The MacNeil/Lehrer Report; No Money/No Schools

ROBERT MacNEIL: Good evening. The nation`s public schools re-opened this week, after the Christmas vacation and after living through one of the most difficult years in their history. Rising school costs and taxpayer resentment caused cutbacks all over the country. Teachers were fired and classes doubled up in New York; Detroit closed ten grade schools, dropped most career guidance and many elective courses; Rockford Illinois fired four hundred teachers and eliminated extracurricular activities, including sports. If not as severe as these, stringencies were felt everywhere. In terms of national averages the cost per pupil of education increased 132 percent since 1967-68 season, while the consumer price index rose only 60 percent in that time. In some areas taxpayers` anger caused drastic action. In Toledo, Ohio schools were closed for most of December because taxpayers refused to vote extra operating funds. There`s another taxpayers` revolt in Oregon. Tonight we look at the growing emergency in the cost of education and at efforts to reform school financing. Jim?

JIM LEHRER: Robin, the situation in the State of Oregon is particularly acute right now. Residents in three school districts there will vote January 11 -- that`s next Tuesday -- on whether to increase property taxes and thus pay for re-opening their schools. Two of the districts are open, but just barely, on emergency funds, and the third is closed down altogether. With us from Oregon tonight is Philip Piele, who is Director of the University of Oregon`s Educational Resources Clearing House on Educational Management. He has been monitoring the situation in his own state as well as elsewhere; he`s also the co-author of the book, Budgets, Bonds and Balance: Voting Behavior in School Financial Elections. Mr. Piele, first, why are people of Oregon revolting against school budgets?

PHILIP PIELE: I wouldn`t characterize it as a revolt, really. There are 331 school districts that do have approved budgets; three school districts do not have approved budgets at this time, and the reasons are primarily high inflation -- that is that the pocketbooks of many people there, coupled with high unemployment -- plus the fact that in the three school districts that do not have approved budgets, that we have a history of controversy involving the curriculum, involving issues such as consolidation, and unhappiness with the administrators in some of those districts.

LEHRER: Your first reason that you mentioned had to do with pocketbook tax things; is it aimed specifically at the schools because they don`t like the schools, or is it aimed at the schools just because they can touch them and they can`t touch, say, the state or the federal budgets?

PIELE: I would say that it`s aimed not at the schools; there is evidence in our research that many people have decided that they will vote against all local property taxes; and whether they be for` sewer improvement or for schools, or what have you, it`s a position that many people have come to because they feel that the cost of government exceeds their ability to pay, and the returns from government are not in keeping with the money spent.

LEHRER: Returns from government meaning returns from education also?

PIELE: That`s correct.

LEHRER: Do you think this is unique to your part of the country? You keep tabs on what`s going on nationally; have you seen this same kind of thing going on elsewhere?

PIELE: Yes, it has gone on elsewhere, of course.

LEHRER: Robin just laid through several of them, but are there other indications, too? PIELE: Sure; there have been an increased number of school budget defeats in Washington, California, Ohio, Michigan, New York; and we also have evidence, for example, that forty-six percent of the bond issues submitted to the people in 1975 were passed -- only forty-six percent. So it appears to be a nationwide problem.

LEHRER: Is there any pattern to it in an educational way? In other words is this happening in school districts which have, based on accepted criteria, poor schools, or is it in school districts that have good schools -- is there any pattern to it, or is it just kind of spotty, where people are upset for one reason or another?

PIELE: It does seem to be random, in the sense that there doesn`t seem to be any clear-cut explanation for it. There are some, but one prominent factor is that, for example, parents who have children in public schools can no longer be counted upon to support the schools.

LEHRER: In other words, it`s not just people who don`t have kids in schools who are upset.

PIELE: That`s correct.

LEHRER: In the past that`s been the case, hasn`t it, for people who didn`t have kids...

PIELE: That`s right. But, for example, in the Gallup survey of .parental attitudes toward schools that is conducted annually since 1969, in `69, `70, `71, `72, he asks the question in the survey, "Would you vote to increase your taxes -- yes or no?" And in 1969 forty-four percent of the parents of public-school children would have voted no; but by 1972, fifty- six percent would vote no.

