Audit blasts expenditures of Phoenix school district

Karina Bland
The Arizona Republic
Oct. 1, 2005 12:00 AM

PHOENIX - Too much money is spent on administration, transportation, food service and plant operations in the Phoenix Elementary School District compared with its urban counterparts, according to a new state audit.

The audit, based on data from the 2003-2004 school year, suggests school officials tighten such spending and instead funnel more money into classrooms.

Districts are chosen randomly for audit, said Mike Quinlan of the auditor general's office. So far, 15 districts have been audited. State auditors will review the Phoenix district's progress in six months.

Many of the problems cited in the audit already have been fixed, says Sara Bresnahan, district spokeswoman. School officials have no arguments with the recommendations.

Administrative costs, at $991 per pupil, are 61 percent higher than the average $556-per pupil cost at five nearby districts. Because the district operates more schools - 15 - than similarly sized districts, it has more principals and office staff, driving up administrative costs.

Still, the audit suggests the district could have up to 29 too many administrative employees. Since the 2003-04 school year, the district has eliminated 27 of those positions.

School officials also have cut costs in the other areas, Bresnahan said. For example, more efficiently routing buses; consolidating duties of maintenance workers; and improving food-inventory practices.

The audit suggests the district could close six schools because of declining enrollment. The board did close one school last year, but Bresnahan said the school board is committed to keeping small, neighborhood schools open in downtown Phoenix.

In 2003-2004, the district spent 54 cents of every $1 in its classrooms, compared with the state average of 58 cents. Pupils in the Phoenix district are among the state's poorest, with 91 percent qualifying for the federal free- and reduced-price lunch program.

That means the district must offer more support services, such as counseling, reading specialists, speech pathologists, English language emersion, and special education, which aren't included in the classroom-spending tally.

School nurses, nutrition and transportation also are considered non-instructional costs.

"Our students need those services," Bresnahan said.

The Arizona Office of the Auditor General began reviewing school spending in 2003 after passage of Proposition 301, which gave schools more money for teacher salaries.

65 Cent Solution
Policy-makers, Education Groups Clash Over Classroom Spending Idea

By Jim Small

It has lain dormant since it was first announced by Republican leaders in the spring, but a plan to restructure how schools spend their money is about to rise from its slumber, as supporters will try to get the proposal on the ballot in 2006.

Proponents say the concept is simple: schools don't need larger sums of money, they merely need — like many government operations — a reprioritized spending plan that is focused on classroom expenditures. However, critics argue that creating a state mandate to do so rips local control from the hands of school boards and weakens the very system it aims to improve.

The plan — known as the 65 Cent Solution in a national effort to implement the plan on a state-by-state basis — would require a minimum of 65 percent of a school district's operational expenditures be “in the classroom,” where they directly affect students. One group backing the idea says that Arizona schools spend 58 percent of its operational budget in the classroom; the national average is 61 percent.

“Why shouldn't we put the majority of our money in the classroom, for our teachers, for our kids?” wonders Tim Mooney, a consultant for First Class Education, the national group spearheading plan.

Opponents contend it would be difficult to implement and have minimal impact.

Opposition

“I think that would be a flat-out disaster for school finance and school funding,” said Arizona Education Association President John Wright. “From a school funding perspective, resizing the slice of the pie is not going to help the kids.”

The issue essentially boils down — like so many things politic — to basic philosophical differences and one underlying question: Do schools need more money or just different spending habits to be more successful?

First Class Education is headed by Patrick Byrne, the president of Overstock.com, a Web site that sells everything from books to jewelry to sporting goods. The group's goal is a straightforward one: implement the 65 Cent Solution in all 50 states and the District of Columbia by 2008.

So far, Louisiana's Legislature has unanimously passed a resolution encouraging its State Board of Elementary and Secondary Education to implement the 65 Cent Solution. Kansas recently enacted the measure as a goal of the state as part of a legislative special session. Texas Governor Rick Perry issued an executive order Aug. 21 requiring all schools to spend 65 percent of their budgets in the classroom.

Besides Arizona, five other states — Colorado, Florida, Missouri, Ohio and Washington — are expected to have the issue on the ballot within the year.

The plan was first launched in Arizona at a March 31 press conference. At the time, Senate President Ken Bennett and House Speaker Jim Weiers said they had every intention of putting the issue on the 2006 ballot through the legislative referendum process, even though there was barely two weeks left before the deadline to hear bills in committee.

