Kevin Shafer, president of City Fund, joins Mike Petrilli and David Griffith to discuss efforts to expand access to high-quality public schools across the country. Speaking on his experience with school reform in Camden, New Jersey, Shafer discusses what it takes to improve school systems and the role charter schools can play in that work. Is it better to work with districts to build a portfolio of schools, or focus on growing high-quality charters outside the system?
Then, on the Research Minute, Amber Northern examines a new study finding that districts losing students gain more funding per pupil, but much of that additional money goes toward reserves and facilities rather than higher teacher pay.
Recommended content:
- A flexible “third way” option: Partnership schools on the rise —Andy Smarick, Thomas B. Fordham Institute
- Three ways charters reform and improve our schools —Chester E. Finn, Jr., Bruno V. Manno, and Brandon L. Wright, Thomas B. Fordham Institute
- Denver doesn’t spell doom for portfolio-style reform —Paul T. Hill, Thomas B. Fordham Institute
- The Baby Bust Goes to School —Michael J. Petrilli, Education Next
- Robbers or Victims? Charter Schools and District Finances —Mark Weber, Thomas B. Fordham Institute
- Moving Target: The Success and Failure of Missouri’s Charter School Funding Surge—Andrew M. Camp, Collin Hitt, and David Griffith, Thomas B. Fordham Institute (2026)
- The “Would You Rather?” Test —Marguerite Roza, American Enterprise Institute and Thomas B. Fordham Institute
- Enrollment, Fiscal, and Resource Changes in American Public School Districts, 1998 to 2019 —Matthew H. Lee and Benjamin Scafidi, Education Finance and Policy(2026)
Feedback Welcome: Have ideas for improving our show? We would love to hear them. Send them to [email protected]
Transcript
This transcript was generated with the assistance of AI and lightly edited for clarity and readability.
Introduction
Mike Petrilli [00:00]
Welcome to The Education Gadfly Show.
I'm your host, Mike Petrilli of the Thomas B. Fordham Institute.
This week, Kevin Shafer of City Fund joins us to discuss the promise and challenges of district-charter partnerships and his experience with school reform in Camden, New Jersey.
Should we try portfolio-style reform with districts, or just focus on growing high-quality charters outside the system?
Then on the Research Minute, Amber Northern examines a new study finding that districts losing students have more funding per pupil. But much of that money goes toward reserves, facilities, and more staff rather than higher teacher salaries.
All that and more this week on The Education Gadfly Show.
Mike Petrilli [00:56]
Hello, this is your host, Mike Petrilli of the Thomas B. Fordham Institute, here at The Education Gadfly Show and online at FordhamInstitute.org.
Now, please welcome today's special guest, Kevin Shafer.
Kevin, welcome to the show.
Kevin Shafer
Thanks, Mike. Good to be here. Excited to chat.
Mike Petrilli
Yeah, I understand. Longtime listener, first-time caller kind of situation here.
Kevin Shafer
Sports talk radio and ed reform podcasts.
Mike Petrilli
Good. I love it.
Kevin is the president of City Fund. We will talk more about that and Kevin's background in a moment.
But first, let me welcome my co-host, David Griffith.
David Griffith
Hey, Mike. Always a pleasure.
Mike Petrilli
Yeah.
Well, you know, before joining City Fund, which supports the expansion of high-quality schools, including charter schools, in big cities around the country, Kevin was chief innovation officer for Camden City School District, where he worked on transformation efforts and led to the development of Renaissance Schools, which is a partnership between the district and high-performing charter schools.
Which is really the perfect place to start, because we're going to talk about the pros and cons of reformers focusing on districts, or districts doing charter-like things, doing charter things, versus just, hey, let's just try to expand charter schools and forget about those districts altogether.
So let's talk about all that in Ed Reform Update.
Ed Reform Update: District reform or charter growth?
Mike Petrilli [02:26]
So, Kevin, tell us about your experience in Camden, which, as I recall, was a very exciting success story in ed reform.
For those folks out there that may not know, tell us about that and the role that charter schools and the district played together in that.
