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Monday, August 23, 2010

Never Let a Crisis Go to Waste

In an almost predictable fashion, within two days of a school closing, a "solution" is brought to forward. What is the solution? None other than (drum roll please) vouchers (!). In an editorial by the New Jersey Agudath Israel leader titled "We Know the Problem--What We Need are Solutions", the reader is left wondering if leadership can actually delve deep enough into the Orthonomics to do more than make simplistic declarations such as this one: "The problem is that we simply can’t afford to pay for two school systems – the Public and Non-Public Schools," much less actually offer solutions.

Now I don't mean to sound overly harsh or critical of leadership, but I find it horribly troubling that in the midst of dominoes beginning to fall, and in the midst of 350 students surprised by a school closing on the first day of school (including students with parents who have always paid their way), that nothing by a cry to lobby for vouchers is offered. That's it? It is so helpless! And, who wants to associate with helplessness?

You see, I'm not really interested in "imagining" all of the fantastic possibilities that could develop should this bill or that bill pass, anymore than I'm interesting in imagining all the possibilities that could develop for our family should my husband pick up his phone at work today with an incredible job offer that could potentially double his salary.

To be fair, two other solutions are named:
A. We have to find ways to encourage those in our community that don’t have children in Yeshiva or Day School to help fund these important institutions.
B. We have to find ways for the schools to pool their purchasing power in a consortia to generate better prices from vendors (and a great debt of gratitude is due to all vendors who have extended a great deal of credit and understanding to the schools).

Regarding Solution A, unless I'm the one living on an alternative planet, I think the author both fails to recognize their challenges. Parents who have managed to cut their children loose must often make up for lost time (paying off debt incurred during the Yeshiva years, marrying off kids, catching up on retirement savings). Those who have yet to enroll a child in Yeshiva (that do have regular income) are usually trying to pay off student loans, get ready to put a kid in Yeshiva, and/or save for a downpayment. I believe the vast majority of people (make that grandparents or future grandparents) without their own current tuition bills ARE either contributing directly to yeshivot (actually contributing towards tuition costs, babysitting grandchildren while their children work) or indirectly (supporting Bikur Cholim and Tomchei Shabbos, paying for the education of adult children so that they will be able to pay tuition, etc).

But, there is nothing wrong with pursuing this avenue, just like it is high time to pursue Solution B. But note, in solution B, a possible reason why tuition payments might not be coming in as expected.

Regarding this statement "over sixty percent of our Property Taxes are used to fund public education and we receive very little in return for our children’s education" I do have to note the irony given the other big Lakewood issues of the week where funding was cut from a private pre-school program serving frum children in a private school environment. Outside of the tri-state area, there are virtually no grants to private pre-schools. Transportation for private school students simply does not exist. Taxpayer funded special education and therapy services are not normally available within the confines of private school. Government funded meal programs are not a hallmark of private schools. Personally, I like low tax rates a limited government and I vote likewise. But if you continue to vote for candidates that support every imaginable pet program, expect high taxes.

Feel free to offer your suggestions for solutions that don't require imagining or a Sugar Daddy. I'd like to wake up one day and find leadership supporting educational alternatives that require parental investment, but enjoy some official support. Where general studies are not taken seriously, a good red pen and support from current administration would go a long way. I don't know of a public school district that doesn't offer an Adult Ed program. Those with very limited skills, need to be pushed into improving their situations.

In conclusion, the dominoes are falling and I think leadership efforts are best utilized in-house rather than knocking on the doors of the House. But what do I know? Perhaps the NJ Senate will pass a voucher bill by the end of September?

41 comments:

Chaim said...

What they are really asking for with vouchers is a Gov't funded Yeshiva Bail-Out.

Miami Al said...

Right, because in their fantasy world, they have leverage. There aren't that my adult Frum Jews.

We're 10% of American Jewry. We are probably 30%-35% of < 18 American Jewry given birth rates, but that doesn't translate into votes.

But the leadership is totally missing HOW prices went out of control, because it's in the mirror.

The percentage of Jews engaged in some sort of Rabbinic "make work" and "working for the community" has NEVER been higher, it's held in tremendously high esteem, we hear about their fake "sacrifices" because they have so little compared to the wealthy professionals (as though a random Rabbi from Lakewood would otherwise be a doctor/laywer, he's otherwise be an insurance salesman), and is bleeding the community dry.

Kollel is harmless.

People shoveling money to hire Kollel "graduates" at inflated salaries is the killer.

