New Roles For Teachers

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Petrilli (no relation) has recommended several approaches for realigning the teaching workforce to create productivity gains: 1) redefining the roles of classroom teachers to create a more productive and better paid workforce; 2) prioritizing salary over benefits to attract more aggressive workers; 3) paying for increased productivity by asking fewer people to do more work in order to get better results; 4) integrating online and “blended” education models into public schools. I have not heard of any districts using this advice. As educational leaders look to MOOCs for additional cost savings in public education, perhaps two other proposed efficiencies should be reconsidered.

Per pupil weighted formulas

Hill (2012) suggested federal, state, and local governments combine funds spent on K–12 education, divide it by enrollment, assign it as weighted fractions on a per pupil basis that will ensure sufficient equity, and then distribute those dollars to schools directly. This would force a significant reduction in expensive administrative structures, because money would not be held by centralized bureaucracies to preserve particular schools or programs, but would flow wherever students are educated. This type of revenue stream would help schools eliminate district and state barriers to innovation that are inherent multiple layers of management.

Zero-based budgeting

Jefferson (1995) proposed decentralizing educational budgets to allow the disbursement of funds aimed at maximizing student development. A strategy for decentralizing budgets is zero-based budgeting, which requires a full analysis of operating programs. Jones (2012) clarified that zero-based budgeting called for an intensive examination of all aspects of government programs and their effectiveness. Governor Nathan Deal required zero-based budgeting for 37 of Georgia’s Department of Education programs in its 2014 state budget. Most schools simply review the revenues and expenditures from the previous year with the understanding that everything is working. Zero-based budgeting requires that school leaders assess the best use of taxpayer’s dollars and allocate the money as if they were personally writing the checks.

Reporting administrative and business expenses via per unit costs, replacing restricted categorical funding “buckets” with per pupil funding and using zero-based budgeting methodologies to scrutinize legacy programs may have a profound effect on how schools make financial decisions. By streamlining funding sources and reducing restrictions on how funds are used, school governance structures may be able to more explicitly report spending trends, because there will be fewer categories of funds.

Largely absent from the discussion on MOOCs is reasoned debate on how schools can increase efficiency and productivity. Public education has already identified methods for reorganizing school districts and reducing costs by analyzing district business and administrative costs on a per unit basis. Bydistributing school revenues equitably, transparently, and in ways that allow schools flexibility with funds, decentralized school governance models could implement zero-based or per pupil budgeting at their school sites. While additional gains in teacher effectiveness may be realized by using technology to enhance productivity, the promise of realizing substantial savings from MOOC implementation in K12 pale in comparison to the suggestions listed here.

Sources

Hill, P. (2012). The costs of online learning. In Education Reform for the Digital Era (pp. 77-98). Eds. Chester E. Finn, Jr. and Daniela R. Fairchild. The Thomas B. Fordham Institute. Washington, D.C.

Jefferson, A. (1995). Decentralized budgeting: Getting the most out of disbursements of funds. Education Canada, 35(4), 33-35.

Jones, W.C., (2012) State’s zero-based budgeting program to focus on education. Morris News Service. Monday, June 11, 2012. Athens, GA.

Petrilli, M. (2012). How school districts can stretch the school dollar. Policy Brief. Accessed at http://edexcellence.net/publications/how-school-districts-can-stretch-the-school-dollar.html

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Reducing Costs in K12

Computer Dimploma

MOOCs have recently inspired educational policymakers to think about cost savings and new efficiencies as technology enhances pedagogy. Yet all K12 education units can become more cost-effective by improving their delivery systems. Butler, Haldeman, and Laurans (2012) illustrated how the traditional school model spends over half of its budget on labor, with the remainder mostly allocated to school operations. A blended, partial on-line schooling model could offer yearly savings of approximately $1,100 per student; and a virtual school could save approximately $3,600 per student. Considering that most urban high schools have thousands of students, the savings from an effective blended learning program could be sizable. Also, as demand creates a larger supply of online course content, the online costs will decrease further.

District Business and Administrative Costs

Cochran et al. (2011) acknowledged district reorganizations do not always result in significant savings, however, there are numerous savings opportunities in purchasing costs, and also in personnel costs associated with multiple layers of management and decision making. The Council of the Great City Schools has performed industrial benchmarking on 340 performance indicators for the nations largest urban schools and finds it is possible for districts to save between $50-$100 million annually by bringing their business services, finance, and technology operations in line with best practices (Casserly and Carlson, 2011). Further, for-profit colleges spend less than a third of what public universities spend on educating students, yet they charge nearly twice as much (Aud et al., 2012, p. 104). Public schools may extract additional cost efficiencies from best practices used in the for profit sector.

Per Unit Costs

Examining spending in per unit terms requires uncovering key cost drivers, deconstructing spending patterns, and creative thinking about tradeoffs (Hill & Roza, 2010). Historical practices in school finance become legacies when each department, program, or school summarizes its expenditures in terms of personnel, counted as full-time equivalents, or FTEs. These are bulky allocations that make incremental cuts difficult. Districts rarely merge or scale back programs so for district leaders trying to make spending cuts the only options are to eliminate an entire program, which is politically very unpopular, or to make smaller decreases in each unit’s budget (Hill & Roza, 2010). Budgeting in per unit terms can stabilize the budgeting process. Managing budgets in per unit terms might even be a way of containing costs and avoiding built-in cost escalators, which typically run 4.5 percent annually (Hill & Roza, 2010, p 25). What inefficiencies have you noticed in the school budgeting process? What productivity gains do you envision as teachers flip their classrooms and professional development moves into the MOOC-space?

Sources

Aud, S., Hussar, W., Johnson, F., Kena, G., Roth, E., Manning, E., Wang, X., and Zhang, J. (2012). The Condition of Education 2012 (NCES 2012-045). U.S. Department of Education, National Center for Education Statistics. Washington, DC. Retrieved July 1, 2012 from http://nces.ed.gov/pubsearch.

Butler, T.B., Haldeman, M., and Laurans, E. (2012). The costs of online learning. In Education Reform for the Digital Era (pp. 55-76). Eds. Chester E. Finn, Jr. and Daniela R. Fairchild. The Thomas B. Fordham Institute. Washington, D.C.

Casserly, M., and Carlson, R. (2011). Managing for results in America’s great city schools: A report of the performance measurement and benchmarking project. Council of the Great City Schools. Washington, DC.

Corcoran, J., Gilyard, R., MacBride, L., and Powell, J. (2011). Large-scale cost cutting and reorganizing. Conference paper prepared for the American Enterprise Institute and Thomas B. Fordham Institute conference: A Penny Saved: How Schools and Districts Can Tighten Their Belts While Serving Students Better. January 11, 2010.   http://www.aei.org/event/100164. Washington, DC.

Hill, P., and Roza, M. (2010). Curing Baumol’s disease: In search of productivity gains in K–12 schooling. Center on Reinventing Public Education. University of Washington Bothell. Seattle, WA.