April 24, 2020

The Case of the Missing Students

In the story A Scandal in Bohemia, Sherlock Holmes tracks down the whereabouts of a stolen photograph. He knows who has the photo and believes they’ve hid it in their house, but Holmes has no idea where it is and is unable to enter to find it himself.  He devises a cunning plan: a fake housefire conjured through smoke bombs and yells of “Fire!” Thinking there’s an emergency, the thief rushes to her jewelry box and removes the photograph from its hiding place, and Holmes apprehends her as she flees the scene.

In moments of crisis, we rush to protect what is most precious to us. Why then do school districts cut services to students during financial shortfalls?

Under current funding formulas, most have no choice. As I discussed in my last post, school districts now receive a historically high portion of their funding from state and federal sources outside their control. The ability of districts to raise revenues independently is limited. Most school districts are prohibited from running a deficit in their annual budget.

The stories school district executives tell make sense, too: “We can’t burden taxpayers any further during an economic downturn.” “Any changes in our debt ratio and cash reserves would threaten our bond rating.” “We must balance the long-term financial health of the district against the short-term desire to maintain business as usual.”

Yet we’ve seen this situation before during the Great Recession, and we know the problems that cutbacks bring. Why didn’t we learn our lesson and prepare for the next economic downturn?

The answer is rooted in a powerful story that education executives have told for decades: that schools should run like businesses.


In a recent article published in the journal Educational Policy, Dr. Michael Ian Cohen of the University of Northern Colorado charted the history of the “financialization” of American public schools, the primacy of business values in education decision making.

Most education reforms of the past three decades are grounded in business management philosophies, including standardized testing, performance-based compensation for educators, and the practice of portfolio management, where school districts open, close, and expand individual public and charter schools based on their track records of meeting quantitative standards.

Financialization also describes the greater exposure of students and teachers to social and economic volatility.  We’ve spent less money per student for nearly two decades, a decline that began even before the Great Recession. School districts rely more on risky borrowing practices, such as variable-rate bonds and interest-rate swap agreements, to fund their needs. As Dr. Cohen wrote, “[i]t is one of the cruel ironies of our time that, instead of taxing the wealthiest corporations and individuals at a rate sufficient to fund public services like education, the public sector is relegated to the position of borrowing money from the wealthy and paying them interest.”

The track record of these practices is mixed, at best. In fact, school executives continue to implement them even as the business sectors that inspired them have backed away from these ideas.

Yet the narrative of “schools as businesses” continues because it provides school executives with a believable story to tell voters, parents, and teachers while they make their decisions. Even as the shortcomings of these policies become apparent, the power of their story persists.


Where are students in this? When the numbers yell “Fire!” in a budget hearing, is it the right decision for district executives to rush to protect the district by cutting services?

The answer for the present moment is certainly “Yes”. States and localities are already reeling from lower than expected tax revenues due to the sharp drop-off in spending over the past two months. School district executives are finalizing budgets with a great deal of uncertainty about when and if those crucial funding sources will rebound. Decision makers can’t help but play the hands they’ve been dealt right now.

But there is a deficit that looms greater than any budget shortfall: the deficit of students’ needs. The traumas of quarantine and uncertainty on young people combined with the economic and social stresses that many families will continue to experience is real. When schools finally reopen, the students that return will be much changed from when they left. Ideally, there would even more teachers, educational assistants, and support professionals available to meet this need. Instead, we can expect the same cycle of hiring freezes, layoffs, school closures, and program cuts.

Sherlock Holmes’s philosophy of deduction was, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.” The consequences of the Great Recession demonstrated that it is impossible to help students by cutting staff and reducing services. We must look for new solutions to the coming budget challenges, however improbable, that place the needs of students at the center.  This conversation won’t end with the passage of next year’s budget; the opportunity to change will persist. We can lay the groundwork for a new mindset by consistently and patiently explaining how business philosophies fail to serve students.


“Business-Inspired School Reform in the Era of Financialization: Not Business as Usual.” Michael Ian Cohen. Educational Policy. February 10, 2020.

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