If there wasn't the promise of an 80k-90k + tuition discount Rabbi job whenever the Kollel guy needs to "leave Kollel," there would be a whole lot less sitting in Kollel.

Mark said...

Perhaps the NJ Senate will pass a voucher bill by the end of September?

Proposals for vouchers almost always have many restrictions placed on them regarding who receives them. For example, a recent NJ proposal restricted vouchers to about 20 specific municipalities (Lakewood being the only one on the list that has a significant orthodox Jewish population). Another restriction in that proposal is a strict limit on parents income (which would rule out the vast majority of orthodox Jewish families with working parent(s)). And there are other restrictions regarding curriculum, etc. In short, vouchers are not the solution. Certainly not for everyone.

Paying Parent said...

While I am all for privatizing the education system (many public schools are also wrought with waste, just like Yeshivas and the teachers unions have been known to use mafia type tactics to obtain inflated contracts), it won't happen quickly, if at all. Therefore it should not be offerred as a SOLUTION.
SOLUTIONS FOR YESHIVAS:
1) Legacy positions should be obliterated- if you are not doing your job, you shouldn't be there.
2) Compensation should be considered as an overall package. If you are making $40,000 but have 5 children, each getting a $5000 discount, you get paid $65,000.
3) Scholarships shuold not be given to families where there is an able bodied parent who is voluntarily not working.- This is not just to deter scholarships, but to increase the parnassah of the community and get rid of the incentive NOT to work.
4) class sizes should be increased
5) The community Rabbeim should publicly endorse a homeschooling initiative/ cooperative in the community.
6) SOme high school secular studies should be taught via online classrooms
7) administrators and their support staffs shouls be slashed in half. Any administrative duties that are understaffed should be undertaken as "work study" by scholarship families.

tesyaa said...

Gotta read those Lakewood Scoop comments. Here's one of the few literate ones:

Milwaukee is having a lot of problems with the State right now, with teacher accredidation (all GS teachers are required to have a Bachelors degree in Education), # of required hours for General Studies (they’ve had to lengthen the school day of Friday, Erev Shabbos, to accomodate), and then some. Before taking money from a secular government, be ready for what they may ask in return.

Oh the horror of accredited teachers and sufficient attention to General Studies!

Anonymous said...

The long term remedy is more parnassah (income) for the Orthodox community. The short and long term term remedy is a decrease in spending.

JS said...

It's nice to see our leadership taking a page from the history books. It's just a shame it happens to be Nero fiddling while Rome burns to the ground.

Same tired old solutions that wouldn't have worked even when they were first proposed years ago.

In case you're not convinced this is more wheel spinning instead of genuine concern and a call for action, just look at "Solution B." I mean how hard would it be for all the schools to get all their supplies together, pool together for insurance, centralize administration, etc. It's the most obvious cost saving measure and it's actually in our power to implement - no government miracle needed. And yet, nothing is ever done on this front. I don't even think they bother explaining why it's not feasible. That's the degree of contempt and disrespect they have for their constituents.

As for communal funding, please. With what money? You can't get blood from a rock. There are so many people tapped out from paying they couldn't pay if they wanted to - and I doubt they want to after the fleecing they received. As for me, I just laugh. I'm trying to come up with a realistic plan to educate my kids outside the yeshiva system (at least for the younger years) and I'm going to donate money willingly? I don't want to bankrupt myself on a lousy education and I'm going to donate to the cause? No thank you.

As for vouchers, horrible horrible idea sponsored by people who stick their hands out first and ask questions later. I would vote against any such proposal and actively campaign for others to follow suit.

Lion of Zion said...

JS:

"I don't even think they bother explaining why it's not feasible."

what's to explain? the problem is very simple. let's say school A and school B agree to use the same vendor for paper supplies. that's a great step. but are they going to use the paper supplier for school A (the principal's son-in-law) or the the one for school B (the secretary's husband)? i think we can all agree that it's only fair for each school to coninue using separate suppliers so each gets his share of parnasah.

Serious Question said...

Just how much does "Solution (B)" really save?

I can't imagine it's very much. Certainly not nearly enough to justify the co-ordination work.

Seriously, how much of a discount does co-operative purchasing yield? Is it more than 10%? And how significant is 10% of the purchasing budget to the overall budget of a yeshiva? If it is even 0.5% I'd be shocked.

tesyaa said...

If budgets are 80% salaries, the only way to cut costs significantly is to cut the salary budget - either by reducing salaries or, more effectively, by increasing class size.

