3.12.2018

Social Impact Bonds to Fund Pre-School and the Price Tag of Unintended Consequences

 
 A recent Hechinger Report article covers a new concept for providing revenue streams to various public programs ostensibly without tax increases. Unfortunately, Social Impact Bonds as they are called, are yet another example of how well-meaning individuals and legislators believe they can micromanage all aspects of our lives to make life fair for everyone while soaking the American taxpayer.

But We Can't Fund Pre-School

Salt Lake City schools (like most schools in most states) are having trouble covering the expenses of pre-school programming. It appears Utahans prefer not to be taxed for government services, so state-funded preschool programs there are a "tough sell".  In order "to provide high-quality early education to thousands of poor 3- and 4-year-olds who might have otherwise stayed home" then, the United Way 'teamed' up with Goldman Sachs and the J.B. & M.K. Pritzker Family Foundation to provide $7 million in pre-school financing through something called a "Social Impact Bond".

According to the article:
But with social impact bonds — sometimes referred to as pay-for-success financing models — investors aren’t actually guaranteed that profit. They only get it if the programs they invest in “succeed.” And success is a metric that is carefully negotiated: the higher the success rate, the more investors make.
In Granite’s case, the district, the United Way, the investors and an evaluator at Utah State University agreed success would be measured by the number of “at-risk” preschoolers who avoided special education once they hit elementary school. Today, in Utah, those special education services cost around $3,000 per student per year. According to the terms of the agreement, investors were to be paid back, using a portion of those annual special ed savings. The remaining savings are left on the table; ideally, they will be pumped back into more preschool for more poor kids.
What could be the problem here? Nobody gets taxed to fund the problem, right? Consequently, who could be upset? From 30,000 feet, this idea sounds something like high-level 'crowd funding'.

Returning Investments In Tax Payer Funds

Let's look at this a bit harder, however. Private investors put in the cash and are then paid back with TAXPAYER FUNDS. Anyone catch that? See, public schools are funded solely via taxpayers. From local, to state, to federal level, education is not 'crowd funded', it is funded on the backs of taxpayers and the property they own.

How are Bond investors repaid? By "using a portion of those annual special ed savings". Where do special education funds come from? The Department of Education in Washington D.C. - provided by you, the taxpayer. Truly, this is unbelievable. Paying private investors with public money. Priceless.

What Is Success?

To get a Social Impact Bond, a "success metric" is "carefully negotiated". BOTH these phrases in quotes should be bothersome.

According to the article, a "success metric" can be anything decided upon between the investors in the Bond. In other terms, private individuals and philanthropists determine what 'success' is in a public, taxpayer funded school. This would be fine in a private school, but taking private funds to create a formula for the education of public school kids is more than problematic when taxpayers fund a state Department of Education to consider those issues.

Who really 'negotiates' these bonds? Are there teachers or parents coming together and deciding what's important for the education of their children, or are these private philanthropists doing that? Haven't there been problems with the Bill Gates Foundation directing Common Core? That precedent isn't something taxpayers - or parents - should overlook.

I'll Take "$7 Million Dollars To Teach Preschoolers", Alex

For decades, educators have argued over the merits of pre-school. Unfortunately, even the federal government's own study on Head Start, indicates that pre-school education does little for kids. Kids that are 'behind' in kindergarten, tend to catch up to their peers by third grade.

Why then, if a large body of national research - and research for Oklahoma specifically - exists to show that PreK programming is little more than an expensive babysitting service, do we even consider pouring more public money into public schools for pre-kindergarten education?

In Oklahoma, it's to get more money. Here, $10 million is spent from state-appropriated public school funding on preK in order to receive $10 in matching funds from George Kaiser (who runs his own entrance-selective preK called EduCare). Now Oklahoma can say they spend $20 million dollars on preK funding. Unfortunately, preK philanthropists such as Kaiser omit negative research, make light of it, or hire their own researchers to create research which can be used to market preK programs to legislators for further funding.

Funding Kids To Be Away From Parents When They Could Have Otherwise Stayed Home Doesn't Help Kids, Parents Or Public School Budgets

