Posts from — September 2009

John F. Hood
President, MCH Inc.

The press gets a bad name sometimes, and sometimes I think they deserve it. Not for what they do say, because it’s mostly factual or defensible. My criticism is about what’s left out. What’s left out helps you put what is said in perspective, and that is important. For instance, when arguing about tax levels, those who say federal taxes are regressive include Social Security taxes. Those who say taxes are progressive leave out Social Security. Both can show data that proves their point, but the part about what taxes they are counting is often obscure or left out; hence, no perspective for the reader.

But today is not about taxes. It’s about employment. In today’s (September 8, 2009) New York Times, there is an article entitled Schools Aided by Stimulus Money Still Facing Cuts. It begins: “Children are returning to classrooms across the nation during one of the most tumultuous periods in American education, in which many thousands of teachers and other school workers – no one yet knows how many – were laid off in dozens of states because of plummeting state and local revenue. Many were hired back, thanks in part to $100 billion in federal stimulus money.” It goes on with several wrenching examples. But where is the perspective?

We do know something about educational employment. While not particularly upbeat, it is far from what most other sectors of the economy are facing. According to the U.S. Bureau of Labor Statistics in their most recent employment economic news release covering the period from last August through this August, 72,000 or 0.5% of education jobs were lost in the last year. In the same period, the rest of the economy lost 5,758,000 or over 4% of jobs. So how bad is unemployment in education? Maybe not good, but better than almost everywhere else. Perspective!

If you look at the table below which contains industry segments selected from the press release, you can see that local and state government fared slightly worse than education with a 0.6% rate of job loss and that health care gained 373,000 jobs, an increase of 2.3%. So all told, B2i industry segments had a net gain of 249,000 jobs in the last year while the rest of the non-farm economy lost 6,079 million or 6.2%. B2i is still the best market right now and the stimulus money is helping it stay that way.

U.S. Bureau of Labor Statistics
Economic News Release

Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail.

*Seasonally adjusted employment (in thousands)*

John F. Hood
MCH President

An MCH employee brought in a copy of the newsletter of a neighboring school district, the Concordia R-II School District of Concordia, MO. In an article Show Me the Money, the distribution and use of the ARRA funds are discussed.

“Most of the money coming to the state will be used to help fund the state formula to ensure districts get the amount of funding required by state law.” This refers to the state stabilization funds of which Missouri received over $750 million. Although this is the greatest part of the ARRA money, it receives no further comment by the district. It is possible that they do not know how much they are getting because it is blended into their funding from the state. Regardless, this portion of ARRA is keeping the district “whole” in terms of sustaining jobs and other aspects of “normal” operations.

The rest of the article details the spending of Title I and IDEA money. All districts receiving those funds got an increase of over 40% over the 2 years of ARRA. The district: “will be receiving $191,700 in new funds. The money is being allocated through special education and Title programs. This means there are specific guidelines in how the money can be spent.” The article goes on to explain that the money can’t be spent for artificial turf for the football field or a new roof for the high school.

Here is how the money will be spent:

• an additional special education teacher for the high school for 2 years,
• a paraprofessional at the elementary school for 2 years,
• updating computers and providing projectors in special education classrooms,
• in-service to special education staff,
• outfitting a life skills classroom,
• a part-time Title I Math program, and
• the materials and training necessary to start a new program and supplies for the Title I Reading Program.

“… utilizing new, short-term federal funds can be an exercise in frustration. There are many needs in a district that will have to continue to go unmet as we fill lesser priorities which meet the funding requirements.”

I believe this to be a pretty typical reaction to the ARRA. The largest portion of the money, which sustains the basic operations of the schools, gets spent without much attention, and the federal government doesn’t seem to get much credit. Smaller, but still significant amounts of money that are genuine increases but are also restricted, get the attention and draw some complaints in the process. You can’t please everyone.