The proposal came under fire immediately from virtually all sides. The most damaging lack of support was from the Republican majority caucuses. Mr. Bennett and Mr. Weiers had not informed caucus members of the plan before unveiling it. Most of the criticism was aimed at Mr. Bennett, who took the legislative lead on the issue and was featured in television commercials supporting the plan that began running three days after the press conference.

Some critics — namely, supporters of Governor Napolitano — said Mr. Bennett was using the issue as a platform to gain statewide exposure for a 2006 gubernatorial bid. He has yet to announce he will seek the post, but has said he is considering it.

Within a week's time, the proposal was dead.

“I stand before you embarrassed — things got out of hand,” Mr. Weiers told his caucus in an April 6 meeting, saying the plan would not move forward that session.

Plans For Ballot

Mr. Mooney says the push will be to the get the 65 Cent Solution on the 2006 ballot through the initiative process rather than legislative referendum.

“We have every intention of hanging this on the ballot in Arizona,” he said.

In order to do so, supporters will have to collect 122,612 signatures. Randy Pullen, a local consultant heading up the campaign effort, says he expects a final draft of the initiative will be filed with the Secretary of State's Office by the end of August.

Although the plan is still undergoing the final tweaks, it will be virtually the same as what was presented nearly five months ago, Mr. Mooney said, and it will change the culture of how schools are run.

“The administrative educrats are getting fat and it's time to change that,” he said.

The teachers unions — the Arizona Education Association, specifically — personify the educrats Mr. Mooney refers to. He says they have every reason to support the plan, since their members will see direct benefits to their classrooms. But doing so, he contends, would go against the union's stated position of wanting more money, not more oversight.

“We'll see if they care more about being a union or about teachers and kids,” he said. “They're all about more money. This isn't about more money — it's about spending the money more wisely. They don't want the accountability.”

AEA President Mr. Wright says that “is just flat-out false. That is someone else putting words in our mouth and is false.”

He says the solution is not reallocating an already limited supply of money, but should be giving schools every available resource to support education and give students every opportunity to succeed.

Mr. Pullen, though, says the AEA's opposition — and that of its counterparts nationwide — is indicative of the threat they feel from the proposal.

“You would not have the teachers' unions in a panic unless they saw right away that this was going to change their game plan,” he says.

Defining Classroom Spending

Opponents of the plan say it is simply not feasible to require schools to divert their expenditures to the narrowly defined “in the classroom.”

The definition proffered by supporters is that of the National Center for Educational Statistics. Teachers, supplies, instructional aides, field trips and athletics are all considered classroom spending, while costs related to administration, building maintenance, food service, libraries, counselors and transportation are deemed outside spending.

“There are so many functions that go on that are not considered [classroom] spending,” says Rep. Linda Lopez, D-29, a member of the Sunnyside Unified School Board in Tucson. “Without those functions, teachers can't do their jobs…

“It [takes] more than just teachers in the classroom — you've got to have support.”

Although he has taken no official position on the issue, State Superintendent of Public Instruction Tom Horne said he has been trying to persuade the plan's backers to expand the definition of “in the classroom” to match what is currently used in district offices. That definition includes spending on librarians, nurses, counselors and buses, among other things. So far, he says, he hasn't been successful in changing any minds.

Mr. Mooney says there is no good reason to alter the definition.

“That's the definition that's been used for 50 years,” he said. “We see no need to change [it].”

Janice Palmer, a lobbyist for the Arizona School Boards Association, says her organization opposes the initiative because it will “usurp decision making” from the hands of school boards and, in turn, parents.

“There really isn't the flexibility…at the local level to spend the money as they see fit,” she said.

However, Mr. Pullen, who is also the state's National Republican Committeeman, says the proposal will give districts the same control they have now, as long as they follow the basic spending restrictions.

School boards — “joke,” Mr. Pullen calls them — will continue to approve whatever the district superintendent wants in “rubber stamp” fashion, only they will do so after dedicating nearly two-thirds of their budget to classroom expenditures, he says.

Ms. Lopez says she believes the plan is part of an attempt to sandbag the public school system by conservative policymakers.

“Their motivation has nothing to do with supporting public education,” she said. “Their motivation is to undermine public education and force more money into private schools.”

Polling data released by the supporters at the March 31 press conference showed an 88 percent approval rate for the plan. Although the issue has become one of rhetoric and party affiliation at the Legislature, Mr. Pullen says the polls show how widespread support really is.

“It's not a conservative or liberal issue,” he said. “You don't get over 80 percent [support] unless it's from everywhere.”

