Category: Education

Ten Years After Milton Friedman

One of the greatest minds of our era passed away in November 2006. This Sunday would have marked his 104th birthday. Milton Friedman won the Nobel Prize for Economics; but it was his ability to relate complex economic ideas in simple terms the average person could understand, and his devotion to liberty, that made him truly great.

Milton and his economist wife Rose spent literally decades researching, writing, speaking, and popularizing free-market economics and its connection to liberty and freedom. Rose actually grew up here in Portland, and it was my privilege to call her and Milton my friends.

This Friday, July 29th, the Friedman Foundation for Educational Choice will celebrate the 10th and final Friedman Legacy Day, which began after Dr. Friedman passed away. Rather than continue these annual celebrations, the foundation, created by and named after Milton and Rose Friedman, will move forward with a new name and a new strategic plan. Both will be announced on the foundation website, at www.edchoice.org.

Please join all of us at Cascade Policy Institute as we celebrate the lives and contributions of a great couple, and renew our commitment to promote their ideas and ideals, which include the goal of every child being able to attend the public, private, religious, or home school of their choice, with funding following the student.

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Portland Schools Need More Than a New Superintendent

Portland school superintendent Carole Smith announced her resignation this week after nine years on the job.

The next steps are predictable: The school board will conduct a national search for a successor and eventually sign someone to an expensive contract. After a short honeymoon, the new leader will sink into the bureaucratic quagmire and leave after a short and forgettable tenure.

Management experts know that if system results are disappointing, you need to change the system, not the people. The single most important change Portland could make would be to redesign how the money flows.

Right now, tax dollars go to school bureaucracies, regardless of results. Students are assigned to schools like widgets in a factory, and few families have a “Plan B” if they are unhappy.

A better option would be to enact Educational Savings Accounts (ESAs). This would allow every family to have their share of per-student revenue diverted from the bureaucracy to the student’s ESA, where alternative services could be purchased. Families would instantly have dozens of exciting options.

Equally important, ESAs would incentivize school administrators to make each school perform at a high level, thereby benefiting all students, including those not using ESAs.

Carole Smith made her share of mistakes, but the Portland school district needs institutional change more than it needs a charismatic new leader.

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Extending Oregon’s Public School Open Enrollment Law Empowers Parents

This week the Oregon State Senate passed an extension of Oregon’s open enrollment law, Senate Bill 1566. The bill extends for three more years the sunset provision of a 2011 law which allows students to attend public schools in different districts from their home residences, as long as the receiving district is accepting transfers. The bill is expected to pass the House before the end of the session.

Oregon’s open enrollment law is a victory for parents, because it gives them more power to choose among Oregon public schools without requiring transfer permission from their local school district—permission that was often denied. Other winners include rural district schools which have worked hard to attract incoming transfer students by focusing on strong academics.

Instead of more bureaucracy, Oregon needs effective accountability in K-12 education by empowering every parent to hold his or her child’s school accountable and to ensure that their children are getting the education they deserve. Oregon legislators should be commended for supporting the Oregon open enrollment law, a relatively easy way to promote accountability and continuous improvement within the public school system. When parents can choose the schools that are best for their children, students have better chances to learn and succeed; and school districts have both the incentives and the opportunities to shine. And that can only be a plus for education in Oregon.


Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.

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Will “Free” Tuition Make College Cost More?

By Thomas Tullis

On July 17, Governor Kate Brown signed Senate Bill 81, the “Oregon Promise” legislation that allocates $10 million to a “free” community college tuition program for Oregon students. With college tuition having increased ten-fold over the last three decades, Oregon lawmakers clearly have good intentions, but that doesn’t make the Oregon Promise legislation good policy. Unfortunately, Oregon Promise will do little to solve the problem of tuition affordability. In the long run, it could actually cause education costs for students to increase because government-subsidized tuition is a major reason why tuition costs are so high in the first place.

Essentially, “free” education actually ends up costing more. It doesn’t just affect the student directly. Tuition costs don’t go down; instead, it only diverts the cost from the student to the taxpayers. Rather than making college more affordable, Oregon Promise will encourage colleges to increase tuition. Government loans and grants enable a guaranteed demand for services that ensures colleges can raise tuition and increase their spending. The government even admits to these unintended consequences with a recent Federal Reserve study that showed that government grants and loans have caused a 65% increase in tuition.

