Letter to My Legislators (spelling corrected)

To: Senator Fukunaga
From: Malcolm Kirkpatrick
in re: Education and the State budget
2011-03-02 (2-Mar.-2011)

Aloha, Senator Fukunaga,

The State's amortized annual financial commitments (including pension and health care obligations to retired government workers and current employees) exceed its income. This condition defines "bankruptcy". In this respect, the government of Hawaii resembles many governments at all levels, city, county, and national, across the Earth. Politicians in democratic polities and bureaucrats in one-party States ascend the political hierarchy by promising support to superiors and buying support from constituents. Governments at all levels have made more promises than they can keep. When someone has made more promises than s/he can keep, s/he will break some.

The Governor and State legislators have arrived at only the first, just-walked-past-a-mirror-and-seen-themselves-naked stage of acceptance that the State needs to go on a financial diet. As with any serious addiction, government's addiction to tax revenues will not yield to the first, second, or probably even twentieth resolution to lose weight (or quit smoking, or quit drinking, or quit an abusive relationship).

The State of Hawaii cannot raise taxes. Literally "cannot". Charles Schultz, a Kennedy-Johnson era member of the President's council of economic advisers, called the Laffer curve a straightforeward consequence of standard economic analysis. Productive private-sector workers will not passively accept unlimited taxation. At some point, each productive private-sector worker (and corporation) will either 1) take productive work off the books, 2) trade productive work for leisure, or 3) move to a polity with a more favorable tax environment.

The government of Hawaii will cut spending. The only choices decision-makers have are when and where. The longer legislators procrastinate, the narrower and more unpleasant the range of options becomes. Legislators will not make up the State's budget shortfall seeking quarters under sofa cushions or making cuts to minor programs. Legislators will cut major programs or financial markets and a shrinking tax base will deprive them of any power to make these choices.

To minimize the harm of cuts, legislators must assess the relative value to taxpayers of individual State programs, and transfer to private service providers, whether under contract to the State or unsubsidized, those functions which State agencies currently perform which independent agents would fulfill better and cheaper. I suggest that the above considerations imply a major reduction in the DOE budget and in the State's role in the education industry.

Hawaii's government-operated K-12 schools cost taxpayers over $2.5 billion per year. It does not take 12 years at $16,000 per pupil-year to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. Homeschooling parents out-perform classroom teachers. Independent and parochial schools outperform government-operated schools. In Hawaii, juvenile arrests fall when school is not in session. Juvenile hospitalizations for human-induced trauma fall when school is not in session.

In abstract the education industry, with its critical dependence on enormously varied inputs (each individual student's interests and abilities, each individual teacher's personality and skill) an its enormously varied outputs (the possible career paths which a modern economy offers) is an unlikely candidate for (inevitably bureaucratic) government operation. It is simple mental sloth and fear of organized insider interest groups that blocks a reconsideration of the arguments for the State role in the education industry.

There are too many "r"s in "revolution". Radical change imposes costs in the form of lost information. The least disruptive path from the current policy, which restricts individual parent's options for the use of the taxpayers' K-12 education subsidy to schools operated by government employees, is a policy I call "Parent Performance Contracting" (PPC).

1. Mandate that DOE schools --must-- hire parents, on personal service contracts, to provide for their children's education, if the parents apply for the contract.
2. A child is eligible if:
2.1 S/he is at or above age-level expectations on standardized tests of reading vocabulary, reading comprehension (any language) and math as of August 15, the start of the contract year, and
2.2 S/he has not been convicted of any felony or misdemeanor crime against persons or property in the previous calendar year.
3. Make payment equal to some fraction 1/2 < a/b < 1 of the previous year's Hawaii DOE regular-ed per pupil budget.
4. Make payment contingent on
4.1 Performance at or above age-level expectations on standardized tests of reading comprehension, reading vocabulary (any language) and Math and
4.2 Remaining conviction-free of crimes against persons or property.
5. Count students educated under this program as enrolled in the DOE school which they would otherwise attend.
6. Administer the GED at any age.
7. Allow children who test out of school before age 18 to apply the taxpayers' K-12 education subsidy toward post-secondary tuition or toward a wage subsidy at qualified (e.g., has filed W-2 forms on at least 3 adult employees per sub-adult employee for at least the previous four years) private-sector employer.

Parents could then homeschool, hire tutors, extend daycare to age 18, or supplement the contract amount and send their children to an independent or parochial school.

Parent Performance Contracting (PPC) has several advantages over school vouchers and charter schools.
1. Districts already hire consultants on personal service contracts, so PPC requires no new administrative machinery.
2. PPC includes all currently available options (e.g., homeschooling, charter schools, independent schools).
3. PPC provides greater financial and performance accountability than do school vouchers.
4. PPC requires less intrusive oversight than tuition tax credits.
5. PPC poses less of a threat to the autonomy of independent schools than do school vouchers.
6. PPC is less respectful of current institutions, and so will more likely promote more rapid evolution of the education industry than will school vouchers or charter schools.
7. Since children educated under PPC remain enrolled in State (government, generally) schools, PPC elides the whole Church/State separation argument.
8. Since children educated under PPC remain enrolled in State (government, generally) schools, PPC is immune to the rhetorical attack that it "takes money from public education" or "from public schools".
9. PPC allows incremental implementation, which reduces the financial shock to the current system, and which allows continual assessment and modification.
10. PPC reduces taxpayer exposure to uncertain (but substantial) future public-sector pension and health care costs.

cc Della Belatti

Updated: noun-verb agreement, add comma.

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