Ian Kalin for School Board

Supercharging Investment In Our Schools


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The Problem

Our schools are in a financial crisis.  The lack of investment hurts every single part of our education system.  It wasn’t always this bad. California used to be a national leader. But following oil price shocks and a wave of homeowner concerns about property taxes, a ballot measure was passed in 1978 that instantly cut down school funding. Since that measure, our education investments have been in a steady decline.  

Public K-12 spending in the rest of America (exclusive of California) averages nearly $12,000 per student per year. But in California the average is approximately $9,000, ranking us among the worst states in the country. (References from California Budget and Policy Center and U.S. Census Bureau.)  Making the financial problem worse, California education costs are also higher than other districts due to our significantly higher percentage of English Language Learners, special education students and the stark reality of the cost of living in San Francisco. Everyone is experiencing this crisis, especially teachers.  The median teacher salary in our District is ~$58,000, making it nearly impossible for public school teachers to find affordable housing.  Altogether, the lack of funding is our school system’s most pressing problem.

 

Relevant Financial Policy Experience

Before diving into the education numbers, please afford me the opportunity to share a few stories that demonstrate why I feel I am qualified to provide recommendations.

  • While in the Navy, I observed that there was no central system to manage or improve the preventive maintenance work being done by technicians and engineers.  So I created a new database to help prioritize work.  The new database system saved thousands of hours of labor in its trial phase and was later adopted by the entire naval fleet, later contributing to hundreds of millions of dollars in taxpayer savings.

  • As a clean-tech entrepreneur, I supported California utilities in the construction of the largest-ever solar power construction project.  The whole project was almost shut down because of a perception of escalating costs.  Yet, after leading teams to better use energy price data, we were able to prove that the project was actually going to be much cheaper than originally forecasted.  This led to new rate-payer support and the construction of the solar power plants.

  • In my role as the Chief Data Officer for the U.S. Department of Commerce, I led a team that helped to uncover $5 billion in cost savings at the Census Bureau by modernizing and streamlining database systems.  In collaboration with various levels of government, we developed productive ways to re-invest these savings back into the Census so that they could better accomplish their mission.


The Context

The sources of California’s education funds is as illustrated below:

 

Source: Ed100.org

California’s pie wedge is roughly $50 Billion out of statewide budget of roughly $115 Billion.  Therefore, education is already one of the largest state expenditures and there are several major policy initiatives underway affecting how this money is spent.   Two of them warrant acknowledgement.  First is the national shift from the Federal No Child Left Behind Act to the new Every Student Succeeds Act (ESSA).  Unfortunately, this shift did not result in significant increases in funding for California or San Francisco. Second, after years of the State giving money to local school Districts and asking for numerous reports on how the money was spent, we now are deep into a new system called the Local Control Funding Formula (“LCFF”).  In general terms, LCFF sets the rules for state funding to flow to districts based on the characteristics of the students. Districts receive more state funds for students that are:

  • In higher grades

  • Learning English

  • In poverty

  • In foster care

The LCFF did result in a very modest increase in state funding for SF schools. I am very supportive of the LCFF policy and appreciate its early successes.

But despite this progress, funding for our schools still lags far below where it needs to be for our students and teachers to succeed.The below proposals will be challenging to implement, but represent the best path to a fully funded system of public education.

 

My Recommendation

We can restore San Francisco’s schools to an adequate level of funding in three phases.

 

Phase 1 - “Local Community Building”

IMPROVED PUBLIC-PRIVATE PARTNERSHIPS

San Francisco’s businesses want to invest in their city.  They just need to be enabled and engaged in a productive manner by District leadership.  Just consider the $14 million Salesforce.com has donated to San Francisco’s public schools.  That happened, primarily, because of the hard work of Laura Moran, the Chief of Strategy & Fund Development for Superintendent Richard Carranza, and her team.  The District had a very positive return-on-investment with Laura’s work, which is even stronger today due to the creation of a new District-led non-profit named SparkSF.  Simply put, the more great staff Laura can hire, the more that donations like those from Salesforce will happen.

But tech company CEOs alone are not going to “move the needle.”  There needs to be a comprehensive engagement for ALL the major businesses in San Francisco. Separately, we need to engage the smaller businesses that are close to our schools and that benefit economically from the students, teachers, parents, and staff that come to and from those neighborhoods every day.  We also need to provide central platforms so that individual communities can more effectively fund-raise beyond what is generally collected by Parent-Teacher Associations (PTAs). For both the local small businesses and PTAs, the “Tilt” campaign - a District led initiative to help individual schools create and manage crowd sourcing campaigns - is a step in the right direction.  But much more needs to be done to make the technology effective.

NEW FACILITIES BOND

San Francisco has a voting mechanism to issue bonds and finance improvements to facilities.  There are some drawbacks to facilities bonds, such as the fact that any money raised cannot be used for teacher salaries.  Yet, given our aging infrastructure, the cheap cost of debt, and our collective need to accommodate an increase in student enrollment, the facilities bond makes a lot of sense.  There is a new facilities bond working its way through the ballot process now, the details of which have not yet been finalized or made fully public.  I hope voters approve this bond in November, and I believe we should place similar bond initiatives before the voters in the future. And given the available data on our current needs, the dollar value will need to be significantly higher than previous bonds.

