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Guest post: Crisis in public education…RJs newsletter

Guest Post by RJS

Crisis in public education

School districts around the country have been hit with a triple whammy of cuts to their funding this year…

First, the direct aid in the form of federal ARRA has run its course, so they’re no longer receiving that supplement.

Second, the states have budgetary problems for the same recession-related reasons that federal revenues have declined, and as a result a significant number of them have cut their funds for education and local governments…

Third and most recently, the decline in housing & commercial property values accompanying the bubble bursting has started to translate into declining property tax revenues…but even last year, while school districts were supposed to be getting direct aid from the federal stimulus, I was seeing about a half dozen articles a week from districts around the country where cutbacks to their educational programs were being made…this year, now that federal aid has been cut off, the problem seems to have gotten worse…

According to the recent BLS Employment Situation Summary,  local governments have lost 416000 jobs since an employment peak in September 2008….from what I’ve observed, it seems the lions share of those job losses have resulted from school district cutbacks…but it’s not normally a national story; typically, its a local news story, where upset parents show up at the school board meeting and each district cuts something different; some cut teachers, some spec ed, some cut sports, or art & music, or field trips, still others have cut over a month off the school year…so im going to try to tell this larger story with links to a number of small ones which have appeared since the beginning of the year…

There was a brief media flurry this recent december when students from the US scored 17th on the OECD”s standardized PISA tests (Program for International Student Assessment), a test where 15 year old students from Shanghai, Korea, Finland, Hong Kong & Singapore ran away with the honors, and the US got trounced in math… there were a few calls for education reform, and a mcgraw hill study showed that in the high achieving educational systems it was “a tremendous honor to be a teacher, and teachers are afforded a status comparable to what doctors, lawyers and other highly regarded professionals enjoy in the US“; but for the most part the temporary urgency was overshadowed by concern for holiday retail sales..

T^hen, as the year ended, the Education Trust issued a report indicating that nearly a quarter of all applicants to the Armed Forces, despite having a high-school diploma, can’t pass the necessary military entrance exam; not having “the reading, mathematics, science, and problem-solving abilities” to become a private in the U.S. Army…it wasnt until the state of the union, when obama invoked the “sputnik challenge” metaphor, that education was again in the spotlight…and even ben bernanke got into the act in early march, when he waded into the state & local budget debates with a speech stressing the need for a competitive high-quality workforce,  lauding the benefits of early childhood education in achieving that  goal…but for all the official oratory, not a program has been introduced, and as you’ll see below, further cuts have continued…

Legislative fight expected on class-size limit — Among proposed solutions to the state’s massive budget deficit is changing a Texas law that holds most elementary school classes to no more than 22 students. But teachers groups, backed by Democrats in the House and Senate, say any change will reverse academic gains in elementary schools and force the elimination of as many as 12,000 teaching jobs.

Number Of Homeless Students In State Climbs To 21,000 – They sleep in cars. In parks. In shelters. On the sofas of generous relatives or friends.  They are the more than 1.3 million homeless children nationwide.  Of that total, more than 21,000 live in Washington state, according to numbers submitted to the federal government this past week.  According to the Office of Superintendent of Public Instruction, the numbers show that during the 2009-10, the state reported 21,826 homeless students

State superintendent declares California schools in ‘state of emergency” — Saying schools are in a “state of financial emergency,” the Superintendent of Public Instruction on Thursday called on Californians to get involved in local schools and support tax measures that benefit education. He said $18 billion in education cuts over the past three years have caused thousands of layoffs, increased class sizes, shortened school years in many districts and eliminated or reduced programs such as libraries, art and music. He said 174 of the state’s 1,077 school districts are in financial distress, signaling they may not be able to pay their bills in the next three years

Campus Notes – UNC estimates more job losses – A 5 percent cut to the UNC system budget – which officials say is a reasonable expectation –  could result in the loss of 900 jobs across the state. Of those, 400 would like be faculty cuts, according to data being presented this morning to the UNC system’s Board of Governors. After several years of budget cuts, the system appears ready to reduce its budget again, doing its part to help the state patch a hole in its budget estimated now at more than $3.5 billion. A 10 percent cut would more than double those job eliminations – to 2,000 positions across the UNC system, including 1,000 professor slots.

School officials say cuts could be ‘devastating’ – School officials say programs and people would be two unavoidable casualties of the 10 percent across-the-board cut to education funding proposed Wednesday by S. Dakota Gov. Dennis Dauggard.  “For us, it amounts to a $1.4 million loss. If we would try to accomplish that in one year, it would have a devastating effect. He says he has real numbers. What he doesn’t see is that real numbers affect real people.” For Rapid City, 10 percent means $7 million.”There’s no way we can salvage $7 million in the general fund.”

Dallas ISD now preparing for $260 million funding cut  – Dallas school officials are now bracing to lose as much as $260 million each of the next school years as lawmakers slash education funding to close a multibillion-dollar deficit. The numbers keep getting worse. A month ago, Superintendent Michael Hinojosa thought Dallas ISD might be out $120 million each of the next two school years. The city of Dallas had two mandatory furlough days in 2009, which saved the city $2.6 million. Trustee Nancy Bingham said this afternoon she favors furloughs because employees wouldn’t lose their jobs.

Think $113 Million AISD Deficit Is Bad? Consider This Armageddon ScenarioAustin School Trustees acknowledged they were left with no easy choices last night as they voted 9-0 to approve a plan that would eliminate 485 jobs next school year, mostly teachers. The decision was based on a plan to reduce the $113 million projected budget gap without cutting full day pre-K.  But all those plans could go out the window depending on how the legislature decides to distribute cuts to education funding. At issue is how lawmakers go about defunding education. 