LEHRER: Thank you, Sir. One person who has been on the school finance firing line at the local level is Mrs. Mary Anne Lecos. For the past ten years Mrs. Lecos has served as a member of the Fairfax County, Virginia, school board in suburban Washington. She is the current president of the Virginia School Board Association. Mrs. Lecos, you`ve had some problems in Fairfax County, three of the last six school bond issues being turned down; what`s your reading as to why? Does your personal experience jibe with Mr. Piele`s?

MARY ANNE LECOS: We`ve lost them for different reasons. The first we lost about six years ago; that was the first time in fifteen years that a school bond had been turned down in Fairfax County, and at that time the campaign against the bond referendum was by a group who were opposed to growth in the county and saw the provision of schools in developing communities as encouraging skipping and very expensive development. We came back and passed a bond referendum after that, a scaled-down referendum, but at that time we had a great backlog of needs -- not only new schools for developing parts of the county, but we had a badly needed renovation program in our other schools -- our older schools. We came back with a very large package that would have provided a construction program of about three to five years in length. We found the size frightened the electorate, the fact that there were so many projects included made it difficult for us to justify each of them to everyone`s satisfaction; and by that time we were beginning to feel pressure on our operating budget and people questioned why we were putting money into a new construction when the enrollment had begun to taper off, they questioned why the emphasis on bricks and mortar when we were talking about having to cut back basic educational services that were part of the operating budget. That bond referendum was defeated. The next time we came back we made a very serious effort and lost by only three hundred votes out of fifty thousand. We finally turned it around by going directly to the people with a very aggressive community relations campaign and explaining to them the relationship between the operating budget and the construction budget, the fact that badly needed capital improvements, whether new schools or renovations, would have to be paid out of current revenue if we couldn`t pay for them with bond funds. And the last referendum was passed about four to one.

LEHRER: Have you picked up, in a general way -- as a result of the bond issue, votes, or whatever -- a reluctance on the part of the people in Virginia, or specifically Fairfax County, to go along automatically now with increasing expenses for schools?

LECOS: Oh, absolutely.

LEHRER: Is it anti-school, or anti-government?

LECOS: No. it`s anti-high taxation, I think, more than either of those other two, particularly in an area where assessed valuation was increasing at the rate of about ten percent a year. Although the supervisors cut the tax rate, people realized that their tax bills were going up by what they thought were unacceptable amounts every year; and I think the votes against the school bond referendum, which were the only questions put to them over those years, were a message sent to the county government and to the school systems.

LEHRER: What has been your experience -- as Mr. Piele said, in the past school administrators, school boards could depend on the parents to usually support anything that would improve the schools; is that still the case in Fairfax County, or are they saying, "Hey, wait a minute," too?

LECOS: The parents are harder to sell, but they`re still more supportive than citizens whose children are no longer in the public school system or the large number of people now moving to Fairfax County who don`t have children of school age and don`t intend to.

LEHRER: How serious to you think this whole new questioning attitude of the taxpayers is in terms of affecting education at the local level?

LECOS: I think it`s very different; I don`t think it`s necessarily bad. I think it`s been very healthy in Fairfax County because it has forced us to communicate more directly with the public, and we`ve found that they`re very responsive when you can give the good news and the bad news and keep them abreast of your needs. And we in Fairfax have suffered, as most localities have, from the increasing mandates of state and federal government without accompanying funds. This is what`s causing pressure on our operating budgets, even more than inflation has; and when we explain this to the people -- the increases in the school budgets as a result of changes in state law, as a result of equalization of school financing, which has affected Fairfax County as a result of loss of federal impact funds, which is affecting us very much in the next budget year...

LEHRER: So they will listen if you explain all that to them.

LECOS: They will listen, and they are sympathetic when they understand that educating a special education child, a handicapped child, costs three or four times as much as educating a normal child. If you can document and justify these things and if you can deliver in terms of educating the children in basic skills, I think we can retain the support of people.

LEHRER: Thank you. Robin?

