Podcast: Teachers Opt Out of Union Membership

AUGUST 19, 2014  | by JOHN BOUDER

As part of National Employee Freedom Week, we sat down with two western Pennsylvania teachers who successfully left their teachers’ unions last year. John Cress is a middle school math and special education teacher and Rob Brough is a 20-year history and reading teacher. Both were motivated to opt out after seeing the political nature of their unions’ activities.

Why is an annual educational campaign designed to inform teachers of their right to opt out of full union membership even necessary? Teachers’ unions don’t make such information widely available. Indeed, both Rob and John thought they had to join the union as full members in order to get their first teaching jobs.

Rob Brough for BlogBrough says, “The bottom line is: No. I can say with absolute certainty that none of those options were given to me . . . If a person doesn’t know that their rights even exist, how can they exercise those rights freely?”

Cress agrees, saying, “There should be full disclosure on where the dues are going and the educator should be permitted to make the decision by him or herself as to whether or not to continue to contribute to those causes.”John Cress for Blog

After years of union membership, Brough determined that the teachers’ unions weren’t designed to help improve his effectiveness in the classroom: “I was learning nothing about becoming a better public servant. I was, however, learning about politics. I was learning about organizations that were designed to increase the union’s effectiveness.”

Cress disagreed with his unions’ political stances but was powerless to change them: “It was very frustrating every time one of those [political] emails came because I was thinking, ‘Why do I have to be part of this organization? Why do I have to support these causes just to be a teacher? I should have free will. I should be able to have an open mind, but I was under the impression that I couldn’t.”

Listen to the full conversation:

Know a teacher who might benefit from knowing their rights? Send them to www.FreeToTeach.org for more information.

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School Reserves Offer Pension Reform Opportunity


Pension Reform

Despite the rhetoric of "billions of dollars" in cuts from education, school districts across Pennsylvania have been able to increase their reserve funds. School districts had a combined reserve fund balance of nearly $4 billion as of July 2013, a $445 million increase from the prior year.

Jan Murphy of the Patriot-News reports that several districts have fund balances equaling almost a third of their annual budgets. One district—Valley Grove School District—even has a fund reserve of more than 99 percent of its total budget.

As part of the story, the Patriot-News created a database for readers to look up school districts' annual budget and reserve fund balances.

PA School District Fund Balances 2014

One school superintendent suggested that school fund balances be considered as a factor in state funding—that is, school districts with excessive reserve funds would receive fewer state dollars.

At the Commonwealth Foundation, we've pointed to the growth in school funding reserves, but also outlined a commonsense way to put those funds to use immediately.

Many school districts have built up funding reserves in anticipation of the coming pension crisis—and yes, there is a crisis, and it is getting worse for school districts. Putting money aside for future pension costs makes a lot of sense.

But it would be better to pay off pension obligations now and earn investment income on those fund reserves. If a school district turned their reserves over to the pension system now, however, it would simply be pooled with other funds, and that district would still have to pay the same contribution rate as other districts next year.

To help alleviate our looming pension crisis, lawmakers should look to change state law to allow districts to use reserves to prepay their pension obligations and receive a credit for doing so. 

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Pennsylvanians Win: Liquor Markup Increase Nixed

AUGUST 18, 2014  | by BOB DICK

Finally some good news for booze consumers: the Pennsylvania Liquor Control Board (PLCB) has decided against increasing the markup added to each wine and spirits product, according to PLCB Chairman Joseph Brion.

The announcement came last week after an internal PLCB memo calling for a 16.6% increase in the PLCB’s markup received wide media attention, much of which was unfavorable. The proposal was being considered given the agency’s projection of a 20% reduction in their net income due to rising employee costs and government mandates. The memo itself quashed one of the anti-privatization movement's favorite talking points: that the PLCB is an unparalleled source of revenue for the state.

The PLCB’s decision to forgo the markup increase raises an important question, though: How will the agency make up the lost income, i.e., taxes it collects from consumers? Calls for "modernization" will undoubtedly be touted as a solution.

But instead of trying to mold the PLCB to work more like a private system, which is like pushing on a string, the state agency should be steered in a different direction, getting it out of the business of booze sales and ending its costly conflict of interest.

