rolling the dice

The legislative habit of gambling on the future

One of the many peculiarities of Colorado’s complex state budgeting process is the legislature’s weakness for spending – or at least promising to spend – money before it’s even collected.

The latest example popped up just last week, when the House approved House Bill 14-1342, a measure that would provide extra funding for higher education construction projects – but only if the 2013-14 budget year ends with more surplus revenues than currently predicted.

K-12 education has benefited from such tactics in the past, and there has been some fear in districts that this year’s higher ed plan might disadvantage K-12.

The scheme probably means that the State Education Fund would receive a smaller infusion of cash than it might have otherwise. But in any event the higher ed finance plan won’t affect district funding in 2014-15, an issue that’s the focus of a separate – and bigger – debate.

“It’s based on ‘if’ there’s money left at the end of the year,” said Dillon Democratic Rep. Millie Hamner, chair of the House Education Committee.

So the K-12 lobby has decided not to pick a fight over HB 14-1342 and instead to remain focused on its main goal for 2014 – persuading lawmakers to make as large a dent as possible in the state’s $1 billion K-12 funding shortfall.

“Do we like this amendment? No!” Bruce Caughey, executive director of the Colorado Association of School Executives wrote in an email to members last week. He said the CASE legislative team recommended “that we do not get drawn into a battle with higher education, the governor and the Joint Budget Committee” and remain focused on reducing the shortfall, known at the statehouse as the “negative factor.” A group of superintendents is pushing for a reduction of as much as $275 million. A pending bill, House Bill 14-1292, proposes $100 million.

That doesn’t mean HB 14-1342 will get a free ride in the Senate. Denver Democratic Sen. Pat Steadman, vice-chair of the Joint Budget Committee, doesn’t like the idea of earmarking unknown future revenues. “I’m not the biggest fan,” Steadman said Tuesday morning before the bill was approved by the Senate Appropriations Committee. “I expect we’ll be talking more about the bill on the floor,”

Budget timeline
  • The legislature will vote by May 7 on a budget for the 2014-15 fiscal year, which starts July 1.
  • That budget is based on revenue estimates that were issued in late March.
  • Actual tax collections almost always differ from those estimates, especially when revenues are increasing.
  • So, backers of HB14-1342 are betting that when the state closes its 2013-14 books next fall there will be a bigger actual surplus than was predicted this spring, providing money for buildings.

Summary of HB 14-1342

Like virtually every other budget fight, the HB 14-1342 tussle has its roots in the 2008 recession, which sent state tax revenues into a tailspin. Among the many programs cut was construction on college campuses.

Revenues have been slowly recovering over the last two years, and lawmakers, lobbyists and executive branch bureaucrats hoped the 2014 legislative session would provide the opportunity to put some catch-up spending in the 2014-15 budget.

Even before the session started, Gov. John Hickenlooper proposed a $100 million increase in higher ed operating funds, a plan widely supported in the legislature. And college leaders and lobbyists also were looking forward to a boost in construction funding.

The Capital Development Committee, a joint House-Senate panel that reviews construction projects, produced a list that included some college projects. But the committee’s plans were derailed on March 20 when JBC members announced they would back an alternative project list supported by Gov. John Hickenlooper, which included only two higher education buildings, one at the Auraria Higher Education Center and one at the University of Colorado campus in Colorado Springs.

That’s when the higher education lobby and sympathetic legislators sprang into action and came up with the plan to spend possible future money on those campus buildings. The amendment was added to the bill last Thursday and given final approval in the House on Friday.

The amended bill protects two programs that the 2013 legislature had designated as recipients of sany urplus funds – the Colorado Water Conservation Board ($30 million) and the State Education Fund ($31.1 million).

In theory, that means the SEF would get less money than it would have under a 2013 law that allocated 75 percent of any surplus to the fund. (The SEF is a dedicated account that is used to supplement state General Fund spending on schools and for other K-12 spending.)

Even with the cap on the SEF transfer, Hamner called the bill “a fair compromise,” adding, “I have to look at the bigger view” of both K-12 and higher ed needs.

If there’s enough surplus to cover the water board and SEF transfers (plus $10.3 million to be kept in the General Fund), then any money above that would go to a ranked list of higher education construction projects. There’s a cap of $119.5 million on the campus spending. If the surplus revenue is more than about $190 million, the money above that goes to the SEF.

In past years lawmakers have used the future-revenues gambit to benefit the education fund, and those gambles have paid off. For instance, the SEF last fall received slightly more than $1 billion in 2012-13 surplus funds.

And K-12 advocates are trying to go back to that well. A House amendment to House Bill 14-1298, the annual School Finance Act, proposes diverting 75 percent of any 2014-15 surplus into the SEF.

Earmarking to-be-collected funds, whatever the purpose, bothers Steadman, one of the legislature’s budget experts. “It’s not the way to do it,” he said in an interview. Noting that the legislature meets every year, he notes, “We’ll be here next year to spend next year’s money.” Budgeting should be done “in real time,” he said.

