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Tuesday, February 7, 2012

Making Sense of Dollars and Cents

Let's look at some of the elements of school finance from a different perspective, using the wisdom of business books regarding fiscal management practices.

The italicized quotes have been extracted from the book,GUTS! Companies that Blow the Doors off Business-as-Usual, by Kevin and Jackie Freiberg.

"Establish a way of frequently reminding employees of the relationship between their job performance and business results. Then show them how those business results affect their lives."
In contrast to the state's plan to associate achievement of learners and performance of teachers to determine personnel evaluations, there is another relationship that can represent a more visible impact resulting from perceptions of the teacher-learner dynamic. 

Since we have a Charter school in our area, approximately two miles from our school, we face competition for learners. In fact, our district must pay nearly $14,000 to the Charter school for each learner from our attendance area that they enroll. That's a dramatic drain on our scarce resources. I don't believe that the cost associated with each "lost" learner was ever shared with the staff. That meant they were unaware of the consequences of any dissatisfied parent electing to exercise their prerogative by sending their son or daughter to an alternative learning center.
During a faculty meeting in which our budget was a focal point I took the opportunity to point out that each group of four learners who might depart our school for the Charter school represented a loss equivalent to the salary and benefits of a full time teacher. That potential impact, during a time of decreased aid from the state and a weak economy, would require us to reduce our staff as a consequence of learners leaving for the Charter school. That point was an attention getter!

While there are many different reasons that a parent might opt to withdraw their child and enroll them in a Charter school, we had to become more cognizant of the perception parents have on our customer service and relationship management, as well as our achievement levels. We could ill afford to lose $14,000 for each departure.

"Employees must understand how economic value is created, how revenues and expenses translate into profit, how they can create financial security for themselves and the organization, and what investors contribute and want in return. Employees must be taught to see themselves as the people who make the business grow. Simplify your financial statements, and then teach your employees to read and analyze them. If you don’t already know it, figure out your break even point, and then communicate it clearly and vividly."

If you condense all of the aspirations and expectations that parents have for public schools I suspect it could be reduced to nurturing the hopes and sustaining the dreams of children and inventing a better future. Our staff needs to treat all learners as if the children were their own son or daughter. Our staff must work cooperatively to develop a school environment that they would want to experience if they were young learners. That's what parents generally want.
If we pursue such a goal, then we have a better chance of retaining the learners we have, attracting new learners, and convincing residents of Green Island who attend Charter, parochial, or private schools to return to Heatly. That would help us financially. It would generate more state aid per pupil and reduce the costs involved with transporting learners to other schools, equipping them with textbooks, and, in the case of Charter school attendees, decrease our tuition costs of $14,000 per learner.

"Find and present relevant metrics that explain your company in understandable and practical terms – i.e. number of meals served, number of buffer pads consumed, phone calls received, emails transmitted, gallons of gasoline, substitutes employed, books in the library, minutes and hours of school, miles driven safely, pencils purchased, sheets of copy paper,…"

We have to collect data that will make a difference in what we do. Beyond tests score results, we need to: improve the number of parents at Open House; increase the attendance rates of learners; decrease the number of study halls taken by learners; expand extra-curricular participation; encourage learners to enroll in more challenging courses; improve our customer service practices and our relationship management methods,... 

Finally, when thinking about our goals we must reflect on the advice of Peter Senge, author of Schools That Learn, when he opined:

"We tend to think that we believe what we measure, but it's more likely that we measure what we believe."


  1. Your blog is a great model of clear communication with the public about public finance issues.

    I was curious about the $14,000 tuition figure you mentioned above, and wondered if it was the same for all school districts. I discovered that it is apparently quite different from district to district.

    The variation in the table is a mystery to me.

    Some wealthier districts with larger tax bases (e.g., North Colonie) pay substantially less in tuition per pupil attending charters than your district, which seems odd, since your district is clearly less able to afford the loss than those districts are.

    I also wondered how the amount your district loses in state aid when a parent decides to "vote with their feet" and moves out of the district in order to enroll their child in a public school elsewhere compares to the amount lost by the district if they stay in Green Island and send their child to a charter.

    Or--framed more positively--how much does your district *gain* in state aid if the excellence of your school attracts new families with school-age children to move *into* your district in order to enroll their children in your schools?

    1. If families move in to our school district with children enrolling in our school, the state aid per learner we would receive is far less than what we pay out to charter schools for tuition. Put in another way, the money we lose in state aid if a child moves out of our district to enroll in another public school is much less than what we pay if they remain in our district and go to a charter school.

      Here is the state education department's explanation on how charter school tuition is calculated: Calculation of Final 2010-11 Charter School Basic Tuition

      2010-11 charter school tuition per pupil equals the product of the school district's 2008-09 approved operating expense per pupil (AOE/TAPU) multiplied by the percentage increase between the 2009-10 statewide total approved operating expense and the 2007-08 statewide total approved operating expense (111.8%).

      Please note that the 2009-10 State Budget initiated a one year freeze on these per pupil charter school payments. The 2010-11 Executive Budget proposed extending that freeze for one additional year, and the budget bills enacted by the legislature included that provision. While that legislation was vetoed by the Governor for reasons unrelated to the charter school tuition freeze, no additional legislation was enacted during the 2010 legislative session, and the provisions currently in law continue to apply.