Kevin Shafer
Yeah. Excited to talk about it.
So I started my career, you know, middle school teacher, Bridgeport, Connecticut, and found myself in 2012 working for Paul Vallas in Bridgeport.
And we tried to do a bunch of things to make schools better and got a lot of the politics wrong, got a lot of the engagement wrong, the community side wrong, and found essentially that our school board flipped on us.
Paul went to go run for lieutenant governor, and I was sort of like, what do I do next?
The state then took over Camden City School District.
It was a rare state takeover where the mayor asked for it and local electeds were saying, come do this.
Hired my boss at the time, an amazing leader named Paymon Rouhanifard. I spent thirty minutes with him and was like, sign me up.
I want to be a part of this because there was just such unbelievable need and unbelievable opportunity to actually make a difference.
So, 2013 Camden.
In a pretty small district, 15,000 students, but 23 of the 26 schools in Camden were in the bottom 5 percent in the state of New Jersey.
There were three students, not 3 percent, three total, that met the College Board's college-ready benchmark.
Something like 70 percent of our buildings were constructed before 1928.
And so it was just an absolute system in total crisis.
And I think I'm going to get this wrong. If Paymon ever listens, he'll call me out on it.
But there was something like ten superintendents in thirteen years before he got there.
And, you know, amazing people in that system working hard for kids every single day.
And the system wasn't working.
It didn't work for kids. It didn't work for families. It didn't work for the community.
And so we saw our job as, really, let's do two things.
Let's do everything we can to help improve the schools that are underneath us.
And also, let's recognize that turning this sort of Titanic around is going to be really hard. It's going to take a really long time.
And, you know, superintendents don't last.
We lasted for five years, and I think that was the longest one in thirty years.
But superintendents don't last very long.
And so what can we actually do that will both make an immediate change and will last?
And so there was this really novel piece of legislation called the Urban Hope Act, which created something called Renaissance Schools, which in Camden's case meant essentially it was the governance of a traditional charter.
So all the autonomy, a charter held by the state, performance standards they need to meet, sort of all those things.
But it was also a partnership with a local district, which meant a defined neighborhood.
So everyone in North Camden got to go to that Renaissance School, had a guaranteed seat, which in a city like Camden was hugely important.
You know, if a family didn't have the means to drive their kid across town or if city transportation wasn't reliable.
So that sort of safe neighborhood component was really important.
So it's basically the benefits of a charter with a neighborhood school.
And this piece gets sort of underreported, but it was really, really important: a facilities requirement.
And so it was actually a requirement that every school either was a brand-new construction or significantly renovated.
And so because of that, we were able to leverage the bill and these partnerships to get hundreds of millions of dollars in new school renovation, which was critical to actually getting the infrastructure met.
Which, you know, great schools, I've seen great schools in church basements and in $50 million high-rises. You know, great school anywhere.
And the signal it sent to kids in Camden about how much we value them and their education was real.
Mike Petrilli
Interesting.
So the district role then was what in the facility piece, basically?
Kevin Shafer
Yeah.
So the district, but even this gets to your sort of district-first, charter question.
We had a choice.
You could sort of say, we'll partner and we'll open some Renaissance Schools across the street from a district school, right? Or down the street, right?
If you're sort of, we're going to grow charters next to the traditional system, we could have done that.
The downside to doing that was you're bleeding enrollment from the traditional district school.
It's slower to actually get as many kids into a higher-quality school.
It just takes ten more years, right, if a school starts with kindergarten and grows its way up.
Or can we actually do the work to figure out, can these Renaissance Schools take over an existing building and transform it wholesale?
And so we were lucky enough in New Jersey that we had some amazing school partners.
This was KIPP from Newark, Uncommon from Newark, and Mastery Charter Schools from across the river in Philadelphia.
And all of them were willing and had the ability to sort of do whole-school turnarounds.
And so we actually took a bunch of traditional district schools that were most under-enrolled, had been most chronically struggling to perform academically, and where there was real community demand and parents saying, we would want something different.
