HALL MONITOR — Lawmakers deal MPS deathblow
By Jay Bullock June 1, 2015 Bayview Compass
See blog at: http://bayviewcompass.com/category/hall-monitor/
After Wisconsin’s Joint Finance Committee finished its late-night work on education funding last month, I posted this line from Shakespeare to Facebook, spoken by Romeo’s friend Mercutio, “Ask for me tomorrow, and you shall find me a grave man. I am peppered, I warrant, for this world.”
Mercutio has just been stabbed and he staggers offstage to die a few lines later.
It was, I thought, the only fitting response to the committee’s votes—and here I do not exaggerate—to bankrupt the Milwaukee Public Schools if its plan works as designed.
The JFC’s education policy hacks and slashes at MPS and public schools around the state, via a massive expansion of statewide private school vouchers, tight limits on how MPS deals with empty (or partly empty) school buildings, and even meddling in how some school boards are constituted.
But the deathblow is a plan to take schools from MPS and give them—buildings, contents, and students (but not the teachers!)—to voucher school operators or charter school programs. The plan would take up to three schools a year in the first two years, and up to five schools a year after that.
It’s the loss of funds from those students that will do the real damage. All of us in MPS, from Superintendent Darienne Driver to folks like me in classrooms, know that it won’t take much of a fiscal hit to send us into a spiral of default and dissolution. Driver who told a local TV program that MPS wouldn’t survive this plan.
Bay View resident and citywide MPS school board representative Terry Falk told me, “We can’t lose 20 schools and survive. Can we lose five schools? I don’t know.”
Like any longstanding organization such as General Motors or Ford, Falk suggested, MPS has legacy retiree-costs that make it uncompetitive with upstarts. Think Toyota or Volkswagen. When foreign automakers opened U.S. plants 20 or 30 years ago, Falk said, their cars could be made more cheaply because they didn’t have decades of retirees to support. The same is true for MPS when compared to new voucher or charter schools.
MPS enrolled 100,000 or more students for many years and had enough teachers to educate all of them. At that time, the district encouraged those teachers to retire early by offering a supplemental pension and retiree health insurance.
“People ask, ‘Why were you so foolish?,’” said Falk, who was an MPS teacher back in those heady days of high enrollment. “Actuarially, it was the correct decision.”
In other words, the district’s bean counters said it was cheaper to pay low salaries for young teachers than to pay high salaries for veteran teachers, including the retirement costs. With today’s high insurance premiums, that sounds crazy now, but a couple of decades ago it was not that expensive to provide insurance to retirees.
“It was an economic incentive for the district for teachers to retire at 55,” Falk said. However, MPS is still supporting many of those teachers, and it needs to plan budgets with funding for retirements among the current staff.
Today MPS enrolls around 80,000 students, its population reduced by students who are enrolled in voucher schools, charter schools, inter-district schools through open enrollment, and other programs that take students out of MPS’s traditional public schools. The lower the district’s enrollment, the greater the share of per-pupil funding that must go to those legacy costs. That means fewer funds for the schools, yet currents students still need to be taught.
“If we had 100,000 kids today, it wouldn’t be a problem,” Falk said.
But we don’t, and that is a problem.
Milwaukee’s Public Policy Forum issued a 2012 report about changes MPS enacted after the state’s Act 10 legislation gave districts power to impose change without negotiating with its unions. “We cut long-term costs from $2.6 billion to $1.4 billion,” Falk said of those changes. “I didn’t like it,” he added, “but a brand new teacher in MPS in the last couple of years gets no retiree health benefits and has to teach until at least 60.”
There’s also no supplemental pension, and all of us, new or not, pay more out of pocket for our state pension and skimpier health insurance coverage.
Still, PPF levied this dire warning: “The significant decline in enrollment has made balancing the district’s budget very difficult.” Falling enrollment, they said, “paints a bleak picture for fiscal solvency.”
So how much more can enrollment drop before MPS has to default on payments or even declare bankruptcy? I didn’t get a firm number from anyone. Public Policy Forum’s president Rob Henken cautioned me that “such an analysis would be extremely difficult to do” because there are a lot of variables and moving parts involved in setting MPS’s budget.
Falk couldn’t give a sure number, either, but he offered a guess. “We’re only talking about a few thousand students. That might make the difference,” he said.
If the first three schools handed off to outside operators are large high schools—and low-performing high schools are a constant challenge here—it might take just one year to send the MPS budget into default. If they’re smaller elementary or K-8 schools, it might take a few years to hit that mark.
There are other considerations, such as how much the state or the city will care about the situation. If MPS is facing insolvency, would the city assume some or all of its legacy costs? Would the state increase the district’s revenue limit to stave off disaster?
And, if not, what then? What of the tens of thousands of students in MPS’s remaining schools when the district, like Mercutio, is peppered for this world?
I just don’t know. But it looks like we may find out, and soon.
Jay Bullock teaches English at Bay View Middle and High School and tweets as @folkbum. Email him at