Privatization, anyone?

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More on Philadelphia School Trends

AUGUST 15, 2014  | by JAMES PAUL

Philadelphia-based Research for Action (RFA) took issue with CF’s Policy Points on spending, enrollment, and staffing trends in the School District of Philadelphia. The RFA rebuttal intended to provide “a more complete grasp of the situation.” Yet they don’t dispute any of the facts we provided in the Policy Points, which offer broader perspective on what has happened in Philadelphia over the past decade. Instead of “informing this important dialogue,” RFA only has spin to contribute.  

The following will respond to their criticism, point by point.

Why did CF examine the ten year window between 2002-2003 and 2012-2013?

By not including statistics from the 2013-2014 school year, RFA accuses CF of using “selective data points to build a case.” Our Policy Points relied on data from the Pennsylvania Department of Education (PDE) Annual Financial Reports, Public School Enrollment Reports, and Professional Personnel Reports. For each set of reports, the most recent year of available data is 2012-2013, so naturally, this is where we concluded our analysis. PDE statistics from 2013-2014 were not available. Far from using “selective data points,” the CF analysis draws on the most recent available information on the preceding decade.

Given the high levels of poverty in Philadelphia, shouldn’t low test scores be expected?

RFA notes that “nobody should satisfied with academic performance among city students.” The authors then qualify this statement by adding that Philadelphia’s poverty rate is one of the highest in the nation and “its [National Assessment of Educational Progress] scores on most categories are comparable to cities such as Los Angeles or Chicago with significantly lower poverty rates.” In other words: Philadelphia scores are lousy, but they are similar to the scores of other cities with high levels of poverty. RFA provides the chart below, which does very little to support their claims.


Philadelphia may have a slightly higher poverty rate than Los Angeles, but it also has lower test scores in three of the four categories. Compared to Chicago, Philadelphia scores are lower in all four categories. RFA is thus being rather liberal with the word “comparable.” Also of note: the only listed district with a higher poverty rate—Dallas—has higher average test scores than Philadelphia in all four categories. In this case, even the “selective data points” chosen by RFA do not support their arguments.

RFA claims the CF analysis of academic achievement “rests solely…on the National Assessment of Educational Progress (NAEP).” This is false, as the CF report also compares how charter schools stack up against district schools on the Pennsylvania School Performance Profiles (SPP). Charters significantly outperform district schools in Philadelphia on this metric, which is noteworthy, since they both operate in similar environments of poverty. 

When it comes to SPP scores, we agree with RFA that cyber charters have been underwhelming. Of course, cyber schools have the ultimate incentives to succeed and improve: they will be shut down if they persistently fail, and they only receive funding when parents choose these schools as the best place to educate their children. 

Throughout their rebuttal, RFA insists on singling out poverty as an explanation of poor academic performance. It is dangerous to get caught up in this “myth of helplessness”—a phrase coined by education policy expert Dr. Jay P. Green. Although many students face serious social problems outside the control of local school districts, is this reason enough to oppose school reforms that expand choice, opportunity, and accountability? Poverty must not become an excuse that prevents schools from improving their services to children and families.

Are charter schools contributing to growing costs for the district?

RFA claims that because “charters assume 30 percent of the district’s budget” they “undeniably contribute to the district’s rising costs.” This represents a fundamental misunderstanding of charter school financing.

For each student attending a charter, the child's home school district sends a payment to the charter equaling the district’s per-student spending, excluding all expenditures for adult education programs, community/junior college programs, student transportation, facilities acquisition, construction and improvement services, debt payments, and federal funds received.

The bottom line? Charters schools spend and receive less funding per student than district schools. In Pennsylvania, this discrepancy amounts to an average $1500 per student, money that school districts retain for students they no longer educate. Accordingly, it is wrong to argue that charter schools add additional costs beyond those of traditional public schools. 

Charters should not be criticized or punished for attracting new students. It is incumbent on district schools to compete, innovate, and improve in order to win back the lost enrollment, as well as the payments that are sent to charter schools.

What is happening with district enrollment? What implications does it have for spending trends?