And said, we're going to give you, Uncommon, this facility. You're going to take every student in that building. You're going to transform outcomes.
So it was really the district-initiated sort of whole-school turnarounds.
And then we were basically the authorizer, and they ran great schools and have done great things for kids.
Mike Petrilli
So that's interesting.
So you are the authorizer. Okay, so it's not that, you mentioned the contract being held at the state level.
Kevin Shafer
Yeah. I mean, this is the risk of being, like, really wonky and nerdy.
It's both.
So it actually has to get initiated by the district.
The district holds a contract with the operator, but then that contract goes to the state.
And so neither party can amend it or change it without the state signing off.
Mike Petrilli
Oh, interesting.
Your point about sustainability questions, you know, someone comes in and says, I think this is a bad idea.
You have to go convince the state, and both sides have to agree.
So the story goes on.
Some fantastic results at these schools and the district as a whole. Tremendously better results.
Right?
But you guys leave.
And so the concern has always been sustainability, right?
The next guys or ladies come in and just kill it, turn it back into a traditional public school.
The union demands, you know, get rid of these providers.
Is that what has happened? Or has this rule about getting state approval helped to keep it in place?
Kevin Shafer
It has not happened.
The schools have kept growing. They've added high schools. They're now fully K through 12.
Definitely been challenges along the way, as any systems face over the last ten years.
And I think it's sort of two reasons.
One is the policy structure, for sure.
State holds it. That is all true and a big part of it.
I think the other part of it is how it happened.
I think if you do these things to, not with, there's just always going to be some backlash.
I think credit to Paymon and Mayor Dana Redd and local parents and local council leaders.
But this really was done with folks so that these schools were seen as community schools, and there was big public engagement and buy-in and support.
Not everybody was happy all the time, sure. These are hard changes.
But I think that actually people were bought into doing this.
And then, two, the schools delivered.
And I think if these schools were not actually doing better for kids, if they weren't serving all students, if they weren't getting great results, then I think it's a really different conversation we're having today.
Which I think, these strategies, who's running the schools matters way more, just as much, I think, as which policy construct you use.
Mike Petrilli
Well, this is interesting.
And this is good for me to hear, Kevin, because it is challenging some of my priors.
You know, because I have been in this debate forever, somewhat skeptical of what people have called the portfolio strategy, right?
Saying that, you know, people should come in and they should try to devolve power to these charter schools or charter-like schools as district officials.
It just always seemed like, you know, the politics of that would be unsustainable.
You know, maybe that's what you have to do as a compromise organization.
Okay, but why not just instead put all of your focus on starting high-quality charter schools completely outside of the district?
You know, so basically like in D.C., right?
In the District of Columbia, you've got this separate authorizer, separate mechanism.
They've solved the various problems over the years with facilities and enrollment and all the rest.
And so they've built this great system of charter schools that sits right next to the system of traditional public schools.
Versus what we see in, say, Denver, where there was this focus on, you know, having the district partner with these kinds of schools, charters and charter-like schools.
You know, and then the policy shifts, the unions vote in an anti-reform board, and then a lot of it is fragile. It's at risk.
Right?
But you're making a case that says, hey, you know, at least in this New Jersey example, you have, partly because of good state policy that brought in this investment in the facilities, that gave you some leverage, you know, maybe to make sure this came out right, that there were some real benefits.
And this idea that these are takeovers, transformations, they're neighborhood public schools.
I don't know. This all sounds pretty good.
David, what are you thinking about this?
David Griffith [11:18]
Yeah, I mean, I tend to agree.
I think I've made the point a couple times that I at least feel like, in some circles, what we'll call the Denver model, maybe it's the Camden model, is underrated, right?
I think there are these sort of unfortunate transition costs that are associated with the route that the big Missouri districts that we studied are taking, that Indianapolis is sort of finally turning the corner on, right?
Like this sort of rocky road to destroying the district to save it.
And so I don't, you know, as much fun as that looks like, you know, I think we should consider these alternative routes, right?
