Our New Flexibility Explained

As you are all certainly aware, last week the legislature passed and the governor subsequently signed HF 68. For reference, this is the voucher bill that will commit more than $900 million in the first four years of operation before becoming a standing appropriation in excess of $340 million every year thereafter. My opposition to this type of legislation is well documented over the years, most recently here. Included in the legislation were a few few nuggets for public schools, such as flexible use for some categorical funds. Many of those who support the bill tout it as allowing more flexibility for districts to free up large sums of money to put into teacher salaries. None of this is false, but is a bit misleading and out of context. 

For starters, much of this flexibility had previously existed due to action by the legislature several years ago. What was added in this new bill was flexibility for both the TAG (Talented and Gifted) and TLC (Teacher Leadership and Compensation) funds. Now, when the original flexibility legislation was being debated several years ago, I had explicitly advocated for flexibility in the TAG fund because our allocation has continued to increase year over year. At that time, I was told it was a nonstarter. A redline that would never be crossed. Based on that set of facts, this year I began a deep dive of TAG and am now fully engaged in an overhaul of the program. When commissioning this project, the fact pattern was simple: it was desirable to both strengthen and improve on these services, particularly at the secondary level; and we carried a pretty large reserve fund balance that was restricted. This new legislation changes the fact pattern insofar as the reserve fund balance will now be a thing of the past. If we so desired, those monies could simply be re-appropriated to teacher salaries. In my discussion with the school board, they asked a very simple question: Would our students be well served by strengthening the TAG program? Yes. Based on that, we will proceed uninterrupted with this work.

As mentioned briefly in the preceding paragraph, the other restricted fund that school districts have been the given flexibility to re-appropriate is the TLC fund. In Hudson, we do not carry a reserve fund balance in this category. Truth be told, we have a very robust and enviable teacher leadership program. One might remember that I was around when the TLC debate was raging in the legislature back in 2010. With a start up cost of $150 million there were a lot of reservations from legislators at the time regarding the cost of the program. So much so that the 2011 legislative session ended without agreement, and a resulting 0% in SSA for the first time in Iowa history. It is peculiar that [now] we are willing to jettison the crowning achievement of a prior administration from the same party in exchange for this voucher program. In Hudson, it would make very little sense to mothball our teacher leadership program in service of freeing up funding. I would argue many of the reasons we have been so successful in moving the needle on student achievement is precisely because of this work. Yet there must be no mistake: this policy decision will cause an erosion of teacher leadership programs around the state. 

Ok, let's get down to brass tacks! What is the number for Hudson? The number that has been floating around Facebook is somewhere around $233,000. The number is pretty accurate, but the categories are not. 

In the table above, the project code or 4 digit number identifies each of the restricted funds for the district. At first you probably notice the total number is $288,159.08, which is quite a bit more than the $233,000 number being discussed. This is because we back out project code '3117'. This is funding reserved for preschool and was not included in those flexibility provisions. When doing that, you are left with $233,372.58. But project code 1118 is restricted to TAG and 3376 is for professional learning, not teacher leadership. Further, these numbers are based on the close of fiscal year 2022, or June 30. Because of the flexibility laws that were enacted several years ago, the school board used their authority to move the $25,953.94 into the flexibility account. But they couldn't do so until after the books were closed in June, because we didn't know what the number would be. You can read that resolution in our October 19 regular meeting minutes. In essence, that would leave the district with $207,418.64 in TAG funds that could be repurposed. Which we can do if we are uninterested in improvements to the current program.

If that were indeed the case, in my view it would run counter to our philosophical approach of developing and managing the school budget. My practice of setting the budget is based on what many would consider 'fiscally conservative practice'. Underestimate revenue and overestimate expenditures. And never, EVER pay for ongoing expenses with one-time money. So, if we were to do what the legislature suggests and use this money to pay for salary increases, great. Let's say I'm able to give everyone an extra $2,000 in raises, exhausting that reserve fund balance. That money is now gone. What happens next year when that reserve fund balance isn't there? That $2,000 raise is no longer sustainable.  