Over the last decade, district schools have seen a 25 percent decline in enrollment, while charter schools have seen a three-fold increase. This is where spending per Average Daily Membership (ADM) is helpful, because it includes charter enrollment and provides a complete look at district-wide trends.

Curiously, the RFA report did not address CF’s analysis of spending per ADM—which has unquestionably increased in Philadelphia. This is true over both the 5 year and 10 year snapshot, with an inflation-adjusted 8 percent increase since 2008-2009, and a 21 percent increase since 2002-2003. 

philly schools spending per adm

Keep in mind, these figures actually underestimate spending in district-run schools, because they include charter enrollment. As mentioned above, charters spend and receive less funding than traditional public schools.

The RFA authors also claim that “districts cannot pare personnel, building, and services costs proportionately” to offset enrollment declines. This fixed costs argument is a classic red herring in the case against school choice.

What about the bond sale?

RFA seems to view a recent Philadelphia bond issue as a smoking gun in the case for increased state and federal funding for district schools. Of course, borrowing the revenue is not a policy supported by CF either then or now. It will amount to more costs over the long term, and it is yet another temporary solution to a long-term problem. If anything, this type of action underscores the urgent need for better financial management. The bond issue does not change the fact that district spending has increased substantially, which is a key finding of CF’s decade-long analysis.

What is happening to class sizes?

The original CF Policy Points was careful not to make any specific claims about average class sizes in Philadelphia. Our report merely presents the facts: the student-to-teacher ratio has declined over the last ten years. In 2012-2013, this ratio was 15.6 to 1. Nowhere did we claim that the average class size is 15 or 16 students. Average class sizes tend to be somewhat larger than the student-to-teacher ratio. But the ratio remains useful information in the context of claims that classrooms are on the verge of skyrocketing to 40 children or more. In light of a declining student-to teacher trend, it’s fair to say such claims are exaggerated and misleading.

Are school districts struggling to meet their obligations for pensions and debt/construction costs?

Absolutely this is the case, and we agree with RFA on this point. There is no disputing that these obligated costs will force a greater percentage of funds to be spent in areas other than classroom instruction. The key question now, however, is how to deal with such fiscal challenges. Do expensive bills for pensions and debt provide carte blanche to raise taxes? This has certainly been the preferred approach over the last decade, and it appears to remain the preferred approach for those in favor of an increased cigarette tax in Philadelphia.

What would a different approach look like? It would include reforms to public employee pensions, an issue we’ve been concerned about for quite some time. Prevailing wage reform is another step that would significantly lower school construction costs.

CF is hopeful that RFA will join us in support of these policy objectives, which would result in important savings to taxpayers, as well as increased flexibility for local school districts feeling the wrath of poor policy decisions from several years prior. 

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Booze Lose: PLCB Proposes Increased Mark-up Price

AUGUST 14, 2014  | by BOB DICK

Get ready to empty the piggy bank because soon you could be paying the government even more for your booze. At least, that's the Pennsylvania Liquor Control Board’s (PLCB) latest idea to cover the growing costs of its operations.

According to the Tribune-Review, the PLCB circulated a memo suggesting a 16.6% increase (from 30% to 35%) in the mark-up price added to each wine and spirits product. The proposal is a response to the growing personnel costs and new costs of government mandates, which the agency projects will lead to a decline in its “profits” for next fiscal year. But as we pointed out in the past, the PLCB isn’t any more profitable than the IRS. Any additional revenue it collects above the cost of its operations is essentially a tax paid by consumers.

Supporters of our anachronistic system have long defended the PLCB as a "cash cow" for the state, but this has never been true. More than 80% of the revenue generated by the PLCB results from taxes, which would still be collected under a private system. The lack of profitablity is even more obvious now that the PLCB's costs are eating away at the small portion of "profits" it does transfer to the General Fund. 

In its memo, the PLCB points out the difficulty in assessing the effects of its proposal on prices, but no matter the outcome, people will be hurt if the PLCB moves forward with their plan. If vendors decide to lower the prices of their products to keep competitive, they will have to absorb the losses. If vendors don’t change what they charge the PLCB, consumers will feel the effects in the form of higher prices. "People that buy at the state stores are going to pay more. Period," says Dr. Antony Davies, associate professor of economics at Duquesne University. "The PLCB doesn't have any competition," Dr. Davies tells WTAE, "so you don't have those forces pushing costs down."

