Where has all the money gone?

by Lonnie Palmer

Almost every time I told someone I was writing a book about education they asked the same question: Where has all the money gone?

The American public knows we’re spending more on education than we have in the past. They also know we’re not seeing results.[i] They want to know why.[ii] They’re right about the fact that we’re spending more – way more.

In 1970, the average annual cost per pupil in New York State was $1,327, according to the National Center for Education Statistics.[iii] Factor in simple (Cost Price Index - CPI) inflation (6.46 percent) and that number in 2015 should have been $8,572. But the actual median expenditure per pupil in New York State in 2014-15 was $22,552[iv]; that’s 163 percent or $13,980 more than inflation can explain.

And New York and other high-cost strong public union states are not the only ones spending more. States like Utah, Idaho, Arizona, Oklahoma and Mississippi, the five lowest education spenders in the nation, also have consistently spent more than inflation. In 1970, they were spending $610 per pupil per year.[v] In 2015, they spent an average of $7,490 per pupil; that’s 89 percent or $3,549 more than inflation can explain.[vi]

We’ve reached a cost-per-pupil crescendo that started gaining steam in the 1990s, one that has risen steadily since I started teaching in 1970.[vii] [viii]

So where has all the money gone?

"The Politics of Education K-12" is available on Amazon.

FDR was mostly right

Soon after becoming a teacher in 1970, I remember reading that Franklin Delano Roosevelt, the famous Democrat and depression era and WWII president, did not believe in public union negotiations for salary and benefits.[ix]

This confused me. Weren’t the Democrats supporters of unions? Didn’t FDR help to establish the National Labor Relations Board and support private unions? Why this stance on public unions?

FDR apparently concluded that city, county and village legislators, state legislatures or Congress should set wages and benefits for public employees and that, while the public sector employees should be free to join unions, their involvement in negotiations with their government employers made no sense.

After 40-plus years working with public unions, I’ve concluded that FDR was mostly right. The typical teacher and public employee negotiations distract us from the critical task of making our public institutions more responsive and effective, while wasting enormous amounts of precious leadership time and public tax dollars on local negotiations.

Frequently, these negotiations in the strong public union states pit David, played by the local public employer, against Goliath, played by the local public union and its state or national partner. And it’s not just the teachers union, it’s the bus drivers union, the administrators union, the support staff union.

As a result of laws and court decisions, public union employees are guaranteed annual raises based on seniority steps, continuing high-cost health insurance with little employee contributions and high employer contributions to state-controlled pension plans.

Guarantees produced by laws and supporting court decisions apply to state, local government and school district employees in strong public union states.[x] Public unions in these states also have an unfair advantage because they provide campaign contributions and endorsements to members of both Democratic and Republican parties.[xi] [xii]

The public unions received paybacks in the form of legislation giving them the upper hand in contract negotiations over the decades of the 1960s through the 1990s. In New York State, Democrats received much of the contributions, but the Republicans got their share as well. The teachers unions contributed millions to their campaigns and continue to contribute to this day.[xiii]

To make these negotiations less lopsided, school districts, towns, villages and cities try to arm themselves with the best slingshots available (expensive labor attorneys)[xiv] . Those labor attorneys have developed an extremely well-funded cottage industry that grows into a more expensive and debilitating barnacle on the public school district ship every year.

While private worker union influence has shrunk over the past five decades due to the impact of globalization and technology,[xv] public unions have become even more pernicious, particularly in states that made strategic errors by passing laws that tilted negotiations toward unions.

Public employee unions gained negotiating power primarily in blue states like New York, Rhode Island, Massachusetts, Illinois and California. States like Ohio and Wisconsin, where Republicans only recently took control, tried to create a more equitable balance.[xvi] The U.S. Supreme Court in 2016, short one member due to the death of Justice Antonin Scalia, tied 4-4 on a crucial case that would have had negative impacts on public union finances, but the status quo won.[xvii]

In Albany, NY, where I served as a school superintendent for six years, extended and acrimonious negotiations with our teachers union, our support staff union and our school administrators union resulted in several incidents that illustrated the bitterness that can come from public union conflicts.

