October 2, 2013

MPS is a failing school district. Only 14.4 percent of students in the city’s public schools rated out as “Proficient” or better when it came to fourth grade reading in the 2012-2013 school year. Just 16.4 percent of MPS’s eighth graders earned the same label in math. According to Department of Public Instruction data, only 61.8 percent of these students graduated in four years.

Earlier this month, we were reminded of this again when MPS was the only school district in the state to receive an “F” on the School Report Cards.

Milwaukee’s literacy rate at MPS is so poor that it falls in line with some of the worst districts in the nation, like Detroit, Cleveland, and Washington D.C. In 2011, the city not only lagged behind the US large urban district average, but actually regressed in reading scores when compared to 2009. Eighth-grade reading dropped from a score of 241 to 238 on national testing while the large-city average across the country increased from 252 to 255.

If MPS does not begin to turn around today, another generation of children will be lost in a failing system that does not prepare them for college or a career. Adults that don’t finish high school in Wisconsin are more likely to have lower paying jobs, less likely to have health insurance, and considerably more likely to be incarcerated at some point in their lives. In fact, a MacIver study showed that dropouts cost the state of Wisconsin $3.7 billion. Starting with a strong education is the best way to give these Wisconsinites a strong first step on the path to a promising adulthood.

In short, MPS must do better.

That’s not what Milwaukee Public Schools are offering right now. The district has a unique set of challenges that come with being the only first class city in the state. No other district deals with as many students that come from low-income backgrounds, and that presents a major challenge for teachers in any classroom. However, this should not be used as an excuse for the district’s deplorable academic performance.

Fortunately, there’s evidence that shows that schools can reach these children and improve education in Milwaukee and beyond. It won’t be easy, and it won’t come without significant reform. Nonetheless, Act 10 offers an opportunity to make these bold changes without the usual interference from the teachers union and resistance from bureaucrats.

In our efforts to help turn around Wisconsin’s most embattled district, here’s how the MacIver Institute believes that Milwaukee can go from the state’s worst district to a national model for reform and academic success.

Background

In 2010, Milwaukee Public Schools came to a historic agreement, coming to terms on their first four-year contract in their history to keep teachers in the classroom. This pact saved the district $50 million in its first two years and ensured basic raises for educators in its final three years. It also came under heavy scrutiny when the Milwaukee Teachers’ Education Association decided to hold true to their contract in the face of over 400 layoffs for the 2011-2012 school year.

The four-year pact had gained approval despite warnings. Earlier that year, the Wisconsin Association of School Boards had advised districts to avoid pacts that extended beyond two years due to looming questions about the 2011-2013 state budget. These concerns came to fruition just four months after the ink had dried on Milwaukee’s contract. Newly elected Governor Scott Walker announced his intentions to balance the state’s budget in February, using state employee contributions and curbing collective bargaining to give local districts the financial flexibility needed to absorb cuts in funding.

It was no surprise that Milwaukee, the state’s largest district by a considerable margin, was affected the most by the new budget. These schools were hit doubly hard as nearly $90 million in federal stimulus funding expired in the same year. This storm put the district’s staff at risk for the second time in two years. Like in 2010, Milwaukee Public Schools were forced to send layoff notices to over 400 educators. However, they still had options from Act 10 to create the savings that could balance their ledger and retain young staff members across the district.

Unfortunately, that didn’t happen. Instead of reopening their contract and accepting the employee contributions and collective bargaining concessions outlined by Act 10, MPS chose to stick with their original contract. This left the district unable to deal with the nearly $90 million reduction in funding that came with the 2011-2013 state budget. Instead, the teachers voted to retain their four-year pact and deal with the layoffs that would become necessary as a result.

That contract ran through one final school year in 2012-2013 before the district fell subject to the policies implemented by Act 10. As a result, the summer of 2013 and the preceding months have been a busy time for the district’s administrators and staff. MPS will head into their new contracts with concessions as a near certainty, but board members and administrators will also have the chance to create lasting positive change in the district as a result.

