STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS - Government of Ontario

TOPIC: UNREALIZED COST-EFFICIENCIES AT THE MINISTRY OF EDUCATION

January 23, 2014

Submitted by : Bill Templeman,

btemp@sympatico.ca http://savelocalschools.com/

Note: This submission has been prepared to be read either online or printed as hardcopy. All references whether hyperlinks or actual documents have been numbered. The contents of hyperlinks or documents have been numbered and listed in the Documents Cited section at the end of this submission

PREFACE:

As I stated during my presentation (1) on January 15, there are significant opportunities for cost-savings in the Ministry of Education (MOE), particularly with regard to the Ministry’s policies regarding the consolidation of schools due to low enrollment in many parts of Ontario.

To summarize: the MOE is enabling school boards to deal with low enrollment by closing small, neighbourhood schools and busing students to large, consolidated schools. Clearly the option of closing schools is the easiest way to remedy low-enrollment. The goal of this submission is to make the point that the easier response is not the best response in terms of cost savings for tax payers. The MOE could save significant expenses by keeping most low-enrolment schools open and sharing use with appropriate community agencies. Communities would get to keep their neighbourhood schools, community agencies would find appropriate accommodation at affordable rates and school boards would earn rental income.

THE FISCAL CASE FOR CLOSING SCHOOLS AND SCHOOL CONSOLIDATION: MYTH VS. FACTS

Across Canada, public school enrolment is dropping. For example, the Hamilton-Wentworth District School Board has more than 11,000 extra spaces in its 113 schools; board officials believe that up to 30 schools may have to be closed. The board believes it has no choice. This scenario is playing out across the country, with the exception of areas experiencing high immigration, mainly large metropolitan areas like Toronto.

For education planners and school boards, this means excess capacity and an opportunity to build more efficient alternatives. The conventional wisdom is to close half-empty schools. The preferred code words for “school closures” are “school consolidation.” Small neighbourhood schools with falling enrolment are being closed, with their students being bused to larger conglomerate schools. Busing kids to school is seen as a worthwhile trade-off to provide more modern facilities that can offer a larger range of courses. School consolidation is assumed to be a way of creating greater efficiencies, while providing enhanced learning opportunities for students. Both these assumptions are wrong. As the following research shows, closing schools:

· Doesn’t save money

· The resulting large, bus-fed schools produce inferior academic and behavioural outcomes.

Researchers in the U.S. have shown that the savings touted by proponents of school consolidation rarely materialize once the small neighbourhood schools are closed. Why do Canadians refuse to learn from U.S. mistakes? Recent U.S. research (2) shows that the cost savings from school consolidation are not born out in fact:

“• In many places, schools and (school boards) are already too large for fiscal efficiency or educational quality; deconsolidation is more likely than consolidation to achieve substantial efficiencies and yield improved outcomes

•Financial claims about widespread benefits of consolidation are unsubstantiated by research about cost savings. … The assumptions behind such claims are most often dangerous oversimplifications. School closures often result in extra costs due to more mid-level administration, added expenses of transportation, management, and the like

•Claims for educational benefits from systematic statewide school and (school board) consolidation are vastly overestimated and have already been maximized. Schools that are too large result in diminished academic and social performance ….

•Overall, state-level consolidation proposals appear to serve a public relations purpose in times of fiscal crisis, rather than substantive fiscal or educational purposes….”

Dr. Allan Lauzon, a researcher at the University of Guelph, in his 2000 study Rural Schools and Education Reform: Should We Keep Rural Schools Open (3) concludes:

“First, there is little empirical evidence for cost savings that can be realized through consolidation and board closures. The literature reveals that this is a contentious issue and that differences in outcomes are dependent upon on how administrators and politicians calculate the costs and savings. The alleged savings that can be realized at this point appear to have more to do with rhetoric and ideology than they have to do with the empirical realities of what we currently know. There is a need to have clear principles for making these calculations and it must account for the consequent educational outcomes. This is particularly important given the preponderance of evidence supporting that small schools are more effective pedagogically than larger schools, particularly for disadvantaged and marginalized youth. Furthermore, there needs to be accounting of the impact upon student’s lives and their development. Education is about more than simply class room learning, but much of the education of students occurs as a result of being an active and participating member of a community. It is here where students learn their first lessons in civic and social responsibility. It is here where students learn lessons in compassion, empathy, and leadership. Not through textbooks and classrooms but through their active participation and involvement in their school community. Consolidation often negates this opportunity for many students to participate in these activities as a result of long rides to and from school, or as a function of school size. As stated in the review, it is only a select group of students in large schools who have the opportunity to become members of communities that share time and space with adults. Giessen (1998), reflecting on the nature of large schools and paraphrasing the Carnegie Council, characterizes large schools as “mills” whose main function is to “process” the masses of anonymous youth into an endless stream of students.”

