Why Now? The Year of Statewide Teacher Strikes

3

• Labor Markets in the Long Run• Competitive Wage Cycles• Staffing Quantities•Understanding Trade-offs & Timing

• Public Finance & Revenue Cycles• The Judicial Role• You are Here! Where do we go next

legislative session?

SESSION DETAILSThe session will focus on four main topics:

Cyclical effects of teacher labor markets; competitive wages

Cyclical effects of revenue sources at the state and local levels

Current role of the courts (specifically, the varied

interpretations of clauses from state constitutions; equal vs.

adequate vs. equitable)

You are "here"; what now?Conversation highlights included:

Labor economic issues vs. public economic issues vs. legal regulations

Decisions made by lower courts in CT without legal precedent

Kansas' four branches of government

Rob Whealen (?) of the Federal Reserve Bank of BostonVarious graphs and illustrations highlighting the cyclical nature

of the economy during periods of crisis and recoveryEffective advocacy: given where we are in the cycle, what

should the talking points be so that we can effectuate change

through the decisions of policymakers in Jan- March?Teacher wage vs. non-teacher wage gap is growing because

non-teacher wages are fueling the aggregate income growthIllustrate the quantity vs. quality trade-offs and long-run cycles

4

5

$6,8

11

$6,5

67

$6,4

93

$6,4

40

$6,4

71

$6,5

81

$6,6

00

$6,6

16

$6,7

99

$6,7

38

$6,8

39

$6,8

32

$6,9

52

$7,0

38

$7,1

90

$7,3

49

$7,3

63

$7,2

90

$7,1

76

$7,1

03

$7,0

59

$7,1

35

$6,9

85

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1993 1998 2003 2008 2013

Spen

din

g p

er p

up

il

Year

FIGURE 1.4CURRENT OPERATING EXPENDITURES PER PUPIL

ADJUSTED FOR LABOR COSTS

ECWI* adjusted NominalNote: *Education Comparable Wage Index (http://bush.tamu.edu/research/faculty/Taylor_CWI/)Source: Baker et al., School Funding Fairness Data System.

6

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

YEAR

FIGURE 1.5DIRECT EDUCATION EXPENSE AS A SHARE OF GROSS

DOMESTIC PRODUCT AND INCOME% Personal income % National income % GDP

Sources: Current Population Survey: Income, US Census Bureau, http://www.census.gov/hhes/www/income/data/historical/families/; Population Estimates, US Census Bureau, http://www.census.gov/popest/data/historical/2010s/vintage_2013/national.html and http://www.census.gov/popest/data/national/asrh/2014/index.html; State and Local Government Finances, US Census Bureau, http://www.census.gov/govs/local/; National Income and Product Accounts Tables, Bureau of Economic Analysis, US Department of Commerce, http://www.bea.gov/iTable/index_nipa.cfm.

7

5.73

5.

75

5.78

5.74

5.

88

6.03

6.

17

6.19

6.

30

6.30

6.25

6.24

6.

37

6.40

6.34

6.

49

6.42

6.25

6.24

6.23

6.

24

6.26

5.60

5.70

5.80

5.90

6.00

6.10

6.20

6.30

6.40

6.50

6.60

1993 1998 2003 2008 2013

Teac

her

s p

er 1

00

pu

pils

Year

FIGURE 1.6TEACHERS (ALL) PER 100 PUPILS OVER TIME

Source: Baker et al., School Funding Fairness Data System.

