Saving Teachers with Natural Gas

I'm cross-posting this, so to speak, at a site for local school discussion; I'm not sure that will go anywhere, but I think it's worth a try. Anyway....

Back on January 25, the Syracuse Post-Standard said that Hamilton officials discuss proposed natural gas utility with school district officials, residents:

The creation of a natural gas utility in the village of Hamilton could save the Hamilton Central School District close to 50 percent — or $160,000 — on its annual heating costs, officials said Tuesday. The savings are equally substantial for the community’s two other main power users — 56 percent for Colgate University and 39 percent for Community Memorial Hospital.

That's two teachers who don't have to be cut -- year after year after year. Maybe three teachers. It's a big deal.

I'm adding this page on March 29th, because there's a Gas Utility Meeting Tonight | Radio Free Hamilton

There will a discussion of the village's proposed natural gas utility tonight at 7 p.m. in the large group instruction room at HCS. It will begin with a presentation about the planning that has taken place to date, and then be opened to questions and answers.

Natural gas is not a very-long-run option; it's a fossil fuel. It will run out. In the very long run, you're probably all going to do it the way I do it: there's a compressor in the basement below me, and when the thermostat behind my head says "Brrrrrr..." that compressor starts pumping heat out of the ground, using electricity (from Niagara, from windmills, eventually from solar panels attached to the wires now buried in foam insulation under my roof -- but also, for now, from coal). I take 50F water out of the ground and put it back in the ground 10F colder. In the summer, to a lesser extent, I take 50F water out of the ground and put it back in the ground 10F warmer, as the basis for air conditioning. You should do that too -- if you're building a new house. It was expensive to add to an old heating system, though; I'm not sure my system will pay for itself in my lifetime.

Natural gas can be a "bridge fuel", serving my kids but probably not my granddaughters. As Scientific American put it summarizing an MIT report, Natural Gas Could Serve as 'Bridge' Fuel to Low-Carbon Future

A cushion, but not a complete answer... Gas is an option for cutting power plant emissions and addressing global warming in the short term. But the researchers warned that the gas cushion shouldn't distract policymakers from addressing the need for nuclear power and carbon capture and sequestration (CCS) technology for coal-fired generation. "Though gas frequently is touted as a 'bridge' to the future, continuing effort is needed to prepare for that future, lest the gift of greater domestic gas resources turn out to be a bridge with no landing point on the far bank," the report says.

Still, it's what we have for now. There is a local controversy about this, based on a list of concerns which I think deserve a serious hearing, but which don't, I think, turn out to be correct. The list has been circulating as "The Dirty Dozen", and I've received copies as email forwards and by door-to-door handout. I'll put one below, with my responses above. In the end, though, as Jim Bona put it, Natural Gas Utility for Hamilton is Green:

You can choose to go with natural gas and be green at the same time. It is a big decision with long lasting effects. I will vote to give the project the green light.

My summary, sent by email and edited here: I sympathize, but I mostly disagree. This is stuff I've thought about, as the geek on the Southern Madison County Natural Gas Landowner's Coalition steering committee (how's that for a mouthful? A few hundred parcels, mostly farmland, maybe 30-odd square miles. I don't expect to make any money personally, but I think it's a good thing to do.) As the Colgate guy mentioned at the village meeting, there was a Howarth study at Cornell that claimed shale gas was dirtier than coal, last year and it seemed perfectly respectable but turned out to have made a bunch of assumptions that nobody else agreed with. My take:

• The endgame is necessarily about sustainability...it won't include shale gas;
• Shale gas is a lot cleaner than coal, and is getting more so;
• Natural gas doesn't kill nearly as many people per terawatt as coal which doesn't kill nearly as many as oil (solar and wind are better still; nuclear, oddly enough, is best of all)
• Gas is a big help as a "bridge fuel" towards a wind/solar/biogas future;
• Nothing's perfect, and neither companies nor regulators should be trusted.

Well, let's look at cleanliness; I hope everybody realizes the uncontroversial part:

Natural gas produces far lower amounts of sulfur dioxide and nitrous oxides than any other hydrocarbon fuel (fossil fuels).[42] Carbon dioxide produced is 117,000 ppm vs 208,000 for burning coal. Carbon monoxide produced is 40 ppm vs 208 for burning coal[citation needed]. Nitrogen oxides produced is 92 ppm vs 457 for burning coal. Sulfur dioxide is 1 ppm vs 2,591 for burning coal. Mercury is 0 vs .016 for burning coal.[43] Particulates are also a major contribution to global warming. Natural gas has 7ppm vs coal's 2,744ppm.[44] Natural gas also has Radon, from 5 to 200,000 Becquerels per cubic meter.

And I think everybody agrees that you gotta watch that radon, whether it's in your basement or in a well. As Secretary Chu has pointed out, a coal power plant disperses more radiation per watt than a nuclear plant (by a factor of 100, actually.) But you gotta watch it.

Now, the controversy...but the controversy in this letter is not, so far as I can tell, really much of a controversy. The Howarth study is not well-regarded by the sources I've read...Scientists still feuding over natural gas 'fugitive emissions'

A study by Robert Howarth, professor of ecology and environmental biology at Cornell, found that the greenhouse gas footprint of natural gas could be twice as bad as coal over a 20-year timeframe and comparable at a 100-year timeframe. A fellow Cornell professor, Anthony Cathles, has been going back and forth refuting Howarth since the initial release of the study last year.... "There really hasn't been that much of an uproar about it, I believe," Malcolm said. "Mainly because, I believe, so many of the conclusions that were drawn from the report were patently ridiculous and the data that was used in the report was false." A number of studies have refuted Howarth's report, including information published by the Environmental Defense Fund, the Natural Resources Defense Council and a Carnegie Mellon study partially financed by environmental organization, the Sierra Club.