With Oregon boasting the lowest high school graduation rates in the country, lawmakers should focus on allowing a free market to exist for education providers to compete on quality and price. The real solution to tuition affordability would be freeing the education market from government intrusion.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.

 

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Nevada’s Education Innovation

By Emma Newman

According to the U.S. Department of Education, Oregon’s 2013 graduation rate is the worst of all 49 states which reported data. Nevada, which held Oregon’s position at the bottom in 2012, has decided to do something truly bold and create a system that allows for unprecedented levels of accountability, opportunity, and individualization in education.

Next January, Nevada will start the most inclusive educational savings account program in the nation. Educational saving accounts, or ESAs, allow public school students to take 90 percent of the money the state would spend on them and put it on a restricted use debit card. Parents can spend this money on a wide variety of approved educational options, such as private school, individual tutoring, and distance learning. Any money not used is rolled over for parents to spend in the future.

By allowing parents to choose where they send their child to school, schools become more accountable. Families who currently can’t afford to pay taxes for the public school system plus tuition for private options will now have real opportunities to meet their kids’ individual needs, learning styles, and interests.

While Oregon responded to having the worst graduation rate in the nation by giving its failed Oregon Education Investment Board a new name, Nevada responded with innovation.

Emma Newman is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She is a student at George Fox University, where she is studying Economics and Computer Science.

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How the State of Oregon Gambles Away Its Lottery Proceeds

By Thomas Tullis

When Oregon politicians pretend to be experts on venture capital investing, it ends up costing the state millions of dollars in education money.

This is exactly what is going on with the Oregon Growth Board, a project of the Oregon Business Development Department. Tasked with generating a return on investment by financing venture capital funds in Oregon, the Board receives 10% of state lottery profits that are supposed to be apportioned to a state education endowment fund. Unfortunately for students, the Oregon Growth Account boasts a measly 1.5% return on investment over a 15-year period.

In order to justify these dismal returns, the Board claims that venture capital funds tend to lose money in the early years but then make it up as new companies mature. They also admit that they’re recovering from $22 million in losses suffered when the dot-com bubble burst 15 years ago.

State legislators don’t recognize the irony of using profits from the Oregon Lottery to gamble in high-risk investments to benefit an education stability fund. Perhaps the Oregon Growth Board would have a more reasonable ROI if they just flew to Vegas and put our education money all on red.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.

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Scaling Down: The Power of One

By Darla M. Romfo

Last fall I had the pleasure of attending the awards ceremony for the Broad Prize for Urban Education. In the ensuing days, many bloggers and journalists weighed in with criticism, including one who pointed out that “although recent winners of the Broad Prize show positive results compared to many large urban districts, their scores are largely flat—or worse—over the past several years.”

I am sure this must be both disappointing and frustrating to Mr. and Mrs. Broad who made the fortune they are giving away by innovating, adapting, and always getting better. They wanted this prize to inspire the same kind of actions in public education.

Teddy Forstmann, who, along with John Walton, founded the Children’s Scholarship Fund (CSF) in 1998, was a man cut from the same cloth as Mr. Broad. Ted hoped the demand demonstrated when parents of 1.25 million children applied for 40,000 partial scholarships to escape their assigned public school would get the ball rolling and bring about substantial educational improvement for all children within the four-year window for those first scholarships. In Ted’s experience, demand for a better product and a bit of competition led to an improved product. Ted was certainly frustrated with the snail’s pace of it all.

And by now everyone who has ever uttered the words “education reform” is a little frustrated. More than a decade later, billions more in taxpayer dollars, in addition to the billions heaped on by private philanthropy, has been spent to achieve largely mediocre to poor overall results. There are pockets of hope, and we do have much better data. Now we know there is not only an achievement gap between minorities and whites, but also between all U.S. students and children in other countries.

It’s not clear that if we had full blown school choice, the end of teacher tenure, higher standards, or whatever flavor of education reform you favor, that every child would have the opportunity to reach their full potential. Certainly, one or some combination of those things would help many children; but we would still have kids who live in poverty and very unsettled home situations coming to school every day with needs that are beyond what can be addressed by education reform alone.