Long Beach Unified prepares to send out 621 preliminary layoff notices to teachers – Administrators at the Long Beach Unified School District say proposed budget cuts are likely to force the district in the next month to send out more than 600 Reduction In Force notices to employees with teaching credentials. If the proposed layoffs are made final by summer, the ensuing teacher cuts would mean a minimum class size increase of five students in kindergarten, first, second and third grades. The increase would lead to 30-students classes in those grades. Classes in grades sixth through 12th grade would increase by two students to 34 students per class.

Nothing Off Limits On OPS Budget – Class sizes could go up. Some programs, such as summer school or programs for the gifted, could be scaled back. And new textbooks could wait a year. All of those are options as Omaha Public Schools look to make budget cuts next school year. District administrators are seeking to make cuts totaling $22.2 million, including $11.1 million from programs funded by federal stimulus money that runs out after this year. Teachers, school board members and administrators say the list is intended to ignite discussions with the public and OPS staff about where to make cuts. “There’s nothing that’s off the table at this point,”

Pennsylvania schools could lose $1 billion – Less than three weeks after taking office, Gov. Tom Corbett is swinging the budget axe at public schools.  Schools may lose up $1 billion in state aid in the coming school year, setting up one of three scenarios.  Homeowners could see substantial property tax increases.  School boards may slash programs and jobs in the coming school year.  Or families may take a hit to their wallets and still see school programs or jobs wiped out. How big is a $1 billion loss? It amounts to about a fifth of the $5.1 billion that the state budgeted for basic education this year. 

New York City May Fire 21,000 Teachers – New York City could lose $1 billion in education aid from the state, forcing the nation’s largest school system to cut more than 21,000 teachers, Mayor Michael Bloomberg said Friday.. If the governor proposes a $1 billion cut and the Legislature approves it, the mayor estimated the city would be forced to cut 15,000 teachers, most of which would be accomplished through layoffs. That’s on top of plans, outlined by the mayor in November, to cut 6,166 teachers in the fiscal year beginning July 1.

LA school board contemplates up to 5000 layoffs – The Los Angeles school board is set to vote on authorizing layoff warning notices for more than 5,000 employees, including 4,000 teachers, in a bid to close a $408 million budget deficit for the 2011-2012 academic year. The board will vote Tuesday on the warning notices, which by state law must be sent by March 15. The notices do not mean that all employees who receive them will lose their jobs on June 30. The exact number of layoffs will depend on whether voters approve state budget balancing measures on the ballot in June.

Study Predicts 3300 Teacher Layoffs On LI – Teacher jobs on Long Island may be in jeopardy after a new study estimated more than 3,300 layoffs over the next two years. The study, done by the New York State School Board Association, estimates that Nassau County will have to lose more than 1,500 teacher positions while Suffolk County will need to cut more than 1,800. The study credits the governor’s proposed cap on property taxes and a reduction in school aid for the probable cause of the layoffs.

School District Cuts 778 Jobs, $24.4M In Anticipation Of Reduced State Budget – In response to what the Long Beach Unified School District is quite accurately calling “the state’s unmitigated budget disaster,” the LBUSD Board of Education on Tuesday voted to cut $24.4 million and 778 jobs to reduce expenses.  Class sizes in nearly all grades will rise with the loss of hundreds of teachers. There will also be reductions to elementary school busing and transportation. The board voted a few weeks ago to close two elementary schools and cut an addition $27 million. The LBUSD has cut more than $200 million since 2008, and studies suggest that things are not likely to improve any time soon.

AISD trustees discuss slashing more than 1,000 jobs – Austin school board members Monday talked about possibly axing more than 1,000 jobs and declaring financial exigency, or a state of fiscal emergency, to clear the way to do so. Chief Financial Officer Nicole Conley-Abram told trustees Monday that the proposed cuts would increase class sizes at elementary schools, require secondary teachers to teach 174 students a day, cut athletic spending by 5 percent and, pending state approval, mandate two-day unpaid furloughs for district workers.

Significant 2011-2012 deficit projected for VBPS – Board may need to cut as much as $5,000,000 – At the regular meeting of the Van Buren Public Schools Board of Education, consultant Mike Dixon presented a grim budget update to the board. Early projections for the 2011-2012 school year show an excess of expenses over revenues of $5,328,329.Mr. Dixon explained the key factors driving the projected deficit. On the revenue side, an estimated drop in students from 5,582 to 5,518 would decrease revenue by $371,840. The loss of federal funding (from ARRA and Edujobs federal sources) is projected to total $1,774,213 in decreased revenue compared to the current school year. On the expense side, rising retirement costs present a significant financial burden to the district.

Detroit Ordered to Close Half Its Public Schools Amid Budget Crisis – The Detroit public school system has been ordered to close half its schools to make up for a $327 million deficit. The schools will be shuttered over the next four years, causing class sizes to bulge to 60. The plan, mandated by state education officials, will reduce the number of schools in the district from 142 to 72. Robert Bobb, the district’s emergency financial manager, said he doesn’t think the plan will be effective because it’s likely to drive students out of the district, making the fiscal crisis worse.

Elk Grove schools face massive budget cuts, layoffs –  More than 400 jobs are on the chopping block as the Elk Grove Unified School District wrangles with a $40 million budget deficit, according to a list of cuts scheduled to be considered by the school board.  “Morale is low. We’ve been fending off cuts for a number of years” The district is recommending increasing class sizes to 30 next year. “With just four extra students, I can tell the difference. Now the expectation of teachers is that we continue to teach as if we still had just 20,”

‘Draconian’ Cuts Considered For Schools (Jacksonville) At a special board meeting Tuesday, members went through a 25-page list of suggestions from staff of ways to trim the budget.  In addition to cutting art, music and PE in primary schools, other money-saving ideas being considered include making the school week four 10-hour days, consolidating smaller schools, reducing bus routes to some magnet and alternative schools, limiting middle school athletics to four days a week, and cutting field trips to the Marine Science Education Center. 

