Presentation given by Prof. John Sipple at the Chautauqua County School Board Association Dinner. May 8, 2014.

1. Educational Insolvency:
What do we need to know?
John W. Sipple, PhD
Associate Professor
Cornell University
CaRDI, NYS Center for Rural Schools
NYRuralSchools.org @jsipple
CCSB Dinner, Jamestown, NY

2. Key Themes
1. Caught between constraints in state aid
and property tax cap
2. Variation across state in need and impact
of state aid and tax cap
3. Regional response and shared services
4. Programmatic vs. Financial insolvency

3. A Preview
• No flurry of tables and charts detailing flaws in
state aid. Others have & will do this.
• Problems are more political than technical.
• The imperative is not to find more money in the
state, but to better allocate and use what we
have (e.g., Formula, GEA, STAR, local
decisions).

4. “Educational Insolvency”
•A relative term…depending on what we
are trying to accomplish.

5. Forgive me... A bit of history
about WHY we educate?• Jefferson's Plan – Public Schooling in VA 1817
(Identifier)
• Mann's Plan – Common schools in MA 1849
(Equalizer)
• Conant's Plan – Comprehensive High School 1959
(Stratifier)
• Clinton/Bush/Obama/Tisch/King Plan – Standards &
Choice (??)

6. Thomas Jefferson’s Plan
• “Twenty of the best geniuses will be raked from the
rubbish annually.”
• “We hope to avail the state of those talents which
nature has sown as liberally among the poor as the
rich.”
School as sorter and identifier of select talent… but not
just from wealthy communities/neighborhoods.

7. Horace Mann’s plan
• “The Common School...may become the most
effective and benignant of all the forces of
civilization.”
• “The materials upon which it operates are so pliant
and ductile... Inherent advantages of the Common
School.”
School as societal change agent - Actively shaping all
youth and community

8. Conant’s High School Plan
(1959)
• School serves community– all kids go to same
Comprehensive High School
• Multiple paths to different outcomes
• “What will make the schools democratic is to provide
opportunity for all to receive such education as will fit
them equally well for their particular work life.”
Boston Superintendent, 1908
School as Stratifier - all-things-to-all-people

9. Clinton/Bush/Obama/King
• All children can and should achieve
• Market forces shape and motivate success
• Dramatic lack of trust in the educators and system
Schools caught between consumerism and Egalitarian
ideals

10. 0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
-
2,000
4,000
6,000
8,000
10,000
12,000
#ofNYSDistricts Number of NYS and U.S. School Districts
NYS
US
Equilibrium

11. The Big Squeeze
Population/Enrollment
decline
• Increased unit cost
Demographic change
• Poorer
• Minority growth
• ESL
• Special Education
Revenue constraints
• Tax cap
• State aid cap & GEA
• Property wealth
concentration
• Income concentration
• RTT Funding and now
Fed sequester & cuts

12. 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
AxisTitle
% of Revenues from State
NYC
Big 4
Small City
HN Rural
Ave Need
Low Need
38
%

14. 0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Assessed Property Value/Pupil
NYC Big 4 Small City HN Rural Ave Need Low Need

15. 0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Assessed Property Value/Pupil
NYC Big 4 Small City HN Rural Ave Need Low Need

18. $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Unrestricted Fund Balance/Pupil for School Districts
Small City HN Rural Ave Need Low Need

19. Need
• Let’s watch together… http://pad.human.cornell.edu
• What causes this?
• What are the cost implications?
• What are the implications of insolvency?
• Causal Inference – schools impact poverty || poverty impacts
schools

20. Insolvency
• Financial Insolvency
• Fund Balance gone
• Obligations exceed revenues
• Educational Insolvency
• Quality of educational opportunity and outcomes
legally/socially/technically unacceptable.
We thought this would happen
We fear this is happening

21. Shared Services
Study

22. Fiscal Insolvency?

23. Educational
Insolvency?

25. Result
• Slow to restructure contracts
• Most scaled back or cut courses/programs
• Most cut staff
• Many shared services
• Fund balance squeezed but not exhausted
• Spike in merger discussions, but still few mergers (see NYASBO
Study)

26. In short…
• If the aim was to squeeze the districts into
merger and Financial insolvency… it failed (thus
far)
• Rather, school districts have gutted program &
teachers resulting in what we might call
educational insolvency.

27. So how bad is it?
• I don’t know – across the state.
• You might know in your home district
• But we will…

28. How can I measure Educational
Insolvency?
• New NYSED data system will allow us to peak inside
any classroom.
• What course? Who is taking the course? Who is
teaching the course? Performance in the course?
Chemistry Calculus
Remedial
Eng.
A B C

29. This becomes possible
School A School B
% Minority 18% 18%
% Poor 37% 37%
Physics Global Physics Global
N 21 27 6 11
% Minority 16% 18% 0% 12%
% Poor 31% 37% 2% 9%
%CCR 83% 81% 92% 85%

30. Options to Avoid Insolvency
• Merger
• “Fundamental financial reform.”
• I disagree. Indeed a good option in some places, but…
• High Tax, Low performance metric – Forced closure ?
• Regional High Schools – Enrich academic program for small
schools
• Shared Services – much going on.
• Technology – Reduce isolation, enrich program, lower cost

31. No guessing about impact
• Measurable
• Detailed Data – Access, Performance, Productivity
• We can assess Educational Insolvency based on our
expectations of what our schools are for. Identifier? Stratifier?
Equalizer?