Research from Pennsylvania (4) shows that in many cases, renovating existing schools makes more fiscal and educational sense than building large consolidated schools. Furthermore, students do better in smaller schools:

Students in small schools have better attitudes toward school and higher attendance rates

· They do better in standardized tests

· Students in small schools are more likely to participate in extra-curricular activities

· There are fewer discipline problems in small schools

· Students feel safer and more secure in small schools because they are well known by their teachers and their peers

· Studies of schools in places as diverse as New York City and Nebraska show that small schools are less expensive in terms of “cost per student who eventually graduates” rather than simply “cost per student enrolled.”

· Drop-out rates are higher in large schools

· Small schools with many grade levels make ideal neighborhood schools. Families know their children will attend a nearby school for many years. The school lends a sense of permanence to the neighborhood and helps keep it healthy. But above all, it can be a superior place to learn

Another study (5) of several American states finds that school consolidation does not reduce costs. If school consolidations do not save money or provide better learning outcomes for students, why are they unfolding with such disastrous regularity? Why are we wasting tax dollars on solutions that we know will not work?

What are impacts of these closures? Are there any policy alternatives to school consolidation?

One solution would be to seek partnerships with other education institutions, social service agencies, and community groups to establish multi-usage of school facilities and cost-sharing. Keep small neighbourhood schools open by sharing building space with others. Make more effective use of technology to provide enriched curriculum in smaller schools.

According to Dr. Kenneth Leithwood, (6) of the Ontario Institute for Studies in Education, a high school with as few as 500 students can offer the core provincial curriculum. He concludes:

“Smaller schools are generally better for most purposes. The weight of evidence provided by this review favours smaller schools for a wide array of student outcomes and most organizational outcomes as well. ...Cost efficiency is no longer a justification for large schools. Most contemporary studies have concluded, unlike an earlier generation of studies, that small schools are more efficient or cost effective. Small secondary schools manage to graduate a significantly larger proportion of their students than large secondary schools.”

The current funding arrangement for the construction of new schools has created what Arthur Cockfield, a Queen’s University law professor refers in his Jan.19, 2014 Toronto Star article (7) to as ‘moral hazard’ for school boards.

“After the Liberals came to power in 2003 they changed how new school constructions would be funded. Under the old rules, local school boards had to pay for new builds out of their own budgets. The new rules changed this so that new school constructions would now be paid out of provincial coffers. The new regime creates what economists call a “moral hazard,” where school boards neglect renovation costs at existing schools, then request new school funds from the province because they know their own budgets will be unaffected, even though Ontario taxpayers bear the cost nonetheless.”

Dr. Cockfield goes on to state:

These construction projects are contributing to soaring education costs: a year ago the Ontario government, as part of what has become an annual ritual, trumpeted an additional $711 million for new construction, retrofits or additions for schools. Astonishingly, the total cost for new construction exceeds $12 billion since the Liberals came into power back in 2003. Despite opposition from parents and students in cities like Hamilton and Peterborough, hundreds of schools have been closed to pave way for new schools. And all these costs were incurred while the Liberals were blaming our teachers for their fiscal woes.

Are government and school board leaders aware of these research findings concerning negative cost savings plus poor academic and behavioural outcomes for large, consolidated schools?

Why do the MOE and board administrators choose to ignore these findings when they advise trustees on school closures? Are provincial ministers of education aware of these research findings? Or do these findings clash with an outdated ideology?

In Peterborough, we suspect that our local board, the Kawartha Pine Ridge District School Board (KPRDSB), did not fully disclose the Facility Condition Index for one of its prohibitive-to-repair schools, ASCVI, during the Peterborough 2010-2011 Accommodation Review Committee process for a questionable reason. By not using current FCI numbers for ASCVI, this school was removed from consideration for closure, thereby freeing the KPRDSB to close a perfectly sound and successful smaller downtown school, PCVS. The Board hoped that after the ARC and the closure of PCVS, it could simply request that ASCVI be replaced, citing its former PTR designation. Had PCVS remained open, the MOE could have maintained, quite rightlty, that there would have been more than enough student seats among the Board’s 4 surviving city secondary schools, thereby negating the need for a new school. So now the Province may have to foot the bill for a new school that, before the closure of PCVS, the community did not need, and as it turns out, still does not need.