• My mailbox was destroyed by early morning explosions on three separate occasions during negotiations.
• Someone banged on my door at 2 a.m., waking and frightening my teenage daughter and my ex-wife while I was working at an extended nighttime negotiations session with the teachers union.
• My car was “parked in” by a vehicle belonging to one of the district’s teachers who parked his car one inch from my vehicle in an attempt to make it impossible for me to drive home after a negotiating session that didn’t end until 4 a.m. (It took me an hour, but I got out of the spot.)
• At the height of the same negotiations a disgruntled and ineffective payroll employee who was also a member of the support staff union leadership was involved in several conflicts in the office and had repeatedly been uncooperative with her supervisor. This employee was transferred to a different job in a different building at the same rate of pay. I had investigated the possibility of terminating this employee, but the school district’s attorney told us that given her union leadership status firing her would probably result in a reinstatement by the Public Employee Relations Board (PERB) that oversees challenges on such issues. The day she left for her new work assignment the entire payroll file for our district was deleted from our computer system. This delayed paychecks for 1,200 employees and required several employees to work overtime on the weekend to hand write checks for impacted employees who received their paychecks one to three days late. Even though we could trace the payroll file deletion back to the specific computer used by this employee our attorney strongly advised us not to take further disciplinary action against her due to her union leadership status and PERB rules and decisions regarding union animus (retaliatory actions by public employers toward public union leaders).
• A confidential negotiations document I had given to the school board describing my plan to begin to replace through attrition the existing high school educated teacher aide staff with lower paid and more highly qualified teacher assistants with teaching certification or at least a bachelor’s degree was pilfered from my desk and altered to say my plan was to immediately lay off all these employees (over 100). The altered version (I had no plans to lay off anyone during this process.) was distributed to all the members of the district’s support staff union. Imagine my surprise when over 150 members of this union showed up at our next school board meeting with no warning. These employees, who attended the meeting as a result of theft and deception, were armed with picket signs calling for my firing and they chanted repeatedly “Palmer must go” for the benefit of the television and newspaper reporters they had called in advance of the meeting.
• During the acrimonious negotiations with our support staff union, I visited one of the district’s elementary schools to check on the progress of summer cleaning and maintenance work. When I returned to my car, I found I had a flat tire. I pulled into the adjacent gas station and asked them to fix the tire while I grabbed lunch in the diner across the street. When I returned from lunch the mechanic said, “Well, I can fix the two holes in the tire tread but the 14 holes in the sidewall are another matter. You’ll need a new tire.”
• When I was the interim superintendent in Troy, NY, I made decisions that reduced unnecessary overtime for custodians. Several of those custodians were making more in yearly wages than my newer school principals due to “boiler” time where they “watched” the steam boilers in the high school and the middle school at night, supposedly for safety reasons. No safety issues had ever been noted during these overtime shifts and I had previously worked in other school districts with steam boilers like those in Troy that did not pay overtime for steam boiler supervision.
• ?Shortly after I ended “boiler babysitting” a bullet hole mysteriously appeared in a window in my office, the air conditioning in my office did not work and wasn’t fixed for several months (this resulted in severe allergies I struggle with to this day) and a key supervisory custodial employee took a leave of absence of more than one year in duration for an unspecified illness, creating significant operational issues for the district and for me.

Next up: It’s the health insurance, stupid

For the entire "The Politics of Education K-12", click here.