Providence plans to pink slip all teachers.  The school district plans to send out dismissal notices to every one of its 1,926 teachers, an unprecedented move that has union leaders up in arms. Supt. Tom Brady wrote that the Providence School Board on Thursday will vote on a resolution to dismiss every teacher, effective the last day of school. In an e-mail sent to all teachers and School Department staff, Brady said, “We are forced to take this precautionary action by the March 1 deadline given the dire budget outline for the 2011-2012 school year in which we are projecting a near $40 million deficit for the district,” Brady wrote. “Since the full extent of the potential cuts to the school budget have yet to be determined, issuing a dismissal letter to all teachers was necessary to give the mayor, the School Board and the district maximum flexibility to consider every cost savings option, including reductions in staff.”

San Jose’s budget deficit points to likelihood branch libraries will be open just three days a week – Several years ago, all of the branches were open six days a week, with a few open on Sundays. With the recent huge deficits, that number dropped to 5½, more recently to 4½ and after June 30–the end of this fiscal year–it may drop to three days a week. Depending on the budget–and things don’t look good–officials running the library are looking at options, one of which is opening branch library doors three days per week.

Nearly 500 in S.F. schools to get pink slips – Nearly 500 San Francisco teachers, aides and administrators will find pink slips in their mailboxes within the next two weeks as the school board works to backfill an estimated $27 million shortfall if the state’s worst-case budget scenario pans out later this year.If the layoffs hold, class sizes would go up and overall support for students would decline, district officials said Tuesday night. The board voted 6-1 to send notices to 140 teachers, nurses and counselors, 194 teacher aides and 139 administrators.

Williams says NYS budget could mean 750 layoffs – Buffalo Schools Superintendent Dr. James Williams threatens to leave if Albany imposes a salary cap on school superintendents.  Williams is predicting dire consequences for the Buffalo School District. If Governor Cuomo’s current budget proposal passes, Dr. Williams says there will be massive layoffs. “You’re looking at about 750 people,” said Dr. Williams.

District 205 Teacher Layoffs Could Cut into Tenured Ranks – Six Rockford schools will close. The developments are sending shock waves throughout the affected areas. Emotions ran high as more than 500 people came to the special board meeting to hear the fate of the district.  Due to widespread interest in district cuts, the board meeting was moved there to accommodate a large crowd. In all the board voted to close six schools, repurpose two, and decided to leave the fates of three schools alone.

U.C. Davis Braces For Cuts – Up to 500 jobs could be eliminated, and students could face higher fees under a proposal being circulated by U.C. Davis Chancellor Linda Katehi. In a letter released by her office, Katehi projects a shortfall of $107 million next year, as a result of Gov. Jerry Brown’s proposed budget cuts.

Tight Budgets Mean Squeeze in Classrooms – Millions of public school students across the nation are seeing their class sizes swell because of budget cuts and teacher layoffs, undermining a decades-long push by parents, administrators and policy makers to shrink class sizes.  Over the past two years, California, Georgia, Nevada, Ohio, Utah and Wisconsin have loosened legal restrictions on class size. And Idaho and Texas are debating whether to fit more students in classrooms.  Los Angeles has increased the average size of its ninth-grade English and math classes to 34 from 20. Eleventh- and 12th-grade classes in those two subjects have risen, on average, to 43 students.

CMS Budget Cuts Could Mean Hundreds Of Teacher Layoffs – Charlotte-Mecklenburg Schools is preparing to lay off hundreds more teachers, and Goodwin said she thinks veteran teachers have the advantage. “If you are an untenured teacher, unless you’re in a critical area, really, start going ahead, making plans (and) looking at other options,” she said.  The 2011-12 proposed budget calls for a $100 million reduction. The cuts could cost up to 600 teachers their jobs. 

Layoffs Approved at FUSD; Averted in Clovis – Fresno Unified teachers and their supporters showed up in force Wednesday night as the district’s Board of Trustees met to discuss their budgetary options in the face of a multi-million dollar shortfall. Despite the outcry to avoid impacting the classroom by targeting teachers, the board voted to send out more than 300 layoff notices, which by law need to be in the mail by March 15th.

San Diego School Board May Warn 900 Teachers Of Layoffs – California’s budget crisis threatens to devastate the public-education system. Deep budget cuts are forcing school districts throughout the state to lay off thousands of teachers, expand class sizes and close programs. San Diego Unified, the state’s second largest school district, will decide Thursday on whether to send layoff warnings to 900 teachers and 600 non-teaching staff to close a $120-million budget deficit. “The state treasurer started throwing around the notion of a 130-day school year. That would mean school would end at the end of March. Five months of the year, kids are out of school,”

Education Secretary: 82% of US public schools may ‘fail’ this year – In testimony to Congress Wednesday, US Education Secretary Arne Duncan made a startling claim: This year, up to 82 percent of public schools could ‘fail’ the government’s ‘No Child Left Behind’ standards.  Last year, just 32 percent of schools were failing the government’s rigorous testing standards.

UC Riverside leaders consider sweeping cuts in face of budget crisis – Should library hours be cut? Could some academic programs be closed or merged? Will turning down air conditioners and fixing leaky sprinklers save much money? UC Riverside administrators are mulling such questions as they face an expected reduction in the campus’ core budget next year of at least 8%, or $38 million, even as they cope with higher pension costs and energy bills. The decisions could affect the livelihoods of employees and quality of education for more than 20,000 students at the Inland Empire campus. The 10 UC campuses have been through similar drills over the last three years of state budget crises, and alarms rang again recently with Gov. Jerry Brown‘s call to cut $500 million from the UC system for the 2011-12 school year.