I respectfully request that this committee take prompt action to address the spending waste described here as generated by the MOE. Clearly their funding policies for new school construction and school consolidation need to aligned more closely with the current fiscal situation facing this government, to say nothing of other government legislation promoting healthy communities and urban hubs such as Places to Grow. During difficult financial times, families make prudent decisions about spending on new products, versus repairing and ‘making do’ with older products. Can we not act with the same prudence when dealing with low enrollment and consolidating schools? Clearly Ontario’s school boards are, with the MOE’s blessing, using the low enrollment situation to needlessly update their building inventory at the expense of Ontario’s tax payers and to the detriment of Ontario’s students.

SUGGESTIONS FOR SAVING MONEY:

(1) Return to small boards with local control

(2) Renovate old neighbourhood schools rather than build new suburban super-schools

(3) Adjust the funding formula so that local school boards pay for their own busing and their own construction of consolidated school

(4) MOE needs to provide more direct governance over school boards to monitor spending

(5) School closure processes are very costly for boards and school communities; insist that boards follow Ministry guidelines

(6) MOE must set binding rules for up-to-date Facility Condition Reports in making school closure decisions. Some schools may still need to be closed, but in many cases neighbourhood schools can be saved by sharing usage with appropriate community groups

(7) Stop the funding of renovations and new school construction and start sharing the use of space in under-utilized schools by renting out floor space to appropriate community groups. Imagine the synergies to be realize by having a seniors recreation program, a day-care or a municipal library located within a school. Students could do their volunteer hours right in the school building. And school boards would earn rental income

For more information, please visit: http://savelocalschools.com/

________________________________________________________

Sign our Open Letter to Premier Kathleen Wynne and Education Minister Liz Sandals requesting a moratorium on all Ontario school closures.

________________________________________________________

DOCUMENTS CITED

(1) Presentation given in Peterborough on Jan. 15

(2) Consolidation of Schools and Districts: What the Research Says and What it Means, Howley, Johnson & Petrie, 2011, Ohio University

http://files.eric.ed.gov/fulltext/ED515900.pdf

(3) Rural Schools and Education Reform: Should We Keep Rural Schools Open, Lauzon & Leahy, 2000, University of Guelph Rural Schools and Education Reform: Should We Keep Rural Schools Open

(4) Renovate or Replace? The Case for Restoring and Reusing Older School Buildings, The Pennsylvania Department of Education, http://www.saveourlandsaveourtowns.org/pdfs/RenovateorReplace/RoRMASTER.pdf

(5) The Fiscal Impacts of School Consolidation: Research Based Conclusions, The Rural School and Community Trust, 2003

http://www.ruraledu.org/articles.php?id=2042

(6) Review of the Empirical Evidence About School Size Effects, Leithwood & Jantzi, 2007, University of Toronto, Ontario Institute for Studies in Education (OISE), http://www.edu.pe.ca/esd/pdf/sop_Review_of_Evidence_about_School_Size_%20Effects.pdf

(7) Stop Soaring School Cost in Ontario, Arthur Cockfield, Jan. 19, 2014, The Toronto Star, |http://www.thestar.com/opinion/commentary/2014/01/19/stop_soaring_school_costs_in_ontario.html

For more information on these topics, please go to http://savelocalschools.com/

DOCUMENTS CITED APPENDIX

(1)STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS - Government of Ontario

TOPIC: UNREALIZED COST-EFFICIENCIES AT THE MINISTRY OF EDUCATION

Peterborough, January 15, 2014
Presenter: Bill Templeman,
btemp@sympatico.ca

Note: A document providing full background, references, and supporting arguments on this topic will be submitted by January 23^rd. The following points are merely a summary of this document. Some the research referred to here is available at http://savelocalschools.com/

CONTEXT: The Ministry of Education (MOE) and local school boards across Ontario are confronting a low-enrollment crisis. The MOE is responding to this crisis by appearing to do nothing to prevent school boards from closing neighbourhood schools and older schools in favour of consolidating programs and busing students to large, regional schools. The MOE is failing to intervene in board decisions to enforce cost effectiveness

1. Low-enrollment – a challenge for educators, schools and communities. Half-empty schools, building costs, limited programming options, MOE’s funding formula

2. MOE’s response – school consolidation, busing, more programming options, bigger schools

3. MOE’s vision – every secondary school can offer the full Ontario Curriculum –administratively attractive, practically unworkable, not all schools have to be all things to all students, small specialized schools have been very successful, MOE’s funding formula drives school board decisions, school boards do not consider busing as an expense as costs are covered by MOE

4. MOE needs to make their accommodation review guidelines binding on school boards in order to enforce fiscal discipline and respect for tax dollars

5. Problems with consolidated schools – inferior behavioural & academic outcomes, lack of cost savings, the absence of a “low-enrollment dividend” for tax payers, better to renovate old schools than build new (‘make do’), poor business decisions made by trustees who in many cases lack experience in strategic business decision making

