Sunday, March 27, 2011

Making Goals Mean Something

About a year and a half ago, the Matawan-Aberdeen school board had agreed upon three goals:

  • Grade level reading/writing proficiency for all students
  • Among a pre-selected group of twenty-five school districts, ours rank among the top fifteen on all state assessment exams
  • The district would not raise taxes above 2% in any year
Since that time, we haven’t heard much, if any, discussion related to those three goals. That’s a mistake. Like the mission/vision statement, those goals should be a constant focus of the school board.

In the meantime, how are we doing?

Reading/Writing Proficiency
I think it’s a mistake to use the state exam as a standard. Proficiency should not be defined as knowing half the material nor should we rely upon the state to set consistent standards.

Still, considering the resources being used to train our students to pass the state exams (curriculum rewrites, professional training, consultants, etc.), it’s certainly fair to ask how we did.

Here are the results. Don’t get too excited by the 11th grade LAL. The state dumbed down the exam resulting in a big jump across the state. That’s why school ranking is a better indicator of performance than year-over-year score improvement.

3rd LAL TP
4th LAL TP
5th LAL TP
6th LAL TP
7th LAL TP
8th LAL TP
11th LAL TP

Top 15 Ranking
The school board selected 25 districts in the GH district factor group (one above Matawan-Aberdeen) and set a goal to rank among the top 15 in both total proficiency and advanced proficiency for each state exam.

Click here for the full report on the Top 15 ranking.

As seen in the chart below, Matawan-Aberdeen’s Top 15 ranking increased from 8 to 12 categories out of 32, including all 3rd grade categories. On the downside, the district finished dead last in 11th grade math. More on that to come.

Rank Percent Goal Above/Below 1-Yr Change
3rd LAL AP 19 7.6 7.6 0.00 2.6
3rd LAL TP 3 78.4 68.9 9.50 10.1
3rd Math AP 13 53.2 47.2 6.00 3.8
3rd Math TP 9 90.7 88.1 2.60 0.2
4th LAL AP 11 12.1 12.1 0.00 3.3
4th LAL TP 18 64.8 71.7 -6.90 -9.2
4th Math AP 14 39.8 42.7 -2.90 -3
4th Math TP 15 81.5 86.5 -5.00 -6
4th Sci AP 18 53 51.6 1.40 3.6
4th Sci TP 23 95 96.9 -1.90 -1.3
5th LAL AP 19 8.9 10.9 -2.00 4.7
5th LAL TP 25 65.5 71.6 -6.10 -4.6
5th Math AP 18 48.7 44.6 4.10 7.4
5th Math TP 19 83.6 87 -3.40 -0.4
6th LAL AP 18 8.7 9.4 -0.70 5.3
6th LAL TP 22 73.5 76.2 -2.70 -1.5
6th Math AP 18 30.9 28.8 2.10 5.5
6th Math TP 20 81.9 79.7 2.20 3.2
7th LAL AP 23 19.4 21.1 -1.70 3.6
7th LAL TP 22 77.1 77.9 -0.80 2.6
7th Math AP 9 34.3 28.3 6.00 7
7th Math TP 17 78.7 74.8 3.90 -2.6
8th LAL AP 19 21.8 24 -2.20 -1.6
8th LAL TP 18 88.9 90.9 -2.00 -0.6
8th Math AP 8 41.9 36.7 5.20 2.5
8th Math TP 9 77.5 78.7 -1.20 -5.2
8th Sci AP 25 34.1 39.8 -5.70 -5.5
8th Sci TP 16 89.5 90.9 -1.40 9.3
11th LAL AP 21 19.9 22.3 -2.40 2.1
11th LAL TP 21 90.5 93.6 -3.10 1.2
11th Math AP 26 16 25.9 -9.90 -0.9
11th Math TP 24 67.1 81.3 -14.20 -3.2

Tax Increase of 2% or Less
Given the state’s newly mandated 2% cap on school budget tax increases, this goal doesn’t sound as impressive as it did when first passed. Unfortunately, the district has used newfound state funding to avoid the aggressive cost cutting still needed for taxpayer relief.

Although the proposed tax hike is only 1.69%, at $61.8 million the proposed budget will increase spending 4% during a recession.

We can save over half a million dollars from outsourcing personnel (bus drivers, secretaries, guidance counselors, child study teams, teacher aides, etc.) and another half million by cutting extraneous personnel.

Let’s make sure the 2% is a cap and not a target. More can be cut.

The board set goals. Let’s make those goals mean something.
>>> Read more!

Thursday, March 24, 2011

Resetting the Comments Policy

This site has an established tradition of being extremely liberal in its comments policy. That now has to change. The vulgarity being regularly posted has crowded out all civil discourse, making it difficult, if not impossible, to have an intelligent discussion of the issues.

Therefore, I am lowering the bar for comment exclusion. Any comment that includes inappropriate language or innuendo may be deleted at my discretion.

I have confidence that posters will be able to fully express themselves without resorting to the same language they would forbid their children from using. >>> Read more!