But salaries and/or staff can't be cut because of "parnasa" and "the economic impact on our community".

In the face of this, the leaders throw up their hands and yell for vouchers.

Dave said...

Not only are general vouchers not politically viable, not only do they not apply to most parents, not only do they come with stiff government regulation, they also come with a "you take this much money and you cannot charge a penny more" rule.

tesyaa said...

Dave - I think they could, in theory, still charge for the religious component. As we know, money is fungible and nothing will stop total tuition from rising - especially not vouchers.

Lion of Zion said...

SERIOUS QUESTION/TESYAA:

a) it's not just in purchasing that they can collaborate to negotiate cheaper prices. (e.g., health insurance, which accounts for part of that 80% that goes toward staff expenses)

b) so what even if it's only 0.5%? it's always easy to say that it's only x% more or (as one adminstrator said to me when i suggested a way for my son's school to save a few dollars) that the price differential is only incidental when it's someone else's money

Lion of Zion said...

DAVE:

pre-k is government funded for all kids in new york. you think that i didn't have to pay any tuition that year?

the technicality is that the goverment program pays for about 3 hours a day and the school only charged me for the rest of the day (which wasn't any different than the tuition for all the other grades anyway)

remember, if parents are (somehow) managing to pay $x now, if there are vouchers the schools will simply raise tuition by the amount provided for in vouchers. after all, the parents managed to pay until now, so why lower the tuition?

JS said...

Serious Question:

The policy was implemented in the NYC public school system. Purchases for all public schools are done through a central office. They applied the same concept to various insurances that are bought as well. Most significantly, they consolidated administration and secretarial staff.

A friend works in the public school system, so this is all information from her. According to her the savings were significant.

I suspect the real reasons it's not done in yeshivas are:
1) They can't agree on hashkafa how can they agree on suppliers;
2) They're too disorganized to take on a meta-project like this - they're too bogged down in little day to day nonsense;
3) They think every person is providing an invaluable service and can't imagine that a central office would do things better;
4) Never wanting to fire anyone;
5) They'd have to fess up to each other what they're spending on what and what benefits they provide, etc.
6) Laziness
7) Apathetic customer base (parents)

tesyaa said...

From what I understand, many yeshivot provide minimal health benefits, if any. So there's nothing to save there.

JS said...

Either way, the message from the leadership is that the model is fine, we just need to find some new revenue sources (vouchers, communal funding, etc).

Good luck with that.

Miami Al said...

JS,

Correct.

What amazes me is that the leadership doesn't even pay lip service to safeguarding communal funds.

Normally, you pretend you care about wasting donor money. They don't even bother.

They want MORE spending, they just want non-customers to pay for it.

Serious Question said...

"so what even if it's only 0.5%? it's always easy to say that it's only x% more"

That's not my attitude with the question. What I am saying is 2 things:

1) Collaboration will take a massive amount of work and co-operation
2) Even if we maximize efficiency of every expenditure, it only affects the very tip of the iceberg. If you don't melt the part that concerns salary and benefits you haven't done anything worth congratulating yourself over.

So if you want to try and pull off this massive undertaking to save $50 per tuition, kol hakavod. $50 is $50. I would thank you for my part (which would be $100). But I wouldn't be willing to put in so much work for that kind of return.

The NYC public schools are essentially one entity, all of whom report to the same "boss". There are no two yeshivos that have the same "boss". Situation is not comparable in the least.

P.S. As someone who works inside an insurance company, I can tell you that small groups may be better off than midsize groups for health insurance rates. The smallest groups are protected by law from being hit with premium increases due to poor experience of other groups. Midsize groups are not - i.e. even if your group had no large claims and deserves a decrease, it could be cancelled out by an increase that is spread among several groups (of which one or more had poor claims experience). Just FYI.

Miami Al said...

Serious Question,

This is why it is so difficult to take these schools seriously. In a $6-$9 million dollar organization, there is no such thing as "a massive amount of work and co-operation."

Things take man hours, and have a cost. If their is a positive return on it, you do it. If there is a negative return, you do not do it.

You don't not do something because it's "hard work."

Now, spending $10,000 of labor to save $8,000 is not worth it. But spending $10,000 on labor to save $20,000, $30,000, or more is worth it.

These aren't hobbies, these are multi million dollar organizations to which their members have committed up to 50% of their income.

