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Sunday, March 20, 2005

Moskovitch Article - November 2003

I went as an observer to a meeting of the Progressive Caucus last spring.

The Caucus is made up of about 25 legislators, who are ardently and unashamedly left wing. They are in favor of universal health care, sustainable wages, extended benefits of many kinds. While they are well intentioned, they are rarely interested in the fiscal consequences of their proposals, believing that closing 'corporate tax loopholes' will enable them to have their $40 billion budget with no consequences. This time, though, they had a special guest whose ideas I very much wanted to hear. His name was Ed Moskovitch.

Ed Moskovitch is not a household name on Cape Cod, but he should be. He has affected the life of virtually every person on Cape, regardless of age. He is the man who wrote the education formula.Back in 1993, the Legislature passed the Education Reform Act. In exchange for submitting school systems to measurements such as instituting testing of students (which came to pass 5 years later as MCAS) and a uniform curriculum framework (to prevent students from learning about the Civil War twice and the Revolutionary War not at all if they changes school districts), the State announced that it would pump many millions of dollars into local school districts to allow these school districts to offer new courses, offer teacher training and reimbursement, and set a foundation for student spending, to guarantee that each student had at least a certain amount spent on their education. A formula would have to be devised to distribute all this new aid. That is where Ed Moskovitch and his consulting firm, Cape Ann Economics, came in.

Mr. Moskovitch wrote a complex 36 step formula, which weighed various factors about each school district, and was to provide a fair and equitable distribution of the money. The Formula would be in place until 2000, when seven years had passed, and it would be reexamined at that time. (That reexamination did not occur at that time. Instead, the existing formula was left in place with only a few changes such as giving even more money to towns which had met a 10% affordable housing goal, which benefited only a few urban communities. A committee is now studying the formula to have the 2000 revision done by 2004).

The Formula has been a disaster for Cape Cod since its inception. While the income of residents, need for transportation, age of residents, etc., are all factors in the equation, nothing comes close to the 'weight' of the EQV (EQualized Valuation). This is the gross value of the property in the community, combined with what the Formula deems an 'appropriate' tax rate. For example, while the Dennis-Yarmouth School District receives about 22% of its budget as state aid, North Attleboro, with virtually identical student numbers, average income, tax rates, etc., receives about 44%. This all stems from the fact that the formula thinks that Dennis and Yarmouth residential taxpayers don't have high enough property taxes, and therefore have a higher EQV.

Boston legislators genuinely think the Formula is by and large an equitable one. When poor Tom Birmingham, then Senate President, was running for Governor, he completed his across-the-state bicycle tour in Sandwich, and was truly puzzled when he was mobbed by angry Sandwich residents complaining that the Ed Formula was bankrupting the town. "The formula is a fair one," he said. Of course, he is from Chelsea, which was very well treated by the Formula.

So I was very curious to hear the rationale behind the Formula from the man who wrote it.Mr. Moskovitch addressed the group of about 20 legislators and staff. His opening words were, "The purpose of the education formula, and indeed all state aid, is to redistribute wealth through tax monies from wealthy communities like those on Cape Cod who have a lesser need for the funds, to poorer urban comminutes like Lawrence, Lowell and the inner cities, where the need is so much greater. If you cannot accept that basic premise, then there is no need for further discussion. Are we all agreed?"

I looked over at the Progressive Caucus legislators, who were nodding like bobble-head dolls. This premise seemed fair to them, so the explanation would continue.

Mr. Moskovitch went on to explain how wealthy comminutes, like those who were party to the pending RAGE lawsuit, should simply face up to reality and raise property taxes to appropriate levels, at which time they would become eligible for increased aid. He did not take into account residents like the seniors on Cape Cod, who have had their Medicare supplements and drug costs skyrocket, at the same time they are coping with the possibility of lack of Prescription Advantage coverage, who cannot afford to triple their property tax. Instead, he spoke about 'second home' communities, where the absentee owners do not send any children into the school system, and who therefore had wealthy homeowners subsidizing their school systems with no costs incurred.

He did not mention, or pause to consider, that in fact the taxes paid by those second homeowners are the only funds which allow these communities to cope with the doubling and tripling of population during the summer months. For example, when a town of 7,000 becomes a town of 15,000 every summer, there are a large number of arrests, fires, lost dogs and children, etc., that the taxes paid by the owners of the usually empty summer homes help offset. Those extra revenues are the only thing which allows call firefighter departments, and essentially rural police departments, to function. The premise that all extra tax money can flow seamlessly into the school systems is a flawed one at best, yet that is what the education formula expects to happen.

Mr. Moskovitch spoke wistfully about the Chelsea School system. Since 1993, the State has given the Chelsea school system about $10 million in additional aid. This should have been a new dawn for those students, who should now be better educated and better equipped for the state tests. Yet, the test scores of the students have risen less than a percentage point. He suggested that perhaps the state would like to hire him to analyze why this heroic transfusion of cash into the system has produced such paltry results. The possibility that throwing money at the problem had not been a solution was not suggested. Mr. Moskovitch finished his remarks, and the legislators were pleased with the explanation. Nobody asked him why any community should receive more than 100% of its school budget in the form of state aid.

So - what can Cape Cod school systems and towns do to combat the stereotypes which abound in Boston of 'wealthy' Cape Cod, with its green golf courses, blue swimming pools and champagne-drinking seniors in trophy homes? We need to educate the legislators. Not our delegation, which is keenly aware of the problem, but the others. Our school administrators and school committees are in direct competition with other school districts that only need to hop on the subway to have a face-to-face meeting to plead their cause, and bring teachers and schoolchildren with them to demonstrate why they should get additional funding. We need to point out that we have more children in the school lunch program, an objective Federal measure of poverty, than many of the 'disadvantaged' school districts the aid is steered towards. We need to explain that we have no Forsyth Dental Clinic, no juvenile psychiatric facility or correctional facilities, none of the programs for the disadvantaged that urban areas take for granted, yet our level of poverty is greater than theirs. It isn't easy for vacationing legislators to believe that we have teen murders, domestic violence, drunk driving, heroin addiction, just like the inner city, but it's true and even backed up by recent Federal crime statistics. Out tourist industry is designed to cover up the cracks in our foundation, but they are surely there. We also need to be shrewder in the management of the resources we do have. For instance, there is a great deal of discussion of class size, with about 22 as the target. Yet, it has been shown that 15 is a better size for kindergarten and early grades. We see television commercial urging 'early education for all'. So why don't we have class sizes of 10 or 14 for early grades, graduating to the 20's for middle school, and to the 30's for high school? Most high school seniors who attend college will find themselves as freshmen in 'auditorium classes' of over 100, taught by teaching assistants instead of professors. Why not accustom them to larger class sizes and greater self reliance and personal responsibility for their studies while still in high school, and dedicate our teachers to the intensive teaching recommended for the early grades?

Ed Moskovitch has had ten years to see how his ideas might work out. For the rest of us, it's time to marshal our facts and figures and present them to the legislature as simple justice for our children. Speak softly, but carry a big statistic!


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