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Oregon School Boards Association annual meeting (Nov. 10, 2012)

​Thank you for having me here today. I want to start by thanking each of you on behalf of all Oregonians for your tremendous service to the state. Nowhere is there a better example of democracy in action than at our local school boards across Oregon – committed volunteers deeply rooted in your communities coming together for a common purpose – to ensure our children gain the knowledge, the skills, the opportunity and the experiences they need to lead productive, successful lives.

As you are well aware, that is at once a straightforward and very complicated task. And I know it can sometimes be thankless work – especially during a period of declining resources and gut-wrenching decisions. But know also that your work and your ongoing commitment is profoundly important and critical to everything we need to do to build a more prosperous future for Oregon. You are part of the best of Oregon, providing a great foil to a national narrative of divisiveness and cynicism.

Let me take a moment to provide a broader context for your work. As I have been putting together my recommended budget for the upcoming 2013-15 biennium, I have come to realize it is guided by a simple premise – that all Oregonians deserve their shot at the American dream. And while many of our assumptions about work, progress and fairness have been shaken by economic uncertainty, my optimism for a more prosperous future remains unwavering and unshaken. Our great challenge lies in ending the income stagnation that erodes the middle class, exacerbates inequality and for the first time threatens a generation of Oregonians with the prospect of a declining standard of living.

Government plays a critical role in improving the lives of Oregonians, but it must change and adapt to meet the current challenges. That change is about more than delivering services more efficiently and spending tax dollars more effectively. The public resources we do have are increasingly being spent on health care; pension obligations; corrections; and the human consequences of neglect abuse and addiction – at the expense of investments in children, families and public education. We must reverse that trend and, in the process, no agency or institution – including our system of public education – can be exempt from examination and reform if we are to meet our goal of better preparing children for success; better serving families in need; and improving Oregon’s business climate for growth and investment.

Two years ago, recognizing we could not wait for a better economy or more resources – or use limited resources as an excuse – we began to take control of our educational destiny.

-  We found our own North Star. Oregon’s 40-40-20 goal is not a final port of call, but a compass, established here, to guide our collective efforts.

-  We began eliminating the silos between early learning, K-12 and post-secondary education and training – recognizing the connection between pre-school health and nutrition and kindergarten readiness, between kindergarten readiness and third grade reading proficiency, between third grade reading and high school graduation, and recognizing the connection between degree attainment and income mobility.

-  We created an investment board and Chief Education Officer to advise me and the Legislature on a rational approach to education funding in order to achieve results.

-  We passed bills in two consecutive sessions that relieve schools from the burden of reporting mandates that didn’t serve students.

-  And we have cut ourselves free from the indiscriminate nets of No Child Left Behind, replacing its punitive labels and arbitrary sanctions with an authentic method of evaluating schools and a customized approach to improving them.

Some have suggested we have come too far, too fast. What I hear from Oregonians is that we have not come far enough. We cannot lose our nerve at this critical moment. We must forge ahead together.

For the first time in Oregon, we have begun to align funding and governance across the entire continuum of education – from early learning through K-12 and post-secondary education and training – which will be critical to our long-term success.

But we must do more to give you the power to confidently put your students on a path toward our shared goals. Most of you do not have sufficient tools or resources to do what you know your students need. Reinvestment will take time and requires a strategic approach – which is why I want to talk about what I will be proposing to the 2013 Legislature.

Let me start by saying that the entire enterprise of public education is underfunded at every level – from early childhood to post-secondary education and training. And it is clear that we will be unable to achieve our 40-40-20 goals without a significant reinvestment of resources into the classroom. And to make that happen three things are required.

First, we need comprehensive reform of Oregon’s system of public finance – a task I have undertaken.  Over the past eight months we have taken steps to rebuild the business-labor coalition that will be necessary for success at the ballot box. We have done polling and conducted focus groups. Over the next six months we will be working to develop a solid proposal, a timeline and a budget.

Second, we need to reduce the cost of health care and public safety in order to free up resources to reinvests in education. For example, moving public school teachers and state employees into the same kind of high quality, low cost health care model that we are developing through our coordinated care organizations could save as much as $5 billion dollars over the next decade. Likewise, by adopting the anticipated recommendations of the Public Safety Commission to find alternative ways to sanction non-violent offenders, we can keep the public safe while reducing the cost of corrections.

Third, we need to reduce the cost drivers within the system of public education that are diverting resources from the classroom. For example, if we continue into the next biennium doing business as usual, the cost to school districts will increase by more than $1000 per student.

Let me say that again. If we do nothing, the cost to the state per student will increase b y over $1000 in the next biennium. The increase in the cost of PERS alone – which is approaching 25 percent of payroll – accounts for $500 per pupil. Salary increases account for another $300 and other benefits $130.

My point is that for this enormous expenditure, we will not lower average class size; we will not restore lost school days; and we will not bring back programs like the arts or vocational studies. And while I firmly believe we need to maintain a strong retirement system for our public employees and good wages and benefits for our teachers and school employees – we cannot ignore that PERS increases alone are expected add $308 million of cost for school districts.