I don't think collaboration of supplies would matter much, except maybe to beat up vendors on the religious education side. You'd be better off in a general co-op for office supplies, where you can do the entire thing via a website.

That said, one of the board members ran many expenses for the school on a credit card of his. He wanted everyone to know what a serious macher he was for this.

I don't remember if he had cash back or airline miles on this, but he got a serious benefit. And because of his roll at the school, he was able to insist that his credit card be paid off first, before the school paid other bills, so his risk was pretty minimal.

Of course many of these vendors, wishing to avoid 2% credit card fees routinely give 1% cash discounts (last time I did supply purchasing, this might have changed)... but why save 1% on supplies when a board member can run $200k/year through their credit card, and as a result, take trips to Israel using airline miles.

Serious Q. said...

I don't want to be the naysayer. Shooting down ideas is not constructive. So I want to offer a very real idea that could help melt the budget buster (i.e. cost of staffing):

You want vouchers- you can have them- with some good planning.

Why are you paying the Rebbeim random salaries? You should be reverse engineering each Rebbe's salary to the level that maximizes his ability to get governement benefits. He should be collecting EITC. He and his family should qualify for government sponsored health insurance. He should qualify for TAP for each child in school. As many a kollel guy has discovered, maximizing government benefits often has more benefits than working a real job with a salary.

You wanted vouchers? There they are - essentially, the government is paying your Rebbeim, your Morahs. On top of that, their kids get free tuition, and Shalom al Yisroel. All you need is a savvy tax accountant/attorney to figure out the best salary for each individual employee based on # of dependents and other factors.

Everyone else benefits from the decreased cost of staffing because it means a decreased budget, and therefore decreased tuition.

IMHO, this is the single greatest impact idea ever brought forth in this tiresome debate.

tesyaa said...

You should be reverse engineering each Rebbe's salary to the level that maximizes his ability to get governement benefits.

Oh lovely.

Anonymous said...

Am I the only one that hopes that Mr. Serious Q is not serious when he suggests that relying on government benefits is the solution and the right thing to do?

Miami Al said...

Anon 5:59,

Why, people say that the Catholic schools have the advantage of clergy with a vow of poverty. If you are just paying them enough to max out EITC, same thing.

I don't think it solves your tuition problem, but it challenges those that say it does to provie it.

Financial Psychologist said...

Much like the shidduch crisis we can try to solve the problem by identifying what changed between 20years ago and today. And aside from the economic crisis of the last two years, the answer is the fact that is some circles of our society able bodied men are encouraged to be unemployed.

There may be another answer though - which is that schools are built very expensively, meaning that the costs to run it are huge. However, I don't know enough to say this for sure. I do know that one school in my neighborhood has a monthly maintenance of $60k. If you need 3/4 of a million just to pay the electric bill and gardener, you will likely always have financial difficulty. Especially if the mortgage on the mulit-million $ building (half financed with donations) is still unfinished.

garfieldcat3 said...

My father never came across a yeshiva that he didn't support financially, despite the fact that I refused to attend one. The current state of yeshives, both in terms of education and how they budget make me say that I wouldn't support a yeshiva on a bet. If they can't live within their means, they should close down.

JS said...

Just a comment on the article. I understand that a school closing and stranding parents and their children is a "crisis" of sorts. But, I disagree with this:

"...I have heard that in Northern New Jersey there are 30 families that have pulled their children out of the local Day School and placed them in Public School due to lack of financial resources to pay their tuition bills.

I don’t know if this has become a crisis or if these are isolated situations..."

Why is parents taking their kids out of expensive yeshivas they can't afford and putting the kids in public school a "crisis"?

Is it the fact that yeshiva is so expensive that parents can't afford it? Is that the crisis?

Or is it just that anything other than a yeshiva education is a crisis?

Why isn't the bankrupting of a community because of expensive yeshiva tuition a crisis?

Anonymous said...

Al: The difference is that the clergy don't live off of the public dole. The church -- via its donors -- pays for housing, food, healthcare and pensions for its clergy. I think it would be a huge chillul hashem for yeshivah education to be financed, in part, by designing a system to permit and encourage rebbes and morahs to milk public benefits in lieu of the community rolling up their collective sleeves to earn the money and make the sacrifices to support the segregated system them want and claim to value.

tesyaa said...

I guess politically conservative frum Jews (the vast majority) are only opposed to entitlement programs for other people. As I said, lovely.

Orthonomics said...

tesyaa-I'm politically Conservative and I find the suggestion abhorent!