One thing I have both experienced through relationships with students I’ve met through CSF and observed in the lives of others is that a caring adult who really invests in an authentic relationship with a child will bring enormous benefits to the child, to say nothing of the rewards to the adult. I know Ted and John both experienced this with children they helped directly apart from their education reform efforts. John once told me on a school visit in Omaha that giving the scholarships and meeting the kids and their parents grounded the whole effort of trying to reform the larger system. He knew no matter what happened with those efforts, he was having a direct impact on the lives of kids today.

We can’t stop trying to get education right in America, but maybe we will get further faster if every adult who can gets involved in the life of a child who has a couple of strikes against them. Whether it is through a mentoring program, a scholarship program, a school-based program, or some other means, it could make the ultimate difference in a child’s life, and you don’t have to be up to speed on the latest education reform idea to do it and make it work. Anyone who is willing to give of themselves to another human being will bring about change in that person and themselves. Isn’t that the real reason we are all here anyway?

(January 25-31, 2015 is National School Choice Week, an annual public awareness effort in support of effective education options for all children. A version of this Commentary was published in 2014.)

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Press Release: Legal Analysis Finds Land Board in Breach of Trust over Elliott State Forest

November 25, 2014

FOR IMMEDIATE RELEASE

Media Contacts:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

Kathryn Walter
617-519-6168
kwalter@altuslaw.com

 

PORTLAND, Ore. ― A detailed legal analysis released today by Cascade Policy Institute concludes that the State Land Board, which has responsibility for the Elliott State Forest, has not prudently managed this asset and likely has breached its fiduciary trust to generate maximum net revenue over the long term for K-12 schools, as required by the Oregon Constitution.

The Elliott is a 93,000-acre forest on the south coast. It is part of a portfolio of lands known as “Common School Trust Lands” (CSTL), and these lands must be managed as endowment assets for public schools. The State Land Board, comprised of the Governor, the Secretary of State, and the Treasurer, manages all Trust Lands.

For over 30 years, the net revenue from the Elliott has been steadily declining. In 1994 a consultant to the Oregon Department of Forestry recommended that the Board divest itself of the Elliott entirely, stating that, “Selling the Elliott is the only marketing alternative likely to significantly increase net annual income to the CSF.”

In 1995, the Division of State Lands (as it was then known) recommended that the Board sell all 3.4 million acres of Trust Lands for the same reason. Both recommendations were rejected by the Board.

In 2013, the Elliott actually lost $3 million, prompting the Board to sell 2,800 acres. On December 9, 2014, the Board will consider recommendations from the Department of State Lands for a “new business model” for the Elliott.

Trust law requires that trustees exercise reasonable care and skill in managing a trust and make trust property productive. Trustees must also preserve trust property and defend actions that may result in loss to the trust and must act with absolute loyalty to the beneficiaries. Failure to carry out these duties is a breach of the trustee’s fiduciary duties.

The Cascade legal analysis, undertaken by Portland attorney Kathryn Walter, concludes that:

  1. The Board is not prudently managing the trust land assets. Although a trustee is not charged with 20/20 hindsight, the trustee must be able to explain the reasoning behind an investment strategy. Only recently has the State Land Board attempted to understand the value of the Elliott State Forest. Further, the Board has ignored recommendations to divest all trust land holdings.
  1. The Board should have known that doing nothing was imprudent. The Board, by its inaction, has breached its duty by failing to dispose of the Elliott State Forest when the opportunity presented itself and, by waiting too long, has left the trust with devalued property.
  1. The Board must protect the trust from loss, including insuring trust property against loss and when facing litigation or other claims implicating the trust. A trustee is also obligated to defend the trust against claims, to avoid claims of liens and other losses, and to pay taxes. The Board failed to fulfill its duties by not negotiating a Habitat Conservation Plan (“HCP”), which would have alleviated the impact of the federal Endangered Species Act (ESA) on the Elliott.
  1. The appointment of the State Land Board as trustee in Oregon’s constitution likely violated trust principles from the trust’s beginning. A trustee has a duty to act honestly and with undivided loyalty to the interests of the trust and its beneficiaries. By virtue of the Board members’ political roles, the Board members cannot offer undivided loyalty to the beneficiaries because they are beholden to so many competing interests.