And one reason, I think, it's sort of been touched on, right, is like if you have enough political support to take a few steps down this road, chances are it doesn't just evaporate completely if there's some, you know, if there's turnover at the school board level, right?
I mean, you can have dramatic changes in school boards. I don't mean to sort of discount that.
But I mean, I don't think that parents woke up in Denver or Camden and felt completely different about charter schools overnight because of something that happened with the school board.
And so, you know, I think there's sort of more latent support, even in these places where reform is struggling right now, than maybe it seems.
So, you know, if you can go this route, like, why not?
I guess the flip side of that, I would also say, is like, you know, the completely external route has its own challenges, right?
And not just sort of educational challenges.
Like, I don't know, you have a serious facilities challenge, like we've been talking about, if you're not going to partner with the districts, right?
Like, my understanding is that in North Carolina, for example, it's just like a queue to try to find buildings that look like schools, right?
I don't know.
I don't want to undersell this choice.
I think it's a significant strategic choice on the part of the charter sector.
But I do think there are pros and cons to each side.
And I don't think you can judge it over three years or five years.
I think you have to judge it over twenty-five to thirty years because these are long political cycles.
Mike Petrilli
All right. So that's well said, David.
So, Kevin, all right.
So you've got this experience. You now are in this role at City Fund.
You all raise money from some of those pro-ed reform billionaires that are still out there, Reed Hastings and others, and invest them in trying to grow high-quality seats, what, a couple dozen cities around the country.
Excited that you're working in Ohio and Cleveland.
Woo!
Glad to see that.
So how do you think about these issues now?
I mean, is it a, you're trying to do both-and in a lot of these cities? Or do you kind of pick one or the other?
How's this go?
Kevin Shafer [13:59]
I think both-and.
But I wouldn't want to understate sort of, the nuance really matters here.
And so on the one hand, I look at Camden, I look at Indianapolis as two cities that have come the closest to New Orleans on creating a system that really is about outcomes for kids.
Lots of high-quality choices, performance bar, cycles of accountability.
You know, 70 percent of students or so in both places that are actually going to a charter or charter-like school.
And both Indianapolis and Camden called them something different, and they leveraged some version of this, right?
The innovation law in Indianapolis converted good schools to great and had sort of this turnaround component. Lots of similarities to Camden.
Camden had the Renaissance School piece.
But in both places, they also were protected from the political swings.
Like the state charter in Camden, being like the charter ultimately being held by the state.
In Indianapolis, at an innovation school, if the district decided to tear up that contract, every innovation school has a charter contract.
And so I think there is just a protection in that that, frankly, Denver doesn't have.
And in Denver, an innovation zone, it's at the whim of that board.
And so the families in Denver and leaders of those schools every year have to go fight to defend those schools that have done amazing things because it's not protected in law.
In Texas, the 1882s, it really varies by what the contract looks like.
So there's ones that are really protected and there's ones that aren't.
And so I actually think the nuance of this actually matters more to me than, is it...
Because I think there's no doubt that if you have the operators who can do right by kids, you have the community willing to do it, it is a more efficient, faster route to get more kids into better schools faster.
Can it sustain?
And that actually becomes a policy, it really is a policy question.
Mike Petrilli
Yeah.
Well, that is, so no, it's really interesting.
And so the question, yeah, right.
So for policy people, us policy wonks who think about, hey, maybe, you know, how do we change state policy to be supportive?
Right?
Indianapolis route is one way. Hard politically.
I mean, you know, maybe there's some more red states out there willing to do what Indianapolis, what Indiana has done in terms of taking basically the facilities and the transportation and the money out of Indianapolis Public Schools, giving it to this new independent board run by the mayor.
I mean, that is, I'm still super excited about that, but that's hard.
So this other option then would be to create basically what? This Renaissance Schools policy like you have in New Jersey.
Who knew that New Jersey should be such a great model of state policymaking?
Kevin Shafer
Well, in true New Jersey fashion, this law was available to, like, the five biggest urban districts, and only one was willing to do it.
And it's worth noting, only one was willing to do it that was under state intervention.
