Slides from the Keynote talk Prof. Sipple gave at the "School district Financial Stress" Symposium at the Rockefeller Institute of Government in Albany, NY on October 4th, 2013.

1. Educational Insolvency: How we got
here and where are we heading?
John W. Sipple, PhD
Associate Professor
Cornell University
CaRDI, NYS Center for Rural Schools
NYRuralSchools.org @jsipple
RIG Conference, Albany, NY

2. Key Questions
• What is insolvency and why it matters?
• How did we get to this point? What is at stake?
• What should we do?

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, but to better allocate
what we have (e.g,, GEA, STAR, High Tax aid, 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
• Mann's Plan – Common schools in MA 1849
• Conant's Plan – Comprehensive High School 1959
• Clinton/Bush/Obama/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.”
• Right and obligation to tax private goods and transfer to a public
use. To support paupers, defend foreign invasion, to support the
“most effective means of developing and training” a man.
School as change agent - Actively shaping all youth and
community

8. Conant’s High School Plan
(1959)
• School serves community– all kids go to same school
• Comprehensive and diverse High School experiences
• 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 all-things-to-all-people

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

10. 0
10
20
30
40
50
60
70
80
90
100
Total Enrollment (K-12) by Category - Percent
Enrollment as % of total population
Enrollment as % of 5- to 17-year-olds
% of total enrollment in high schools(grades 9-12)

11. 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

12. 0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Percent Revenues by Source of Funds
Local
State
Federal
41
%
50
%
9%

13. 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

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

18. 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. 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

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

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.
• But we will…

28. How to measure Educ
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 based on our expectations of what our schools are
for