MacNEIL: The school equalization that Mrs. Lecos mentioned brings up another subject: the rapid escalation in school costs and the growing fury of property taxpayers have focused new atten tion on measures to reform school financing. In more than a dozen states there have been efforts in recent years to move schools off the property tax alone. One of the latest actions came from the Supreme Court of California last week; it ruled, for the second time, that the property tax is an unconstitutional method of financing schools. It gave the California legislature until 1980 to enact a valid substitute. One person deeply involved in the reform effort is Donna Shalala, Professor of Political Economics at Columbia University Teachers College, and Treasurer, incidentally, of the Municipal Assistance Corporation, formed to deal with New York City`s financial crisis. Professor Shalala, what`s wrong with the property tax as a basis for financing schools?

DONNA SHALALA: The property tax has been what we`ve mainly relied on in this country for financing schools, and what that has meant, at the local level, is if you lived in a property-rich area you would have a lot of resources to spend on your schools; but if you lived in a property-poor area, even with extraordinary efforts you would have trouble raising as much money as a property-rich area. I did want to note here, though, Mr. MacNeil, that the California court did not ban the property tax, it simply banned the present method of financing in California and said, You`ll have to do something with the property tax, but indeed, make the wealth of the entire state available." We can do some things to the property tax and still continue to use it.

MacNEIL: Would you describe it? That`s the basic objection to the property tax alone as a base for education; would you describe some of the basic reform attempts that have been made in the last few years?

SHALALA: We`ve been talking about equalization formulas in this country, really, since the 1920`s. Mathematically they`re all the same; they`re all an attempt -- and they all have the same purpose -- to make the wealth of the entire state available for a child`s education, to equalize the differences in wealth between school districts within a state. And that can be done in a variety of different ways; you might decide that the easiest way to do it would be to administer a statewide property tax, all the resources going to the state and then pass them out in some fair way. Or you might decide to keep your local property tax, but when that tax is levied for the state to guarantee that if you live in a property-poor district you will be able to raise the same amount of money with the same unit that`s levied that you would in a property-rich area.

MacNEIL: That`s the so-called equalization that Mrs. Lecos referred to, in Virginia.

SHALALA: That`s right.

MacNEIL: And Virginia is one of the states that`s tried it. And the former one -- is that the so-called Robin Hood idea that, for instance, the State of Maine has attempted?

SHALALA: Robin Hood is really the Robin Hood technique, which is called a recapture mechanism, and is stealing from the rich and giving to the poor; it`s an attempt, in some states, to take some resources away from wealthier districts and redistribute them to poorer districts. It depends on whether you have a surplus in your state, whether you have a set of very healthy taxes, a mix of income and perhaps sales taxes, or whether you have to take existing money from wealthier districts.

MacNEIL: From your knowledge, in those states where this has been tried, is that making people like the taxpayers in Oregon, for instance -- people as angry as they are -- is that making them more contented? Are they calming down as a result of these experiments, and do they find it fair and equitable?

SHALALA: I don`t know the answer to that question, in part because we haven`t had enough experience with full equalization plans; we`ve had experience with some limited equalization in this country. We do know a couple of things: in places where you have put new resources into communities we know that those communities have not simply poured that money into increasing salaries for existing teachers; they`ve looked at alternative programs. So to the extent that a community wants to extend its program we have some limited evidence that the communities have been able to do that with a new equalization plan. We don`t really know whether communities are going to be more satisfied; to the extent that equity makes everyone more satisfied, from a psychological point of view, I certainly would be willing to make an argument that it would help, at least, and relieve some of the tension of the system.

MacNEIL: "To the extent" -- equity doesn`t make everybody more satisfied.

SHALALA: Certainly for low-income people, low-income communities that really work very hard to make an effort to. spend considerable money on their schools, to the extent that they`re relieved of their tax burden those communities would feel better.

MacNEIL: Let`s bring the others in. Professor Piele, do you think, for instance, that reform is that answer to some of the objections that are being raised, for instance in Oregon, to the cost of schooling? In other words, I guess the question is, are they fundamentally objecting to the style and quality of schooling today, or are they fundamentally objecting to the cost, which they see so intimately in their property taxes?