And so while there was local support and cover, I think the reality is, if we wait to find the conditions where you get the right law, the right willing district partner to do it this way, we're going to be waiting a long, long time when hundreds of thousands of kids are stuck in systems where they're not getting access to great schools.
So the question of, like, which route to go, maybe it is a both-and.
And, you know, the majority of our cities are every day figuring out, how do I grow a great charter school for the students and families in that neighborhood that's most underserved?
Right?
How do I then grow another one and another one?
And hopefully there's a moment where you can partner with the district or you can figure out a plan for the whole city.
But that's the thing we can control.
They can do right by kids every day.
And then try to create more moments where you have opportunities to work with and go faster.
But those moments are hard, and they've been a lot fewer in the last five years than they were in the ten years prior.
Mike Petrilli [17:31]
All right.
One last question, Kevin.
You know, back to this portfolio model.
You know, the alternative for what districts should do, right, is to do what D.C. Public Schools has done and a few other big-city districts and just try to get really good at running traditional public schools.
Right?
Forget this devolution thing.
It's basically a top-down playbook.
Lean into high-quality instructional materials, a very clear vision around what high-quality instruction is, you know, a lot of support, a lot of training.
Accountability up and down the system.
You know, and it has been proven in DCPS and maybe a few other places that you can do this and you can do it at scale.
And the benefit, by the way, is that in a place where there's a lot of kids in poverty, they move around a lot.
Wherever they land, the curriculum is the same, high quality.
The teachers are using the same kind of language. They're getting the same training.
It's maybe not so different.
And it's a nice complement to this choice-based system that the charter schools have.
Right?
I mean, you can tell I'm a huge fan of what D.C. does, right?
And I still think it's the best of both worlds.
But I mean, to me, that, though, is not what you guys do.
That you are not supporting district reform strategies unless they embrace the portfolio model.
And the question is why?
Like, what's your take on that?
Kevin Shafer
I think it really, I think the progress and results in D.C. have been incredible.
And I think part of the reason the district has been able to sustain this is also because they've done it alongside growing an incredible charter sector.
And I wonder, I don't know, it's a thought exercise, but I wonder whether it would be as sustained if charters were 10 percent of D.C.'s share versus 50, right?
And so it's hard to separate those two things.
And we want to see every city we support have a world where every kid gets access to a great public school.
And if that is 40 percent charter or 50 or 70 or 20, don't really care.
It's ultimately, do kids get access to the school they need and can it last and sustain?
I think what we've seen in places outside D.C. is that playbook works.
It's really hard to execute it well.
Mike Miles in Houston is doing an absolutely phenomenal job of executing that playbook.
Lots of other challenges, but, like, the results are unbelievable.
But it's really hard to actually execute it well, and it's really hard to sustain it.
And what often happens is the average superintendent comes in, spends three years building this up, have their new curriculum, have their new teacher-support program, have their new principal, their new academic team.
Just when they start to see gains, time for a new school board, time for a new superintendent, and a version of the same thing, but a little bit different, happens.
And you're in this sort of constant flywheel.
The miracle of D.C. is that they've been able to sustain this progress for fifteen, twenty years.
And I wonder if that's possible without charters keeping the bar high for progress and accountability.
We haven't seen that anywhere else over a big city over that lifetime.
So I think if you can actually guarantee districts could keep doing that and get a better governance model, it's way easier.
It'd be way easier than trying to grow charters and make it work.
I think unfortunately, we just have thirty, forty years where D.C. is one outlier, and that outlier came when you grew the charter sector to 50 percent.
Mike Petrilli
Yeah. Yeah, no, it's fair.
And look, this reminds me of my good friend Rick Hess's classic Spinning Wheels, right?
This is what we know from urban districts.
I mean, we maybe can point to some others.
Houston is a very good example.
You know, Chicago there for a long time got a lot of credit, especially from Sean Reardon's analyses, for really boosting achievement.
And, you know, there too, it helped that there was a strong charter sector.
But it seemed like the district was doing good things as well on the teaching and learning front.
Maybe, you know, depending on how we define big districts, we could find a few others, maybe a few of the big suburban districts.