Let me make it clear that this is not about the value of our school teachers and classified employees. Nor is it about a major overhaul of a retirement system that remains among the best funded in the nation. It is simply about trying to strike a balance between the cost of the retirement system and our ability to put resources into the classroom today to ensure the success of our children tomorrow. The fact is that no amount of revenue will be adequate to meet our education goals unless we get a handle on major cost drivers that divert resources from the classroom.

With this context, let me turn to my budget. For the 2013-2015 biennium, I will be proposing a budget that is a radical departure from typical biennial budgets of the past. It will combine cost-saving reforms with strategic investments to allow us to keep moving forward with limited tax dollars. I will recommend making adjustments to PERS, building on our health care reforms to lower costs, and pursuing public safety reforms to keep the public safe at a cost we can afford. These initiatives can free up hundreds of millions of dollars for public education – some in the short term, more in the long term – and reverse the decline in education funding as a share of the general fund.

My budget will also propose targeted, strategic investments in order to scale up the best practices that many of you have attempted to model in your districts even in tight budgets: investments in educator effectiveness and diversity, parent and family engagement, reading by third grade, and STEM plus the arts, or “STEAM.”

These strategic investments are a commitment we’re making to Oregon’s children that we will invest in those areas that give us the greatest leverage to improve their opportunity to succeed.

-  Reading by Third Grade. I have heard this from teachers and we see it in study after study. There is no bigger bang for the buck than investing in early success. Third grade reading proficiency is a critical indicator of future educational and social success. Our long term goals for high school graduation and economic vitality are not possible without an emphasis on early grades. 

-  Educator Effectiveness. Oregon is home to tremendous teachers. Yet, we can do more for their professional development, and we must do more to ensure they have the resources they need to succeed. No state or nation that has significantly improved outcomes for students has ever done so without making a major investment in the quality of its educators and the supports they deserve.

-  Parent and Family Engagement. Dr. Crew has been a passionate advocate for the power of parental involvement in student success – and it’s clear to me as the father of a high school freshman. A Harvard Family Research Center study estimated that schools would have to spend $1000 more per pupil to reap the same gains in student achievement that an involved parent brings.

These are indispensable investments, and they are not ones that districts should be expected to bear entirely on their own. They’re indispensable if we are serious about transforming teaching and learning and community engagement in ways that will be necessary to significantly improve results for kids. And they’re an indispensable part of a strategy to boost the resources we need to address class size and learning time and college affordability.

The bet that we’re making is that when we dedicate a small amount of funding for strategic investments that don’t just sustain but help transform the system – somewhere in the neighborhood of one percent of our total education budget – we build the public case for the significant reinvestment that needs to follow. We create a snowball effect of targeted investments that improve results that lead to more investments … and so on.

To win the public argument for significant new investment in education – and not just to win it among parents and students and educators, but among the public at large – will require demonstrating, more clearly than we have before, that new state investment will produce tangible results. I believe we have a window of opportunity to make this case to Oregonians, and it’s an opportunity that we must not let slip away.

One more point on funding. We can no longer ignore the post-Measure 5 disconnect between state funding; our 197 school districts; and over 350 local bargaining units and contracts. We have a statewide pension system; we have a statewide health insurance pool in OEBB that provides the coverage and negotiates rates; and then we have local bargaining over wages and working conditions. These two or three year contracts bargained at the local level are, in many cases, disconnected from the revenue available in the state school fund – and yet the state is required to come in a pick 70 percent of the cost on the back end.

It is this disconnect between what is bargained for at the local level and the actual fiscal condition of the state that is one of the elements that creates the fluctuation and the instability in school funding. And I have said clearly – since before I was elected, during my campaign and after – and I have said this to all of you and to union members and education leaders alike, that we need to figure out a way to address this disconnect. And that means
That we are probably going to have to have some expectations on how the state dollars are being spent at the local level so we have a statewide response to this challenge, not 197 different local responses.

I don’t have a preference on the structure or solution, and this isn’t ideological. I believe in collective bargaining; and I will defend collective bargaining. But we need to align state funding with local collective bargaining to maximize and ensure stability of resources going into the classroom.

Finally, I want to thank you for the work that you all did this year to put together your first achievement compacts. I know this wasn’t easy for many of you, particularly given the very tight time line and perhaps even ambivalence some may have felt about their purpose and use.

Let me say this: the compacts were not created to be an accountability tool that arbitrarily rewards or punishes school districts. That’s the system the compacts helped us escape. Rather, achievement compacts represent shared goals for student success – goals owned by you, your educators, the OEIB and the state, and hopefully by your community. Goals are no substitute for the investments or strategies that will be necessary to turn them into reality. But they will help focus the conversation we must have – with each other, with parents, with businesses, non-profits, with the faith community, even with students – about the commitments we’re willing to make to each other in order to improve results.

The state can’t possibly do this work alone. Neither can you, your teachers, or your students. I hope that my coming here today, if nothing else, symbolizes the type of partnership that will be required in order to seize and shape Oregon’s destiny. So thank you all so much for the time and energy that you dedicate as volunteers to your school districts, to the great state of Oregon and to the students who represent our future.

William Jennings Bryan on said: Destiny is not a matter of chance, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved.” With your help and leadership; with the partnership of teachers, parents, students and the larger community – I am confident that we will choose the path to a bright future that leads to the realization of our aspirational goals.

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