PIELE: I think that it would probably be a little of both. It would be hard to say that either one is persuasive here. I think the people of Oregon have historically wanted to retain the local control of their schools, they have historically had great pride in their schools, and I think that in many cases the taxpayers are simply sending a message to the boards that "we want to be heard, and we want, sometimes, fundamental changes in the kind of curriculum and the kind of education that`s being offered."

MacNEIL: Mrs. Lecos, what has been the effect of the measure of reform in Virginia on the attitudes of taxpayers; do they welcome it, is it helping the situation, is it making paying taxes and supporting the schools easier?

LECOS: It happened in Fairfax County because we`re one of the more affluent districts that gives more to the state treasury than we get back in support for public schools. But I think in any system of equalization is going to take...

MacNEIL: You`re the rich that Robin Hood is stealing from.

LECOS: That`s right. (Laughing.) Any system of equalization is going to require political courage and realism in figuring out the basic cost of even a pared-down program. The problem with some of the reforms is that they are fine on paper and theoretically will solve the problems, but the members of the state legislatures or governors are not willing to put their reputations or their political careers on the line to recommend the increases in taxation, even if the taxation is equitable, that will be necessary to provide quality education throughout the state. School boards and members of local governments will support equalization plans because they`re right -- I don`t think we can argue against them -- but we want plans that are fully funded; once they`re designed, we want plans that take into account increases in the cost of living and the cost of new requirements that are constantly placed on local governments and on school boards, and that`s going to require leadership, that`s going to require political courage, and that`s going to require school boards and local governments to demonstrate to the electorate that they are producing efficiently with the tax funds that they`re receiving.

MacNEIL: That`s interesting; thank you. Jim?

LEHRER: Nationally, the financing of the public schools breaks down this way: just over half of the money comes from the localities themselves, forty percent from the states and less than eight percent from the federal government. One man who thinks Washington`s share of the pie should be increased is John Ryor, President of the National Education Association, an organization primarily of classroom teachers around the country. Mr. Ryor himself is a former teacher in Battle Creek, Michigan. How much more of the expense, percentage-wise, do you feel the federal government should pick up?

JOHN RYOR: We believe the federal government ought to be paying as much as one third the cost of public education in this country, and I think for all of the reasons that have been stated, at least in part, here on this program this evening. And that is not only the inefficiency of the property tax system, but the basic unfairness of it, the inability to bring about the equalization that each one of the other guests have talked about. We have such wide disparity between the various states in terms of the amount of money behind each child -- you have as much as $2900 per child being spent in Alaska, as little as $980 per child being spent in Kentucky -- and that in no way can provide what we believe to be an equal educational opportunity.

LEHRER: So you`re in favor, then, of equalization nationally, not just on a statewide basis.

RYOR: We think that one of the most efficient ways to do that would be for the national government to pick up its fair share of what we think its public responsibility is in that regard. The fed eral government currently pays, as you pointed out, eight percent of the cost of education.

LEHRER: 8.8, I think last year.

RYOR: 8.8; and I know there are a variety of fears about loss of local control, but right now...

LEHRER: You took my next question right out of my mouth; go ahead.

RYOR: Very good. Every one of our states has some mechanism, in the state Department of Education of those states, for distributing funds. We think it`s entirely possible for those funds to be channeled through those state departments to be expended in ways that are equal and bring about an equalization in the funds available to the local governments.

LEHRER: But if the federal government is putting up one third of the money, don`t they then also inevitably have one third of they control?

RYOR: The inevitability, I think, that you talk about grows out of some past practice, but I don`t think it has to be that way; and I don`t think the situation is inevitable. We think it`s possible for those funds to be controlled with a minimum of strings from the federal government. I think it`s important that they be expended on an equal basis and without regard to race, creed or color.

LEHRER: Where would this extra federal money come from, just come out of the general revenue, like everything else?

RYOR: I think so; I think that by and large it would mean a re-examination of the national priorities as a whole. I think there are a variety of ways one can do that. The Proxmire report suggested a lot of ways that were inefficient in federal government that could make it possible for more funds to be available for public education.

