EFFICIENT AND EFFECTIVE SCHOOLS FOR OHIO Education Efficiency Initiative: Finding ways to save money while improving student achievement

The governor’s charge Gov. Ted Strickland asked KnowledgeWorks to lead comprehensive review of K-12 education system to:  find efficiencies  maintain focus and investment on improving student achievement Initiative is to:  be collaborative, nonpartisan effort with full range of interests involved  identify achievable near- and long-term goals for modernization and efficiency  share findings by December 2010 for consideration in the next biennial budget.

Context for initiative Ohio is in midst of economic crisis  Estimated budget shortfall of $8 billion in next biennium  High unemployment rate and rising Medicaid costs But maintaining education reforms is critical  Education and school finance reforms of HB 1

Opportunities we see:  seed the state with innovations  build on effective best practices  encourage collaborations Opportunity is missed by most people because it is dressed in overalls and looks like work. Thomas A. Edison Opportunity in time of crisis We recognize that in times of crisis… there is an opportunity for real growth and change. John Bliss Close scrutiny will show that most ''crisis situations'' are opportunities to either advance, or stay where you are. Maxwell Maltz

· Find ways to improve student achievement without raising costs. · Find ways to reduce spending without hurting student achievement. · Find additional community resources to help support student achievement. Our approach

Improve student achievement without raising costs Possible strategies  Identify “ideal” education systems and innovations that better promote learning  Create tools that allow districts to explore implementation of the Ohio Evidence Based Model Looking for ideas Which educational strategies are both effective and practical? Can incentives encourage those strategies? Would a pilot project identify ways districts could use OEBM to restructure budget?

Reduce spending without hurting student achievement Possible strategies  Identify districts that seem to get more for their money in non-instructional spending areas and encourage best practices  Enable greater collaboration among districts and schools to share services Looking for ideas How can districts use economies of scale in their favor? Does the state have a role in economies of scale?

Additional community resources to support student achievement Possible strategies  Examine governance structures and practices that bring more community resources into schools  Build closer and more formal ties between Ohio education system and philanthropic community Looking for ideas Can P-16 councils or Education Service Centers play a larger role? Can private investments be made more effectively? How can more schools be considered Community Learning Centers?

How we’ll proceed  Collaboration  Transparency  Outreach  Research-based ideas  Bipartisanship  Comprehensive review

How can Ohioans help?  Provide feedback  Participate in studies  Generate and share ideas  Help champion good ideas  OhioSmartSchools.org

One Area of Focus: Shared Services Definition  Any collaborative arrangement between two or more boards of education, or between a board of education and one or more other public or private entity to obtain or provide goods or services.  Includes some element of collaboration. IS ESC’s but IS NOT outsourcing that amounts to nothing more than a vendor-buyer relationship.

Shared Services

Ohio Models  Educational Service Centers (ESC)  The Ohio Schools Council (OSC)  126 school districts, 22 Northern Ohio counties  Efficient Government Now  Northeast Ohio  Greene County  Administrative and financial services, AP/Curriculum, Contracted Services, Special Education

ESC’s at center of Shared Services  Educational Service Centers (ESC)  56 ESC’s  Defined in state law as school districts and in federal law as Local Education Agencies  In the school year, for every $1 provided by the state of Ohio, ESCs delivered approximately $26 in programs and services to school districts, teachers, and students across the state

Evidence Supports ESC’s School District Consolidation Study In 10 Michigan Counties (2010)  Study urges coordination of services vs. consolidation  Expand role of 57 Intermediate School Districts to provide the mechanism to share services such as purchasing, warehousing and data processing, & the coordination of contractual services for transportation, food and building maintenance  Projects cost savings for county-level coordination of services, with est. savings in transportation (18%) and operations (8%)  Findings consistent with other research studies in NY and IN

Evidence Supports ESC’s (2) Study of the Cost-Effectiveness of Consolidating Pennsylvania (2010)  Operating costs of PA’s 501 school districts have grown at nearly three times the national rate of inflation  Gov. Rendell’s budget included $1 million to provide advice to groups of school districts on ways they can share services in such areas as instructional services, transportation, food services, safety and security, health services, purchasing, finance, payroll, facilities, human resources, technology, and administration  Report says Intermediate Units need to be strengthened if shared services are to improve, and identifies new areas where services can be expanded  Report also recommends streamlined purchasing programs, state- negotiated contracts, procurement networks, & purchasing cooperatives.

Evidence Supports ESC’s (3) Restoring Prosperity: Transforming Ohio’s Communities for the Next Economy (2010)  Brookings/GO says OH must shift more K-12 dollars to classrooms. Ohio ranks 47th in the nation in the share of elementary and secondary education spending that goes to instruction and ninth in the share that goes to administration  Report urges the state to:  Make the costs of school district administration transparent to Ohioans  Push school districts to enter aggressive shared services agreements; state should tie state formula aid to districts’ willingness to implement these cost-saving measures

Evidence Supports ESC’s (4)  Report recommends that ODE should require school districts to share services, ranging from personnel to health care.  A study of several school districts in Binghamton, NY region suggests that creating a “federation model” could save $12 to $16 million a year for the 15 districts involved. The model posits centralizing services such as transportation management, maintenance garages, bus routing and dispatching, facilities management, energy management, and core building operations and joint strategies for reducing health care and special education costs.  If strategy were replicated across the state of New York, taxpayers could realize $87 to $137 million a year.

Greg Harris, PhD Public Policy Advisor