?

Now that I have lowered expectations we can start.

The state government decides how much the state is going to contribute to K12 eduction through the budget process. How that money is allocated to the school districts and educational service districts is governed by ORS 327.013. The meat is all in that section. It explains how you count kids and how some kids count more than others, to get Average Daily Membership Weighted, ADMw. It gives some call outs for special funding, limitations, special treatments for small remote schools, but the big thing it does is give two funding formulas. The first is the general purpose grant which determines how much the district can get from the state and local property tax and the second is the transportation grant.

The formula for the general propose grant is pretty simple.

Funding Percentage * ($4,500 + $25(Average Teacher Experience- State Average)) * ADMw

I know that because I put an equation about half of you turned your brains off or stopped reading. Thanks for sticking around.

The funding percentage is a fudge factor that scales the formula so that the amount that is distributed is equal to the amount the state budgeted. If the budgeted amount is 10% more than what the funding formula without the fudge factor give you, then the fudge factor is 1.1.

The transportation grant is even simpler, the state pays a fraction of the cost and that varies between 70% and 90% depending on transportation costs per ADMw. If a district has transportation costs that are in the 90th percentile per student, the state pays 90%. If the district is in the 80th percentile or less then the state pays 70%.

Each of these formulas uses ADMw as a volume index. The volume index is how we adjust the scale of large school districts and small school districts to make them comparable. Choosing the right volume index is important. It has to capture cost differences and it needs to provide good incentives to reduce costs. Rather than write a bunch about volume indexes, here is a short video from my engineering economics class on the topic.

The take away you should get is that you don't have to use ADMw and while it may be logical, it doesn't have to be the volume index and it is probably the wrong one.

One of the assumptions you make when you are working with a volume index is that the costs are the same, or nearly the same, per unit of the volume index. This is clearly not true for the general grant, since teacher salaries vary wildly over the state.

The Oregon School Boards Association does a survey every year. You can see the big differences on page 5. A teacher with a MA can get as little as 37K and as much as 58K. For the same money, one district can have class size of 20 and another can have class size of 30. Equal treatment does not mean you get equal results.

The funding formula captures some of the variation due to steps with the experience adjustment, but it does not capture the differences in cost because of education level of the teacher or the regional variation. Higher salaries are offered in urban areas because the cost of living is higher.

The transportation grant has other kinds of problems. The formula adjusts for costs, since it is essentially a cost sharing contract, but it provides little incentive to make cost saving investments. I have written about this before when when SB555A was proposed.

If we negotiate a little harder, say $1 harder, to lower costs by $2. What happens is that because our costs went down by $2 we get $1.40 less in our transportation grant. From our point of view we spent a dollar to get sixty cents worth of savings. That is not smart from our point of view.

Now that we have the problems sorted out, lets move on to a few solutions. The solutions I am going to offer are not radical. They are run of the mill solutions that are in common use elsewhere. This is part of economics called industrial organization and what we are discussing is regulation or provision.

Portland Charter Review

2010-12-16T11:11:00.000-08:00

The Portland Charter will be under review again starting next year. My concern last time was district representation. This time around my concern is, you guessed it, district representation.

Last time, Jeff Merkeley, my district 47 representative at the time, gave the egghead version of why we needed district representation to get equity east of 82nd. I came with the visceral side, picture of roads unpaved, and months of calendars where the city councilors never got east of 82nd.

Here is what I sent out today to Amanda Fritz.

First, thank you for heading up the next iteration of the charter review commission. It is clear that it is not the format you would have preferred but thank you for doing it.

One of the charges is to develop a list of issues that will be addressed by the second commission. I want to bring up the issue of district representation again. I'm from that gap of land between 205 and the eastern edge of the city. Frankly, we are not treated well by the city. These aren't sins of commission; they are sins of omission.

Things are done in the city core first, with a promise that they will be later done out here. Or things are done in the core, and if there are resources available they will be done out here. Later never comes and there are never enough resources.

The Equity Atlas makes the strong case that services for youth and those with lower income are desperately needed in my area, but the allocations only rarely match up with the population. This spills over into arts, transportation, many areas where the city has influence but not control.

I feel that Portland will not be able to advance until it has made huge investments in the areas that were annexed in the 80s and 90s. I have been told that integrating the east side is an underlying goal in the Portland Plan, but twenty years of history leads me to the conclusion that it won't happen with the current form of government. We need someone on the city council dedicated to defending our welfare, or at least pointing it out, in every vote.

My preference is to move away from the commission form of government, something only 16% of cities our size have, to a strong mayor system. The mayor should be elected at large but the city council should be elected by district.

Thank you for hearing my concerns and for the good work that you do.