The Wild West of Open Enrollment

As the current school voucher legislation is being fast tracked through the law-making process I believe it would be a wise course of action to slow down and ensure mistakes aren't made. If we can learn anything from [recent] history; public input, vetting, and scrutiny would only strengthen the process by ensuring the voices of Iowans are heard and unintended consequences are avoided. We don't need to look too far back to uncover some of those consequences. 

In the waning hours of the legislative session late last spring, the General Assembly removed the March 1 deadline that was applicable for students requesting open enrollment into a school district. Further, they legislated that the per pupil funding would follow immediately. Now, the March 1 deadline was in place to allow school districts ample planning time for the number of students they would have attending the next fall (and the funding that would accompany them) as well as knowing how many teachers they would need to employ. These changes were enacted without the benefit of public input where those charged with executing this policy change could have shared valuable insight into how this would likely play out in the real world. What we are beginning to see now is something akin to the 'Wild West of Open Enrollment' where anything goes.

Now, that's not to say open enrollment couldn't happen outside that window, it could and it did. Probably more frequently than most people realized. The majority of the time was for reasons known as 'good cause'. Good cause includes such factors as pervasive bullying that couldn't be adequately addressed in the resident school district, a known health reason, or, in some cases it was determined that a change in placement made sense for a variety of reasons. In all of these instances, superintendents at both districts (receiving and sending) had been able to work out an arrangement for the transfer with the caveat that the funding would flow the following year. This was to mitigate any disruptions to the sending district(s) budget--and the receiving district was almost always willing to accommodate the request. Why? Because any added cost is unlikely since the school year was already underway, and they could bank on that added funding for the 'out year'. If the receiving district already has the desk in the classroom and the supplies on hand, they are not adding any additional expense. The sending district on the other hand had already invested in the supplies and human resources needed to educate the pupil. It's not like you can simply send them back or let the teacher go. Much like the current voucher legislation that is being proposed: the expense side of the ledger has not been impacted, the revenue side most certainly has. 

Part of the reason for this late change to the open enrollment law was to expand school choice, which has been a major priority for the governor for the last several years. To date, those efforts have been unsuccessful because the legislature (acting in a bipartisan manner) has understood and recognized the dangers of school voucher schemes and the real harm they will do to local public school districts. This [change in open enrollment] was likely an attempt to assuage the fact that the preferred school choice legislation was not going to advance last session. Further speculation as to why the law changed so abruptly could be due to policy decisions that were made by a local school district in eastern Iowa that wasn't all that popular with some parents. The theory was that the district purposely waited to adopt the policy until after March 1, thus 'trapping' some parents and families in the district who otherwise would have opted for open enrollment prior to the adoption of said policy. It all sounds pretty conspiratorial to me, but some legislators have made that point. If that is the case, one might question why a policy decision made by a single school district in the state should impact the state public school system writ large. Why on earth should Hudson be held accountable for the policy decisions of another school district?

In full disclosure, Hudson is net positive when it comes to open enrollment. In fact, we are net positive by a pretty large margin. This means a change in open enrollment laws for us is much more nuanced. But, there is no mistake that it does have a negative impact. 

Again, the law was changed very late under the cover of darkness and without any input as to what the possible consequences of such an act would be. Had there been an opportunity to provide input into this proposal, it could have been addressed differently and some of the more onerous consequences could have been avoided. Some of those consequences are now being felt. By removing the March 1 deadline, the good cause provision is a thing of the past. This means students can leave at any time during the school year for any reason or no reason. Proponents would probably argue this is exactly the point: people can 'vote with their feet'. If the district doesn't respond in the way you want, you can just 'take your ball and go home'. Don't like the grade you got in English? Open enroll. Don't agree with the late start last week due to weather? Open enroll. The team isn't good enough for your star athlete? Open enroll. A student detention for insubordination? Open enroll. A family is held accountable for truancy? Open enroll. No bus ride from two blocks away? Open enroll. 

The examples are endless and unfortunately aren't far off the mark. It creates an environment of instability, not only for the school district that has to mitigate the abrupt changes to classroom rosters, but to the student who is leaving for a new school. For sure there will be gaps in learning for the student. And depending on the age of the youngster, being the 'new kid' in class isn't always easy-- especially when you leave a well established peer group. 