Union: 19000 educators get pink slips in Calif.—California school districts have issued at least 19,000 layoff notices to teachers and other school employees amid heightened uncertainty over the state budget, the teachers union said Tuesday.  The California Teachers Association announced its estimate of preliminary notices on the day school districts must let employees know they could lose their jobs.   Many districts have not reported how many pink slips they have issued as they prepare for worst-case budget scenarios, said CTA President David Sanchez. He expects the number to surpass 20,000 when the union has a more complete count by week’s end.

Facing $80M In Budget Cuts, CPS Hears Public’s Input – About 200 people packed a Cincinnati School Board meeting Monday night, many of them to talk about the district’s finances. Cincinnati Public Schools is trying to figure out how it will balance its budget in the face of an expected loss in revenue next year of nearly $80 million, or 17 percent. The district, like schools across the state, is bracing for deep cuts to education funding when Gov. John Kasich releases his biennium budget today. It’s also facing losses in federal funding and rising expenses. The district made no decisions Monday night. The forum was intended to get the public’s opinion on what they think the core mission of the district should be and what programs are important to the community.

Christie’s budget cuts left N.J. schools unable to provide ‘thorough and efficient’ education  – Gov. Chris Christie’s deep cuts to state school aid last year left New Jersey’s schools unable to provide a “thorough and efficient” education to the state’s nearly 1.4 million school children, a Superior Court judge found today. Christie slashed state aid by $820 million last year, and Doyne found that altogether, the state would have needed twice that much — $1.6 billion — to fully fund the School Funding Reform Act formula.

Hundreds of Layoffs at Montgomery Public Schools – Hundreds of employees will be laid off from Montgomery Public Schools at the end of the school year.  The Montgomery Co. school board approved the layoffs of 270 non-tenured personnel. Most of those being laid off are teachers.  Spokesman Tom Salter says there are fewer teachers being let go this year compared to last year.  

Tentative schools budget includes 2500 layoffs, pay cuts, larger classes – The mood was somber as Jeff Weiler, chief financial officer for the Clark County School District, finished a presentation Thursday night at a School Board meeting. Sitting in front of a standing-room-only crowd, Weiler served as the bearer of bad news: As part of a tentative 2012 budget, $411 million would be cut from the district and nearly 2,500 employees would lose their jobs.The tentative budget includes a 7.8 percent reduction in salaries for all employees, a 25 percent cut in funding for textbooks and supplies, a 20 percent cut in administrative department budgets, an increase in health insurance costs for employees and an increase in class sizes by three to seven students.

150 Michigan school systems on verge of going broke  More than 150 school districts and charter schools in Michigan are teetering on the edge of going broke, a situation that is likely to get worse under Gov. Rick Snyder’s proposed cuts of $470 per pupil. These are the districts that have so little set aside in rainy day funds that Snyder’s cuts — coupled with a huge increase in retirement costs this summer — could put them in a deficit, joining the 43 districts and charters already there. It’s a situation that has mobilized school leaders — testifying in Lansing, writing lawmakers and sending letters to parents. They say that after years of closing schools, laying off staff and slashing programs, there’s little left to cut.

Massive enrollment cuts at CSU expected = The nation’s largest university – California State University – is shrinking as state funding is cut. CSU trustees on Tuesday heard a series of proposals to cope with a cut of $500 million in state support – or possibly as much as $1 billion if some taxes set to expire June 30 are not extended. The state budget proposed by Gov. Jerry Brown calls for the $500 million in cuts to CSU, but the university says it will actually need to address a $550 million total gap in funding once $50 million in mandatory costs, including increased energy and employee health premiums, have been factored in.  The $500 million cut reduces CSU’s state funding by 18 percent from last year and equates to funding for over 85,000 students across the state, it says.

Fresno State to turn away 600 as CSUs ordered to make cuts – The California State University system plans to enroll about 10,000 fewer students as part of its response to anticipated cuts in state funding, school officials said Tuesday. That includes about 600 fewer students at the Fresno campus. At the CSU Board of Trustees meeting in Long Beach, administrators outlined strategies for the 23-campus system to cope with the $500 million, or 18 percent, cut proposed in Gov. Jerry Brown’s state budget plan. The system received about $2.8 billion in state funding for the current fiscal year. In addition to the enrollment cuts, the 23 campuses are being asked to reduce their budgets by a total of $281 million, officials said. Those cuts could lead to fewer course sections and fewer faculty and staff.The 600-student decrease would be in addition to cuts that have already been made.

Rich District, Poor District – To balance New York State’s budget, Gov. Andrew Cuomo wants to cut a record $1.5 billion from the $23 billion budget for grades K-12.  The cuts would scarcely affect wealthy districts that rely primarily on local taxes to support lavishly appointed schools. But they would be catastrophic for impoverished rural districts that have been starved of state aid for decades and are still reeling from cuts levied last year when David Paterson was governor. Already struggling to furnish even basic course offerings, the poorest districts would need to cannibalize themselves to keep the doors open and the lights on.

Some Rochester parents set to fight school budget cuts – Now, armed with hard numbers released on Tuesday, parents citywide are analyzing figures and mobilizing to protest what could be some of the biggest budget cuts in Rochester School District history.”There’s going to be a deterioration in the services offered our children,” . “I can appreciate that there are concerns about the budget getting out of hand. But our first obligation is to teach our children. That’s my central concern. I think they’ve forgotten about the students.”  The plan calls for cutting 900 jobs — 15 percent of the district workforce — to bridge an $80 million budget gap.