But you're right.
Spinning wheels seems to be much more common than the success stories that we are pointing to.
I guess the basic takeaway is no matter what you try, it's hard.
And so we have to stay humble and be willing to be flexible.
But this is great.
Kevin, I really appreciate you coming on the show.
Appreciate what you did in Camden and now what you're doing at City Fund.
And we'll have to have you on again sometime soon.
Kevin Shafer
Yeah. Love talking about this stuff and, you know, grateful to be able to be in the seat and learn from a lot of amazing leaders doing hard things for kids everywhere.
So appreciate you all having me on and would love to come back anytime.
Mike Petrilli
All right. Great.
Again, Kevin Shafer, president at City Fund.
Now it's time for everyone's favorite, Amber's Research Minute.
Research Minute: What happens to district finances when enrollment falls?
Mike Petrilli [22:04]
Amber, welcome back to the show.
Amber Northern
Thank you, Mike.
Mike Petrilli
So, yeah, as you can tell, if you're watching, you know, behind me, the weather has changed here in Washington.
It suddenly feels cooler. It's a little rainy, a little fall-like.
An autumn breeze is in the air.
Is it the same down there in the South where you live?
Amber Northern
It is. Definitely is.
I'm just waiting to go get the pumpkins, Mike.
Mike Petrilli
Oh, are you big into pumpkins now?
Amber Northern
I do a lot of pumpkins on the front porch.
I don't know, kind of a pumpkin aficionado.
I get the different colors and different shapes.
Mike Petrilli
Mums also?
Are you into the mums?
Amber Northern
Yeah, do the mums.
Mike Petrilli
Okay.
All of that. Excellent.
Whereas David has to save all his money for the hordes of children that go to his Capitol Hill house on Halloween, right?
Thousands and thousands. Isn't that the case?
David Griffith
That is the case on East Capitol Street, about four or five blocks north from me, Mike.
It is not the case on Seward Square.
We have a big semi-historic square that nobody really comes to.
But D.C. Halloween is amazing.
It's one of my favorite things about D.C.
Also, it doesn't rain out here like it does in Portland.
So it's a genuinely magical time.
Mike Petrilli
Lovely.
Okay, wow.
And we are, of course, way ahead of time here because, you know, we can keep talking and looking forward to Halloween for a whole other month.
I love it.
Amber Northern
Yes, we can.
David Griffith
And I'm sure you will, Mike.
Mike Petrilli
I will.
I do like Halloween.
I do like dressing up for Halloween.
I was just thinking the other day about my...
[Unclear costume name in the source transcript.]
...costume that I won a little bit of a New York Times newsletter contest in at one point.
And I was always very proud of that.
I thought, you know, but I do have my number two pencil costume. It's always a classic.
Can't come up with anything else that is a classic.
Amber Northern
It is. It is.
David Griffith
Yep.
Fascinating, Mike.
Mike Petrilli
Yes.
All right.
Hey, I digress.
Amber, what's on the research?
Amber Northern [24:11]
We've got a really cool descriptive study.
I think it's sort of like, I feel like we've talked about this before on the podcast, but we've never had, like, a study that actually kind of shows this descriptively.
It's tracking how revenues, expenditures, and per-pupil resources changed across nearly all U.S. school districts as their enrollments grew or shrank over two decades.
It is in the AEFP journal.
It isn't even out yet. It's on, like, just accepted.
So anyway, it literally is, like, not even off the press yet.
But anyway, interesting stuff coming in AEFP.
Data come from NCES Common Core of Data, so we know this sort of bread-and-butter data set.
1999 through 2019.
It covers 12,000 traditional public school districts across 47 states and D.C.
As you can tell, it predates COVID and ESSER, those influxes of dollars.
So we don't know whether these patterns persist into the 2020s.
But regardless, it tracks each district against its own history.
And the study design basically allows the shrinking and growing districts to follow different patterns rather than assuming that the pattern works the same way in both of those growing and declining districts.
Okay, so I'm not going to get into all of the specifics around that, but it's an appropriate methodology.