6. Impact of school consolidation on communities, lack of alignment with Places to Grow --Ministries need to act in alignment and respect each others’ regulations –MOE permits school boards to over-ride Places to Grow by closing downtown schools, lower property values, small business impacts, environmental impact of busing, less walking/biking to school, increased transportation costs

7. Alternatives to consolidated school – shared use of community schools, keep neighbourhood schools open, provide programming options online, cluster of schools for program diversity

8. Research findings – smaller schools less costly to operate, better learning and behavioural outcomes, the programming advantages of large schools over-ridden by student academic performance results

9. Suggestions for saving: (1) return to small boards with local control (2) renovate old neighbourhood schools rather than build new suburban super-schools (3) MOE needs to provide more direct governance over school boards to monitor spending (4) school closure process very costly for boards and communities, insist boards follow Ministry guidelines (5) MOE must set binding rules for up-to-date Facility Condition Reports in making school closure decisions. Some schools may still need to be closed, but in many cases neighbourhood schools can be saved by sharing usage with appropriate community groups

(2) CONSOLIDATION OF SCHOOLS AND DISTRICTS:

WHAT THE RESEARCH SAYS AND WHAT IT MEANS

Craig Howley, Jerry Johnson, and Jennifer Petrie, Ohio University

http://files.eric.ed.gov/fulltext/ED515900.pdf

Executive Summary

Arguments for consolidation, which merges schools or districts and centralizes their

management, rest primarily on two presumed benefits: (1) fiscal efficiency and (2) higher

educational quality. The extent of consolidation varies across states due to their

considerable differences in history, geography, population density, and politics. Because

economic crises often provoke calls for consolidation as a means of increasing

government efficiency, the contemporary interest in consolidation is not surprising.

However, the review of research evidence detailed in this brief suggests that a century of

consolidation has already produced most of the efficiencies obtainable. Indeed, in the

largest jurisdictions, efficiencies have likely been exceeded—that is, some consolidation

has produced diseconomies of scale that reduce efficiency. In such cases, deconsolidation

is more likely to yield benefits than consolidation. Moreover, contemporary research

does not support claims about the widespread benefits of consolidation. The

assumptions behind such claims are most often dangerous oversimplifications. For

example, policymakers may believe “We’ll save money if we reduce the number of

superintendents by consolidating districts;” however, larger districts need—and usually

hire—more mid-level administrators. Research also suggests that impoverished regions

in particular often benefit from smaller schools and districts, and they can suffer

irreversible damage if consolidation occurs.

For these reasons, decisions to deconsolidate or consolidate districts are best made on a

case-by-case basis. While state-level consolidation proposals may serve a public relations

purpose in times of crisis, they are unlikely to be a reliable way to obtain substantive

fiscal or educational improvement.

Recommendations

As is evident in the above summary, findings based on available research suggest that

decision makers should approach consolidation cautiously. Specifically, we recommend

that policymakers:

• Closely question claims about presumed benefits of consolidation in

their state. What reason is there to expect substantial improvements, given that

current research suggests that savings for taxpayers, fiscal efficiencies, and

curricular improvements are unlikely?

Avoid statewide mandates for consolidation and steer clear of

minimum sizes for schools and districts. These always prove arbitrary and

often prove unworkable.

• Consider other measures to improve fiscal efficiency or educational

services. Examples include cooperative purchasing agreements among districts,

combined financial services, enhanced roles for Educational Service Agencies,

state regulations that take account of the needs of small districts and schools,

recruitment and retention of experienced teachers for low-wealth districts,

distance learning options for advanced subjects in small rural schools, smaller

class sizes for young students, and effective professional development programs.

• Investigate deconsolidation as a means of improving fiscal efficiency

and improving learning outcomes.

Please click on the above link for the remainder of this 27-page document

(3) RURAL SCHOOLS AND EDUCATION REFORM: SHOULD WE KEEP RURAL SCHOOLS OPEN

Lauzon & Leahy, University of Guelph

Introduction

Rural Schools and Education Reform: Should We Keep Rural Schools Open

Rural school closure is not new. Educational reform in the Canadian context has been

characterized by a continual process of reform and consolidation since its inception as a public

service. Originally, in the earliest days of public education in Canada, the structure for school

governance was quite simple. According to Gallagher (1995), schools were an essential element

of the social and cultural fabric of community life. People, even those who did not have school

age children, were still close to the school and in many ways part of school life.