8

78

.6%

77

.9%

79

.0%

79

.6%

80

.6%

83

.1%

84

.1%

82

.4%

83

.3% 84

.6%

82

.0%

82

.6%

82

.4%

82

.6% 83

.9%

88

.5%

87

.2%

86

.9%

85

.4%

80

.9%

78

.8%

78

.1%

76

.3%

76

.5%

77

.4%

78

.3%

76

.4%

75

.9%

77

.0%

77

.2% 78

.5% 8

0.1

%7

8.8

%7

8.4

%7

8.1

%7

7.2

%7

7.2

%

74.0%

76.0%

78.0%

80.0%

82.0%

84.0%

86.0%

88.0%

90.0%

1979 1984 1989 1994 1999 2004 2009 2014

Teac

her

wag

es a

s %

of a

ll co

llege

gra

du

ate

wag

es

Year

FIGURE 1.7RATIO OF TEACHER WEEKLY WAGES TO COLLEGE-

EDUCATED NONTEACHER WEEKLY WAGES

Notes: "College graduates" excludes public school teachers, and "all workers" includes everyone (including public school teachers and college graduates). Wages are adjusted to 2015 dollars using the CPI-U-RS. Data are for workers aged 18–64 with positive wages (excluding self-employed workers). Nonimputed data are not available for 1994 and 1995; data points for these years have been extrapolated and are represented by dotted lines (see Appendix A for more detail).

9

80%

85%

90%

95%

100%

105%

110%

115%

1990 1995 2000 2005 2010 2015

% D

IFF

ER

NC

E O

VE

R P

RIO

R Y

EA

R

YEAR

FIGURE 7.6VOLATILITY OF TAX REVENUES BY SOURCE

Property tax Sales tax Income tax

Sources: State and Local Government Finance Data Query System, The Urban Institute–Brookings Institution Tax Policy Center, http://www.taxpolicycenter.org/slf-dqs/pages.cfm; US Census

Bureau, Annual Survey of State and Local Government Finances, Government Finances, Vol. 4, and Census of Governments (1990–2014)

10

Abbott v. Burke (Abbott III) Abbott v. Burke (Abbott

IV)

Abbott v. Burke (Abbott V)

Abbott v. Burke (Abbott XX)

Abbott v. Burke (Abbott XXI)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

1993 1998 2003 2008 2013

RE

VE

NU

E P

ER

PU

PIL

YEAR

FIGURE 6.3NEW JERSEY REVENUE BY SOURCE OVER TIME FOR

HIGH-POVERTY DISTRICTS Predicted state revenue per pupil at 30% poverty

Predicted local revenue per pupil at 30% poverty

Predicted federal revenue per pupil at 30% poverty

Source: Baker et al., School Funding Fairness Data System.

11

Abbott v. Burke (Abbott III)Abbott v. Burke

(Abbott IV)

Abbott v. Burke (Abbott V)

Abbott v. Burke (Abbott XX)

Abbott v. Burke (Abbott XXI)

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1993 1998 2003 2008 2013

PR

OG

RE

SSIV

EN

ESS

IND

EX

YEAR

FIGURE 6.4NEW JERSEY FUNDING PROGRESSIVENESS OVER TIME

Progressiveness ratio for teachers per 100 pupils

Progressiveness ratio for current spending per pupil

Progressiveness ratio for state & local revenue per pupil

Source: Baker et al., School Funding Fairness Data System.

12

AL

AK

AZ

AR CACO

CT

DE

FLGA

HI

ID

ILIN

IAKS

KYLA

ME MD

MA

MI

MN

MS

MOMTNE

NV

NH

NJ

NM

NY

NC

NDOH

OK

OR

PARI

SC

SDTN

TX

UT

VT

VAWAWV

WI

WY

R² = 0.41894000

6000

8000

10000

12000

14000

16000

18000

20000

30000 35000 40000 45000 50000 55000 60000 65000 70000

STA

TE

& L

OC

AL

RE

VE

NU

E P

ER

PU

PIL

*

STATE GDP PER CAPITA

FIGURE 4.1STATE GDP AND REVENUE

Source: Baker et al., School Funding Fairness Data System.

13

AL

AK

AZ

ARCACO

CT

DE

FLGA

HI

ID

ILIN

IAKS

KYLA

MEMD

MA

MI

MN

MS

MO MTNE

NV

NH

NJ

NM

NY

NC

NDOH

OK

OR

PA RI

SC

SDTN

TX

UT

VT

VAWA WV

WI

WY

R² = 0.33434000

6000

8000

10000

12000

14000

16000

18000

20000

0.02 0.025 0.03 0.035 0.04 0.045 0.05 0.055

STA

TE

& L

OC

AL

RE

VE

NU

E P

ER

PU

PIL

*

EFFORT RATIO

FIGURE 4.5FISCAL EFFORT AND REVENUE

Source: Baker et al., School Funding Fairness Data System.