Farmington Board of Education Makes Budget Cuts– Board of education members trimmed $494,103 Monday from the proposed education budget, including cuts to sports and reading programs, summer school, proposed facility improvements and transportation. The cuts were in response to reductions that the town council made during budget workshops last month. The proposed education budget is $53,978,296, which is 4.83 percent more than last year’s budget. A budget referendum is planned for May 5. “After four years of reductions, we are at a point that if you make a reduction, it really begins to hit up against programs and class size,”

Norfolk school budget cuts 159 positions – The School Board voted 4-3 on Wednesday to approve a budget for next year that would eliminate 159 positions and ask the city for $822,000 more than the $104 million Norfolk currently provides. It retained cuts including literacy teachers, school deans, media assistants, career/technical teachers and other positions, and closes Dreamkeepers and Oakwood elementary schools. Some board members noted that Norfolk’s city government has a projected $32 million budget shortfall that could make the requested increase in school funding a hard sell..

Kansas school teachers brace for cuts – Kansas teachers and administrators say there is little reason for optimism from the 2011 Legislature where lawmakers are preparing to make deep cuts to public schools.Their concern is this won’t be the last reduction as demands for educating students and meeting ever-increasing achievement mandates increase.  Republican Gov. Sam Brownback proposed cutting school spending by $232 per student in next year’s budget. The House and Senate budget plans largely follow that recommendation, reflecting tight state revenues and the end of federal dollars sent to states to support education budgets.

School budget cuts take a painful human toll -The two were among seven teachers at a magnet program at LBJ High School, who learned last month that their jobs are being eliminated as part of an Austin school district plan to cut 1,153 positions — 471 of them teaching jobs — to close a $94 million budget hole for 2011-12. Districts across Texas are contemplating similar actions as state lawmakers move forward with a proposed budget that would reduce aid by billions of dollars. On Friday, the Round Rock district announced it will terminate about 350 employees, including 234 classroom teachers.

Schools potentially face tremendous cuts – With budget negotiations in Sacramento in tatters, the bloodletting is starting to come into focus. The state is facing the threat of a damaged credit rating and even more cuts to the poor, disabled and elderly. And now California schools are also grappling with a nightmare scenario: $1,000-per-student cuts, 30 days shaved off the school year and school districts falling into bankruptcy. On Wednesday, the budget crisis of 2011 entered Phase Two. Gov. Jerry Brown and Democratic lawmakers have said all along that they would have little option but to slash education spending if voters didn’t extend sales, income and auto taxes in a June election. K-12 education had been protected in the $8.2 billion in cuts — mostly affecting the state’s most vulnerable populations — signed by Brown last week.

Cleveland Metropolitan School Board Votes to Close 7 Schools – The Cleveland Metropolitan School Board voted 6-2 Tuesday evening to close seven schools, and layoff 702 Cleveland Teachers Union employees, including 643 classroom teachers in the district. Additional layoffs will be considered at an April 26 meeting, officials said.

Detroit to send layoff notices to all its public teachers (Reuters) – The emergency manager appointed to put Detroit’s troubled public school system on a firmer financial footing said on Thursday he was sending layoff notices to all of the district’s 5,466 unionized employees.In a statement posted on the website of Detroit Public Schools, Robert Bobb, the district’s temporary head, said notices were being sent to every member of the Detroit Federation of Teachers “in anticipation of a workforce reduction to match the district’s declining student enrollment.” Bobb said nearly 250 administrators were receiving the notices, too.The district is unlikely to eliminate all the teachers. Last year, it sent out 2,000 notices and only a fraction of employees were actually laid off. But the notices are required by the union’s current contract with the district. Any layoffs under this latest action won’t take effect until late July.

Denver Schools $800 Million Sale to Help Escape JPMorgan Swap – The Denver public school system is borrowing $800 million to restructure pension debt and help escape part of a money-losing interest-rate swap with JPMorgan Chase & Co. (JPM)  Denver City & County School District No. 1, Colorado’s second-largest by enrollment, is issuing taxable securities with about $400 million in fixed-rate bonds today and about $400 million of variable-rate next week, to replace $750 million variable-rate debt and terminate a swap agreed with JPMorgan in April 2008.  The district is being forced to restructure the debt in the form of certificates of participation, because it is losing its standby purchase agreement with Dexia Credit Local, a unit of Dexia SA (DEXB), April 23.  “This is the best deal the board could unanimously agree on,” . “It was important for us to go forward with a united voice.”

Maine Republicans seek to loosen child labor laws – Republican lawmakers are pushing a bill through the Maine Legislature that would rollback child labor laws enacted by the state in 1991. The bill, LD 1346, establishes a ‘training wage’ for employees under 20 years of age at $5.25 per hour for their first 180 days of employment and increases the amount of hours minors can legally work. The proposed ‘training wage’ is over two dollars less than the state’s current minimum wage. The bill also would eliminate the maximum hours a minor over 16 can work during school days and allow minors to work over 50 hours a week when school is not in session. Another bill, LD 516, is headed to the Senate floor for a vote after being passed along party lines by a Senate committee, with Democrats voting against the measure. It would allow minors 16 years and older to work up to six hours a day and until 11pm on a school night.