This isn’t the first time the PLCB has proposed a change in its pricing formula. A few years ago, the agency proposed and eventually adopted a shift to variable pricing in its handling fees. This decision currently empowers the PLCB to charge more for certain products if vendors increase their own prices.

Here's the problem: Pennsylvanians have no choice but to live with these decisions, unless residents break state law and buy their liquor in other states (which does occur). But it’s still not fair to penalize entrepreneurs and those who don’t live near the border with a system obviously failing residents.

If Pennsylvania were to end the booze monopoly, one of the benefits (and there are many!) would be more choice and convenience for consumers and entrepreneurs who would no longer be subjected to the decisions of a small group of people in Harrisburg. Revenue for the state would increase as more job creators could expand their businesses, and more Pennsylvanians would buy their booze within state borders.

The lives and decisions of those in the wine and spirits industry should not be tied to a system well past its expiration date.



Teachers Call for More Freedom, Choices


Heather Lister and Joe Connolly are both Pennsylvania educators, and they couldn’t be more different.  Heather is a 25-year-old library media specialist and a registered Democrat. Joe is a veteran high school guidance counselor and a proud conservative.

On the surface, the teachers are poles apart, but there is something they agree on: Lister and Connolly both believe that labor union membership should be voluntary.

You might wonder why that’s such a big deal—don’t teachers already have a choice? The short answer is no.

In the 26 states that are not “right to work,” most public school teachers who decide not to join a union must still pay union fees—whether they want union representation or not. That's why Commonwealth Foundation is participating in National Employee Freedom Week (August 10-16), a broad grassroots effort to inform teachers and other unionized workers of their labor rights.

We're highlighting the stories of teachers like Heather, Joe and many others, and providing an easy step-by-step guide for teachers on how to resign from their union.  Stay tuned for more this week!

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Study: Selective Carve-Outs Make Poor Tax Policy

AUGUST 7, 2014  | by EMMA CRISCI

Lawmakers across the country have promoted specific, targeted tax breaks that encourage businesses to invest in their state. According to a recent study, these incentive programs are ineffective at promoting widespread economic benefits, despite being advantageous for certain firms and industries. 

The study, published by The American Legislative Exchange Council (ALEC), examines "the use of public policy to benefit a specific industry, firm, or individual, as opposed to setting broad and generally applicable rules and policies that apply to society as a whole." These include targeted tax breaks or cash subsidies for select firms, as well as preferential tax treatment for firms located in a given geographic area.

ALEC finds that while this type of tax favoritism is not illegal, these programs stunt a state’s potential growth. Tax carve outs, while helping ease the tax burden for select businesses, create an uneven playing field on the whole.

When select businesses are exempt from the standard tax rate, the tax base decreases. ALEC notes that "with a smaller revenue base, states must continually raise tax rates to get the desired amount of revenue." Overall, this results in most businesses paying higher taxes, as they are forced to subsidize the lower tax burden of firms receiving preferential treatment.

To achieve a state's greatest economic potential, carve-outs must be eliminated altogether. Tax policy should be competitive and equal for all businesses. 

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Agreed: Public Resources Should not be used for Politics


"Public resources are not supposed to be used for partisan political purposes."

So says Barry Kauffman of Common Cause PA in a Tribune Review article. What Mr. Kauffman and other critics were referring to was allowing campaign staff to participate in a meeting held in the state capitol. They are seemingly concerned about the blurred lines between government roles and election activities.

What is odd is that the critics have been silent about, or even supportive of, the practice of using taxpayer resources to collect campaign contributions in that same state capitol. 

As we've noted before, public resources—including staff time and payroll systems—are used to collect Political Action Committee (PAC) contributions that can be given directly to candidates. The state Treasurer alone collects and transmits more than $700,000 each year to union PACs, while school districts and local governments collect millions more.