MPS is in the midst of its first contract negotiation since the passage of Act 10. In other districts around the state, these new freedoms have let them turn to innovative reforms to improve their schools and teachers.

Milwaukee has the opportunity to do the same.

This opportunity will give MPS the chance to rebuild and reform in order to provide students and families with the best possible education. That means more quality options for children, eliminating the perpetual lineup of failing schools and a dynamic system of learning that can meet the needs of an ever-changing student body. Milwaukee will be free to pursue a contract that cuts bloated administrative and bureaucratic costs in favor of true reform and dedicating money to the classroom.

Change has never come easy thanks to the MPS school board, but the freedoms granted by Act 10 will allow the district to improve education for all of the city’s students if the board finally stands up for our children, not kowtow to the union bosses.

The 2013-2014 school year will be one of the most significant in MPS history. There are many avenues that the district can take to improve education throughout the city. This document provides broad reform-based ideas that could create significant benefits for the city’s families and students.

They range from simple ideas, like competitive bidding to lower health care costs for staff members, to more complex ideas, like more national charter programs similar to Rocketship Schools. Each one should help to create the rising tide that will lift all students, whether they are in regular public schools, private voucher schools, charter schools, or even virtual schools.

While Milwaukee presents the state with several challenges when it comes to public education, it also presents an opportunity for Wisconsin to become a national leader in revitalizing urban education.

Promoting a Shutdown Model
Intervention doesn’t work when it comes to turning around chronically underperforming schools. Instead, they must be replaced with a model that fits.

One of the least-talked about areas of success in Milwaukee’s public schools is the way that non-instrumentality 2R charter schools are performing on state standardized tests and DPI’s School Report Cards. As the MacIver Institute has reported, these schools are excelling in traditional measures of student achievement, such as reading and math test scores in fourth, sixth, eighth, and tenth grade. These gains are significantly higher than the student averages in the city’s traditional public schools and Milwaukee’s instrumentality charter schools.

These schools have shown that they educate a similar percentage of students from low-income families and do better when it comes to state-based metrics in the classroom. However, they still make up a small portion of Milwaukee’s Public Schools, and growth in that sector has been slow. So how does the city promote the schools that get stronger performances from their students while eliminating the schools that chronically disappoint?

Our plan would minimize the use of a program that has been ineffective in Milwaukee. Real consequences would be the direct result of bad grades and a failure to improve. Instead of rehabilitating these programs, we would rebuild them and use the schools that are showing progress as their model. The institutions that are showing growth in Milwaukee would replace failing schools, and successful techniques will have the chance to grow and be replicated across the district.

If a school earns two or more “F” grades when it comes to student growth in a five-year span, significant consequences will follow. All students that attend this school would be made eligible to receive a voucher to attend the school of their choice through the Milwaukee Parental Choice Program (MPCP). This would be an expansion of the current eligibility limits for the program, which currently allows students that come from families with an annual income of less than three times the Federal Poverty Guidelines to receive a voucher. While this initial step wouldn’t necessarily add several students to the program and threaten failing schools with a greater risk of losing pupils, it would help place a stigma on underperforming schools and spur improvement in order to avoid this label. A similar program was successful in terms of reducing the amount of repeat “F” schools in Florida in the 2000s.

That wouldn’t be the only sanction for low-performing schools. Institutions that fail to spur student growth during the school year would face more than just additional voucher competition; they would have to deal with the prospect of shutting their doors entirely and being transformed into a public, non-instrumentality charter school or a voucher school.

Chronically low-performing schools in the district would have five years to show significant improvement through the state’s report cards – gaining the equivalent of a letter grade or more in terms of student growth. If they cannot show this kind of value in the classroom, they will have their doors closed by DPI and rebuilt as a public non-instrumentality charter school. This would include the state’s virtual charter schools.