14

AL

AK

AZ

AR

CA

CO

CT

DE

DC

FLGA HI

ID

IL

IN

IA

KS

KY

LA

ME

MD

MA

MI

MNMS

MOMT

NE

NV

NH

NJ

NM

NY

NC

ND

OHOK

OR

PARISC

SDTNTX

UT

VT

VA

WA

WV

WI

WY

R² = 0.3935

4

5

6

7

8

9

10

5000 7000 9000 11000 13000 15000 17000 19000 21000

TE

AC

HE

RS

PE

R 1

00

PU

PIL

S**

CURRENT SPENDING PER PUPIL*

FIGURE 4.7SPENDING AND STAFFING RATIOS

Source: Baker et al., School Funding Fairness Data System.

15

AL

AK

AZ

ARCA

CO

CTDEDC

FL

GA

HIID

IL

IN

IA

KS

KY

LA

MEMD

MAMI MNMS

MO

MT

NE

NV

NH

NJ

NM

NY

NC ND

OHOK

OR

PA

RI

SC

SD

TNTXUT

VT

VAWA

WV

WI

WY

R² = 0.317

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.85

0.9

0.95

1

5000 7000 9000 11000 13000 15000 17000 19000 21000

TE

AC

HE

R S

ALA

RY

PA

RIT

Y (A

GE

45

)**

CURRENT SPENDING PER PUPIL*

FIGURE 4.8SPENDING AND TEACHER SALARY COMPETITIVENESS

Source: Baker et al., School Funding Fairness Data System.

16

Inefficiency

Spending

CostMeasured

Student Outcomes

Student PopulationInput Prices

Structural/Geographic Constraints

Efficiency Controls: Fiscal

capacity, competition, &

public monitoring

17

Current spending (2013-2015) as % of

“cost” of achieving national average outcomes (red =

lower, green = higher)

Current outcomes (2013-2015) with

respect to national average outcomes (red = lower, blue =

higher)

18Resources

Out

com

es

Equal Opportunity Intercept

Actua

l Distr

ibutio

n

Current Average Resources

Cur

rent

Ave

rage

Out

com

esAdequacy Target Exceeds Current Average

Adequacy Cost Exceeds Current Average

19

AL

AZAR

CA

CO

CT

DEFL

GA

ID IL

INIAKS

KY

LA

ME

MD

MA

MI

MN

MS

MO

MTNE

NV

NH

NJ

NM

NY

NC

NDOH

OK

OR

PA RI

SC

SD

TN

TX

UT

VT

VA

WA

WV

WI WY

-0.06

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

-$8,000 -$6,000 -$4,000 -$2,000 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000

OU

TCO

ME

GA

P

SPENDING GAP

FIGURE 10.2FUNDING AND OUTCOMES RELATIVE TO NATIONAL AVERAGE

(MIDDLE-POVERTY QUINTILE)

20

AL

AZ

ARCACO

CT

DE

FL

GA ID

ILIN

IAKS

KY

LA

ME

MD

MA

MI

MN

MS

MOMT

NE

NV

NH

NJ

NM

NYNC ND

OH

OKOR

PARI

SC

SDTNTXUT

VT

VA

WA

WV

WI

WY

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

-$4,000 -$2,000 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000

OU

TCO

ME

GA

P

SPENDING GAP

FIGURE 10.3FUNDING AND OUTCOMES RELATIVE TO NATIONAL AVERAGE

(LOWEST-POVERTY QUINTILE)

21

ALAZ

AR

CA

CO CT

DE

DC

FL

GA

ID

IL

IN

IA

KS

KY

LA

ME

MD

MA

MI

MN

MS

MO

MT

NE

NV

NH

NJ

NM

NY

NC NDOH

OKOR

PA

RISC SD

TN

TX

UT

VT

VAWA

WVWI

WY

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

0.02

0.04

-$25,000 -$20,000 -$15,000 -$10,000 -$5,000 $0 $5,000 $10,000

OU

TCO

ME

GA

P

SPENDING GAP

FIGURE 10.4FUNDING AND OUTCOMES RELATIVE TO NATIONAL AVERAGE

(HIGHEST-POVERTY QUINTILE)

22