Organizationally, schools were governed by a board of elected trustees whose job was to govern

and manage the local school, ensuring that it adhered to the provincial guidelines. Typically,

each community had one school and one board of trustees, except for those larger urban

communities where one board of trustees might be responsible for the governance and

management of several community schools (Gallagher, 1995). While this structure served both

children and communities well, school does not operate independent of the larger social and

economic forces. At the end of World War II Canada was increasingly becoming urbanized and

consequently patterns of schooling and school board activities changed. It is during these years

that education is radically altered through its professionalization. The increasing use or need for

professional managers in education leads to undermining any sense of community ownership.

Furthermore, with education becoming professionalized there are further changes in governance with school boards moving from being local to regional. The consequence, according to Gallagher (1995: 67) was that “Schools were now more distant, in many respects, from many of the community members whose children they were intended to serve.” Also during this period the cost of education increased. Some communities, unable to raise sufficient funds to cover the cost of education, became dependent upon provincial grants in an attempt to ensure educational equity. Subsequently, community members become even more detached from schooling and there was a rapid decline in commitment to education, causing a rift between those who have children and those who do not. Gallagher (1995) argues that the consequence was further marginalization of parents and community members from the educational process and the school.

Howley (1997: 2) characterizes education during this period as “part of the march of progress

toward an inevitably better future - a progressive, postwar and increasing post-rural future.”

Between 1971 and 1991 there was a significant growth in the number of teachers and

administrators employed as the professionalization of education continues. In response to the

further estrangement of parents and community members from schools, there were attempts

made to involve lay constituencies in education. However, despite the collaborative rhetoric,

community members still remained passive spectators to the educational enterprise. Gallagher

(1995: 69), in summarizing this period of education, concludes that

What had been community-based schools became the domain of hired,

professional, expert teachers and administrators, and of school trustees whose

personal agendas often went well beyond the establishment of school policy.

What had once been a community based and supported enterprise had been transformed into a

professional activity where those who had the greatest interest - parents of children - had the

least power or authority to play an active role in the educational enterprise.

Recently we have once again embarked on another round of reform and consolidation of

education in Canada. In a time of increased need for economic efficiency in order to combat

provincial deficits, Canadian provinces have turned to the idea that by increasing the size of

administrative units within education a savings can be created while at the same time providing an education of greater quality (Gallagher, 1995).

Please click on the above link for the remainder of this 18-page document

(4) REVIEW OF THE EMPIRICAL EVIDENCE ABOUT SCHOOL SIZE EFFECTS, Leithwood & Jantzi, Univeristy of Toronto, Ontario Institute for Studies in Education (OISE),

http://www.edu.pe.ca/esd/pdf/sop_Review_of_Evidence_about_School_Size_%20Effects.pdf

This document could not be copied, please access via the above link.

(5)THE FISCAL IMPACTS OF SCHOOL CONSOLIDATION: RESEARCH BASED CONCLUSIONS, The Rural School and Community Trust,

http://www.ruraledu.org/articles.php?id=2042

The Fiscal Impacts of School Consolidation: Research Based Conclusions

Last Updated: June 01, 2003

Consolidation proponents often argue that consolidating schools and/or districts will lower per pupil costs. But a stream of studies over half a century casts doubts on this assumption.

Many consolidation decisions are justified in part on projected cost savings. These projections are based on standard economic theory regarding "economies of scale. Theoretically, certain fixed costs -- such as the number of administrators or the amount spent on utilities -- do not increase, and may even decrease, when the number of students in a school or district increases with consolidation. With more students and the same or lower costs, the total cost per student should come down. Some analysts and many consolidation proponents accept as an article of faith that larger schools and larger districts have lower costs per pupil than smaller ones.

But the relationship between size and cost is not that clear, as the many studies reveal:

An early study by Hirsch (1960) of 29 school districts near St. Louis reviewed costs not only on a per pupil basis, but based on number of pupils per square mile, and rate of increase in enrollment. Hirsch concluded that there were no consistent economies of scale, and that sharing academic programs would be a more cost-effective way than consolidation to deal with the fiscal problems of districts.
A quarter of a century later, Valencia (1984) reviewed 40 studies on the impact of school closures on costs and other factors. He concluded that "closing schools reduces per-pupil costs very little, if at all." One of the leading studies Valencia reviewed (Andrews 1974) examined school closures in 49 districts nationwide. Of the 49 districts, 35 had projected cost savings in support of the proposed closures. Andrews compared these projections with the actual changes in cost after the closures. Of the 35, only 12 had actually calculated the changes in cost after the closures. Of the 12, only four were able to report actual savings, six concluded the closures had no cost impacts, and two reported actual cost increases.
Later, Jewell (1989) studied data from 50 states and the District of Columbia and found that per pupil cost and student enrollment were not statistically related, suggesting that there are no economies of scale.
At the same time, Kennedy et al (1989) analyzed 330 school districts in Arkansas and found very slight correlations between district size and cost per student (measured as Average Daily Attendance), with the cost being lower in the larger districts. Test scores at some grade levels were higher in smaller districts and some were higher in larger districts. Larger districts were also more likely to have higher drop out rates. All of these correlations, however, were very slight and not practically significant. The authors concluded that "there is no evidence to suggest that consolidation of small school districts into larger ones will necessarily reduce expenditures per student, increase standardized test scores, or reduce dropout rates."
More recently, Streifel et al (1991) analyzed the revenue and expenditure changes for three years before and after 19 school district consolidations, comparing the rate of change to the state average rate of change. The 19 were selected from information supplied by state departments of education. Five of the 19 were in Arkansas. He found a no statistically significant relationship between changes in the total cost per pupil of the consolidated districts and the other districts in the same states and concluded that "…there appears to be no overall basis for expecting that significant financial advantage or increased revenue are necessary outcomes of consolidation."
And most recently, the Charleston Gazette, in a national award winning series of articles on the cost of school closings in West Virginia, found that over a ten year period the state closed 325 schools in pursuit of economies of scale, and in doing so substantially increased the number of central office administrators, despite the fact that the number of students being served by the system declined by 41,000 in this period. Meantime, per pupil transportation costs more than doubled (Eyre and Finn 2003).

Why do costs increase with consolidation, and what kinds of costs increase?

Projected cost savings from consolidation are either temporary or illusory because lower costs in some expenditure categories are often offset by higher costs in other areas.

Streifel's study noted above is revealing. He analyzed the expenditure patterns before and after consolidation for six expenditure categories (administration, instruction, transportation, operation and maintenance, total cost, and capital costs). Of these six, only savings in "administrative costs" was related to consolidation at a statistically significant level. Consolidated districts increased administrative costs 10 percent while the average cost increase was 31 percent. Although this relationship was statistically significant, the relationship was not uniform. In three of the 19 consolidation cases, including one of the Arkansas districts, the district administrative costs actually increased more than the state average.

But what might have been saved in administrative costs was often more than offset by increases in other costs. As a result, although not statistically significant, total costs per pupil actually increased more in the 19 consolidating districts than statewide average increases (32% compared to 29%), including in three of the five Arkansas districts.

It is interesting that in the category of "instruction costs" (where one might expect any savings from lower administrative costs to be shifted in the interest of educational quality improvement) the increases in spending in the 19 consolidating districts were actually lower than the state average increases in spending (25% compared to 29% overall, and in 11 of the 19 districts individually).

And significantly, Streifel found that whether a consolidation proved fiscally advantageous or disadvantageous with respect to a particular expenditure category did not depend on how big the consolidating districts or the resulting consolidated districts were.

Consolidation and Equity

Valencia (1984) also concluded from this literature search that schools with large percentages of low-income and minority students have experienced most of the closings in five major cities, and that the school closings reduced parental involvement in children's education and decreased public support for educational bond levies. These impacts raise significant equity issues. In Phoenix, a federal court agreed with plaintiffs who filed a lawsuit claiming that consolidation decisions unfairly selected a minority school for closing. The court ruled that the plaintiffs "have a right to expect that the administration of the schools of this city will be done fairly, without discrimination or undue adverse impact to any particular segment of the student population."

Reasons Why Consolidation May Impose Fiscal Hardships

Numerous reasons have been suggested for the increased costs or reduced revenues that may result from consolidation (Sher and Tompkins 1977):

Moving personnel from salary schedules of smaller schools and districts to higher salary schedules of larger schools and districts. Increasing bargaining power of teachers.
More specialized staff
Higher costs of having to transport more kids longer distances.
Higher rates of vandalism
Lower support for bond levies
Need for new and larger facilities

Some of these changes may result in improved school performance. Some clearly do not.

The Fiscal Impacts of the Socio-Economic Effects of Consolidation

The socio-economic impact of schools on communities is significant, and school closures reduce the fiscal capacity of local communities to provide support for education.