G O P Lawmaker Wants To Roll Back Child Labor Laws – Missouri State Sen. Jane Cunningham [R] has introduced a bill to minimize child labor laws. SB 222 – This act modifies the child labor laws. It eliminates the prohibition on employment of children under age fourteen. Restrictions on the number of hours and restrictions on when a child may work during the day are also removed. It also repeals the requirement that a child ages fourteen or fifteen obtain a work certificate or work permit in order to be employed. Children under sixteen will also be allowed to work in any capacity in a motel, resort or hotel where sleeping accommodations are furnished.

i wonder what kind of message we are sending to our young people when at the first sign of budget troubles, it is funding their education that we chose to cut…and how many promising young educators are being discouraged or let go in the process…the continuing decimation of our human capital is certainly a national problem worse than our crumbling infrastructure…while there are those in congress who pretend to be worried about leaving debt for the next generation, they are leaving the next generation without the tools to compete in an increasingly challenging future…

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CPI


In March the CPI increased 0.5% bringing the year over year change to 2.7%.

I will leave the analysis of the CPI to other and just discuss some of the implications.

First, this caused my Fed policy index to turn positive for the first time since 2008. This index is a form of a Taylor Rule but it gives inflation and the unemployment rate an equal weight as compared to most versions of the Taylor Rule that give inflation roughly double the weight of unemployment or growth. But this implies hat the Fed should allow QE 2 to expire this spring. Moreover, it raises a real possibility that the Fed may raise feds funds in the second half of the year.


Second, I will look at the not seasonally adjusted (NSA) core CPI. In a low inflation environment firms tend to raise prices once a year, typically at the start of the year. As a consequence in the NSA core CPI over half the annual increase occurs in the first quarter of the year.

The third quarter pop stems largely from tuition, home owners equivalent rent and new car prices.

In the first quarter of 2011 the NSA core CPI rose 0.852% as compared to 0.469% in 2010.
This is the first time since 2004 that the NSA core CPI was higher than in the prior year.
If the average that some 55% of the annual increase occurs in the first quarter holds this year it implies that in 2011 the December to December increase in the core CPI will be about 1.55% or about doulbe the 2010 gain.


A 1.5% annual increase in the core CPI would be well within the Fed’s implied target of 2%
core inflation. To but this in perspective, from 1965 to 2008 the core CPI never fell below
2%.


In the short run, however rising inflation is creating problems for the consumer. In March the year over year change in real average hourly earnings fell to -1.0% and real weekly wage growth turned negative. This weakness in real wages is showing up in the economic data.
For example, in March nominal retail sales rose 0.4%. But most of this was gasoline and excluding service station sales, nominal retail sales only rose 0.1%. This CPI report strongly implies that real retail sales actually fell in March. This means that in the first quarter real consumer spending is ending on a very weak note — one reason forecasters were optimistic about first quarter growth three months age was that the fourth quarter ended on a strong note. Moreover, the second quarter will be when the biggest impact of the disruptions to the supply chain from the Japanese disaster will occur. So the standard thinking that growth will rebound in the second quarter is questionable.

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Why I will not be Voting for Obama in 2012

by Mike Kimel

Why I will not be Voting for Obama in 2012

Cross posted at the Presimetrics blog.

The presidential elections are a year and a half away, but I am pretty certain of one thing: I will not be voting to re-elect Barack Obama. That does not mean that I will be voting for the Republican nominee, or for any of the third party candidates, but rather that I do not see any likely circumstances under which Barack Obama will do anything I think is necessary to earn my vote. That may seem unusual because I voted for Obama, and my economic views are probably best described as slightly left center.

Now, I’m nobody special, and my endorsement or lack of it isn’t going to make a whit of difference, but I suspect there are other people who are also somewhere close to slightly left of center (i.e., who are either what Obama considers to be his “natural constituency” or close enough that they can be convinced to vote for him rather than his likely eventual opponent) who are starting to think the same thing I am. So perhaps its worth trying to explain why I feel the way I do. I think its easiest to do that by discussing the issues I think I important and what Obama has done (or not) about them.

1. Economic growth/unemployment/taxes. These three topics, as Senator Ryan and all economists know, are closely inter-related. Sadly, the relationship between these three topics is very, very different than Senator Ryan and most economists believe. Getting the economy moving is vital after eight years of mediocre growth under GW Bush, culminating in the Great Recession. But when you go back as far as the data allows, you find a quadratic relationship between the top marginal tax rate in one year and growth in the subsequent year , and that we are at a point on the curve where it is an increase, not a decrease in tax rates, that is likely to lead to faster economic growth. Even sticking to the period of relatively low taxes we’ve been in since Reagan started his tax cuts, growth rates should go up and unemployment rates should go down if tax rates go up.

There are two reasons this is true. One is that taxes pay for the existence of the government. The government provides services the government provides that are conducive to growth and which the private sector simply has not historically provided at non-negligible levels. These services include national defense, monitoring and controlling epidemics, and building infrastructure.

The government also provides some leadership that can make it possible for the private sector to adopt new technologies. As an example – in this day and age, having a vehicle that could run on any mix of gasoline, ethanol or natural gas (depending on which is cheapest per mile) would be a nice thing to have. You can buy one of those vehicles today… in Brazil. Never heard of such a thing? Well, there are millions of bi-flex and tri-flex vehicles on the road in Brazil today, made by such exotic companies as GM, Ford, Volkswagen, and Mercedes. Why are there so many flex-fuel cars and motorcycles on the road in Brazil? Because the Brazilian government realized you can’t get from 1970s fuel shortages to where they are now without someone forcing both auto makers and fuel stations to make changes simultaneously. Without government action, auto makers wouldn’t have been willing to mass produce flex-fuel vehicles out of fear there would be no filling stations for those vehicles, and fueling stations would have been reluctant to make investments out of fear that there would be no vehicles to take advantage of them. In other words, the situation we see in the U.S.

