Educating Pete...or Educating Me?
Pete called about today's post...a fictional account...
The phone buzzed. I was driving home from dropping the kids off at school. It was Pete. He usually calls this early. I figured he would have something to say about my third rail ride today.
“Steve, my god. Did you really go after the teachers,” he asked.
“No, I discussed the state of education in California. The teachers are part of it. The CTA is a major player and they have a responsibility to play to get $0.40 of every dollar which comes through this State.”
“Steve, you know it is not $0.40 of every dollar. Education gets $0.40, not the teachers, but I get the point.”
“Fair.”
“Listen,” Pete continued. “You know the CTA is the most powerful union in Sacramento, a force for all electeds. Look what they did to Broad Foundation’s reforms. Anyone who goes up against them loses- even if they win.”
“True,” I said. “I get it. You know I like to question those which look immovable. I know they are a force, no doubt. However, you have to consider many of the shibboleths they rest their Power on are not holding up. They are aged. They are shifting. Demographics is destiny my friend.”
“Steve,” Pete said, “the points you made about the facts are not lost on me. Declining usage. Increased revenue. A deal struck almost 40 years ago. A model which is not relevant anymore. A bargain and obligation well funded and met in terms of dollars and budgets, likely even more than was intended when Prop 98 was created in 1988.”
“Yes,” I said. “Here is what I was really driving at. The base on which it rests, along with so much else in California, is not as solid as people think. Demographics are driving people to have less kids. Less kids means less need for such a huge part of our budget. Less people affected because they are not using the schools means less support publicly. The crisis is here not today. The CTA is Powerful enough to stomp out any dissent like they did with Broad. They tolerate little wins to keep the big ones out. They are playing from the top of the mountain assuming you want to climb the mountain. However, what if you don’t do that? What if you can get to the destination without going to the top?”
”Fair,” Pete conceded. “So, you are saying, the old rules do not apply?”
“They apply for right now, but not forever.”
“Like Prop 13,” Pete said. “The pressure to have to do something about housing and the huge distortion between those in homes and not leaving and those who need them urgently will create a groundswell?”
“With the right pressure and message, yes,” I respond. “Think about it this way. People are using healthcare at an increased rate. The battles in the Legislature and in Propositions are about how to fund it. They are not using Schools like they did. Education gets twice as much from the budget as Healthcare (40% versus a discretionary 20%). How long does that last? How long until boomers start to decide healthcare is a more pressing need than Education which is not being used as much? Why do we need to spend what we do to educate which is not even working? If I was the CTA, I would be worried.”
“Interesting point,” Pete says. “You are arguing essentially interests will diverge and those which support Education will not hold, even with the arguments they are making?”
“Look at the spend per student. It is double what it was 10 years ago. Even with inflation, the numbers are 4x. Even if we capped it today and set it to inflation, it would allow about on average $6 billion a year to switch to healthcare instead of just for Education which is declining. $60 billion is estimated over 10 years. 60% of the BTA’s attempted win without the same costs to our economy. Our spend per student is already quite large, 13th nationally, without local property tax additions to the equation. The facts bear out we have done enough to grow our Education budget, and we need to look at other parts of our budget to shore up, areas where usage is increasing, not decreasing.”
Pete paused. I could hear the wheels turning. “Then, what about Labor? CTA is not the only beneficiary of the ‘automatic budget allocation.’ SEIU is there too. They are representing the workers outside of Teachers.”
“Sure, that is true,” I say. “But which part of SEIU? I am sure SEIU-HCW would enjoy seeing a surfeit of funds into their program instead of going to a declining usage part of the Budget. I am sure Dave Regan, one to ruffle feathers inside and outside of Labor would consider $6 billion a gift, especially if it could be a year. Over 10 years? $60 billion. Hmm…and not chase out the Tech Billionaires? Found 60% of the $100 billion the BTA is supposed to raise, but it is not going to. Fascinating right?”
Pete was smiling. I could hear it. He gets quiet when the wheels are turning. He is a finance geek, so it was all registering.
”Dave Regan gets $6 billion more a year for nothing other than throwing a grenade and getting a compromise” he questioned. “Wow, interesting. I wonder how much the CTA would enjoy those facts being out there, their vulnerability from a certain point of view. All they need to do is stop their automatic increase and shift to inflation to save us the trouble of the BTA. The Budget implications are clear- the State could transfer a lot of money to Medicaid and help grow the workers on that side and not even lose the baseline which exists on the Education side. Labor is not all one unit is it?”
“No,” I said. “Look, today, it is theoretical. Tomorrow, it is not. Imagine if Silicon Valley had just thought of all this before they got into the tit for tat with regards to the BTA? Imagine if they use this information as part of the negotiations with the Governor as they determine whether it gets on the ballot? I know, not going to happen, but seems like a practical solution to a pressing problem."
Pete then said, “you know, I just ChatGPT’d what percentage of the workforce is going retire from the CTA over the next 10 years. It is approximately 30-40%. Maybe you just let people retire and ‘right size’ from there.”
“Interesting, right,” I said. “Do we need to tax billionaires and kill our economy? Nope. It goes back to my point this morning, the Education part of our budget should be re-imagined. Teachers and those benefitting are getting a huge portion of our tax dollars. It is on autopilot so nobody touches it. Tensions exist because we need to rethink portions of it. $0.40 of each dollar, every year, on autopilot, means you need to be responsible to ensure you do not kill the golden goose. Either we grow the budget, or we manage the stagnation. It might not resonate today, but it will. It is not a Republican talking point, it is a real talking point. It is pragmatic. It is not taking, it is giving. I am not saying we shovel every dollar saved to Healthcare per se though if it solves our immediate crisis, why not? In fact, I think Healthcare is already over inflated too- 50% even after the HR 1 cuts over where the dollars and spend were before COVID. However, I think we also need to consider the fact we have a huge problem on our hands with the BTA and addressing this decline in usage on one side of the ledger opens up another to address the problem. Silicon Valley should pay attention- this is how you play the Game. Hollywood? They are so far behind right now. Silicon Valley is at least starting to realize they need to find solutions. Hollywood has only just realized they have a problem. For Education, it is time to be contributory to keep the entire system going instead of self-interest which has been governing the conversation up to this point. Vision is needed. Courage is needed. Someone needs to say the hard things.”
Pete was getting another call. “You are right,” he said. “While it is not perfect, it is a framework people should be considering. If it means a constitutional change, so be it. Switch the BTA to the SOAA- Save Our Asses Act.”
“Ha,” I said. “Funny. It is true. It is time we start going outside the box, looking holistically instead of in silos at our problems. We still need to address Healthcare, but that crisis can be addressed in the future. First, let’s look at how we can avert the Dave Regan inspired end point. He gets a win. The CTA gets to keep its wins. The Governor looks good. The Budget is not cut, but it is not taxed further. We ‘rightsize’ usage for the next decade, a favorite of the electeds- kicking the can down the road. We start to look at the future and further practical solutions. I wish it could just be ‘made so.’”
“Talk to you soon,” Pete said.
“Bye,” I said.