Lyson (2002) analyzed data from all 352 incorporated villages and towns with populations of under 2,500 in New York State, almost all of which had had a school at one time. He compared the 71 places with 500 or fewer people with the 281 with more than 500 people. Almost three-fourths of the larger group had a school (73.7%), while only about half (52.1%) of the smaller group did. Those with and without schools in each of the size categories had similar age level profiles, percent of households with children, and percent of children enrolled in school, but the economic and fiscal capacity of the communities without schools was much lower than that of the communities with schools. Among the smaller size grouping of towns and villages:

Sixty percent of the communities with schools saw population growth from 1990 to 2000; only 46 percent of those without schools grew.
Average housing values in the communities with schools are 25 percent higher than in those without schools. Their houses are newer, and more likely to be served by municipal water and sewer systems.
Communities with schools enjoy higher per capita incomes, a more equal distribution of income, less per capita income from public assistance, less poverty and less child poverty.
Communities with schools have more professional, managerial, and executive workers; more households with self-employment income; 57 percent higher per capita income from self- employment; a higher percentage of residents who work in the village; and fewer workers who commute more than 15 minutes to their jobs.
The differences between larger rural communities with schools and those without were similar, but not as extreme as the differences in the smaller communities.

An earlier similar study reached similar conclusions. Dreier and Goudy (1994) compared population changes in incorporated Iowa towns that had or did not have a high school. Half the communities with a high school gained a significant amount (5 percent or more) of population over 2 or more decades while three-fourths of communities without a high school were losing population. They concluded that a community without a high school loses population faster than all communities losing population during the same time period.

Sederberg (1987) studied the secondary economic impacts of school districts in six rural Minnesota counties and found:

School district payroll ranged from 4-9 percent of total county payroll.
Total take-home pay from school district jobs ranged from 5-10 percent of the counties' retail sales.
School district expenditures ranged from 1-3 percent of total retail sales.
People employed by the school district ranged from 1-5 percent of all employed people in the counties.

Finally, Petkovich and Ching (1977) examined changes in retail sales and total labor supply that could be expected if the local high school in an agricultural community in Nevada were closed. An input-output model constructed from survey data predicted that closing the high school would produce an eight percent decrease in retail sales and a six percent decrease in labor supply.

Conclusion

School and school district consolidation produces fewer fiscal benefits and more fiscal costs than is popularly believed. Administrative cost savings are most likely, but these savings may often be largely offset by other cost increases, especially for transportation. Consolidating schools can also adversely affect the local economy, reducing the fiscal capacity of the school district. These costs are disproportionately imposed on poor and minority communities.

References:

Dreier, William H.; Goudy, Willis (1994). "Is There Life in Town after the Death of the High School?" or High Schools and the Population of Midwest Towns. Paper presented at the Annual Rural and Small Schools Conference, Manhattan, KS, Oct 24, 1994.

Eyre, Eric, and Scott Finn (2002). Closing Costs: School Consolidation in West Virginia. Series on the costs of school consolidation running August 25 and 30, September 8, 12. 24, and 29, and October 3 and 6, 2002.

Hirsch, W.Z. (1960). Determinants of Public Education Expenditure. National Tax Journal, 13(1), pp 29-40.

Jewell, R.W. (1989). School and School District Size Relationships. Education and Urban Society, Feb 1989, pp. 140-153.

Kennedy, Robert L. et al. "Expenditures, MAT6 Scores, and Dropout Rates: A Correlational Study of Arkansas School Districts," ERIC Accession No. ED303910, Jan. 1989.

Lyson, Thomas A. (2002). What Does a School Mean to a Community? Assessing the Social and Economic Benefits of Schools to Rural Villages in New York. Department of Rural Sociology
Cornell University, Ithaca, New York.

Petkovich, M. D., & Ching, C. T. K. (1977). Some Educational and Socio-Economic Impacts of Closing a High School in a Small Rural Community. Reno, NV: Agricultural Experiment Station, Max C. Fleischmann College of Agriculture, University of Nevada.

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(7) STOP SOARING SCHOOL COST IN ONTARIO, Arthur Cockfield, Jan. 19, 2014, The Toronto Star, |http://www.thestar.com/opinion/commentary/2014/01/19/stop_soaring_school_costs_in_ontario.html

Stop soaring school costs in Ontario

Ontario school boards are neglecting repairs, which they have to pay for, and forcing the province to spend billions on new schools.

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While recent media attention has focused on Ontario students’ dismal math performance and the government’s “discovery” curriculum approach to learning math, another government education scandal has escaped broad public scrutiny. The provincial government spends billions on budget-busting new school construction that thwarts the interests of students throughout the province.

After the Liberals came to power in 2003 they changed how new school constructions would be funded. Under the old rules, local school boards had to pay for new builds out of their own budgets. The new rules changed this so that new school constructions would now be paid out of provincial coffers. The new regime creates what economists call a “moral hazard,” where school boards neglect renovation costs at existing schools, then request new school funds from the province because they know their own budgets will be unaffected, even though Ontario taxpayers bear the cost nonetheless.

