Saturday, January 29, 2011

Personal Financial Literacy in Worthington Schools

At the January 21, 2011 work session of the Worthington Board of Education, we had an in depth discussion about Personal Financial Literacy. At the heart of the discussion was whether or not Worthington should require a semester class in Personal Financial Literacy as a graduation requirement.

There is little doubt that the lack of personal financial literacy is a societal problem. Surveys show that kids graduating high school lack the skills and knowledge necessary to make good decisions with regard to personal finance at the very time in their lives when they need to start making those decisions.

Ohio requires the study of economics and financial literacy,  however, the law was non-specific as to what had to be taught and how much of it had to be taught. These decisions were to be left to local school districts, however, a committee was formed to recommend guidelines. Worthington elected to fulfill the requirements by modifying the graded course of study for American History and teaching the content standards over the course of a week or two at the end of the school year.

Instituting a new local graduation requirement is unusual, but not unheard of. Worthington requires one semester of speech, for example, even though it is not required by the state of Ohio. No one doubts the importance of personal financial literacy, the question is whether it rises to the level of importance given to other required classes.

According to the Jump$tart coalition, 4 states already require a semester of personal financial literacy with others considering such a policy. The third recommendation of the Ohio Financial Literacy Commission was to require a class.

What is the downside of requiring a semester of personal financial literacy. In Worthington, our high school students have a rich variety of electives that can spark an interest in all kinds of subjects. Mandating a semester of personal financial literacy would remove the opportunity to have selected one of those electives. Arguably, some students already know the subject matter and would therefore be wasting their time in the class. A Time magazine article suggested that students who have taken such a class are no better off than those that have not.

After considering all the data, I am leaning in favor of Worthington Schools modifying our graduation requirement to include a semester of personal financial literacy.  I believe that we must do all we can to arm our graduates with the knowledge necessary to make good financial choices as they start college or enter the workforce. The requirement would be able to be satisfied in a number of different ways, including economics classes, a business class or even our new mathematics class titled "Financial Algebra". Thanks to Ohio's new Credit Flexibility law, students that already have the knowledge would be able to test out of the requirement  and students would also have the ability to satisfy the requirement through independent study, online courses or internships.

Agree?  Disagree?  Discussion?

Saturday, January 15, 2011

Why we need a five year forecast

Today's edition of the Columbus Dispatch brought the unwelcome news that the Ohio legislature is contemplating removing the requirement for a five year forecast and substituting instead a three year forecast requirement. The legislature correctly believes that the fourth and fifth years of the forecast are usually inaccurate, state revenues will always be unpredictable and therefore, there is no value in providing them in the forecast. I disagree. While it  is clear that forecasting 5 years out when the state is on a two year budget cycle is problematic, the value of the five year forecast goes way beyond this relatively minor issue.

For example, the entire expense component of the forecast can be predicted with an acceptable margin of error given the relatively stable nature of the workforce and the relatively narrow range of employee compensation and there is value in doing so. Forecasting through the entire 5 year period allows school districts (indeed, requires school districts) to work towards a planned levy cycle. Currently, Worthington is planning its next levy for 2011 or 2012, but the fourth and fifth years of the forecast are required to determine how large the levy should be and when the next levy would be.  The forecast serves as documentation for internal and external audiences that the next  levy will be required and why. Cutting the forecast to three years would make it more difficult to build community support and community understanding of a planned levy cycle.

Worthington is currently struggling to find a path to long term financial stability. One aspect of this project is to convince our constituency that change is necessary. The 4th and 5th years of the forecast are exhibit A in this effort. In addition, reducing the forecast period would serve to obfuscate the  cost of employee labor agreements and ongoing requirements such as employee health care.

Indeed, even the one component of the forecast that cannot be forecasted accurately, state revenues, derives benefit from a 5 year requirement. The permanent reimbursement of tangible personal property taxes, an issue of significant importance to many Ohio school districts only came on the radar screen of many school districts because the lack of said reimbursement caused  revenues to take a significant hit in the 4th and 5th year of current forecasts.

It's my hope that the legislature reconsiders this change.

Sunday, January 9, 2011

Ohio School Boards Association Award of Achievement.

The Ohio School Boards Association (OSBA) is an organization that represents the 3000+ school board members in the state. Districts join OSBA using taxpayer funds. For large districts, the charge is 70% of the District's Cost Per Pupil, so in Worthington, that works out to $9261/year for 2011. For your $9261, OSBA provides a number of "free" services, some of which are significant such as providing lobbying support for districts and legal advice on school board related matters to board members.

OSBA also has many opportunities for "training". These are fee-based classes that school board members can take to become better, more informed school board members. I've attended a number of OSBA sessions, notably the OSBA Capital Conference, and have found them to be helpful in understanding various aspects of school board governance.

The other day, I received this communication from OSBA in the mail and it inspired this blog post. The mailer describes the OSBA "Award of Achievement". How does one get the "Award of Achievement". Simple. Enroll is as many OSBA taxpayer funded classes as possible.

Now, I'm a big believer in board members learning everything they can about the business of education in the state in order to best represent their constituents, however, I am not a fan of spending taxpayer dollars to do so. Every dollar that board members spend on themselves is a dollar that is taken away from the teachers, students and programs that they are able to offer. This mailer seeks to use the ego-boosting "Award of Achievement" as a way to artificially get board members across the state to take classes and spend taxpayer money. In fact, it goes beyond that. It also introduces the "Master Board Member" as one who takes even more classes over an extended period of time.

Now, don't misunderstand my rant. I'm not saying that all OSBA classes are bad or a waste of money, I'm ranting against OSBA's self-serving "Award of Achievement" and "Master Board Member" status symbols as a way to drum up business. By all means, board members should take classes if they feel the need to get educated on a particular topic, but they should make sure they are doing so for the right reasons. If OSBA wants to recognize board members for excellence, it should pick criteria that does not make profits for OSBA. Otherwise, it would be like Kroger issuing an award of achievement for buying a certain amount of groceries over the course of year which is to say.. meaningless.