LEHRER: One more detail on your plan: would this money be distributed to school districts based on the number of students, and all that, or would it be done on an equalization basis? In other words, Mrs. Lecos` school district is one of the rich; it might not get a dime, is that right, or would they get some from the federal government or would it go, say, to another school district in Virginia which percentage-wise would get a lot more if they were a poorer district?

RYOR: I think there are a variety of ways it could be dealt with; and without an unnecessarily precipitous answer here, I think what is important is that part of the legislation demand that the local and state governments be making some sort of minimal effort in that regard in order to participate. It simply wouldn`t be fair for a state like Virginia or New York, or any other state, to pay great sums in, and because some other state refused to tax itself adequately to have most of that going back to those states. So I think it would require an equalization of the efforts at the local and state level, and then funds distributed to bring up what the basic inequities in those states cause.

LEHRER: Mrs. Lecos, what do you think of that idea?

LECOS: I think that makes sense; I think the federal government could provide leadership and maybe some technical help to assist us to achieve equalization within states, without some of the problems that have surfaced with the efforts attempted so far. I also think they might have a role in achieving equalization among states, once you had had equalization within states. I agree with Mr. Ryor that the amount of federal control should be kept to a minimum, and that it`s not inevitable; some of the most successful federal education programs have not had extensive control. Some of those with the least amount of money have had the most control, and this is what members of local school boards complain about -- the programs that are very expensive to apply for, that have high administrative overheads, that are so expensive to evaluate that most of the money goes into that sort of activity -- administrative activity -- instead of flowing directly to children. We don`t want any more of that kind of federal aid to education. We don`t think that the controls are inevitable; and all members of local school boards complain about and welcome the opportunity now to comment in advance on regulations that accompany federal legislation. Impact aid is a good example of a federal program that is very well supported nationwide, because it`s like general revenue sharing in that the decisions about how to spend the money are made by the people in the best position to make those decisions -- members of state and local education agencies.

LEHRER: Ms. Shalala in New York, what do you think of Mr. Ryor`s plan?

SHALALA: I thought what I might do is comment on local control from the point of view of someone that`s been in New York for the last couple of years, and just to make the general comment that there`s not much local control if you don`t have money. I think the Mayor of the City of New York would be the first one to say that there`s not much flexibility if you don`t have money, so that local control is almost a mute issue for many of the very poor school districts in this country. Second, a very important point, I think, because we have some studies in this area; and the studies, at least, in the education area, show that who pays the bill doesn`t significantly affect local control. Studies of states that pay almost ninety percent of total school costs, or states that pay a very small percentage, have indicated that local control is not affected. I think that has to do with the nature of the education system and, I think, the commitment of the leaders in education to local control -- there are a variety of explanations. As for the federal government picking up one third of the bill, I`m in conflict over that, since we would also like them to pick up a very large share of the welfare bill this year.

LEHRER: All right. Mr. Piele, what do you think the reaction would be in Oregon to the federal government to really mass federal aid to education?

PIELE: I think that, again, money is welcome, but there is, again, a fundamental feeling among the citizens in Oregon that they ought to have a right to control their schools; and although at times school budget failure is painful, it also can be healthy because it forces school officials to re-examine their position and re-examine their relationship with their community.

LEHRER: Mr. Ryor, finally, the N.E.A. for the first time endorsed a Presidential candidate and he happened to win; his name was Carter. Have you got any indications from President-elect Carter that he will push for this kind of thing?

RYOR: Yeah -- the answer is, of course, we have indications from Mr. Carter that he`s very much concerned about that and will move toward increasing the federal participation in funding and paying for public education. The question of moving toward one third the cost of funding public education in this country is not something that`s going to happen overnight. You`re talking about rearranging priorities, re-examining the bureaucracies...

LEHRER: That`s going to take a long time. And speaking of time, we`re out of it. Robin?

MacNEIL: Thank you very much. Thank you all in Washington; thank you, Ms. Shalala. Jim Lehrer and I will be back tomorrow night. I`m Robert MacNeil. Good night.