The authors look at one-year, four-year, and twenty-year enrollment changes to capture both short-run adjustments and long-term trends.
So key finding number one: Declining districts saw significantly larger increases in per-pupil revenues than the growing districts did.
And this held across all three time periods.
So the main driver was local revenue.
I think we know this.
The property taxes and other local sources, they don't fall proportionately when students leave.
Property values don't drop because, you know, fewer kids are enrolled, so the tax base largely stays in place.
Federal dollars also enhance this effect because federal aid is tied to school-age child counts from the Census, not district enrollment.
So when kids move to homeschools or private schools, for instance, the federal dollars largely stay behind as well.
And then the state revenues showed an advantage as well for the declining districts too, partly because states have these hold-harmless provisions which protect districts.
And the advantage there was smaller because those provisions do tend to be temporary, like one to three years.
Number two: On the resource side, declining districts saw much larger increases in staff and teachers per 100 students.
Over twenty years, districts with long-run enrollment declines spent roughly $1,700 more per pupil than the growing districts did.
And they employ 2.55 more staff per 100 students than the growing districts.
So basically, the declining districts were accumulating per-pupil funds even as their headcounts fell.
And on the other hand, these growing districts were absorbing students faster than they could add staff or funds.
Number three: Salary and benefits per employee show no meaningful difference between declining and growing districts.
So those gains in per-pupil funds I was just telling you about weren't going to higher compensation.
So where did the money show up?
It showed up in stronger fiscal reserves and capital projects like facilities.
So basically, because these declining districts had higher per-pupil revenues and healthier balances, or bank accounts, the bond markets said, hey, they have more credit.
So that means they got cheaper borrowing for their capital projects.
So they were doing some building.
And then the last finding I'll highlight is on grade-level differences.
They looked at that as well, and they found that this fiscal advantage I've been talking about was biggest for districts losing elementary kids.
It was smaller for middle grades, and the advantage was smallest for high schools.
And they discussed that and basically say that there's more of a fixed-cost problem at the secondary-school level because you can't, you know, just cut a chemistry teacher when your enrollment drops because you still have to offer chemistry.
Whereas at the elementary level, it's a little easier to consolidate positions and that sort of thing.
So bottom line, the conventional thinking, which holds that enrollment decline leads to, like, fiscal crises or disaster, isn't really how it works out, at least in the aggregate, which this study analyzed.
Again, individual districts may look different because, you know, some factory leaves or big employer leaves.
But in the aggregate, these are the patterns, and basically shows that, if anything, the growing districts are the ones who look more squeezed.
And those state formulas have a lag.
The property taxes, which I've already talked about, take time to adjust to new development.
So in those places, the growing districts, the revenues can't catch up to the students coming in.
So anyway, I thought it was a great study.
Just kind of writing some sort of common notions that some of us hold.
And I love that it's descriptive and still landed in a prestigious journal.
Mike Petrilli
That's great, because this is super helpful information to have.
And you look at, you know, you say, oh, this is bad news that these growing districts can't keep up.
On the other hand, we don't have growing districts anymore, so that's fine.
That's not a problem.
Amber Northern
Not many.
Mike Petrilli
We have very few.
We have very few.
Look, I will say that I am proud that way back in something like 2018 or '19, I wrote an article for Education Next about the baby bust and what that was going to mean for schools.
And, you know, I remember just looking at state-by-state spending, and you could see that the states that had already had enrollment declines, even at the state level, their per-pupil financing went up also.
And here I think the phenomenon is that, you know, the state legislatures, they don't think about this in terms of per-pupil funding, right?
They think about, okay, last year we gave $20 billion to the public schools, and so this year we're going to give them $21 billion, maybe without, you know, contemplating that there's fewer kids.
Right?
And so that is exactly what we see happening.
So for all these reasons, yeah, this is not, at least in the short term, a financial catastrophe.
Right?
And the other thing is that this is helping to explain, but also show, that the staffing surge, right?
We just keep choosing more staff over higher salaries.
It drives me so crazy.
How do we fix this?