Personally, the more leadership puts its hand out, the more I am turned off. I don't see leadership fighting the policies that are being passed by governments, federal and local, that the economist in me believes will hurt small business and industry. These policies WILL hurt our bottom line next year. These policies WILL hurt the average tuition payer. And there is nothing but silence. But when a local entitlement program that frum people are on is scheduled to take a budget hit, the guns come out blazing.

Anonymous said...

I'm not politically conservative. I have no problem with my tax dollars going to programs to help those who are elderly, sick, disabled and those who are willing to and do work hard, but still can't make ends meet (no matter what, we are going to have minimum wage earners in this country) but I abhor the notion of people who advocate planning to be on benefits, who know better and have the opportunity to get educated, work and be self-supporting but choose not to -- whether it is so they can segregate their kids, sit and be holy or sell crack -- and any leaders that would advocate that as a life style are theifs. The reason that benefits for those who really need them (those disabled from work, etc.) are so paltry (you try living on 660/month in ssdi) is because of people who abuse the system.

Mike S. said...

I really don't get the constant grousing. In a society where religious schooling (thankfully, in my opinion) is not paid for by taxes, you cannot expect to provide your kids with a Jewish education without some material sacrifice. Whether that is forgoing a 2nd income to home school, paying day school or yeshivah tuition, hiring tutors after the public school day, making aliyah with a lower material standard of living, or what have you. Could the schools be somewhat more efficient? Maybe. But my kids' school charges around $17K per kid (also the total cost--scholarships more or less balance other income); the local public school costs about $12K. But the day school (even with chaggim off and early Fridays) has about 20% more hours and averages about 16 kids per class versus about 23. Which makes the school about 20% more efficient than the public system. Sure, they'd be able to charge a little less if they upped the class size; it was suggested a few years ago, but a great many of the parents (including full tuition payers) objected.

Some of you talk like running a yeshivah were a great way to get rich--if you really believe that, quit your job, open a yeshivah that charges less splitting the "overcharges" with the parents and make out like a bandit.

feivel said...

"The problem is that we simply can’t afford to pay for two school systems... –"

Actually, three school systems.
I'm counting kollel, and why not?

Miami Al said...

Even in high property tax NJ, it seams that in the MO area, the cost of property taxes for a "normal" upper middle class home is 12k-14k/year. Even if 100% went to schools (more like 60%), that's still less than one tuition.

I'm pretty certain that if, hypothetically, the state gave Orthodox Jews a pass from property taxes since you renounce your right to a public school education, you wouldn't dramatically fix Yeshiva finances.

tesyaa said...

Al - great point that many people don't get. People think more in terms of per-student public school spending and have that amount in their heads when they think of "vouchers". No joke, people think they should get $10K or more in vouchers per child because that's what they're "saving" the district.

Orthonomics said...

When there is a large group of private schoolers, some money is saved. One thing I know it isn't $16K per kid or whatever is being thrown around. And I'm sure most taxpayers don't see the savings as much more than the cost of some workbooks so long as there are enough open seats to easily accomodate any students that might actually take a seat in a public school. Should that number become large enough that new buildings need built and new staff need highered, the argument of cost savings is weak imo.

Anonymous said...

So people who are likely among those complaining about a muslim religious institution being legally built on private property in lower Manhattan and think that politicians/the government can and should stop that building also want a voucher system where taxpayer dollars will go to fund private muslim schools. Something is very wacky here.

Serious Q. said...

You should be reverse engineering each Rebbe's salary to the level that maximizes his ability to get governement benefits.

tesyaa said...
"Oh lovely."

Anonymous said...
"Am I the only one that hopes that Mr. Serious Q is not serious when he suggests that relying on government benefits is the solution and the right thing to do?"

AND JUST HOW EXACTLY IS THIS DIFFERENT FROM DEMANDING VOUCHERS???

Serious Q. said...

To clarify;

If you are opposed to my suggestion, then you should be opposed to vouchers (as I am). Either way you are shifting the burden of paying your staff to the general public.

If you support the idea of having the public pay for your school system, then why sit around hoping for a voucher when there is a perfectly good, legal subsitute?

Sheer laziness.

Does anyone think that people this lazy can pull of "co-operative purchasing"?

Anonymous said...

What exactly does government owe us? Does that include someone else's money? If so, we'd better get that "someone else" to agree!

tesyaa said...

To clarify - I am opposed to vouchers and I am opposed to healthy adults planning their life around government programs.