For some school districts, especially the small rural ones, the financial implications could be catastrophic. If a few students leave one grade level, a district may find itself in a position where they are upside down with staffing: in the middle of the year with no way to address it. 

Again, in Hudson we are net positive with open enrollment so the impact isn't quite so dramatic. But it is a reality and it does have a negative impact. We have had students leave this year using this new law as their vehicle. Some of the reasons were suspect, others had no reason at all (see example above: they are not made up). A few were actually very good reasons where the family worked with the building principal for an appropriate placement: which they could have done without this change to law. Not that it mattered because it is no longer a requirement of the law. The funding that will follow immediately will likely have no bearing on our hiring decisions going forward. At this point we don't have to worry about anyone losing their job due to overstaffing. But there was real funding that we were counting on for our budget that we can no longer count on: somewhere in excess of $10,000. This could mean the difference between making a curriculum decision now or a delay to some point in the future. And if it continues to create instability? The legislature would be wise to carefully consider the decisions they make.

The Impact of the Voucher Plan on Hudson Schools

During the first week of the legislative session, a proposal for a comprehensive school choice plan was introduced that is far more expansive than anything ever proposed before. This universal program would provide any student in the state with the ability to take the state cost per pupil that had previously been allocated to the public school district and use that money to pay for private school tuition. It also phases in a mechanism to pay that amount for families that have already chosen private school. This includes any and all students without regard for poverty level. While you may think that Hudson is immune because we don't have a private school in our district, let me correct the record. We may not have a private school in our district, but we most certainly have students who attend private schools outside our district.

But before we get there, I think it is first imperative to look at the topline numbers in this proposal. As a starting point, $106 million is being proposed in this first year. When fully enacted, according to the governor's office, the plan is expected to cost over $900 million within 4 years, and then $340 million annually. Now, to put that $106 million [base year cost] in perspective, it is important to note that the increase in school funding for next year is proposed for just $83 million, or 2.5%. Furthermore, this is a significant expansion from previous proposals. Three years ago it was very narrow and limited to a small number of students in metro areas. Last year, the proposal was $55 million and based on a poverty factor that would accommodate up to 10,000 students. Neither of these proposals were enacted. One must wonder why such an extreme position was taken up this session. 

Here in Hudson I have forecast our budget five years into the future. In that model I assume a growth rate of 2.5%, solve for enrollment growth, and increase expenditures 5% per annum. Is 5% too aggressive? Perhaps. But, consider the following: CPI is currently running at 8.6%, the labor shortage requires us to offer more competitive wages to attract and retain quality teachers and staff; and as a growing school district we are actually adding teaching faculty. The fact is, the primary reason we are in such great financial shape is because of growing enrollment. The model I have prepared considers all those variables. But if this model comes to fruition it will catch up to us, and quickly. In just 5 short years, we will bleed off more than $3 million of our $4 million in reserve. And remember, that assumes enrollment continues to grow. Imagine if instead of investing the proposed $83 million in state aid for the funding formula, we invested $189 million (the sum of the state aid and funding proposal for the vouchers). I can promise you it would make a tremendous impact on our forecast, our ability to hire and retain staff,  and enable us to protect the program opportunities that may otherwise be in jeopardy.

Based on our most current data, we have approximately 15 students who already choose nonpublic school. Those students aren't currently counted in our enrollment, so when they become eligible for the school choice plan being debated there is lost funding for our district. Further, one could reasonably conclude based on our historical data [that] at any given time in the future, we could lose 15 or more additional students. At the current state cost per pupil that would be a loss of $113,970 annually. That is just the state cost, but other funds are generated based on enrollment, such as the state penny for school infrastructure, dropout prevention and instructional support. While the proposal allows school districts to keep some of the categorical funds associated with the number of resident students attending the private school, it doesn't come close to making up the shortfall. Considering all the impacted revenues, Hudson public school students would be shorted a net of $121,440 if just 15 more students attend private schools. Roughly the equivalent of two teaching positions. 