This is on top of the hundreds of millions collected in government union dues, at taxpayer expense, that are given to "SuperPACs" to fund election ads.

These services offered to union leaders to collect their political money have real and measureable costs. While the marginal costs of payroll deduction for union PACs may be small, it is infinitely more than the nonexistent cost of a campaign staffer sitting in a taxpayer-funded chair for a meeting.

Public resources shouldn't be used for partisan political purposes? We agree. That's why we hope Common Cause and other so-called "good government" reformers will support us in fighting for paycheck protection.

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Seniority Reform is Pro-Child, not Anti-Teacher

AUGUST 6, 2014  | by JAMES PAUL

It seems clear that there is widespread agreement—across party lines and ideological barriers—that we must address school seniority rules and tenure reform.

Check out this stunning video from MSNBC's Morning Joe and take note of who is sitting around the table: liberals, conservatives, moderates, and independents. Everyone seems to agree that all children deserve access to the highest quality teachers.

Everyone, that is, except the teacher union leaders—who fight tooth and nail to retain inflexible seniority rules and status quo tenure policies.

As mentioned in the clip, teachers are not interchangeable parts. They should be treated, evaluated, and compensated like any other professionals, which is based on performance. Seniority rules mandate that teachers be placed and furloughed simply according to their years in the system, not how effective they are at instructing students. This results in the best teachers being left out in the cold, while those who are less effective, but longer tenured, are protected.

There is a solution to this problem in the commonwealth. HB 1722, sponsored by Rep. Tim Krieger, would ensure that furlough decisions are based on actual job-performance, as well as increase the benchmark for tenure from three to five years.

This important legislation would dramatically improve the quality of education throughout Pennsylvania.

Who could possibly stand in the way of such sensible reforms?

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Protecting Children Should Trump Politics

AUGUST 5, 2014  | by JAMES PAUL

A harrowing study shows that sexual misconduct by teachers is becoming more prevalent in the commonwealth. Since January, there have been 24 reported cases of sexual abuse by Pennsylvania teachers. Only one state has seen more incidents than Pennsylvania in 2014, according to the Houston-based Drive West Communications.

Megan Harris of TribLive.com has more appalling details of misconduct and abuse.

A Tribune-Review analysis of disciplinary actions from 2004 to 2014 found they more than quadrupled in 10 years. At least one-third of all cases resulted in quiet resignations not immediately reported to the public. Since 2004, at least 332 teachers voluntarily surrendered teaching licenses before a state commission could pursue disciplinary action.

Of course, the vast majority of teachers are committed to the well-being of their students. 

But these findings are alarming—especially when coupled with an outrageous loophole in state law allowing accused teachers to quietly resign and relocate without having to inform their new district of the alleged abuse. Within the education community, this is known as "passing the trash"—moving staff to a different city in order to avoid lawsuits, criticism, and above all else, justice.

Take a moment to consider what this means. Teachers who sexually abuse or have been otherwise accused of harming children are permitted to resign or temporarily walk away from the classroom. In some cases, these individuals eventually reclaim a teaching position.

It’s almost impossible to comprehend.

Last year, the Pennsylvania Senate unanimously passed SB 46, sponsored by Sen. Anthony Williams of Philadelphia, to address this unconscionable oversight, but the bill awaits action in the House. The legislation would provide for more thorough background checks and put an end to "confidentiality agreements" that prevent school districts from disclosing whether an applicant was previously investigated for wrongdoing.

Sen. Pat Toomey of Pennsylvania cosponsored similar legislation at the federal level.

If you thought this could be a rare issue where unions, taxpayers, and families can agree, you’d be wrong. As of late 2013, the Pennsylvania State Education Association (PSEA) and the Philadelphia Federation of Teachers (PFT) were neutral on SB 46. Neutral.

For the PSEA, "neutral" is actually an improvement from a 2012 hearing on similar legislation, where they testified in opposition to the bill.

On most political issues, there are reasonable arguments to be made for either side.

But this is not any political issue. This is about keeping child predators out of schools. It should be a no-brainer for lawmakers in Harrisburg.

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The Commonwealth Foundation is Pennsylvania's free-market think tank.  The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.