The recent emergence of entities like Rocketship Academies in Milwaukee suggests that the interest is there amongst alternative schools to operate as a 2R charter in Wisconsin’s largest city. A shutdown model would give these groups more opportunities while turning the page on some of the least successful schools in the district. While this would require more work from the City of Milwaukee and the University of Wisconsin-Milwaukee – the district’s two independent charter authorizers – the benefit would be significant.

However, the key to these grades would rely heavily on the student growth measurement aspect of the state’s report cards. To ensure that all teachers, classrooms, and schools are given a fair grade, these institutions must be able to prove that students are learning and making gains throughout the year. That way, teachers that deal with children who enter the classroom at a level behind the state average can still be acknowledged and rewarded for helping their pupils catch up.

Therefore, even schools with low proficiency scores will have the chance to prove their value by showing that students are learning at a similar, or better, rate than their peers. This program would use the state’s new emphasis on value-added growth data while ensuring that teachers who get the most out of their students aren’t unfairly punished. Even if their schools are shut down, individual strength will shine through, and allow educators several opportunities to continue making a positive impact in the classroom.

This shutdown model would have significant consequences for teachers. Educators in the schools that do not show improvement would face layoff notices and administrators at that school would be dismissed. A new principal, chosen through a vetting process and Educator Effectiveness marks, would be responsible for hiring new staff. He or she would be limited to hiring no more than 30 percent of the original staff back to the school. Any rehired teacher would have to earn a proficient grade through the upcoming Educator Effectiveness program as well – a system that uses student outcomes and growth along with administrator observation time to judge every public school teacher’s performance in Wisconsin. If the new principal wants to hire more than 30 percent of the original staff, he or she would have to get permission on a teacher-by-teacher basis from DPI.

This model would empower administrators to use the new knowledge about the teaching skills of their educators to build a new school from the ashes of a failing one. DPI has cautioned against using the Educator Effectiveness program to make high-level staffing decisions during its pilot year. However, the state would have until the 2016-2017 school year – at the earliest – to refine their EE program and the grades that go along with it. That should be plenty of time for adjustments to ensure a fair and accurate program.

Wisconsin has the tools in place to increase accountability in its public schools and attach a high-stakes performance program to eliminate failing schools from border to border. A program like that would be most effective in Milwaukee, where the bulk of the state’s underperforming schools are situated. Thanks to the creation of the School Report Cards, the implementation of the Educator Effectiveness program, and the phasing out of the WKCE in order to use value-added data that tells us how students are growing, the Badger State can make a concentrated effort towards shutting down and replacing ineffective schools.

Using this shutdown model and basing it on improvements in student growth would have several benefits. It would provide real consequences for failing schools and promote change at the school wide level in order to avoid losing students or an eventual shutdown. It would also allow 2R charter schools – schools that have significantly higher proficiency rates and School Report Card scores, on average, than their MPS peers – the chance to expand into Milwaukee.

This would go above and beyond the current legislation aimed at transforming chronically underperforming schools that has been proposed in Madison. Recent proposals have suggested a turnaround model for traditional public, charter, and voucher schools. If a school earns a failing grade for three straight years, that school will then have three more years to improve their score on the School Report Card. If those improvements are not made, then these underperforming schools would be shut down and replaced. It’s a change from what has been a soft learning curve for low-performing schools that the state has dealt with in the past. Unfortunately, it does not go far enough.

Schools need to have an outright expectation for performance, and institutions that fail to make that grade need to have a specific timeline for improvement. The schools that fail to meet these guidelines need to face direct consequences. Traditional public schools would face being converted into charter schools. Charter schools would face being shut down altogether. Voucher schools would be dropped from the state’s funding program.

Those shutdowns would come after three years of interventions. However, research suggests that banking on these intervention techniques to turn bad schools around is a losing bet.

Turnaround models have little success in reforming schools. This trend carries through at both the national and state levels. David Stuit’s 2010 study Are Bad Schools Immortal? examined low-performing schools in both the traditional and charter sectors of public education across the country. His breakdown also included a look at Wisconsin’s intervention programs.

Stuit’s study found that 83 percent of the low-performing schools that had been targeted for interventions in 2003-2004 continued to grade out poorly five years later. Only one of the 53 traditional public schools that were observed met the criteria to be labeled as a “turnaround” school. Eight of these schools, or 15 percent, were closed altogether – the second highest rate of the 10 states observed in the study. While the report only found three charter schools that met the criteria for intervention, none of these schools were able to show significant improvement in that five-year span as well.

This lack of success is a telling statistic; low-performing schools rarely have the ability to make a marked turnaround despite the state’s best efforts.

Shutting Down Bad Schools, Replicating Good Ones
Let’s replace chronically failing schools with ones that have shown proven results in Milwaukee.

While the closing of underperforming schools seems like a problem, it actually presents an opportunity for local districts. Removing a persistently bad institution also helps to stop perpetuating a culture that struggled to create educational growth. Opening a new school in its place – a school that actively works to reverse that culture through reform – creates greater potential to achieve that growth.

This is something that we’re seeing with the selling of some vacant MPS properties and the emergence of schools like Rocketship. Their experience in Milwaukee is the replication of a high performing model that has worked in California. While that’s a positive step forward, the next level in this process will be learning from and duplicating effective schools inside Milwaukee’s city limits.

For that, MPS cannot be limited solely to public schools. All schools in the city stand to learn from Milwaukee’s success stories, whether the schools in question are traditional public schools, public charter schools, or private voucher schools. While these institutions often differ greatly when it comes to operation, they all work with the same goal in mind – providing the best possible education for children. Ignoring progress because of administrative differences would represent a major wasted opportunity when it comes to improving education in MPS.

In the case of effective private voucher schools, this does not mean bringing religious subject matter into the classroom. Rather, it calls for an investigation of teaching methods, classroom reform, and administrative oversight that may now be more applicable to the city’s public schools. While these schools tend to be run very differently, there is still plenty of room for translation when it comes to effective educational methods. This is not limited to a private-to-public transfer either. There are certainly plenty of success stories within the city’s regular public schools that other institutions can learn from.

This shutdown model cannot apply solely to traditional public schools either. Ineffective charter and voucher schools have to face more accountability when it comes to grading, and then face true consequences when they fail to prove that they are helping students grow. The state’s School Report Cards, which were unveiled in 2011 and now in their second year of operation, can provide this kind of feedback, especially with value-added student growth data being used to replace the one-dimensional WKCE.

Determining what drives success in individual schools is often difficult to pinpoint. All educators will have to take initiative in opening a stronger dialogue with every school that serves students in the city. This could come in the form of a series of roundtables or loaning out teachers and administrators in an observational sense during the school year. Either way, communication between all schools will have to be increased to promote the camaraderie and teamwork that it will take to improve best practices across the city.

Taking these methods into account will help ensure that the new schools entering MPS are rooted in high quality instruction geared toward a dynamic and evolving base of students.

Charter Schools
Expanding the schools that are showing success in Milwaukee.

Charter schools in Milwaukee received a boost in 2011 when the state legislature passed a law that forces Milwaukee’s Public Schools to sell their unused properties when faced with a reasonable offer from an educating authority. This means that former MPS locations that have lain dormant can once again welcome students – but this time as alternative schools such as charters. That’s a big step forward for successful city schools whose growth has been curtailed by a lack of space.

Again, we can look at Rocketship’s experience as an indicator of how non-instrumentality charter schools can grow in Milwaukee and beyond. The first Rocketship Academy opened this fall, and their further expansion will bring a wider variety of independent charter schools to Milwaukee and increase the options that parents and children receive when it comes to public education.

The institution’s plan is to open eight schools within city limits that will educate over 4,000 students. Rocketship’s mission is to eliminate the achievement gap between students of different races and financial backgrounds- a problem that has run rampant in Milwaukee. By using an innovative and comprehensive approach that blends personalized education, traditional schooling methods, and online learning, these schools have gleaned positive results from students from low-income backgrounds throughout their experiences in California.

Milwaukee has already seen success from non-instrumentality 2R charter schools in recent years. 2R charter schools are public schools whose charters are granted by either the University of Wisconsin-Milwaukee, the University of Wisconsin-Parkside, or the City of Milwaukee. They operate outside of the influence of their local school board, and thus have more freedom when it comes to matters like curriculum, staffing decisions, and daily operations.

An analysis of state report card data shows that these schools scored, on average, a full grade level higher than both traditional public schools and instrumentality charter schools in MPS. A look at student outcomes reveals that while these school educate a similar number of students from economically disadvantaged backgrounds (~80%), the independent charters score considerably better when it comes to proficiency in subjects like math and reading.

Using a shutdown model to give failing schools the opportunity to take advantage of the lessons learned by the district’s 2R charters would expand this opportunity for success. Implementing a system that allows them the chance to rebuild some of the city’s worst-performing schools stands to provide significant benefits to Milwaukee’s students.

Rocketship will look to build on this 2R success with their new campuses in Milwaukee. That’s a step in the right direction, but it may not go far enough. Milwaukee has traditionally rejected the presence of national charters and reform efforts. This can be seen in the city’s reluctance to embrace popular programs like Teach for America and KIPP Academies charter schools. A similarly icy reception could handicap a program that has proven successful across the country.

Rocketship had to work especially hard to bring schools to Milwaukee. The group had to raise $3.5 million to fund the openings of their eight schools. Once opened, they’ll have to deal with less funding than regular public schools. Charter schools, by law, only receive $7,925 in funding from the state for each of their students – though that figure will increase to $8,075 in 2014-2015.

Public Pension Reform Pilot Program

Schools like Rocketship will also have to deal with other hurdles related to their status as non-instrumentality charters. However, since the city council and not the local school board approved these schools, they will have to deal with fewer bureaucratic regulations than a regular public school. They will face issues with retaining their high quality teachers thanks to the way that the state deals with retirement plans for teachers at certain charter schools.

Teachers at non-instrumentality charter schools are not allowed access to the state’s pension fund, meaning that these schools have to come up with their own retirement programs for their teachers. This is a problem that many of these charters face across Milwaukee. Some schools have no retirement program, while others are working to institute lower-cost alternatives like a 403B plan. As teachers at these schools grow older, it is clear that the lack of retirement plan will be a detriment when it comes to luring and retaining quality teachers.

This presents two options that could hold benefits for the city and potentially the state as well. The simple solution would be to expand pension coverage to all charter schools in the state and not just instrumentality schools. This would ensure fair coverage for all public school teachers regardless of whether they are in regular public schools, instrumentality charter schools, or non-instrumentality charters.

The more complex solution would be to use these schools as a test run for a program that could eventually replace the state’s expensive teacher pension fund in the future. With this, Milwaukee can lead the way and create a potential statewide reform that would protect the future of our teachers while ensuring that more money goes to the classroom rather than benefits.

These non-instrumentality teachers are in an entirely unique situation. They are the only public school teachers in America that are not tied to their state’s educational retirement plan. As a result, they can provide the litmus test for different pension programs that could provide a similar benefit to educators at a lower cost for the state.

If a lower-cost pension program could be successful amongst these charter schoolteachers, then it is possible that a similar program could be ported over to traditional public schools. Instituting a program such as a 403B plan could lower immediate costs and allow the district to put more money into the classroom. It could also piggyback on the recent post-employment benefit reform that is slated to dig the district’s pension system out of a nearly $2.5B hole. While this would be a long and arduous process, it’s something that could create pioneering reform across the state and free up billions of dollars for education that could be spent in the classroom.

On a smaller, less ambitious, and more realistic scale, the recent property-based legislation will help charter schools move closer to an even playing field with MPS’s traditional institutions. The district will profit from the sale or rental or their vacant properties and no longer sit idly by as their assets depreciated without educating a single student. However, recent experiences suggest that the district is still hesitant to sell its unused buildings.

In an environment where bad schools need to be shut down and good ones need to be replicated, this is an obstacle that can limit quality educational options for students. Fortunately, a shutdown model would eliminate some of these headaches by allowing an independent charter school to take over an existing building with an existing student base and rebuild it from the ground up.

Teacher Retention
Keeping the teachers who bring the most value to the classroom.

Milwaukee is known for its inability to retain teachers. In 2010, 45 percent of teachers left the district within three years of arriving. While some of these vacancies can be attributed to underprepared or overwhelmed teachers, it isn’t a stretch to suggest that high quality teachers are getting lost in the struggle of teaching in Wisconsin’s worst-performing district. The challenges of teaching in a large urban area are well documented, but Milwaukee fares the worst by far when it comes to educator burnout and employee turnover in the Badger State.

So how do you retain these inexperienced but talented educators? Based on the direction that other Wisconsin school boards are taking, MPS may have to be willing to embrace some strong reforms. The key will be creating a comprehensive method to identify and embrace their strongest educators.

We suggest multiple reforms, including a merit pay system, that will reward the best teachers and replace the failing ones.

Other districts in the state have made significant changes aimed at luring and retaining high-performing teachers. Oconomowoc, a district of just over 5,000 students, will press forward with a plan that will raise teacher pay in their high school but rely on these educators to teach four blocks instead of three during their work day. This additional workload led the district to eliminate 15 full time positions, saving $540,000 a year while raising teacher pay by $14,000 per educator. This plan allows the district to create savings that can be poured back into the classroom without eliminating any class offerings or increasing class sizes.

Reforms like Oconomowoc’s are ambitious plans that could pay off significantly for the district. Greater pay means a bigger lure for high quality high school teachers. As long as quality educators are willing to accept more hours for higher salaries, these stipends could play a major role in developing a stronger class of teacher at Oconomowoc High School. This, paired with the additional funding for early education freed up by the half million in savings due to this reform, should help breed a stronger culture of education within the district.

Oconomowoc isn’t the only district that is changing its compensation system in order to entice its best teachers into staying. Hartland-Lakeside School District is in the first year of a pilot program that will award modest merit pay bonuses to high performing educators. Teachers in Hartland-Lakeside will receive pay-for-performance awards based on the work done in their classrooms. This will range from simple work with students to taking on mentoring and leadership roles amongst their fellow educators. That plan went into effect for the 2012-2013 school year.

MPS poses different challenges that are not always visible at a smaller or more affluent district. That is why we believe that good teachers need to be rewarded for being successful in the classroom.

Our plan still includes experience based pay, but we offer a large incentive fund that will reward great teachers with any amount of years in the classroom. New teachers (1-4 years experience) would have a base salary of $35,000, while teachers with five years of experience or more would see a base salary of $45,000. This may be less than the average current salary of $62,723 (without benefits), but we set aside $50 million to provide bonuses to successful teachers.

Assuming that half of the teachers receive a bonus for exemplary performance, the district would save more than $35 million in salary alone. Plus, experienced teachers that receive a bonus would see an average salary increase of more than $5,000.

This would ensure that teacher salary, for good experienced teachers, would actually increase under our plan. Mixed with reforms on health care and retirement benefits for current teachers, the district could see savings of more than $95 million a year. These savings could be put back into the classroom or the hands of local taxpayers.

Being a much larger district with many different demographics, Milwaukee is a unique challenge without a simple answer. While merit pay sounds like a strong motivator, it is important to note that there have been few studies that offer any significant evidence that it has a positive effect on classroom performance. However, since there are many moving gears that are involved with the process, ranging from bonus amounts to union approval to the metric for grading teachers, there is still much that we have to learn about programs that reward the best teachers for their work.

One thing that may make merit pay more effective in Wisconsin will be the restructuring of state standardized testing, the institution of a new school accountability program, and a stronger system of measurement for a teacher’s value based on student results and administrator observations. The inclusion of value-added testing in Milwaukee’s classrooms will help parents, administrators, and Wisconsinites better understand just what an educator offers to his or her students. This upcoming teacher accountability system, which will tell us about a teacher’s impact based on equal parts student growth and classroom observation, will help all districts (not just Milwaukee) find a better way to gauge the strength of their educators.

The district will have more data than ever before with which to compare teachers, and it will rely on what their students are learning in the classroom rather than just the observations of their administrators. That will allow MPS officials to identify and reward their highest-performing teachers while intervening and helping the ones that grade out at the lowest levels.

For a young teacher on the verge of leaving the district, the recognition of a quality performance and additional job security could go a long way – even without a merit pay system.

Teacher Tenure
Eliminating tenure and allowing districts to make staffing decisions based on merit.

One key aspect of Act 10 is that it no longer holds district layoffs applicable to only the youngest or least experienced teachers. In lieu of a mandated system that can reasonably determine which teachers are the best in a school, layoffs in the past have been handed out based on seniority rather than ability. As a result, young, talented teachers were perpetually at a greater risk of losing their jobs than veteran teachers, regardless of how effective they were in the classroom.

Milwaukee will have the opportunity to rectify this in 2013, and it must to promote a fair system that retains the best possible educators. The previously mentioned teacher grading system could additionally play a major role in the unfortunate case of layoffs. Rather than relying on “days taught,” MPS would be able to point to performance when difficult cuts have to be made. It’s a program that is not only fair, but also potentially motivating for educators at all stages of their careers.

Wisconsin has already banked a pilot year of a system slated to measure the performance of teachers and administrators that was fully funded with little debate in the 2013-2015 State Budget. The Educator Effectiveness program is a system that will grade teachers based on a combination of student outcomes and in-class observations by administrators. This system was devised by a design team that included educational stakeholders from across Wisconsin, including teachers, administrators, union leaders, legislators, and employees at the Department of Public Instruction. After a pilot year in 2013-2014, it will begin to provide valuable feedback for educators in 2015. This program is something that Milwaukee can tie in to their new policies when it comes to teacher retention, promotion, and recruiting in the future.

This reform would keep the best teachers in the classroom through tough budgets. It would eliminate stories of teachers being named “educator of the year” and being given a layoff notice weeks later. Most importantly, it will boost schools by providing consistency amongst their strongest educators, helping to build a culture that can create the rising tide that will lift students and drive growth.

Health Care
MPS can save millions of dollars by shopping around and switching plans.

One of the most useful benefits from Act 10’s collective bargaining changes has been greater freedom for local districts to shop for employee health care. In most cases, this has led to a system of competitive bidding from local and national insurers. As a result, annual costs have gone down considerably in Wisconsin. This comes on top of the savings seen from greater employee contributions to health care.

Back in 2010, the MacIver Institute tackled the issue of rising health care costs and the savings provided when districts switched carriers over a six-year period. Milwaukee Public Schools was one of a small group to have multiple insurers, splitting responsibilities between United and Aetna depending on employee needs. However, unlike the other districts in this group, which saw smaller cost increases from 2004 to 2010, Milwaukee’s health care costs rose significantly.

While the average cost of teacher health care in Wisconsin rose by just over 40 percent over a six-year span, Milwaukee Public Schools saw an increase of over 120 percent for single teachers. Family costs endured a rate increase that was double the statewide average. As a result, costs at MPS went from being relatively cheap to expensive from 2004 to 2010. This happened despite the change in carriers and multiple options for employees.

This dichotomy ended in 2010 when the district signed their current four-year contract. Both HMOs and PPOs have been covered by United since then. According to the Milwaukee Journal-Sentinel, this has led to lower premiums for the district and its customers, but it’s unclear just how much these savings are in comparison to the 2010 numbers presented above.

The district will be able to continue this trend of savings by continuing their methods of health care reform. Smaller districts such as Howard-Suamico, Germantown, and Monona Grove all saved $1 million or more through open bidding for insurers and, in some cases, a move to a higher deductible plan. In Appleton, a district with approximately 18.5 percent of the student body that Milwaukee has, these savings were over $3 million.

The actual amount that Milwaukee Public Schools could save isn’t yet known, but it stands to be significant. The 2010 concession that made United the sole provider saved the district a reported $50 million over two years. Milwaukee may not be able to repeat that level of savings, but it is not out of the question to suggest that competitive bidding for a lucrative contract like the state’s largest district could be similarly impressive.

Now that the district can no longer be bound to choosing a health care provider through negotiation, MPS can follow Appleton’s lead even after coming off of a cost-saving switch in 2010. Districts that switched their carriers just once in a six-year span saved nearly 12 percent of their single-person coverage costs when compared to districts that remained static. With family plans, these savings came out to just under eight percent. Assuming that all of the district’s 8,750.9 staff members were insured as single people rather than families (and thus creating a conservative estimate of costs) and a per-person cost that meets the 2010 state average, then the district stands to save at least $650,000 per year from changing providers just once between 2013 and 2019.

When MPS saves money on teacher health insurance, it frees up funding that can be poured back into the classroom. Other districts across Wisconsin have taken advantage of new reforms that have given them the freedom to find savings through their insurers. MPS will have a similar opportunity in 2013, and it should provide relief for budget makers into the future.

Conclusion

There is a world of opportunity that awaits Milwaukee Public Schools as they turn toward a new teacher contract in 2013. The district will have more control than ever before when it comes to instituting reform in the classroom thanks to new limits on collective bargaining. MPS will also have the opportunity to see how other districts across the state have dealt with Act 10’s provisions and what they have done with their newfound freedoms. They have this chance because they are essentially two years behind the curve thanks to the four-year contract they signed back in 2010.

With Milwaukee’s public schools, there’s no shortage of issues that need to be addressed. No one contract would be able to solve all the problems that a major urban school district faces. However, the school board can take several steps to improve education and create a brighter future for a new generation of students – if they are willing to make difficult and seemingly politically unpopular decisions.

The measures here are simple in theory. The district should work overtime to retain and promote their good teachers and rehabilitate or remove their bad ones. The district should close its bad schools and replicate the ones that are working in their place. Students and families should have more options when it comes to their education. Money that can be saved on benefits like health care and retirement costs should be poured back into the classroom.

In the past, instituting the changes behind these ideas would have been an arduous and potentially ineffective process. Now, the district no longer needs teacher union approval to put plans like these into motion. That’s not to say that Wisconsin’s public schools should charge through with reform without their teachers on board. The district should still rely on feedback from its educators. However, the school board is now in the driver’s seat when it comes to changing MPS. If their members can create the initiative to spur wide-ranging reform, then they will also have the power to institute it.

It won’t be an easy task. Reforming MPS – or any school district in Wisconsin – is going to be arduous and occasionally combative. It will also be deflating and demoralizing if not done correctly. If Milwaukee wastes this opportunity for change and continues to serve families with subpar schools, then it will continue down a path of failure that will severely effect another generation of students. That’s a loss that Wisconsin can’t afford to bear.

Milwaukee has the chance to reform education like we have never seen before. That reform could lead to a better education not only within city limits, but statewide. It is an opportunity that the city and the state cannot afford to squander.

Wisconsin’s children deserve better.