John Nelson, the director of the Vermont School Boards Association, thinks he knows why Challenges for Change is having a hard time reinventing how education is done in Vermont.
“You’re talking about an education system that isn’t controlled at the state level. They have a hard time figuring that into their reinvention philosophy,” he said in a recent telephone interview.
Driven by the state’s budget crisis, Challenges for Change has come down heavily on the efficiency side of the long-standing tug and pull between the desire for local control on the one hand, and the demand for bureaucratic efficiency on the other.
In the education debate, efficiency means consolidation — fewer schools, fewer school boards, and a resulting cut in the highly paid administrators needed to tend them.
But state education officials have run up against state legislators, who have to go home at the end of every session and answer to their constituents.
As things stand, the state has fashioned a set of financial incentives to schools that consolidate, instead of absolute mandates.
And the commissioner of education has been instructed to set budgetary “targets” for supervisory unions across the state. Those are due next week, and local school officials await them with a certain amount of trepidation.
“I feel like I’m serving two masters,” said Darlene Young, chairman of the Lake Region Union High School Board.
Challenges for Change is the title of a report put together by a group of legislators with the help of the Public Strategies Group, a Minnesota-based consulting firm. According to Jeff Zlonis, one of three consultants who worked on the report, its primary focus “wasn’t about saving money. It wasn’t a money saving or cost cutting effort.”
Rather, it was “an effort to identify opportunities to redesign services,” he said in a telephone interview. Mr. Zlonis acknowledged that the group also tried to find ways to do more for less, but insisted that money was not the main point.
When the Legislature turned Challenges for Change from a report into Act 146 at the end of the 2010 session, the focus had changed. The goal of finding $38-million in savings was paramount, while improving services was in second place.
The report made recommendations for improvements in general government operations and four specific areas: human services, regulatory reform, commerce and community development, and education.
Education would be made more efficient by reducing “the number of governing units and school buildings through the reduction of administrative/governance funds.” The plan called for setting basic standards for administration and paying only for that amount of administration.
Its recommendations for improving education included proposals to cut administrative spending by $40-million in fiscal year 2012, a figure that the report estimated would amount to 15 percent of current administrative costs. Twenty-five percent, or $10-million of those savings, should be invested in instructional activities, the report suggested.
In order to make the cuts work, the authors of the report proposed spending $2-million on “special one-time investments.”
Bill Talbott, who is deputy commissioner of education and the Department of Education’s chief financial officer, said the figures for administrative expenses used by the Challenges for Change team didn’t come from his office.
He said that his department thinks it knows how that amount was calculated. Mr. Talbott said it appears that the report’s writers took the costs of superintendents, supervisory union business offices, school administration and the cost of building operations and maintenance.
Mr. Talbott said this is a customary way of figuring administrative expenses. Mr. Nelson disagreed. He said that most people would not consider building maintenance as an administrative cost.
Mr. Zlonis said his group’s report was not a study. He said the group took many of its ideas on how to improve schooling while lowering its costs from a report issued by then Commissioner of Education Richard Cate in 2006. That report, in turn, echoed the findings of a study conducted by the “Cost and Quality Commission” in 1995.
Regardless of how the group arrived at its figure, the Legislature moved in a different direction. In Act 146 lawmakers instructed Commissioner of Education Armando Vilaseca to provide each supervisory union and career center district with a proposed target for spending reductions. Across the state these reductions are to total $23.2-million.
Supervisory unions will receive their budget targets by August 1. Mr. Talbott said his department had to use figures from each school district in a supervisory union to calculate the desired budget cuts.
Mr. Talbott said that a system that remains in the same state over a period of time will see increases in costs due to normal inflationary pressures. Forecasts for fiscal year 2011 budgets figured that school costs across the state would rise by about 1.9 percent, he said. When the budgets were passed in March, officials were pleased and surprised to find the statewide costs did not rise at all.
The result was about a $20-million difference from projections, he said. For their 2012 budgets, schools will be asked to make actual cuts amounting to 2 percent of the total state school budget.
Act 146 requires the commissioner to take into account such considerations as demonstrated financial restraint, administrative costs on a per-pupil basis, student-to-staff ratios and number of students from economically deprived backgrounds, when calculating budget reductions.
Glenn Hankinson, business manager of North Country Supervisory Union, said he expects that the commissioner will recognize that North Country schools have traditionally exercised financial restraint and will not press them to make large budget cuts.
“Most of our schools are in the bottom 50 percent,” he said, referring to per-pupil spending across the state. “Some are in the bottom quartile.”
Each supervisory union has until December 15 to let the commissioner know if it can meet the target. If reductions totaling $23.2-million cannot be found, the commissioner is required to prepare a plan in January to make the required cuts, and to present it to the Legislature for action.
“We have no way of knowing what the Legislature will do,” Mr. Talbott noted.
He said legislators already rejected a plan to consolidate unions and school districts. It was put together by his department based on the statistic that 80 percent of the cost of education is in staff. If that is the case, the only way to get major cuts is by having fewer people working in the schools, Mr. Talbott said..
“We suggested that the only way to save money is to employ fewer people. Reducing staff is easier in large than small districts,” he went on.
Mr. Nelson suggested that it might make sense to create single boards to manage all the schools in a supervisory union. That would allow superintendents to perform their duties without attending repetitive meetings, he said. Mr. Nelson said he understood that towns might be reluctant to relinquish local control.
Mr. Talbott also acknowledged that forcing districts to consolidate was always going to be hard to sell to legislators.
Instead of adopting the Department of Education’s proposal, the Legislature chose a plan that offered financial incentives for supervisory unions or school districts that vote to combine.
Legislators also required supervisory unions to cut costs by creating a union-wide curriculum. And starting in fiscal year 2013, which begins in July 2012, special education will be handled by the supervisory union.
Although the Challenges for Change report recommended negotiating teacher contracts on a statewide level, Mr. Talbott said that idea has not had much discussion since the 1980s.
He said there are more than 8,000 teachers in the state and another 4,000 or so classroom aides and paraeducators. Much of the increase in costs has been driven by the second group. While teachers are being laid off as school enrollments drop, the aides are needed to help manage classrooms and to provide services for children with special needs.
While this portion of school staffs once was paid very poorly, many districts have adopted “living wage” policies, Mr. Talbott said. He agreed that is a good thing, but said it adds to the cost of educating children. Many of these staff members have organized, and now receive benefits that effectively double their compensation, Mr. Talbott said.
Currently there are about 90,000 students in the state. Mr. Talbott said his department believes that number will drop to between 87,000 to 85,000 in 2013 and begin to rise thereafter. He said not everyone shares the department’s expectation that the bottom will be hit in the next couple of years.
Mr. Hankinson said he expects that class sizes will grow along with budget pressures. He said that Vermont classes are still far smaller than the national average. Mr. Hankinson said one of Mr. Talbott’s colleagues in the Department of Education presented a chart showing that, if Vermont’s class size reached the national average, the state could close 190 of its 270 schools.
School board members and school officials are awaiting the commissioner’s report on August 31. While everyone says it is important to keep school costs under tight control, many school board members are unhappy about having to balance the need to provide a good education for their pupils with the demands of the state Department of Education.
Important Stories 