Sunday, March 13, 2011

The Fallacy of Guaranteed Pensions

"Don’t place your trust in princes" - Psalms 146

When the Bernie Madoff story first broke, the public was incredulous that one man could steal so much. Then, as details emerged, the public was incredulous that otherwise intelligent people could be so stupid when it came to their lifesavings. How could anyone believe a financial guru who claims to deliver consistent returns regardless of market conditions?

Well, I could think of a whole bunch of people who act just like that. Specifically, the public sector unions. Public union workers spend hundreds of millions of dollars a year to elect political halfwits who know nothing about finance but promise lavish retirement benefits to be delivered long after their terms expire. Then, for reasons unknown, these government employees, who should know better than anyone, plan their entire retirement around these empty promises from unaccountable politicians long gone.

Here’s the list of former Aberdeen employees earning a government “guaranteed” pension. The dollar amounts don’t include health benefits, Social Security, Medicare, Medicaid, or any other program.

Here are some quick tidbits –

  • In the Matawan-Aberdeen school district, for every dollar of salary going to a school employee, the state is spending 40 cents for a district retiree
  • Including Aberdeen’s portion of the school district and library, the state will spend over $10 million dollars in pension payments this year. That compares to a $15 million municipal budget and $9 million municipal tax levy
  • In addition to the pension payments, for every 5 school district employees on the state healthcare plan, so are 4 district retirees
Ah, you say, we don’t have to worry about that because the state manages a pension fund.

Well, about that fund.

Pension funds are supposed to work as follows – Each year they get a little larger so that the investment income earned is enough to cover payouts without endangering the principal. Unfortunately, the state pension plans are designed to fail for several reasons.

Using the Teachers Pension and Annuity Fund as an example, consider the following –
  • Pensions are based upon salaries, which, over the past decade, have risen far faster than inflation or the market
  • In the drive for smaller class sizes and one-on-one instruction, more teachers means more pension liabilities
  • When the market's down, the fund has to sell assets on the cheap to fund benefits, meaning the fund gets smaller and goes into a death spiral as it will never earn enough to payout benefits
  • Pension managers are pushed to assume higher levels of risk to meet the state's unrealistic projections
In 2000-01, the TPAF paid out $1.33 billion in benefits. In 2009-10, the payout was $3.08 billion, a 230% increase in just nine years.

During that same time period, the fund itself has shrunk from $31.05 billion to $25.89 billion. In other words, over a nine-year period, the ratio of assets to one-year payouts, has dropped from 23.35 to 8.41.

The dramatic fall in pension assets occurred despite a sharp rise in pension contributions, an increase from $371.6 million in 2000-01 to $658.8 million in 2009-2010.

As the chart below shows (all numbers in billions), even assuming rosy projections, as the state likes to do, that contributions will increase 8% a year, net return on investments will consistently run a little over 5% a year, and pension liabilities, in contrast to history and common sense, will only increase 4% a year, the Teachers Annuity and Pension Fund will go bankrupt in under 15 years.

Year Withdrawal Contribution Assets
2010 3.08 0.66 25.89
2011 3.2032 0.7128 24.6941
2012 3.331328 0.769824 23.3673
2013 3.464581 0.83141 21.90249
2014 3.603164 0.897923 20.29238
2015 3.747291 0.969757 18.52946
2016 3.897183 1.047337 16.60609
2017 4.05307 1.131124 14.51445
2018 4.215193 1.221614 12.24659
2019 4.3838 1.319343 9.794465
2020 4.559152 1.42489 7.149926
2021 4.741518 1.538882 4.304786
2022 4.931179 1.661992 1.250838
2023 5.128426 1.794952 -2.0201
2024 5.333563 1.938548 -5.51612
2025 5.546906 2.093632 -9.2452

The unions’ response will be to declare unfunded pensions and health benefits are the state’s problem and the state must fix it. In other words, the unions will turn to the very political process that put them in the whole in the first place. Imagine what will happen if they get their wish. >>> Read more!

Sunday, March 6, 2011

Unwanted Development

Well, we all saw this coming, at least everybody but the developer, our “dear leaders” on the town council, and their political hacks on Aberdeen’s planning board and zoning board. Six years after being built, the Cambridge Park development remains over three-quarters empty. The one sale went to a Californian transplant whose employer fronted half the mortgage.

The developer continues to “update” the year built – now showing 2009 – and maintain the properties, but no amount of window dressing will hide the plain fact that the lots are too small. The house at 75 Cambridge practically touches its property borders on all sides. The other homes lack fences and decks to maximize their puny yards.

The four houses plus the undeveloped lot in the back provide the town an annual windfall of $50,000. But those short-term gains will soon become long-term losses.

Tax sale certificates, totaling over $30,000, have been sold against the three vacant houses indicating the developer may be struggling to maintain the properties. If so, the homes will be forced down to market prices. Once occupied, even an average of one public school child per house will cost the district over $5,000 per house. At two children per house, the development would lose the town $75,000 a year.

Of course, by the town council’s calculation, even if each house was home to a dozen kids, the municipal tax rate would still drop from the additional ratables and the inevitable school tax hikes would be blamed on someone else.

Meanwhile, the neighbors can’t be too pleased with an oversized empty development. Which brings us back to the original point – What was the town council thinking?
>>> Read more!