But there is another, perhaps more important reason, why higher tax rates often lead to faster economic growth and lower unemployment. As I keep pointing out, any good business owner (and any lousy one, for that matter) will tell you, if you tax something more, you get less of it. And income taxes can be seen as penalties on withdrawing money from one’s business for the purpose of consumption, which means they discourage business owners from taking profits out of their business. The alternative to taking profits and consuming is re-investing in the business. Thus, higher tax rates on income lead to more investment on business. And this result is borne out empirically; when the top marginal rate is below 50%, a tax increase is correlated with more private investment and less private consumption.

2. Deficits and the national debt. This is another tax related issue. Historically, during and following tax hikes tax collections /GDP rise. During and following tax cuts, tax collections fall. (How a fact so basic that even a child could observe it in the data became a surprise to many people is a testament to, ahem, economists like Art Laffer and Thomas Sowell.
But there are many ways to cut taxes people pay, and changing the marginal rate is only one such way. Enforcement of tax law is another. Since 1929 (that’s as far back as data is available) – every single Republican President decreased the tax burden, the percentage of people’s income paid in taxes, and thus far, all Democrats but Truman and Obama have increased that percentage. Click on the link and you’ll also see that growth rates were much faster for Presidents who increased the tax burden than for Presidents who decreased it. Though there are many ways of being fiscally responsible or irresponsible, it is, of course, easier to balance the budget if tax revenues are higher. The last four Republican Presidents – Ford, Reagan, and the two Bushes all increased the national debt. Conversely, before Obama you had to go back to 1944, when the nation was fighting World War 2, to find a Democrat in the Oval Office who increased the national debt.

And yes, I know, there was a bad recession going on when Obama took office, and the economy still sucks. And yes, I agree with Keynes – the data shows that expansions following recessions during which the government increased its spending are longer and stronger than when expansions following recessions during which the government cut spending. But that spending should have been paid for with tax hikes. Historically, when the government raises taxes during or shortly after a recession, the resulting expansion is longer and stronger than when the government cuts taxes. That’s what the data shows. The reasons are the same as given above in the discussion about economic growth, plus one: during periods of economic weakness those in the private sector tend to sit on money.

As an aside – it is worth noting that both this Great Recession and the Great Depression came about half a decade after big reductions in both marginal tax rates and regulation. Coincidence?

3. Obama’s performance might resemble that of other Democratic administrations more closely had he chosen economic advisors who paid more attention to data and were less enamored of the policies GW Bush was employing. When you pick an advisor who jumps through hoops to be like one of GW’s economic advisors, you will get GW’s outcomes. Its even worse when you’ve been warned and you do it anyway. Frankly, if I say so myself, it isn’t that difficult to find people who actually can spot business cycles at both ends.

4. The bail-outs. Of course, one of the big contributors to the Obama deficits are how Obama reacted to the poor state of the economy. (In fairness, some of the bail-out spending was pre-committed by the previous administration, but then Obama voted in favor of that spending as a Senator and didn’t try to walk it back once he became President.) But where are the prosecutions? Was there not wrongdoing? And then you have stories like Matt Taibbi’s latest. Like GW’s policies before him, Obama’s approach seems almost designed create another mess.

5. Health care. Obama care = Romney care. This is a policy that Republicans were pushing a decade ago, and would still be pushing if a Democrat hadn’t proposed it. Where is the public option?

6. The wars. I don’t have a solution, but then I didn’t spend a few hundred million bucks running for President, nor am I about to spend a billion dollars running for re-election. It is the height of immorality to seek out the presidency or re-election in a time of war and yet have no clue how to bring the war to a successful conclusion.

I always thought it was the height of insanity for anyone to vote to re-elect GW in 2004, after screwing up the economy and two wars. Yes, I know some worthies were still talking “Mount Rushmore” a year or two later, but one should be better than that. And yes, there are a handful of things Obama did that GW might not do, but let’s be realistic – this has looked from the very beginning like GW’s third term.

Which leaves just one question – if the policies of the Republicans are even worse than Obama’s – and they tend to support anti-growth tax policies (calling them pro-growth doesn’t change the data), what should a rational person do? I don’t know. But I think if I’m going to see Republican policies enacted, I’d prefer to see them run under a Republican label. See, Democratic policies may not be very good, but historically they have tended to produce better results than Republican policies. (BTW – Michael Kanell and I have an entire book called Presimetrics looking at how Presidents performed on a wide range of topics.) Another four years spent bringing the feeble Democratic brand down to the levels of the even more feeble Republican brand will cause lasting damage.

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Guest post: No Assumptions for a Change

Guest Post From Robert Bowman, M.D.

No Assumptions for a Change

Assumptions are often incorrect and the assumptions are incredibly inaccurate in primary care and in basic health access. When one starts with the assumption of more pay, then it is easy to rationalize more training or more complexity of care – even when there is little evidence other than assumption.

Primary care is often more difficult than specialty care.

A major reason is that the design of health care in the United States destroys primary care delivery. Reasons for primary care to be challenging are the complexity of the patients, the lack of support staff, the lack of primary care trained support staff, the lack of experienced support staff, the broad scope of primary care, the lack of respect for primary care by those who clearly have little clue regarding primary care delivery, and participating in smaller operations that are neglected by the health care design.

The fragmentation of care with even more fragmentation on the way is a problem. The required context of care includes major care provided by Americans most left out of the designs for health and education – who often cannot access care other than the basics.

The reimbursement for primary care that is less than the rapidly increasing cost of delivering primary care forces primary care practitioners to do additional efforts outside of primary care to support their primary care practices.

The decision to pay more for care other than primary care is arbitrary. This design was set up beginning 100 years ago by those who envisioned domination of all of health care and who assumed their superiority. Even in the 1940s medical leaders still understood the challenges facing generalists – because some generalists still were in leadership positions and other leaders had been generalists prior to their specialization. Once the entire context of selection, training, and practice support was designed subspecialist, this understanding was lost and the current assumptions reigned unchallenged.