It is safe to assume that students who are taking advantage of proposed choice program will be 'normally' distributed across the span of grade levels. In other words, they won't all be concentrated in 3rd grade. This is an important point because often times it is argued; that by virtue of the student no longer being in the school district, they no longer have the responsibility of educating that child. Thus the expense is no longer present. This isn't true precisely because of the distribution of the students. If the 15 students mentioned above (again, a real number by the way) are spread out across 13 grade levels, then the expense has not in fact been removed. Instead, the revenue has been removed, but the expense remains. You can't cut 1/20th of a teacher, lower the thermostat by 1/20th, or reduced any of the fixed costs that are necessary for the efficient and effective operation of a classroom. 

For a moment lets turn back to my forecast mentioned above. Reducing future expenditures per annum may in fact become necessary to balance the budget. How would we do that? Well, if one presumes concentrated loss at the kindergarten level for example, it could come in the form of a teacher. If the average kindergarten class is 55 students, for Hudson that is a relatively easy solution: three classes of 18/18/19. However, if you reduce that class size by 5 and are left with 50, the decision becomes a bit more complex. In this case you may be looking at 25/25. The math is easy. The teachers and parents on the other hand, well, can you imagine 25 kindergarten students in one section? That part, well it's not so easy. 

What Was Your Highlight of 2022?

When the calendar flips over from December to January it is tradition to look back at the year that just ended and reflect on those events and milestones that are memorable and shaped the year that has just ended. I'm sure you have watched as local television stations and network broadcasters have had their annual 'Best of' specials to round out the year. Frankly, it seems a bit out of sync to do so in a school since the turning of the calendar page really only marks the midpoint in our journey. Nevertheless, in the spirit of the holiday season that just ended, I'll share what I believe to be the key moments in 2022. If you have a different highlight, please drop me an email and I'll share it in an upcoming article (I'm always looking for content!) I only ask that you keep your key moments reflective of school related events!

In January of 2022 we convened a task force comprised of community members, city leaders, employees, and school board members to consider a possible renovation and addition to the high school. The weather that evening was very similar to what the weather is right now: cold! Over the course of several months, they listened, provided input, and asked questions. That work led to a recommendation and petition to the school board to call for a special election. Over the course of the summer and early fall this task force held community meetings, visited with neighbors, and advocated for their school. On Election Day, they called those same friends and neighbors and encouraged them to show up at the polls and make sure their voices and opinions, no matter what they might be: were heard. Their hard work and perseverance paid off because on September 13th, voters approved an $11.65 million referendum. The task force committed to this project over a nine month period and put in the hard work to do something that hasn't been done in Hudson for twenty years. And they did it on the first try. Perhaps that is the highlight of 2022?

Certainly no one would point to the two week span from April 18-29th as a highlight of 2022 would they? Probably not. But there is no mistaking this as an important milestone in the year. It is the window where we completed the ISASP statewide testing. Perhaps not a highlight, but no doubt an indicator of student success and one to be celebrated. These statewide assessments are the primary instrument used to determine school rankings in the state. And once again our schools performed very, very well. 

I think most would agree a definite highlight of 2022 came on May 22nd when 46 Hudson High School seniors graduated! That day we honored a class that posted an average GPA of 3.57 and boasted 10 valedictorians. In my final remarks to the class I advised them of the challenges that will lie ahead and the obstacles they would face. At the same time I reminded them that they had been well prepared with the ability to meet those challenges and move the mountains that would stand in their way. I can't wait to see what they become!

Always worthy of celebration, school started on August 23rd and our opening day enrollment numbers suggested growth of 64 students when compared to the first day enrollment numbers from 2021-2022, and an increase of 135 when compared to first day enrollment numbers from 2020-2021. At the same time, the number of teachers we employed has increased steadily over the last couple of years. This year we were excited to welcome 7 new faculty to our ranks with varying degrees of experience and expertise. 

I look forward to hearing from you what stands out in our school about 2022! Happy New Year!

The Word: Change

Nothing ever stays the same, does it? Just look at how different this school district appears physically! Hopefully you would agree that the changes to our district facilities have resulted in positive improvements. At the same time, many of the changes in our district are more subtle. Perhaps it is the adoption of a new math curriculum, or a change in approach to literacy instruction. Maybe the addition of computer science courses at the high school; all these changes have been designed and implemented with the goal of improving the student experience here at Hudson Schools. Other changes are just a sign of the times and a result of the constant churn of life. Take for example the demographic makeup of our faculty. It certainly has changed over the years. We have 70 teachers on staff. Only 22 of them were here when I arrived. I'm not sure that is an indictment of my leadership or a sign of my age! I guess I'll leave that to you!