The reason the proposal has become politicized at the Capitol, Mr. Pullen says, is because the AEA is an ardent supporter of the Democratic Party. Since the union opposes it, those lawmakers endorsed by the AEA are obligated to oppose the plan as well.

“It has to do with who supports whom,” he says.

Critics say the polling data means nothing because the respondents were queried about the generalities of the plan, not specific details.

“Sure, people support it,” Ms. Lopez said. “But folks don't understand the implications of this — they don't understand what the true impact will be, how narrow it is.”

Ms. Palmer of the School Boards Association says, “Sixty-five percent sounds nice. As with most things, the devil's in the details.”

In the end, it comes down to focus. The two sides believe the other is trying to divert attention away from the real issue, which both agree is the same.

“I think by putting all of our focus on the number 65, we lose focus on what all of this is about,” Ms. Palmer said. “We shouldn't be looking at an arbitrary number, we should be looking at the product that is produced.”

Mr. Pulls disagrees, saying the plan does exactly that.

“What it really just comes down to is you need to focus on what's important,” he said, “and what's important is teaching kids.” —

One Man's Way to Better Schools
The Washington Post
By George F. Will
Sunday, April 10, 2005; Page B07

The idea, which will face its first referendum in Arizona, is to require that 65 percent of every school district's education operational budget be spent on classroom instruction. On, that is, teachers and pupils, not bureaucracy.

Nationally, 61.5 percent of education operational budgets reach the classrooms. Why make a fuss about 3.5 percent? Because it amounts to $13 billion. Only four states (Utah, Tennessee, New York, Maine) spend at least 65 percent of their budgets in classrooms. Fifteen states spend less than 60 percent. The worst jurisdiction -- Washington, D.C., of course -- spends less than 50 percent.

Under the 65 percent rule, Arizona, which spends 56.8 percent in classrooms, could use its $451 million transfer to classrooms to buy 1.5 million computers or to hire 11,275 teachers. California (61.7 percent) could use its $1.5 billion transfer to buy 5 million computers or to hire 37,500 teachers. Illinois (59.5 percent) would transfer $906 million to classrooms (3 million computers or 22,650 new teachers). To see how much money would flow into your state's classrooms under Byrne's approach, go to http://www.firstclasseducation.org/.

Byrne, who lives in Utah and has made a bundle in various business ventures, was once advised by Warren Buffett to pretend he is a batter at the plate with no one calling balls and strikes, so he can wait for a perfect pitch -- a perfect idea. The 65 Percent Solution is perfect because it wins 80-plus percent support in polls and torments people who Byrne thinks should be tormented.

Buffett also advised him to ask himself this: If you had a silver bullet, what competitor would you shoot, and why? Byrne says he would shoot the National Education Association -- the largest teachers union. Byrne is pugnacious -- after graduating from Dartmouth, studying moral philosophy at Cambridge and earning a doctorate at Stanford, he tried a boxing career -- and relishes the prospect of the 65 percent requirement pitting teachers against other union members who are in the education bureaucracy. "Educrats," he says, "have become what city hall was 50 or 60 years ago" -- dens of patronage and corruption.

The 65 Percent Solution solves the misallocation of resources, but there is scant evidence that increasing financial inputs will by itself increase a school's cognitive outputs. Or that a small reduction in class size accomplishes much. Or that adding thousands of new teachers would do as much good as firing thousands of tenured incompetents.

However, firing a bad teacher is, according to a California official, less a choice than a career -- figure two years of struggle and $200,000 in legal costs. That is why in a recent five-year period only 62 of California's 220,000 tenured teachers were dismissed.

Much of the reallocated money under the 65 percent requirement would go for better pay for teachers, which is wiser than just adding more teachers. Chester Finn, senior fellow at the Hoover Institution, notes that, while the number of pupils grew 50 percent in the past half-century, the number of teachers grew almost 300 percent. That pleased dues-collecting teachers unions and tuition-charging education schools. But if the number of teachers had grown apace with enrollments, and school budgets had risen as they have, teachers' salaries today would average nearly $100,000 instead of less than half that.

America, says Finn, has invested in more rather than better teachers -- at a time when career opportunities were expanding for the able women who once were the backbone of public education. The fact that teachers' salaries have just kept pace with inflation, in spite of enormous expansions of school budgets, explains why too often teachers are drawn "from the lower ranks of our lesser universities."

Arizona's House speaker and Senate president have endorsed the 65 percent requirement, which should encounter scant opposition here or in the other 49 states to which Byrne's organization, First Class Education, is coming.