Cascade Policy Institute President John A. Charles, Jr. stated, “During 2013, the Land Board managed to lose $3 million on a timber asset worth some $500 million, while the S&P 500 Index was enjoying total returns of 32%. When the Land Board meets on December 9, it must take action to ensure that the Elliott State Forest begins generating income for public schools.” Cascade has recommended that the Board either sell the Elliott, or explore a land exchange with the federal government.

Charles also noted, “Since the Land Board is a highly political entity, the state legislature in 2015 should consider establishing a new, non-political board to assume management responsibilities for all Common School Trust Lands.”

The full report by Cascade Policy Institute may be viewed here.

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Molalla Patriots

Join us as Kathryn Hickok will be presenting to the Molalla Patriots on the subject of Common Core.

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Testimony on Measure 86 to Portland Community College Board

The following testimony was presented to the Portland Community College Board at their meeting on September 18, 2014.  The Board then voted 5 to 2 in favor of a Resolution giving their support to the Oregon Opportunity Initiative, Measure 86 on the November ballot.

Testimony before the Portland Community College Board in Opposition to the Oregon Opportunity Initiative (Measure 86):

Good evening, Chair Palm and members of the Board. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research organization based in Portland.
I urge you to reject this Resolution for the following reasons:

First, you have no assurance that any funds generated by the Opportunity Initiative won’t simply replace funds the legislature already allocates to higher education. Plus, there’s no assurance that one community college student will benefit. Decisions about what, if any, funding will benefit specific students will be left to some unnamed public body, subject to the same lobbying efforts the legislature faces now.

Second, even if the Opportunity Initiative helps some students in the short run, it will make the whole system less affordable in the long run. Such third-party payments from states and the federal government are a big part of the reason that college costs and student debt are rising rapidly.

I’m sure you work hard to keep student prices under control. But, to the extent that Measure 86 puts more taxpayer money in student pockets, it will take some pressure off you to do so.

Third, I’m not sure voters understand that even if the Treasurer’s optimistic investment assumptions for Measure 86 work out, income taxpayers will be on the hook to repay all the principal and interest on any bonds issued by the state for decades into the future.

Before asking taxpayers to repay those bonds for the next thirty years, you might consider how technology is beginning to reduce higher education costs.

One Oregonian who recognizes the power of the coming technological revolution is the chief sponsor of the Oregon Opportunity Initiative himself, Treasurer Wheeler. Last October in a public meeting, he criticized the university system for being…

“…very slow to adapt the opportunities around technology.” He said that “there’s a lot of institutional inertia in the university system just as there is in Salem. And, all of these new technologies have opened up new windows to learning that do not require a student to even be in the same state.” He noted that online programs such as iTunes University on his own smartphone “don’t cost…a cent” and are a “game changer” that “undercut the entire economic model of the university system as it currently exists today.” *

So, if technology will put downward pressure on college costs, why saddle Oregon taxpayers with perhaps one hundred million dollars or more in debt over the next 30 years to fund the current high-cost model?

Finally, based on recent ACT test scores, only 30 percent of Oregon’s high school graduates are competent enough at English, reading, math and science to pass freshman college classes. Before you encourage more spending on higher education, shouldn’t we find ways for our public school system to prepare most college-bound students to actually succeed there? Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.

Wouldn’t you rather see every new PCC student ready for college-level courses, rather than dump more of your limited budget into teaching them what they should already know?

In conclusion, whatever the value of a college degree is to an individual, it’s becoming clear that Opportunity Initiative state funding of those degrees is likely to cost taxpayers more than they gain. I urge you to reject the Oregon Opportunity Initiative.

Thank you.

* Ted Wheeler, Washington County Public Affairs Forum, October 28, 2013.
59-second answer: youtube.com/watch?v=ZMPMtmEyieg.
Entire hour-long presentation with Q&A: youtube.com/watch?v=l1hYXGA3CLA.
Relevant question starts at 52:16.

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