SOCIAL IMPACT BOND

A Social Impact Bond is an innovative financial tool that enables government agencies to pay for programs that deliver results. Social Impact Bonds are a powerful tool for policymakers to acquire more resources and improve services for disadvantaged populations, even in the face of shrinking public budgets.  President Obama referred to this financing mechanism as “pay for success” financing because they are generally only a good fit for programs where outcomes can be clearly defined and historical data is available or when preventive interventions exist that cost less to administer than remedial services.  Social Impact Bonds are relatively new in the United States, but are contributing to meaningful programs to address recidivism and homelessness.  

For San Francisco, there is a real opportunity to explore how Social Impact Bonds can fund early education and home-visit programs.  The first step in applying is to reach consensus with budget stakeholders on who should be the lead in the application process.  I believe the San Francisco School Board should serve that function.

 

Phase 2 - Meaningful Revenue

Philanthropy and bonds are great.  But they will either rely too much on debt financing or will not provide long-term revenue streams.  We cut tax revenues too far on education back in 1978 and as a result California’s education system has steadily fallen to the bottom tier nationally.  It’s a hard truth, but we got what we paid for.  

The last time revenue was raised to the point that teacher salaries were meaningfully impacted was with the 2008 Prop A or “School Parcel Tax”.  This measure was supported by Mayor Gavin Newsom, San Francisco Board of Education, San Francisco Chamber of Commerce, United Educators of San Francisco, Parents for Public Schools, and many others.  This contributed to its successful passage, even though the measure required more than 2/3’s of the voters instead of the typical 50%.  If elected to the School Board, I would seek to build a coalition of City, County and State stakeholders in order to explore how another school parcel tax could provide steady and meaningful funding.  

Voters generally don’t like raising their own taxes.  But historical voter data shows something really interesting here.  There is a historical exception where education funding is concerned. For over 60 years, whenever San Franciscans have been given a choice to vote for greater funding for schools, they have always approved the measure.  

To answer the question of how much more money is needed: I support the California Parent-Teacher Association’s recommendation that San Francisco needs to spend $3,000 more per student.  Another benchmark to consider is teacher salaries, which we need to increase significantly above current levels in order to recruit new talent, build the professional skills of existing educators, and retain those teachers that are feeling the financial pressures of living in San Francisco. Teachers need to be able to afford to live here.  Other consistent areas of insufficient funding include class size, the quality and depth of teacher training, having a nurse on-site, social worker availability, and the availability of modern equipment.

 

Phase 3 - Statewide Leadership

As a result of California’s initiative process, the voters often have a direct say in important issues. Few voter actions have affected public education more than Proposition 13, and almost 40 years later, it is due for reform.  To reform Prop 13 is a big, big deal. What makes it even more complicated is that Proposition 13 came from Sacramento, not San Francisco.  Statewide factors must be considered before any city our county can take a leadership role.  Consider these three examples:

  • Proposition 98 was also hugely impactful to public education funding, but it did not add new revenues to the budget. Rather, it amended the constitution to require that a larger and more consistent fraction of the state budget be spent on education. In 1990, Proposition 111 changed the rules a bit.

  • Proposition 30 and the higher state income tax on the top 1% of earners brought billions to the state budget.  But they have expiration dates that may not be extended.

  • Beyond lottery revenues, which are not significant when compared to the totals, other “deal sweeteners” for education funding being discussed by State legislators reportedly include marijuana legalization and a tobacco tax.

I share these examples to illustrate that engaging the State Legislature is difficult. But it’s not impossible. Realistically, to be successful, San Francisco’s leaders would also have to collaborate with our peers in other major metropolitan areas like Los Angeles and San Diego.  I have successfully engaged various levels of government before and I propose that I am the only Board of Education candidate with this kind of experience.  If elected, I would seek to work with our representatives in the State Assembly and State Senate to build a path to Prop 13 Reform.  

 

Deployment Methods

Strong Schools.  Smart City.

San Francisco can be the nation’s leading city for public education. We have all the building blocks: committed educators, innovative people, commercial wealth, passionate public servants, a growing community of families, and the progressive spirit. We may not have gotten ourselves into this mess, but we can pull ourselves out of it.

A guiding assumption for the three-part strategy outlined here is that I do not and cannot have “all the answers”.  I’ll need to learn from experts inside the School District today and then find creative ways to empower them.  I’ll need to be patient and build trust at every level.  I’m prepared to do this because I have experience working within public institutions like the San Francisco Unified School District.  I’ve worked for many governments at various levels (i.e. city, county, state, and Federal) and also in diverse public sectors (i.e. military, energy, public safety, transportation, technology...and of course, education).  In past leadership roles, I’ve worked with committed public servants to make significant improvements on billion dollar budgets.  I hope to bring this experience to the San Francisco School Board in order to deliver on the proposals outlined in this document.


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