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A Bargain Not Kept
Health Care Costs Overwhelm State Funding for Schools

 

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A stunning Understanding Boston report released at a December 9th forum at the Boston Foundation made front page news in the Boston Globe that day. Called School Funding Reality: A Bargain Not Kept, the report shows that soaring costs for employee health care coverage have drained school budgets and undermined the historic bargain that was central to education reform in the Commonwealth in 1993. The report was prepared for the Boston Foundation and the Massachusetts Business Alliance for Education (MBAE) by economist Ed Moscovitch.

Boston Foundation President and CEO Paul Grogan opened the forum by saying that there was no one more qualified than Mr. Moscovitch to prepare the report because he was one of the authors of the original Chapter 70 state funding formula for school budgets.

“Ed Moscovitch puts into clear and compelling focus what many have suspected for a time, that our good-faith efforts to close the achievement gap are being erased by the cost of health care,” said Mr. Grogan. “This now is the ultimate education issue.”

Ed Moskovitch
Ed Moskovitch used stunning charts to present the report.

Secretary Paul Reville
Secretary Paul Reville was interviewed by WBUR and others after the forum.

 

Placing the report in context, MBAE Executive Director Linda Noonan, said, “We have learned that our significant investment in education since 1993, and the gains in student achievement that followed, are at risk due to the uncontrolled costs of employee health care."

Mr. Moscovitch presented the key findings of the report next, including the fact that from 2000 to 2007 health care costs in school budgets grew by $1 billion, $300 million more than the total increase in Chapter 70 aid, creating a shortfall of $1.7 billion for the current school year.

“We’re asking teachers to do what they don’t have the resources to accomplish,” he said. “Spending on books fell by more than 50 percent from 2000 to 2007 and spending for teacher training fell by almost 25 percent – two expenditures that directly affect student learning.” He went on to point out that the neediest school districts, such as Chelsea and Lawrence, have taken the biggest hits.

“This report is the smoking gun,” said Mike Widmer, President of Massachusetts Taxpayers Foundation, during a panel discussion that was moderated by Mr. Grogan. “It shows that health care costs are chewing up the ability of all of us, including teachers, to give the kind of education we all want for our children. And education is our number one competitive advantage as a state!”

Sidney Smith, Superintendent of Malden Public Schools, provided insights into the effects of tight budgets on a school system. “In Malden, I’m working with an enlightened mayor and union, but none of us can change the fact that this rise in health care costs has landed on the back of our employees, who have had a salary freeze and are paying more for health care.”

“Health care reform is a top priority of the Patrick Administration,” said Paul Reville, Secretary of the Massachusetts Executive Office of Education. “But we have to keep this issue in perspective. We lead the country in education and the architecture of Chapter 70 is still strong, although it needs work.”

Linda Noonan     Mike Widmer
(from left) Linda Noonan, Mike Widmer

 
 

Sidney Smith     Joseph Esposito
(from left) Sidney Smith, Joseph Esposito

As the discussion turned to solutions, Mr. Widmer suggested a solution that the Boston Foundation and others support. “Give school systems the power to manage their own health care costs,” he said, “whether it’s joining the GIC or encouraging employees to move to Medicaid. The employees will benefit because, ultimately, their jobs will be saved."

Representing the business community was Joseph Esposito, Advisor with Ascentage Group, LLC. “If we throw up our hands about education because of this one issue, shame on us!” he said. “We have to believe in our resilience and we have to get the business community to step up again.”

From the audience, Mike Contompasis, former Superintendent of the Boston Public Schools, said that since we know what has to change, the question is whether we have the “political will” to change the system. “We should also think in terms of regionalization,” he said, “so that we can save money by coming together.” Chalotte Kahn, Senior Director of the Boston Indicators Project, added that the study is just the tip of the iceberg, because today we have a system “that drives us toward health care rather than health,” suggesting that health and wellness should be a top priority.

In closing comments, Mr. Grogan spoke about the larger message of the report. “America always has been a ‘tomorrow society’, with the next generation doing better than the last. Are we abandoning that idea? We must use this issue as a gateway to all of the issues which are endangering future generations.”

 

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