Monday, November 14, 2011

Just crazy enough to work?

As an educator, I spend a fair amount of time thinking about the budget crisis afflicting California's schools.  The direness of the situation varies district to district, but here in Napa County, if the state and federal trigger cuts go into effect (which is looking likely) and our fiscal situation remains unchanged, our district will become fiscally insolvent by about April of 2013--in short, we will be bankrupt.

Why are we going broke?  Is it because we are paying our teachers too much?  Is it because of the "illegals?"  Is it because of the "golden plated benefits and pensions" that public employees receive?  Nope.  None of the above.  We are going bankrupt because the amount of funding we are supposed to be receiving continues to be cut while our student population continues to grow and inflation drives up the cost of living and working.  We are going broke because for every dollar promised to school by Prop 98 (which if you don't know sets the legal MINIMUM funding requirements for education) we are getting a mere fifty-five cents.  In other words, we are not receiving forty-five percent of the funding we are promised.  This, in effect, has placed California near dead last in per-pupil spending.

A number of solutions have been proposed, each one more ridiculous than the last.  One thought has been to try to implement parcel taxes.  As you know, taxes are rarely successful; for instance, even though just re-instating the vehicle licensing fee (which hardly broke anyone's bank) would restore $6 billion a year in income, most people would never vote to bring back that sensible fee.  Some counties have voted in favor of parcel taxes in order to prevent their schools from closing or being taken over by the state, but not all counties have enough voters to pass such measures.  Many districts are taking furlough days which equate to pay cuts across the board for all employees (and fewer instructional days).  Other districts bus their children into San Francisco to pan handle on the streets (okay, this was only one school, but it did happen).  The point is, many ideas are proposed, and each one seems more unlikely or more idiotic than the last.

I have an idea.  Hear me out on this.  We essentially get a forty-five cent I.O.U. from California for each dollar we should be receiving.  This money is legally required to go to the schools--eventually.  In the same way that banks packaged up debts and sold them as "investments," we should start selling our I.O.U.s.  My thought was that we could sell them for roughly sixty-six cents on the dollar.  Said another way, if someone gave us a thousand dollars, we would give them fifteen-hundred dollars worth of debt.  This would give them a fifty percent return on their investment, which is not a bad bit of profit.  It would give the schools two-thirds of the money they never thought they were going to see.  Most importantly, it would encourage communities to invest in their schools in a way that would theoretically give them a return on their investment in not only improvements in the fiscal solvency of their schools but also in the form of a personal profit on their investment.

But how will the investors be repaid?  Simple.  If we enacted this plan all over the state of California, suddenly instead of schools sitting on the corner begging for money, we would have millions of investors all looking to get the return on their investment they were promised.  These investors, in coordination with the schools, would then lobby for the necessary changes to our spending and revenue systems in the state to ensure that schools are getting paid everything promised under Prop 98.  The schools could then use the increased revenue to repay investors--each of whom would get back 150% of their initial investment--and would then continue to see increased revenue for the years to follow--thus bringing hundreds of schools back from the brink of bankruptcy.

The worst case scenario is that funding levels will never be restored and the investors will never see the profit on their investment.  Even still, their investment will have helped saved a least a few schools from bankruptcy.  Considering, however, that the law REQUIRES California to fund education at a higher level than it is currently doing so, that is a very unlikely outcome.  More likely, by allowing people to have a financial stake in the funding of California's schools, more people will join the fight to see that funding levels meet the MINIMUM requirements established by our law.  This in turn will make our schools better, which will make our society better, which will make our economy better.

Just sounds crazy enough to work--doesn't it?

1 comment: