Perverse Incentive

The most fashionable word in New York’s education debate is “accountability.” Governor Spitzer has made the concept the organizing principle of his education agenda. The word comes up whenever he talks about his plans for the state’s schools. In a major policy speech, Mr. Spitzer uttered the word 22 times.So what exactly does accountability mean?Accountability usually comes in two parts: one is an assumption or assignment of responsibility and the other is consequence for failure to meet the responsibility. When it comes to education policy, the concept is hard to define and even trickier to implement. For Mr. Spitzer, accountability is a contract, one that he has dubbed a “Contract for Excellence.”The state will increase education aid by $7 billion over four years and in exchange school districts will agree to develop tools for tracking student performance, draw up multi-year improvement plans that specify how each new dollar is spent, and allocate the money on programs that fall within a “menu of approved strategies.”The missing link here is consequences. Undercutting any plan to hold educators and politicians accountable is the no. 1 rule in education policy in New York: Once you put money in, you can’t take money out. The improvement of a school district will have no bearing on the flow of money.In some cases, a decline in performance translates into even greater claim on state resources. This perverse incentive is illustrated by the charter school “transitional aid” awarded to school districts that are losing students to more attractive charter schools.Ordinarily, power of the purse would be the most important leverage Mr. Spitzer has over school districts and teachers unions. But Mr. Spitzer, in his worst strategic blunder since acceding in Albany, gave up that advantage when he committed to spending the $7 billion before school districts agreed to do anything.Superintendents were quick to note that Mr. Spitzer wasted the opportunity to drive a harder bargain with the very teachers unions that call the most shots in many districts. He could have used the money as a carrot and insisted that the unions make concessions in their collective bargaining agreements, such as agreeing to higher pay scales for qualified math and science teachers. Said Solomon Stern, a senior fellow at the Manhattan Institute: “He put the money on the table, and now he expects some accountability provisions.”The governor argues that his “Contract for Excellence” ensures that money won’t be wasted on “programs that fail” by requiring that lower-performing school districts that receive the most money stick to aforementioned “menu of approved strategies” — “class size reduction, programs that increase student time on task, teacher and principal quality initiatives, middle school and high school restructuring, and full-day kindergarten or pre-kindergarten.” Many of these strategies are so vague as to be meaningless. The others are more specific but leave the door open for a misallocation of resources.There’s nothing stopping a district from spending all the money on teacher or principal retreats or on hiring mediocre teachers to bring down class sizes. The question is whether the education commissioner, Richard Mills, will take a hard look at these spending proposals and veto the ones that clearly lack merit. Asks Mr. Stern: “Is the commissioner really going to be rigorous about this? Is he going to have a good bull-s—t detector?”And what if these strategies don’t work? What if the money doesn’t seem to be doing any good? In a January speech before releasing his budget, Mr. Spitzer laid out the consequences: “If after this intervention and substantial new state investment, some districts are still failing their students, we will demand an overhaul in their leadership. That means new management. We will seek to have every district in the state sign contracts with their superintendents that will require dismissal after substantial failure over multiple years.”Mr. Spitzer may have sounded tough but he was picking on the wrong people. Superintendents are perhaps the most accountable employees in the system. There is already a five-year statutory limit on their employment contracts; they lack the protections of tenure, and they often do get fired, at a far higher rate than teachers. Mr. Spitzer seems to have realized the uselessness of the threat and removed it from the final budget agreement with lawmakers.In an attempt to hold districts accountable, the budget allows the commissioner to appoint “distinguished educators” whose job it is to advise districts that haven’t shown improvement over four years and to recommend “corrective action.”These distinguished educators, who are vetted by the Assembly-controlled Board of Regents, won’t make it onto the scene until at least 2011. When they get there, it’s hard to imagine how adding another layer of responsibility is going to improve accountability.Let’s then propose a simpler analysis of accountability. We can talk about distinguished educators, performance plans, assessment data, and strategy menus all we want, but the bottom line is this: accountability starts and stops in the executive chamber.Four years and $7 billion later, if New York schools haven’t demonstrated improvement, the consequence will be in the ballot box.

Perverse Incentive

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