March 2009 Archives

The great Matt Stone, education reporter for the Kennebec Journal, has a column in today's paper describing broad-based support among school leaders for educational collaboratives.

"In recent years," Stone writes, "a number of districts have joined forces to buy supplies in bulk and share the costs of special education, transportation and teacher training. Those districts have reaped the benefits in savings and expanded education opportunities, school officials told members of the Education Committee."

Wait, didn't I say exactly the same thing TWO YEARS AGO?

In fact, I did.  When the governor first proposed his consolidation scheme in early 2007, we responded with a research piece describing what we thought to be a better alternative, Education Service Districts.  These regional cooperatives allow districts to cut costs by sharing purchasing, back-office operations, and all manner of products and services, while allowing districts some level of autonomy. 

From yesterday's article: "Since efficiencies can be achieved by sharing services without changing governance, regional education cooperatives should be embraced as another consolidation alternative," [School Union 102 Superintendent Scott] Porter said.

Funny, I said the same thing in 2007.

We followed up that piece with a report on the Western Maine Educational Collaborative, one of the highly successful collaboratives mentioned in Education Committee hearings on Monday:

"The 11 school districts that belong to the Western Maine Education Collaborative share teachers of classes that typically attract few students, said Thomas Ward, superintendent of Dixfield-based SAD 21 and president of that cooperative. The districts have saved money while offering academic programs they would not have been able to afford on their own, he said".

Like Yogi Berra said, its like deja vu all over again.

HELLO??? Is thing on?

Is anyone listening to us??

A terrific column by Matt Stone in this weekend's Kennebec Journal outlines how Wiscasset High School is working to attract students in the new RSU of which it is part, and how all the families in the region are benefiting from the competition school choice brings.

The new Sheepscot Valley RSU "stretches from Westport Island in the south to Palermo in the north to Chelsea in the west."  Wiscasset High, the only public high school in the RSU, is working to attract students from the northern part of the new RSU, whose students have traditionally attended Erskine Academy in China or Cony High School in Augusta.

As I am quoted as saying in the piece, this is a smart move for Wiscasset.  They have a declining enrollment, and history shows that when area students have a choice, they have often chosen to go elsewhere:

"Nearly all Whitefield students attended Wiscasset High School when the two towns had a contract. But the contract has since lapsed, and just three Whitefield students attended the high school in the 2007-08 school year, according to the Maine Department of Education."

It remains to be seen what steps Wiscasset High will take, aside from launching the marketing effort described in the article, to attract more students.  Ideally, the school will launch whatever reforms are necessary to improve student outcomes, and thus attract more students as a result of being a high-performing school.  Wiscasset's being better will force its competitors to be better, with the end result that through competition, all schools in the area improve. 

That is the beauty of what Winslow High School Principal Doug Carville calls "healthy competition" between schools.

So, families in Lincoln County have school choice, what about the rest of Maine? Stay tuned...

As I have previously blogged here, Maine is now an out-migrant state with fewer people moving in than are moving out.  Now, according to data released today by the U.S. Department of Commerce's Census Bureau, 10 Maine counties saw their population decline between July 1, 2007 and July 1, 2008--see accompanying table (click "continue reading" to view table).  Counties include: Aroostook (-276), Franklin (-43), Hancock (-75), Knox (-37), Lincoln (-141), Piscataquis (-201), Sagadahoc (-12), Somerset (-203), Waldo (-127) and Washington (-205).

Since July 1, 2000, 3 Maine counties have seen chronic population declines: Aroostook (-2,187), Piscataquis (-283) and Washington (-1,393).

Not all of these population declines are due to out-migration.  Some of these counties face serious imbalances between their birth rate and death rate.  In other words, the population in some counties is aging rapidly with few young folks to sustain population growth.  This phenomenon is called "Demographic Winter" and too few folks in Maine are heeding the warning signs, especially policy-makers.

In this second posting on federal spending (first can be found here), let's take a look at federal interest payments.  With federal debt soaring, it is not surprising that federal interest payments are also soaring.

The accompanying chart (click "continue reading" to view chart) shows that by 2019 federal interest payments will grow by whopping 146 percent to $622 billion in 2019 from $253 billion in 2008.

To put this into perspective, spending on the Department of Defense will grow by only 16 percent to $689 billion in 2019 from $593 billion in 2008.  Astonishingly, Defense spending will only exceed interest payments in 2019 by a mere $67 billion.

The question is . . . what will America have to show for all this interest spending?

State and local government officials are delirious with joy over the federal stimulus package.  It is as if they won the lottery.  The mood for taxpayers, however, is much more somber.  Taxpayers know that it matters little to their pocketbooks whether it is state and local governments picking their pockets or if it is Uncle Sam.  In any case, taxpayers will foot the bill.

Yet, state and local government officials should not party too long.  They too will soon realize that the federal government simply will not be able to bail them out forever.  In fact, the day of reckoning is much closer than most want to admit.

This blog post is the first of several that will look more deeply into federal finances.  The data is very worrisome.  First, lets take a look at the size of federal debt. 

This is an important place to start because for a long time now the federal government has effectively been borrowing on behalf of state and local governments.  This is particularly troubling because so many states have balanced budget requirements--including Maine.  The federal government does not have such constraints. 

So if the federal government runs a budget deficit and then sends that money to the states; the federal government is essentially nullifying the intended effect of the state level balanced budget requirements.  After all, money is fungible.

However, this cannot go on forever since even the ability of the federal government to borrow is not infinite.  The accompanying chart (click "continue reading" to view chart) shows the federal debt as a percent of Gross Domestic Product (GDP) as projected by the Obama Administration.  In 2008, federal debt represented 70 percent of GDP.  Yet, by 2019, federal debt is projected to represent over 100 percent of GDP--an increase in the share of over 43 percent!

Not surprisingly, much of the run-up in debt occurs between 2008 and 2011 thanks to the stimulus package.  However, since it is projected that the federal government will continue to run a budget deficit in every year up to 2019, the share of federal debt to GDP continues a slow ascent until breaking the 100 percent of GDP barrier in 2019.

No one know for sure just how much the federal government can continue to borrow before investors get indigestion from buying too many Treasuries.  Unfortunately, this data suggests that we may just find out.