The Funding Crisis of Oregon's Schools: Who's to Blame?

Kyle Curtis Facebook

Did a series of misguided education “reform” efforts implemented by Portland Public Schools over the past decade result in the closure of neighborhood schools? Or were these closures simply due to the fiscal burden created by an inflexible teachers’ union and their expensive public pensions that forced the district’s hand?

The Funding Crisis of Oregon's Schools: Who's to Blame?

Did a series of education reform efforts result in Portland Public Schools closing Marshall High School in 2011, or should the fault lie with the teachers' union and their expensive public pensions?

What is the impact to a community when it's neighborhood school is threatened to be closed?

In 2011, for the first time in three decades, Portland Public Schools shut down a high school, closing Marshall High School located in the Lents neighborhood of deep southeast Portland. In the winter of 2013, the PPS School Board recommended a series of closures in the school cluster in North and Northeast Portland that feeds Jefferson High School. After a concerted effort by parents, teachers, and community activists, the School Board relented in its school closure plan, with the assimilation of Chief Joseph Elementary and Ockley Green K-8 into one school sharing two facilities being the proposal's only outcome.

The Portland School Board closed Marshall and considered the Jefferson cluster closures as cost-saving measures. What occurred in the preceding years that resulted in these neighborhood schools—which had been open for decades—deemed to be too costly for the district to keep open? Did a series of misguided education “reform” efforts implemented by the district administration over the past decade result in these closures? Or were these closures simply due to the fiscal burden created by an inflexible teachers’ union and their expensive public pensions that forced the district’s hand?

The fate of Marshall High School could be tied with its connection to Oregon’s involvement with the Small Schools initiative. Supported by a $25 million grant secured by the Gates Initiative in 2004, Marshall was one of eleven public high schools throughout Oregon that was split up into smaller, more intimate academies. Unfortunately, the state’s experiment with smaller schools did not deliver the expected results: In 2008, half of Marshall’s seniors graduated--the same rate of the district as a whole. After five years, the small-school experiment was abandoned by the Portland School District who instead embraced the notion of larger schools that, with a more balanced enrollment of 1500 students each, would promise equal-access to college-level courses and extracurricular activities. (Of course, another factor that was perhaps overlooked by small school proponents is that of federal funding, and whether these funds were perhaps mis-routed to half-empty school buildings.)

The “open transfer” policy of Portland Public Schools—an adoption of the “school choice” ethic that is popular of education reform proponents, with the corresponding result of re-routing financial support from struggling schools—has had negative impacts on the Jefferson school cluster. Over half of students from white families in the cluster transfer to other clusters, a transfer rate far higher than other clusters. Five schools within the cluster have been closed since 2010, and the resulting low enrollment numbers has led to concern about the secure future for Jefferson High School—Oregon’s only predominately African-American high school—which was on the chopping block as recently as 2010.

To get an idea of what sort of disruptions are caused to a community faced by neighborhood school closures, I reflect on testimony recently shared at a focus group discussion on housing issues held at the Urban League. Representatives of the Portland Housing Bureau asked what the impact of the performance of nearby schools had on home purchasing decisions, and the response received hinted at the anger and distrust created by a community that have routinely dealt with school closures in recent years. One respondent wondered how that question could even be asked when their local schools have been or are continually threatened to be closed, resulting in their children being relocated to schools in other communities that are unfamiliar, lack support networks, and they simply may not feel welcome. How, the respondent continued, are our children expected to learn in such an environment?

Indeed, the inability to guarantee high-quality neighborhood schools in every community is perhaps the most profound failure of our public education system. Where one lives—regardless of the socio-economic or demographic make-up of one’s community—should not be a predetermination of how your neighborhood school performs. Sadly, this is not the case—and this simply should not be acceptable.

But, what about the role played by teachers’ unions play in our declining public schools? Aren't the “small schools” initiative and “school choice” reform efforts only window dressing when faced with the intransigence caused by the inflexible and ever-increasing fiscal burden caused by the teachers unions and their unsustainable public pensions? (In fact, proponents of education reform would argue that these small reform efforts are only a consideration in the first place due to the unwillingness of teachers’ unions to make the necessary sacrifices for the overall betterment of their schools.)