Kingston Collegiate & Vocational Institute (KCVI), another downtown high school under threat of closure, provides a stark example of the incentives provided to school boards to make an annual grab from the giant pot of taxpayer cash. After a lengthy school closure process, a majority of the trustees of the Limestone District School Board recommended that KCVI and another Kingston high school be shut down, but only if the Ontario Ministry of Education agrees to provide more than $30 million to build a new school.

The decision to close this tremendously successful high school has shaken the Kingston community. Founded in 1792, KCVI is Ontario’s oldest public high school and is the leading academic high school in southeastern Ontario. Former students include Sir John A. Macdonald, the first premier of Ontario, Oliver Mowat, two Nobel Laureates, members of the Tragically Hip, Don Cherry, Simon Whitfield, and on and on. The high school continues to attract students from throughout the Kingston area and is at full capacity.

Why close down this academically successful school? From the Limestone school board’s perspective, it makes (perverse) financial sense. The board is in financial trouble and needed repairs to fix up KCVI’s building would normally come out of the board’s own budget. Funding for a new school, however, comes from the province. In other words, the board knows it can neglect repairs and download its financial problems onto the taxpayers of Ontario by getting provincial money for a new school. It would be far cheaper to fix KCVI’s building, which has been named by Heritage Canada as one of the top 10 endangered heritage places in Canada.

A related problem for taxpayers surrounds how these new schools are being built. Since 2006, the Toronto Star, in a series of investigative stories, has tracked the egregious cost overruns for new schools in the Toronto area: $3,000 to install a simple electrical outlet, $143 to screw in a pencil sharpener and so on. The problems are so serious that last October the province put a halt to new school construction for the Toronto District School Board. The only difference between Toronto and other areas of the province, however, is that nobody has looked carefully at the money pits being built elsewhere.

The Liberals were not always so fiscally reckless. Their first budget in 2004 contained a number of new initiatives for students, but nary a word on new school constructions. Pushed by powerful development and construction interests, the Liberals eventually began announcing massive new investments in school construction; in 2012 it was $650 million, in 2013 it was $711 million.

The current system provides incentives for local school boards, as in the KCVI scenario, to act in a fiscally reckless manner as well as against the best interests of students. Premier Kathleen Wynne and her Liberal party should declare a moratorium on all new school construction, then design a different funding system that will not bankrupt our province and will preserve good schools that serve their communities.

Arthur Cockfield is chair of the Save KCVI committee and a professor at Queen’s University Faculty of Law.

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FOR IMMEDIATE RELEASE

Ontario’s Ministry of Education Enables School Boards to Waste Tax Dollars on Unnecessary School Consolidations that Hurt Student Learning Outcomes

Peterborough, Ontario – February 1, 2014

The crisis in Ontario’s school closures process was evident in submissions made to the Standing Committee on Finance last week which noted that consolidating schools doesn’t save money and hurts student learning. School boards are closing smaller schools and busing students to large, consolidated schools, citing budget pressures due to low enrollment. Research shows that closing smaller schools and busing students to consolidated schools neither saves money nor improves student learning outcomes. The Ministry refuses to respond to these research findings while school board spending continues to spiral upwards despite a province-wide decline in enrollment and a huge deficit.

School boards say they have no choice due to low enrollment; they claim closing neighbourhood schools and busing students to large consolidated schools is the easiest option. But the easiest option is not the most cost-effective option, and it is not best option for students. Many neighbourhood schools have higher enrollment as a percentage of full capacity than the large consolidated schools.

According to OISE’s Dr.Kenneth Leithwood, “The weight of evidence .... clearly favours smaller schools for a wide variety of student outcomes and most organizational outcomes as well.... Cost efficiency is no longer a justification for large schools.” Queen’s Dr. Arthur Cockfield says, “The current system provides incentives for local school boards, as in the KCVI scenario, to act in a fiscally reckless manner as well as against the best interests of students.”

A better option is to keep most schools open and share use of empty spaces with appropriate community groups. The Ontario government must cut funding for the construction of new suburban consolidated schools and instead renovate existing neighbourhood schools.

For a more detailed summary of Leithwood’s work and solutions to the low enrollment problem, please visit http://ontarioschoolconsolidation.blogspot.ca/ and http://savelocalschools.com/?page_id=390

Contacts:

Bill Templeman , btemp@sympatico.ca, (705) 745 6925, http://savelocalschools.com/

Art Cockfield, ac24@queensu.ca, (613) 546-8380, http://www.savekingstoncityschools.com/

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Submission to the Standing Committee on Finance & Economic Affairs

Thursday, January 23, 2014

Stop soaring school costs in Ontario

Ontario school boards are neglecting repairs, which they have to pay for, and forcing the province to spend billions on new schools.