David, your thoughts?
David Griffith [31:22]
I do not know the answer to that last question, Mike.
It is remarkably consistent, right, across contexts.
It just makes you wonder if there's some, like, political law, right?
Unwritten political law that if, I don't know, class sizes get bigger than a certain amount or teachers make a certain amount and they stop, you know, asking for raises or something.
I'm honestly not sure exactly what it is.
You would think that teachers would want, you know, raises, right, and lobby for that.
I don't know, at least in some of the contexts.
But it seems like it doesn't matter.
I honestly think if someone could figure that out, like one of our brilliant researcher friends out there, I actually think this is a question that needs an answer at the level of politics and causality.
What actually leads to higher salaries for teachers?
Because it needs to happen, right?
Mike Petrilli
I think there's some evidence that unionization helps a little.
Right?
But, and then, the other thing is just what can states do?
It's like, well, something like the Texas Teacher Incentive Allotment, right?
I mean, like, if you give school districts and schools a choice, it seems like they will just keep hiring more staff instead of paying teachers more.
Right?
But so then you've got to, like, force them to raise salaries instead.
Amber Northern
I mean, this tradeoff survey we did not too long ago with Marguerite Roza, and she helped us develop it.
And we actually asked teachers that tradeoff, like, would you rather have more money or would you rather have a teacher's aide?
And if I recall, it was fairly split, you know, where some teachers actually were preferring an aide to help them.
And, of course, you know, it had to, I can't remember how much of a stipend the question posed.
Obviously, that makes a difference, whether it was $10,000 or $40,000.
But I think teachers are also split on whether they'd like another set of hands in a classroom, especially if it's a high, you know, whether they're dealing with discipline problems or something.
David Griffith
I can't help but point out, right, we also did a study, Mike, I know you wrote about this, but we also did a study in 2021 called Robbers or Victims? Charter Schools and District Finances.
And I have to say, all of this sounded really familiar.
Mike Petrilli
Familiar.
David Griffith
Because when we dug in, the study turned out to be about, you know, there were a couple of states that had, you know, special carve-outs for districts that had lost kids to charter schools, right?
New York, Massachusetts.
But honestly, the list is pretty short of states that actually do that.
The dominant story in, you know, thirty-plus states was exactly what Amber just said.
You know, districts lost money to charters, but not local money necessarily.
Right?
And, you know, they lost students, but, like, there were these declining-enrollment provisions.
And so, you know, it took a few years for it to trickle through.
And then it turns out even the federal government, right, there are essentially time-limited hold-harmless provisions written into federal law.
And so at every level of governance, you're actually pretty cushioned from this kind of blow, whether it comes from charters or whether it comes from some other reason.
And I think, honestly, up to a point, that's right, so long as it isn't permanent.
So, you know, I don't know that there's necessarily a problem that needs solving here except the one that you articulated, Mike.
Mike Petrilli
Yeah.
And that, look, you never know.
Like, there could be a real property-tax revolt coming in some of these places where, you know, people notice that their property taxes, you know, the property values have gone up and the property taxes are really high.
And what am I getting for it?
And anyway, I mean, that hasn't happened in very many places yet, but you could imagine it happening.
There was a wave of it back in the '70s, famously in California especially.
But you could imagine that happening, right?
Because it does feel politically unsustainable.
You know, we look at this in the Missouri study you did recently, where we're going to get to the point where St. Louis and Kansas City are going to be spending $50,000 per kid, you know, with their local funding as they keep losing kids.
I mean, at some point, taxpayers are going to notice.
David Griffith
Let's hope.
Mike Petrilli
Let's hope.
David Griffith
No. My property tax bill was way up this year.
Mike Petrilli
No, no, no. Come on now, my conservative friends.
This is great.
All right. We will have to leave it there.
Thank you, Amber. That was a good one.
Amber Northern
Yes, it was.
Mike Petrilli
All right.
But until next time.
David Griffith
I'm David Griffith.
Mike Petrilli
And I'm Mike Petrilli of the Thomas B. Fordham Institute, signing off.
