MY VIEW • Decentralizing building oversight allows those most affected to hold the strings

The Portland school district's financial problems are well-known. As part of a solution, the district will likely close several schools in the coming years. In 2002 the student count fell by more than 1,500 from the previous year, and it is predicted to decline further. The count has fallen by more than 3,000 in the past four years.

The district will determine which schools to close by targeting those with enrollment below a minimum size, regardless of the benefits to students attending the school. Unfortunately, this treats students and teachers like marionettes in the district's puppet show, rather than as the most important people in the school system.

A better approach would provide building funds directly to schools, remove restrictions that discourage innovation and entrepreneurship and let each school determine the best way to operate and maintain its building.

The first step is to allocate building costs on a per-student basis.

Let's say the district decides to give schools $400 per student for operations and maintenance costs. Each school pays for upkeep out of this allocation, with substantial flexibility to determine the best strategy for meeting expenses. If a school can cover its upkeep for less than the allocated amount, it keeps the difference and uses the money saved in whatever way it decided was best for its students.

Any reasonable amount the district decides to allocate per student for operations will likely be less than is currently spent at many schools where enrollment is far below capacity. Schools that receive less money for building costs than they need will have at least the three options outlined below: Merge with another school, attract more students, or use building space for other purposes.

• Merge. If a school needs revenue from 250 students ($100,000) to pay its operation and maintenance costs but enrolls only 200 students ($80,000), it can make a pitch to other small schools to merge into one building. The merger could save money on buildings and leave more revenue for the combined school to use for education expenses.

This approach allows the teachers and parents of students who attend small schools to see the possible benefits of a merger, because schools Ñ not the central district office Ñ retain the money that is saved, and they can put the money to better use for their students.

• Attract more students. Schools can create unique or particularly effective educational opportunities and attract more students. If 150 students is not enough to cover operation costs but 180 is, those who operate the school might attract 30 new attendees.

• Use for other purposes. A school with 190 students often will fill all the classrooms of a building designed for 250 students. This makes sense as long as the school does not see trade-offs between educational programs and building costs.

But imagine if schools could sublease portions of their building to other users (such as businesses, Head Start, the YMCA or charter schools), keep the rental income and use it to improve programs. Schools might choose to vacate unneeded classrooms and lease them to other users.

This common-sense approach has been stymied by a district policy that requires all tenants of district buildings to pay $13 per square foot per year for school space, which is way above market value. This policy ignores the reality that market prices cannot be dictated by a central authority but are determined by willing buyers and sellers. Schools need the flexibility to charge different amounts to tenants and adjust rates as the demand for space changes.

Currently, if a potential user is willing to pay only $11 per square foot, the school cannot lease the available space. Instead, the space sits empty, costs the district money and does not bring in revenue.

To rectify this, the school board should stop dictating rental rates and allow individual schools to keep the revenue their property generates. Coupling this change with student-based funding for operations and maintenance would move decisions about mergers and property use from central headquarters to the local schools and allow those affected Ñ parents and school staff Ñ to better see the costs and benefits of various real estate strategies.

Decisions must be made in the Portland school district, and there are no easy solutions to improving education quality in the face of declining enrollment and finances. The best approach is to put the decisions into the hands of those most affected by the changes and not hold them hostage to a simplistic formula enacted by the school board.

Nick Weller is education policy analyst at Cascade Policy Institute, a Portland think tank. He lives in Hillsboro.

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