Monday, November 23, 2009

An Argument for a 3% School Budget Cap

Hold the rotten tomatoes, please.

At the risk of inciting the ire of every school board member and school employee in the Garden State, here's why Christie ought to push a hard 3% cap through the Legislature.
  • Who cares whether free public preschool is a the cure for educational equity or a needless babysitting service? The voters want lower property taxes. (Corzine forgot that it's the economy, stupid.)
  • Between 75% and 80% of a local district's school budget is payroll and benefits.
  • Current collective bargaining agreements hover at about the 4.5% mark. This is a direct result of a loose 4% cap on school budgets. As long as a district has a little cash bundled away in surplus (and sometimes when it doesn't), it will lose the case when a contract dispute is put before a state-appointed mediator because 4.5 is awfully close to 4.
  • If there is a hard cap of 3%, then maintaining salary increases in the mid-fours will have an immediate and deleterious effect on instruction in the form of lay-offs, larger class sizes, freezes on curricular material. Local bargaining units will be hard-pressed to rationalize salary proposals so out of sync with budget restrictions when students will bear the brunt of it.
  • Despite local districts' best efforts, salary increases remain stuck in an endless loop because mediators make decisions based on regional settlements. The only way to lower budgets is for the Legislature to step in with a game-changer.
  • Yes, yes, NJEA eats its young, often protecting tenured and long-term members at the expense of the new talent. Lowering the cap doesn't guarantee that settlements will come down. But they likely will, and it's a baby step toward gaining control of the unsustainable costs of a New Jersey public education.

1 comment:

Bruce said...

Tax and Expenditure Limits (TELs) have a pretty questionable track record in relation to public school quality. For example:

Figlio & Rueben in the Journal of Public Economics find:

The average relative test scores of education majors in tax limit states declined by ten percent as compared to the relative test scores of education majors in states that did not pass limits.

Downes & Figlio find:

we find compelling evidence that the imposition of tax or expenditure limits on local
governments in a state results in a significant reduction in mean student performance on
standardized tests of mathematics skills.
http://ase.tufts.edu/econ/papers/9805.pdf

So, caps present the real possibility of diminishing the overall quality of NJ schools in the long run.

That said, it is conceivable that dramatically reducing the number of bargaining units (e.g. consolidation) might better regulate salary growth (if salary growth really was at issue... which is not necessarily the case in NJ, but might be in southern NY). There is little good empirical evidence in this regard, except for some interesting analyses of the spatial clustering of bargaining agreement changes.