With the passing of one year to another it is a time to look forward to the excitement that comes with the start of a new year, and as is tradition: set goals. I have never been a 'New Years Resolution' kind of guy, because let's face it: I'm not interested in losing five pounds and if you think I am going to start a daily gym regimen, well you really don't know me all that well then, do you? Instead, for the past several years (I think we are coming up on a decade at this point) I have instead chosen the 'One Word'. So the word this year is 'change'. I believe the saying is that, 'the only thing constant in life is change!' In any event, I chose this word because I believe we are in for some substantial change this year. Truth be told that probably isn't all that surprising based on the very nature of how education works and how policy is set at the state level. Nevertheless, I do think there are a couple of notable changes on the horizon that are likely to have quite an impact on our district.

The truth is that change is not always easy, and in fact can be quite difficult for some. Depending on one's perspective change can either be good or bad. Without a doubt, change can cause anxiety. As humans, there is comfort in maintaining the status quo. We know what to expect and often are able to anticipate how certain events will unfold based on past experience. Change disrupts this anticipatory ability. When we are unable to anticipate and plan, or if our worldview is disrupted due to change; it can be stressful. Some change can be exciting and cause for great celebration. Other times, it can bring on bouts of anxiety that can be difficult to manage. 

In our school district (as will be the case in many around the state), I think we'll see a number of positive changes to schools. At the same time, I am concerned about other changes that are likely on the horizon and fear they may do harm to public schools. 

Sometimes change come about slowly and give us ample time to prepare. For example, as our enrollment continues to increase, we'll need to plan for larger class sizes. Larger class sizes will create the need for more teachers and job opportunities that will positively impact our local economy. After living through years of declining enrollment this is indeed a welcome change! (But not one without challenges!) In many ways enrollment increases have 'flipped the script' for us. As a school district, we used to delay hiring decisions based on unknown and unreliable enrollment projections. These days, speed is the name of the game. It is important for us to be able to quickly enter the labor market so we can compete for the best talent available. It wasn't always like that here in Hudson. Change.

In September we passed a bond issue for renovations to the high school. Since that election, our team has been meeting regularly and with increasing frequency as we prepare to get that project ready for bidding. I'm looking forward very soon to share an update with you all on these plans as they continue to be refined and finalized. Our construction team has been very busy receiving input and feedback from multiple user groups as these plans come to fruition. It is our desire to be in position to begin construction this summer. This is a very exciting project for our school district and one I know we will all be proud of once completed. Change.

Two years ago, Mr. Schlatter shared with me that during the 2022-2023 school year he would not only complete his twentieth year as principal at Hudson elementary, but that it would mark his fortieth year as an educator. He was being circumspect while at the same time foreshadowing a future where someone else was leading the elementary school. As this school year was getting underway, he shared privately with the team that he was likely going to retire, and on the morning of November 22nd he put it in writing. At our December board meeting it was made official. We are happy for Mark and wish him well on this big change that will be coming his way in a few short months. I promise we will have ample opportunity in the months ahead to thank him for his service and to honor him for his accomplishments on behalf of the district. But in the interim, we have to prepare for a seismic change in our district: the search for Mr. Schlatter's successor. That work has already begun with an official announcement of vacancy right before Christmas: one that is already yielding candidates. I'll be meeting with stakeholder groups in the coming weeks to outline the process for filling this very important vacancy and how you can become involved. Change.

Finally, there is the change that is likely to be a surprise to all of us. The legislature will convene in a few days and with it there will be multiple policy proposals that impact our public school system. Some of these will be welcomed changes, and others not so much. Frankly, when the legislature is in session it often is a source of great stress and high anxiety. Why? Well, it is change of course! And it is change that is largely out of [my] hands. While I have the opportunity to advocate and educate our legislators, it sometimes feels as though that advocacy is not effective. As the session unfolds I'll be certain to explain to you how these changes will impact our school district and encourage you to advocate on behalf of Hudson Schools. Change!

Here's to the change that 2023 is certain to bring!