The subspecialty and academic forces reached their domination in the last decades, rebounded from the managed care reforms with even greater domination – and the United States has all of the cost, quality, and access consequences now that cripple our nation and its people.

There is supporting evidence for primary care complexity as greater at the current time. This includes the fact that two-thirds of primary care graduates (28,000 from six sources) depart primary care. All types are departing primary care with 55 – 85% of graduates after graduation other than family medicine graduates (who have fewest other options). There is lower national health spending on primary care (5% is all there is) and the locations where primary care workforce is highest percentage also receives lowest health care spending at 5% for rural locations and 5% for underserved locations. Established
primary care practitioners have continued to depart primary care even during the 1990s periods of increasing policy support (PA, IM),

Few that are found in direct patient care primary care delivery from nurse, advanced nursing, nurse practitioner, PA, and IM training. Pediatric and medicine pediatric training both now yield less than a majority for primary care as well. In all of these types as well as in family medicine, a minority fraction of the training is spent on primary care. Primary care basics are taught, but it takes a lifetime of dedication to patients and to primary care delivery to even begin to comprehend primary care. Compare primary care and specialty care after a decade of care delivery. Who is worth more – my vote is for a dedicated primary care practitioner in a continuity location with a continuity team? Perhaps many if not most would contest this, but most comparisons are apples and oranges as primary care is so poorly understood.Training that yields primary care as a side effect of specialty care is also apples and oranges as the RN, NP, PA, MD, and DO primary care should be primary care in selection, in training, and in a lifetime of care delivered.

The US needs a foundation of primary care – a balance between primary care and other care. The designs must support this. Even 80% of physicians support more funding for primary care delivery (Leigh) but when asked to give up a few percentage points of reimbursement (that might not even impair pay), physician support melted away.

Once again I would note that nations need designs for care that serve nearly all in a nation nearly all of the years of their life in nearly all locations not a design that serves few for a few years in a few locations.

And there is always a nice video to review such as We’re Number 37 in health outcomes (www.youtube.com/watch?v=yVgOl3cETb4), not to mention a health care design that cripples our economy, all levels of government from schools to federal, our children, and our children’s children.

The current design ensures more graduates from NP, PA, DO, and MD with each passing year as well as higher percentages entering non-primary care as well as higher percentages of primary care graduates entering non-primary care. What we have is more like fantasy as compared to assumption.

Robert C. Bowman, M.D (www.basichealthaccess.org)

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Budget announcement 10:00 AM today

Via Business Insider Joe Weisenthal reports some of the buzz in DC:

The White House is officially going to release its budget for the coming fiscal year at 10:30 this morning. The full announcement will be found here.

Of course, several members of the media have the details already.

CBS’s Mark Knoller has been tweeting details, including:

  • The budget will claim $1 trillion in deficit reduction over the next 10 years.
  • During that time, however, total deficits will hit $7 trillion.
  • Over 5 years, there will be $78 billion in defense spending cuts.
  • There will be a 5-year freeze in discretionary non-defense spending.
  • 3 year AMT patch will be proposed.

What’s not in the budget? Anything relating to Social Security and other entitlements.

Meanwhile, POLITICO has more details:

  • Education spending will increase 11% next year.
  • Foreign wars will cost $118 billion.

CNBC’s John Harwood also notes that the budget will include phase-outs of varous tax breaks.

We’ll be updating LIVE as we get more details and reactions.

Read more: here

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Continuing Resolution reductions

Talking Points Memo points us to a nine page chart specifying which programs are sustaining funding cuts in the Continuing Resolution reductions as published by the Republicans on the House Appropriations Committee. (h/t rjs)

(h/t MG) The original documents from the House Committee on Appropriations are located here. These include the legislation text, legislation summary, and the program cuts. The legislation summary provides a breakdown of spending authority.

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The glass is half full eh one fourth full. Would you believe slightly damp ?

Paul Krugman

To be fair, applying maximizing thinking has achieved some major successes even in macroeconomics. The permanent income/life cycle style of consumption theory does a much better job of accounting for the stylized facts about spending than the old, mechanical consumption function. The natural rate hypothesis, with its crucial implication that high inflation would get built into expectations and not reduce unemployment, was the result of (loose) maximizing reasoning.

I have two discouraging thoughts. First both of the examples of a useful application of the assumption of maximizing behavior are due to Milton Friedman (and others). This shows that Milton Friedman can say useful things while appealing to maximization. I think we can conclude that either the concept of maximization is useful or Milton Friedman was so smart that he could say smart things when standing one foot, rubbing his belly, patting his head, and talking about maximizing agents. I’m afraid the question of which conclusion is more plausible answers itself. Outside of macro we have Arrow and Samuelson and well a bunch of smart people who can say smart things and solve equations at the same time.

Second I now wonder if the PIH glass is half full. Consider a model of totally myopic backward looking agents with habit formation, so consumption moves sluggishly towards current income. This can give consumption depending on lagged income — say a geometric lag. Which of the stylized facts expalained by the PIH are also explained by this not at all optimizing model ? I think basically all of them. The model is due to Stever Marglin who was a bit too heterodox to get attention. But I think it works as well as the PIH.

Taking an equation for x and re-interpreting it as giving x* and making an error correction model of (x-x*) is exactly what macroeconomists used to do before the Rational expectations revolution. It is exactly what Sargent denounces as not taking a model seriously. And, I think, it fits consumption just as well as the PIH.

Oh and as for the shifting Phillips curve, one can go back to a golden oldy “The General Theory of Employment Interest and Money” to find a very clear warning that one better not treat a Phillips curve as a structural equation (only slighly hampered by the lack of the terms “Phillips” and “structural”).

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