He also said earmarking too much money ahead of time might limit the 2015 legislature’s ability to make annual mid-year budget adjustments.

The Senate is considering HB 14-1342 this week, along with the main 2014-15 budget, House Bill 14-1336. Steadman says he’ll have some proposed amendments for the higher ed construction bill, so the debate will continue.

Use the Education Bill Tracker for links to bill texts and other information.

funding dance

Indiana to tap reserves to free up $140M for teacher pay, Holcomb promises

PHOTO: Dylan Peers McCoy/Chalkbeat
Governor-Elect Eric Holcomb speaks to Republican supporters at an Election night event.

Indiana plans to free up $140 million over two years for schools with the goal of increasing teacher pay, Republican Gov. Eric Holcomb pledged Tuesday night in his State of the State address.

The state will tap into its $2 billion in reserves to pay down a pension liability for schools, Holcomb said, reducing schools’ expenses so more money could go to educators.

“Just like paying off your mortgage frees up money in your personal budget, this state investment will save all local schools $140 million over the biennium with continued savings thereafter,” Holcomb said.

He said he hoped schools would use the savings to increase teacher salaries. Lawmakers said after the speech that they would look for ways to make sure local districts direct more dollars to teachers.

The freed-up funding would equate to relatively small raises for Indiana’s roughly 70,000 public school teachers. In a bill seeking designated funds for teacher pay, Sen. Eddie Melton, D-Gary, estimated it would cost $315 million to raise educators’ salaries by 5 percent over two years.

The move to find the money to increase teacher pay comes after education leaders raised concerns over not having earmarked dollars. Holcomb previously suggested that schools use their overall funding, proposed to increase by 2 percent each year, for teachers’ salaries. Other Republican lawmakers have also proposed increasing teacher pay by reducing school budgets in other areas.

Still, the $140 million would come from reduced expenses, not a new influx of state dollars. Lawmakers would still have to approve the move.

“Personally, I think it’s a wise use of surplus,” said House Speaker Brian Bosma, R-Indianapolis.

Against a backdrop of an ongoing teacher strike in Los Angeles and large-scale teacher demonstrations in places such as West Virginia, Oklahoma, and Arizona, Indiana has made addressing teacher pay a top priority in this year’s legislative session. Indiana ranks 18th highest in the nation for teachers salaries adjusted for cost of living, according to an analysis of data from the National Center for Education Statistics and Council of Community and Economic Research — leading some to fear teachers will flee to higher-paying states.

But while the issue has easily won bipartisan support and united unlikely allies, it has proved more difficult to find a solution — namely, the money — that satisfies educators and lawmakers on both sides of the aisle.

“It’s too early to pick a number,” Bosma said, though both Republican and Democratic leaders agreed after the speech that the $140 million — while a “creative” approach — wasn’t enough.

“We can do that this year,” said Senate Minority Leader Tim Lanane, D-Anderson. “We can find a way to give an increase in teacher pay this year. We don’t have to kick the can down the road. We don’t have to say, oh, let’s turn it back over to the local school districts and let them find the money.”

But a meaningful solution could take time: Holcomb also announced Tuesday night the formation of a commission to study teacher compensation and search for ways to improve salaries, with the goal of proposing action in 2021. Business leader Michael L. Smith, an investment fund co-founder and retired Anthem executive, will lead the commission.

“Teachers deserve compensation that reflects one of the most honorable, critical and challenging occupations in the state,” tweeted Lawrence Township teacher Tamara Markey, Indiana’s Teacher of the Year, who was among community leaders invited by House Republicans to provide social media commentary on the speech.

Holcomb’s State of the State speech also emphasized workforce development, including preparing high school students for careers. He introduced Mary Roberson, superintendent of Perry Central Community Schools, to tout the district’s partnerships with local manufacturers to give students hands-on training.

“A strong economy depends on a world-class workforce,” Holcomb said. “That workforce depends on a great education. A great education depends on great teachers.”

protest prep

Los Angeles teachers went on strike Monday. Here’s what you need to know.

Teachers, retired teachers and parents show their support for UTLA in front of Venice High School in Venice, Calif., on Jan. 10, 2019. (Photo by Brian van der Brug/Los Angeles Times via Getty Images)

The nation’s second-largest school district will be upended Monday as Los Angeles teachers are set to go on strike.

Teachers and their union say they are fighting for higher pay, lower class sizes, and more support for district schools. The district says it agrees with many of the union’s demands, but can’t pay for them given its fiscal realities.

The United Teachers of Los Angeles rejected a final offer from the district Friday afternoon, which included steeper class size reductions and more nurses and counselors for schools. There was no bargaining over the weekend.

What will happen at Los Angeles schools on Monday?

Schools will remain open — with other staff, emergency substitutes, and parent volunteers supervising kids. Teachers will be outside picketing. Inside, the L.A. Times reports that “schools have been preparing to keep students together in large spaces and use online education when they can.”