THE END

[i] Nick Anderson, “SAT scores at lowest level in 10 years, fueling worries about high schools,” The Washington Post, September 3, 2015, https://www.washingtonpost.com/local/education/sat-scores-at-lowest-level-in-10-years-fueling-worries-about-high-schools/2015/09/02/6b73ec66-5190-11e5-9812-92d5948a40f8_story.html

?[ii] Lindsay Layton, “U.S. students lag around average on international science, math and reading test,” The Washington Post, December 3 2013, https://www.washingtonpost.com/local/education/us-students-lag-around-average-on-international-science-math-and-reading-test/2013/12/02/2e510f26-5b92-11e3-a49b-90a0e156254b_story.html?tid=a_inl

[iii] Snyder, T.D., and Dillow, S.A. (2012). Digest of Education Statistics 2011 (NCES 2012-001). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC., https://nces.ed.gov/programs/digest/d15/tables/dt15_236.65.asp

?[iv] Snyder, T.D., and Dillow, S.A. (2012). Digest of Education Statistics 2011 (NCES 2012-001). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC., https://nces.ed.gov/programs/digest/d15/tables/dt15_236.65.asp

?[v] Snyder, T.D., and Dillow, S.A. (2012). Digest of Education Statistics 2011 (NCES 2012-001). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC., https://nces.ed.gov/programs/digest/d15/tables/dt15_236.65.asp

?[vi] Snyder, T.D., and Dillow, S.A. (2012). Digest of Education Statistics 2011 (NCES 2012-001). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC., https://nces.ed.gov/programs/digest/d15/tables/dt15_236.65.asp

?[vii] Richard Rothstein and Karen Hawley Miles, "Where’s the Money Gone? Changes in the Level and Composition of Education Spending,” Economic Policy Institute, 1995, https://www.epi.org/publication/books_wheremoneygone/

?[viii] James W. Guthrie, “School Finance: Fifty Years of Expansion,” School Finance, Winter 1997, https://www.ncbi.nlm.nih.gov/pubmed/10892463

?[ix] David Umhoefer, “Did FDR oppose collective bargaining for government workers?,” Politifact, August 13, 2013, https://www.politifact.com/wisconsin/statements/2013/aug/13/scott-walker/Did-FDR-oppose-collective-bargaining-for-governmen/

?[x] Daniel Desalvo, “The Trouble with Public Sector Unions,” National Affairs, Fall 2010, https://www.nationalaffairs.com/publications/detail/the-trouble-with-public-sector-unions

?[xi] Thomas B. Edsall, “Republicans Sure Love to Hate Unions,” The New York Times, November 18, 2014, https://www.nytimes.com/2014/11/19/opinion/republicans-sure-love-to-hate-unions.html

?[xii] Thomas McGinty and Brody Mullins, “Political Spending by Unions Far Exceeds Direct Donations,” Wall Street Journal, July 10, 2012, https://www.wsj.com/articles/SB10001424052702304782404577488584031850026

?[xiii] Chris Bragg, “The Labor Loophole,” Albany Times-Union, June 13, 2015, https://www.timesunion.com/tuplus-local/article/The-labor-loophole-6325922.php

?[xiv] E. J. McMahon, “Taylor Made: The Cost and Consequences of New York’s Public-Sector Labor Laws,” Empire Center, NY Torch Blog, October 17, 2014, https://www.empirecenter.org/publications/taylor-made-the-cost-and-consequences-of-new-yorks-public-sector-labor-laws/

?[xv] Associated Press, “As organized labor shrinks, unions representing government workers grow,” MPR News, July 5, 2014, https://www.mprnews.org/story/2014/07/05/union-members-have-ties-to-government

?[xvi] Neil King Jr., Thomas M. Burton and Kris Maher, “Political Fight Over Unions Escalates,” Wall Street Journal, February 22, 2011, https://www.wsj.com/articles/SB10001424052748703800204576158851079665840

?[xvii] Steven Greenhouse, “The Friedrichs case: A time bomb for unions,” The Washington Post, January 15, 2015, https://www.washingtonpost.com/opinions/the-friedrichs-case-a-time-bomb-for-unions/2016/01/15/f4ff39da-bac3-11e5-829c-26ffb874a18d_story.html?postshare=1261452913720370&tid=ss_mail

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