Certainly, the impending cost increase of PERS and the coinciding impact on school district budgets cannot be ignored. Due to rate hikes that go into effect on July 1st, if absolutely no changes are implemented, the new fiscal year will see public school districts pay an average of 27 percent of their payroll to the pension accounts of the state’s public employees. “This is money that can’t be spent in the classroom,” says Toya Fick, the government affairs director for Stand for Children Oregon. “It can’t be spent on supplies or materials.”

Governor Kitzhaber offered a PERS reform proposal that identified savings which, in turn, would be provided to school districts struggling to fix budget deficits. As a member of the Fix PERS Now coalition, Stand for Children supports the Governor’s proposal reforms, referring to the reforms recently passed by the state Senate—along a party-line vote—as a “temporary fix.” “The Governor’s COLA cap saves $850 million, while the cap passed by the co-chairs of the Ways and Means Committee saves $805 million,” Fick explains. According to Fick, the current version of PERS reform that still needs to pass a floor vote in the House only delays the eventual payments school districts would be forced to make, instead of reducing PERS’ total unfunded liability.

Although it cannot be denied that a steep PERS hike will further constrain school district budgets, very rarely is the reason discussed that this burden exists in the first place. There is an often-repeated criticism offered regarding the “generous” retirement packages offered to public employees, despite the average annual benefit amounting to roughly $32,000. However, just like every other public pension plan throughout the country, the Great Recession kicked off by the burst of the housing bubble in 2008 resulted in PERS losing 27 percent of its investment portfolio. As recently as 2007, PERS had a funding surplus—but has averaged a funding rate of only 84 percent in the years since and currently faces a $16 billion unfunded liability.

The funding deficits caused by public pensions have been the rationale offered to provide thinly-veiled attacks on public employees’ unions throughout the country—from the revoking of collective bargaining by public employee unions in Wisconsin that memorably brought Madison to a standstill, to a similar bill passed by the conservative Governor of Ohio that was rebuked by voters at the ballot box, to the lame-duck lawmakers in Michigan passing legislation curbing the rights of public employee unions after the 2008 elections (and signed into law by a Governor who consistently stated he had “no interest” in taking on public employee unions.)

Repeatedly throughout the country we have seen public employees—or, more specifically, public school teachers—vilified as the “bad guys” responsible for creating an economic mess forcing school districts’ budgets to be hamstrung. This reflects a simple black-and-white view that requires the easiest target to focus blame and finger-pointing on, that it is the teachers who are making it so school districts are unable to offer comprehensive arts or music programs, or no-cost athletic activities, or—in the case of Marshall High School and the Jefferson cluster—even able to keep schools open. Very rarely discussed in the topic of PERS reform is fault placed on the unregulated financial sector that engaged in high-risk speculation with public funds, resulting in a negative impact on available funding for both school districts as well as providing a small monthly benefit for retired educators. If anything, the collapse in PERS investment value suggests the potential lessons that could be learned in regards to connecting “guaranteed” public pensions with the volatility of private financial investments.

Instead, we are seeing a retread of the tired argument that vilifies public school teachers first and foremost. “Why should school districts and retired teachers be tasked with cleaning up the mess of bad behavior conducted by banks?” asks Becca Uherbelau, a spokesperson for the Oregon Education Association, which has taken a stand in opposition to the proposed PERS reforms. The OEA represents public school teachers, classified staff, community college instructors, and retired educators. Even before the huge decrease in PERS investment value and increased unfunded liability, Uherbelau points out that Oregon’s public schools had been chronically unfunded for years. “Prior to 2008, school districts were all ready in crisis mode, slashing school days and laying off teachers. It is disingenuous to focus solely on the “PERS problem” without providing as much attention to the revenue side. It’s a convenient excuse to play politics with public employees’ retirement accounts and turn them into a political football—and that is really unfortunate.”

An organization that hasn’t take an official stance regarding PERS reform is Oregon Save Our Schools, but that doesn't prevent them from voicing concern about the targeting of teachers. As co-founder Susan Barrett points out, “I keep hearing all the time that there needs to be “shared sacrifice” but that's not really true," Barrett says. "It seems that the same people can always be targeted to make sacrifices.” Yes, so it seems.

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