Is this a continuation of the #RedForEd wave of teacher protest?

Yes and no. Schools staying open marks one crucial difference from what happened when teachers went on strike in West Virginia last year, closing schools for nearly two weeks. That was the start of a wave of teacher activism focused on school funding and teacher pay, reaching Oklahoma, Kentucky, and Arizona.

The L.A. Times has a helpful look at why this strike is both similar to and different from the ones across the country last year. Unlike in those red states, it notes, California teachers can’t be portrayed as “victims of Republican machinations” because the state government is reliably Democratic:

An us-versus-them construct, however, does not translate readily to California, where unions are among the state’s most powerful special interests.

And L.A. teachers must face off against a district whose leaders echo their union’s demand for increased state and federal funding for schools.

The union leader also is trying to put forward a complex argument on funding. While [UTLA president Alex] Caputo-Pearl argues that the state needs to do much more, he also says that L.A. Unified is hoarding a fortune — and that district leadership is choosing to starve its schools.

What are the union and the district really fighting about?

The L.A. Times broke down the essential disagreement over funding in a separate story this weekend. In short: Although the district currently has a substantial surplus, the district’s analyses, as well as one from L.A. County, suggest it will soon turn into a deficit. The union claims the district is “hoarding” money, while the district says it’s simply being prudent. At the same time, a proposed budget from the state’s new governor, Gavin Newsom, could bring an infusion of new resources. Reporter Howard Blume ends it here:

Beutner says the union’s demands would cost $3 billion. That’s debatable, partly because the union has not responded to the district with specifics on how much smaller it is asking for classes to be. The union’s position, so far, is to demand the elimination of a contract clause that gives the district broad authority over class sizes. …

Everyone wants smaller class sizes — teachers, parents, students. But meaningful class-size reduction is one of the most expensive reforms in education.

What about charter schools?

Unlike in most places that saw teacher strikes last year, Los Angeles is set to see charter schools play a big role in striking teachers’ rhetoric.

The union has gone on the attack against charters, which serve about one in five Los Angeles public school students and are mostly non-unionized. UTLA recently called for stopping any new charters from opening, pinning the district’s financial struggles on their growth.

The union also believes that the district wants to implement a “portfolio model” of managing schools, a controversial idea that often brings about charter school growth and holds district and charter schools accountable for their results in similar ways. (The district says it has no such plans.)

These union–charter battles have deeply shaped the district’s politics. The last set of school board elections were the most expensive in American history, with charter supporters spending nearly $10 million and unions putting in over $5 million.

But the union’s contract demands only briefly touch on charters. Charters, though, are the focus of many district educators’ anger over not having the resources they say they need and, in the unions’ telling, amount to privatization of public education.

Some of L.A.’s charter schools share buildings with district schools, making some confrontation possible on Monday.

The head of the state charter association wrote an open letter to Caputo-Pearl before the strike. “Please be kind to both our District and charter community,” wrote Myrna Castrejón on Friday. “Students, parents, and school staff aren’t crossing picket lines to make political statements.” (The union’s strike guidelines tells members not to “get involved in confrontations or debates,” threaten people who cross the picket line, or block entrances for kids. “It’s okay to make adults wait a little while to get in [to schools], though,” UTLA says.)

As to the substantive debate, each side can point to research backing up one of their key points. Academic analyses from other states, as well as a union-backed report from Los Angeles, show that districts really do lose resources as charters grow, at least in the short term. At the same time, studies show Los Angeles charter students do better on state tests than similar students in district schools.

What does this mean for teacher unions nationwide?

As the strike kicks off, other teachers unions will be paying attention — wearing red in solidarity or watching for cues as they inch toward strikes of their own. In Denver, for one, the teachers union is entering its last week of negotiations. And as CALmatters noted on Jan. 11:

Issues at the forefront of the LAUSD dispute, such as rising pension costs, declining enrollment and the charged debate over charter schools, are also brewing in other school districts across the state.

The looming strike in Los Angeles has made ripples in local unions across California. Teachers in the Oakland Unified School District, for example, are nearing a potential strike and plan to rally Saturday similar to a demonstration UTLA held in downtown Los Angeles in mid-December.

What will the political ramifications of the strike be?

That’s not at all clear, and likely depends on the length of the strike and the public response. But there is a special election around the corner to fill the seventh seat on the closely divided LAUSD board. Expect the strike and its fallout to play a big role in the race.

A few prominent elected officials have also weighed in supporting teachers, including U.S. Senator Bernie Sanders and California Rep. Ro Khanna — though most national Democrats have been silent.

Los Angeles Mayor Eric Garcetti, who is mulling a run for president, has tried to broker an agreement between the two sides, to no avail. A strike would complicate a campaign kickoff.

“Launching a presidential bid while thousands of chanting, sign-toting teachers take to the streets would seem to be a non-starter,” the L.A. Times wrote. “A strike could force Garcetti to push back any presidential announcement, as better-known rivals enter the race, soak up media attention and begin fundraising.”