Let's look at a few unvarnished truths.
1. There Are Mothers Who Use PreK As Daycare
Six decades ago, a majority of women did not generally work outside the home. Children stayed home with their mothers until they were seven at which point they attended Kindergarten. 
Today, a majority of mothers (Pew Research Center suggests as many as 1 in 3 women now work outside the home) abandon their posts as primary caretakers of their young to complete strangers in daycare centers, while they enter the workforce - whether their budgets require it or not. Society applauds this by saying, "Women can be anything they want" and complains when they don't make as much as men in the same jobs. 
Some women elect to have children out of wedlock, or marry men who can't - or won't - support their families. Sometimes this is poor choice-making, sometimes it's a result of uncontrollable circumstances. Nevertheless, women who find it necessary, or desirable to work outside the home as a primary or secondary breadwinner don't have the luxury of schooling their children at home until 7. Day Care and preK become their only choice. 
2. Babies Having Babies Create Automatic New PreK Users
Today, we're watching babies bringing up babies at breakneck speed, and with little to no societal consequences, making this problem even worse.
As this teacher says,
"None of this is lost on my students. In today’s urban high school, there is no shame or social ostracism when girls become pregnant. Other girls in school want to pat their stomachs. Their friends throw baby showers at which meager little gifts are given. After delivery, the girls return to school with baby pictures on their cell phones or slipped into their binders, which they eagerly share with me. Often they sit together in my classes, sharing insights into parenting, discussing the taste of Pedialite or the exhaustion that goes with the job. On my way home at night, I often see my students in the projects that surround our school, pushing their strollers or hanging out on their stoops instead of doing their homework."
How do you stress to these mothers the stress they and their babies will put on a system paid for by the taxpayer - let alone themselves and their offspring? How do you make them see this isn't 'fun' - that it creates a long term set of situations for their children and those who will be forced to support that decision? One way would be to cease providing day care/preK incentives for single mothers, but, that's unlikely to happen. Ever. Once people are given government benefits, government benefits are distinctly difficult to remove.
3. Instant Gratification Killed Family Planning
In today's world of instant everything, the concept of delayed gratification has become anathema. What is the point of planning children until one parent can stay home, or skimping on lifestyle choices to afford children the benefit of a stay-at-home parent when women can become "empowered" by working outside the home and the family can amass all the material possessions they could want right with relative immediacy?  
Sadly, few parents today appear to read the large number of studies a simple Google search would turn up showing that kids could care less about the stuff money buys and that children brought up in homes presided over by a married mother and father are more likely to succeed in life. Though they can complain about having this, that, or the other thing until a parent's head splits, kids don't generally care about stuff as much as they care about parents who provide them love, affection and guidance.
4. Lax Immigration Policies Are Costing Schools Millions Of Dollars  
Thanks to Obama-era immigration policies public schools are burgeoning with children who can't speak the language, in turn burdening them with costly ESL classes. Yes schools don't have money, but don't blame that on taxpayers, blame that on an administration which cared little about the consequences of unchecked immigration on publicly-provided services - including schools. 
Consider Oklahoma. Hispanics compose 17.23% of the total student population (691,137), or 119,082 students. According to the Oklahoma State Department of Education there are 55,258 English Learners (up from 46,864 in 2012/13) - about half that total. If the state contends it costs $7,923.20 to educate one child, then it costs $437,820,185 just to educate ESL learners alone - many of them likely illegal. That's a staggering amount of money.
Years ago, there were private organizations and churches which provided ESL classes. Why have public schools taken this on as one of their responsibilities? It isn't. This former public school teacher here in Oklahoma would likely say the same thing
5. "Free" Services Provided By Government Will Generate Users Wanting More Free Services
Like so many things today, government subsidizes the use of public school preK programming - with tax dollars. This creates naturally-occurring consequences related to budget and spending that few are willing to recognize.  
With so many schools today fighting funding crises, parents who rely on the 'free' public services they've come to count on - such as pre-K,- will be the first to clamor for increased funding when the service they've come to count on is threatened with cuts. In basic - but irrational - psychology, people will fight tooth and nail for a 'free' service even though its results are less than stellar (only roughly 1/3 of the nation's school students are above proficient in English and math) simply because it's free and they've come to count on it.
6.  The Larger Preschools Become, The More Micromanaged They Become. The More Micromanaged They Become, The More Expensive They Become.
Thanks to the current obsession with accountability and data-driven results, more and more teachers are leaving the early childhood classroom, as more and more research points to the need for children to learn through play - not testing.
This matters not to education bureaucrats invested up to their eyeballs in selling results of state and national testing as proof of learning - and testing companies conditioned to hock their wares to any DOE willing to bite. Thanks to today's test obsession, preK students may be subjected to as many as 4 standardized tests per year - all which have a price-tag attached.  
Though not teased out per grade, Oklahoma's budget allowance for testing for 2018 is $9,512,125.00 - down from 2017 by $1,552,168.00 (due to the repeal of End of Instruction exams now replaced by the ACT), and that's a whole lot of money which could be diverted to teacher salaries, or other items that affect student learning inside the classroom if educrats could agree that not all results can be tested.  
Parents And Taxpayers Have To Be More Diligent Citizens When It Comes To Education Spending - Not Bigger Spenders

Unfortunately, today's taxpayers pay little attention to the words "government program".

Maybe because the largest chunk of our tax monies are taken directly out of our paycheck or our mortgage payment and we don't get to see where they actually go - what they truly fund - we quit paying attention. Truly, if all our earned money went directly into our own hands and we then had to count it back out to the government, there is no way taxes wouldn't immediately fall and government would naturally right-size.

Though it appears self-scholarship and research has also gone by the wayside in the last several decades, it is none the less important today and certainly vastly easier than even twenty years ago. Today, a simple Google search on an iPhone can pull up a staggering amount of information. It makes little sense then that though when asked, 60% of respondents say children are better off when one parent is at home, we spend so many taxpayer dollars padding so many education budgets bent on shipping them out.

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