Sincerely,

Jamie Woods

As Myself

An Economist on the Education Service District System

2010-12-05T15:18:00.000-08:00

Every state has education service districts (ESDs) or something like them. The idea is that there are lots of things that school districts can't do cost effectively at school district scale. This can be things like sending teacher to incarcerated students, which we are required to do, or for students with emotional disturbances so great that they must be kept separate from other students.

Four incarcerated students from four different districts would require four teachers if the school districts all tried to do it alone. ESDs can pay for one teacher and then sell a slice of those services to the school districts. It is a good idea for services where individual districts don't have the scale to efficiently provision those services for their students.

ESDs get 4.75% of the state school support. 90% of those funds go to the schools and must be spent by the schools on services provided by the ESD. The motivation for requiring that they spend the funds there is that a lot of the services provided by ESDs have a high fixed cost, they have to hire someone for the whole year, or sunk cost, they had to buy property in order to provide the service. Services with high fixed and sunk costs are exactly the reason ESDs exist -- so it makes sense to provide them with a little insurance.

It is also the reason why when some services become less popular for one district, say Outdoor School, that the ESDs raise the prices to the other districts. They are just covering their fixed and sunk costs.

That system works fine when a few conditions hold:

The pass through funding that schools must spend with the ESDs is less than what they would wish to spend.
All services desired can be cost effectively provided by something at the ESD scale -- not something larger or smaller.
School districts may provide for themselves, either in house, or through other providers, the same services as the ESDs but just more expensively.
ESDs are actually providing the services the school districts desire.
Everyone is actually trying to provide services at the lowest cost and not trying to increase the scale of their own organization.

Lets describe all the ways this can go bad. The first group has to do with scale problem. There are some services that have a minimum efficient scale larger than an ESD. Think of things like payroll processing. The best example is probably the Oregon Assessment of Knowledge and Skills (OAKS) which is contracted out through the Oregon State Department of Education. There are some things bigger than an ESD that the private sector is not that great at providing.

The ESDs need the capacity to form larger groups, super ESDs, to provide services.

The second scale problem is when there is a service that the largest district within an ESD can provide more cheaply than the ESD, either because the minimum efficient scale is low enough or they were lucky with some fixed costs. Because these services tend to be dominated by fixed and sunk costs

allowing the large district to provide the service themselves, to "opt out", will result in higher costs for the other districts within the ESD. That in turn would make it less likely that the others would find those services cost effective for their students.

The ESDs need the capacity to contract for services from the larger district for resale to the smaller districts as a condition on opting out of ESD services.

The next problem comes with the interaction of the ESD's minimum budget, the 4.75%, and the governance structure. ESD boards are for the most part, elected, this means that the voters have to get upset about the services provided in change the management, not the purchasers of the services, the districts.

Suppose some school districts are upset at the services the ESD is providing and they can't get the board to react. What do they do? Hope a candidate for the board will stand for election and sway the voting. Wouldn't it make more sense to have the ESD board composed of some combination of the superintendents and board members of the constituent school districts? Would't this make the ESD more responsive to its most immediate customers?

I have no problem with the Multnomah Educational Service District (MESD). They do some very good and innovative things for us, but I understand that there are some school districts that are not pleased at the offerings of their ESDs. Those districts would like to take their 4.75% and spend it elsewhere.

That last suggestion may be a little controversial in the Oregon School Boards Association (OSBA).

Finally, doing business at lowest cost is not the objective of all managers. Managers pay is often based on how many people they manage. If the managers keep outsourcing functions to an ESD, they may find that their services are no longer needed.

That has little to do with ESD reform and is an issue within districts.

Critique of Teaching

2010-11-28T14:09:00.000-08:00

One of the things that people forget about me is that I also teach. I'm a professor. I have a Ph.D. The Ph.D. means a survived graduate schools, something that fewer than 1/3 of the people that entered my graduate program did, and I demonstrated that I can do original research. My survival had much more to do with the support of my fellow students than my own ability and ambition.

Being a professor means I started knowing almost nothing about teaching. Yup, no training. I have however turned it into an object of study. I run experiments on my students, do debriefs at the end of every term and allow students to vote on changes to the course. I have started doing some published work on readability and the differences in online and in-class testing.

I take teaching seriously.

Even though I teach large classes you will not see me doing the sage-on-stage trick. I'm all over the room. There is group work in the class. Students explain things to each other. There is a wiki that students have edited. I video demonstrations so students can review things on their own time. My winter term Behavioral Econ course is all discussion and seminar based. There is no lecture in that course.

When I find out about people that take it as seriously as me I take notice. The video below is by a physicist that takes teaching seriously. I recommend watching it. He takes shots at the university. He takes shots at high school. I takes shots at middle schools. Most of the time he hits his mark.

How do you compare?

Dr. Tae — Building A New Culture Of Teaching And Learning from Dr. Tae on Vimeo.