Lots of links available; Google is your friend, if you care. :-) Is there a real controversy, about real problems? YesYesYes! The real controversy has to do with drillers making a mess on the surface, or with drillers failing to seal their well casings correctly so that natural gas flows up the outside of the pipe and mingles with groundwater, or drillers being careless about pockets of gas near the surface (in the water table; people have been lighting up their tap water for a century or more, even with no gas wells...). Also drillers taking huge amounts of fracking water (heavy on brine, mainly, but also containing toxic stuff, mostly natural but who cares?) and trying to find some gullible municipality to accept it. Many bad things. Trust No One. The Truth is Out There. The reason for coalitions like the one I'm in is that you want to have lease terms that keep the company from doing bad stuff (and from paying too little, but "pay me enough" doesn't take much of a 60-odd page lease). And you also want to have regulations that keep the company from doing bad stuff; NY has been working on that, doing I think a pretty good job.

Okay, on with my second item, overall safety. It's absolutely true that natural gas is dangerous, and so is everything else, especially trying to get along without energy. (Of course energy usage should be minimized: we put in spray-foam insulation all over the place here. A nuisance when the electrician drilled into some wires he couldn't see, but definitely worth it.) We still need energy; to stop energy production would hugely raise the death rate. So, we want to compare sources of power: Snapshot of deaths per terawatt hour with recent reports on deaths from coal, oil and natural gas

Energy Source	Death Rate (deaths per TWh)
Coal – world average	161 (26% of world energy, 50% of electricity)
Coal – China	278
Coal – USA	15
Oil	36 (36% of world energy)
Natural Gas	4 (21% of world energy)
Biofuel/Biomass	12
Peat	12
Solar (rooftop)	0.44 (less than 0.1% of world energy)
Wind	0.15 (less than 1% of world energy)
Hydro	0.10 (europe death rate, 2.2% of world energy)
Hydro - world including Banqiao)	1.4 (about 2500 TWh/yr and 171,000 Banqiao dead)
Nuclear	0.04 (5.9% of world energy)

Coal is bad stuff. Let's not use more coal than we have to. (You may think that coal is not killing anybody near you. Well, maybe not. Coal Pollution Will Kill 13,200 Americans This Year & Cost $100 Billion in Additional Health Care Bills ...New York takes third with 945 dead from coal pollution.) Oil is bad stuff. Ditto. Replacing them with anything is a wonderful idea. Can we replace them with the safest option, namely nuclear? No, because the worst-case scenario for currently commercial nuclear is not acceptable. It may become acceptable with pebble-bed, thorium, etc reactors, but we should not be working with nuclear reactors that melt down if unattended or if the backup power goes off (as at Fukushima). Good reactors are possible, and this is an interesting subject, but it's not the subject of this summary. Our endgame for the moment does not count on local nuclear ever being safe; for the moment, we figure on the nuclear reactor that's 90M miles away, i.e. solar and wind and hydro. (We also figure on biogas methane, as a small thing we're learning how to do. Poop Power! It might be a pretty big thing someday, using your grass clippings and leaves and garbage as well as sewage to generate perfectly "natural" gas. And we'll certainly use that 50F year-round heat source/sink a few hundred feet down, and maybe, as drilling technology improves with natural gas experience, maybe we'll start using the much higher temperatures a couple of miles lower down, about twice as far as we now go for shale gas. But that's not a currently available option.)

So, how quickly can we move to solar and wind and hydro? Umm, well, hydro can be expanded somewhat, but maybe not much; we've been trying. Solar and wind do in principle provide enough power for everything. But they have problems, partly that they're expensive which is being cured slowly, but it's harder to cure that they're erratic and that we need electricity when the sun doesn't shine, even if the wind doesn't blow. So we need either

• an alternate source of power, one that can be turned on and off easily, or
• storage for solar/wind power, or preferably
• both.

It happens that natural gas generators can be turned on and off much more easily than coal or nuclear or hydro (these are suitable for "baseload power", but they don't deal with variations all that well.) So solar and wind become more cost-effective simply because their gaps are plugged by having natural gas available. What about storage? Well, energy storage is a hard problem, but one of the things being worked on is "Compressed Air Energy Storage" where you push air in when you have extra energy and then let it push its way out when you need it: Compressed Air Energy Storage

Fast start-up is also an advantage of CAES. A CAES plant can provide a start-up time of about 9 minutes for an emergency start, and about 12 minutes under normal conditions. By comparison, conventional combustion turbine peaking plants typically require 20 to 30 minutes for a normal start-up. If a natural geological formation is used, rather than cavern air storage (CAS), CAES has the advantage that it doesn't involve huge, costly installations of creating the cavern in a salt dome. A depleted natural gas reservoir already contains the space required, in porous rock. Moreover, a CAES project used in conjunction with a gas turbine requires 66% less natural gas to create the same amount of power. Accordingly the emission of green house gases is substantially lower than in normal gas plants.

So using natural gas naturally leads towards wind power stored in CAES, first because it will increase the efficiency of the natural gas usage, and then because the depleted wells will be used for more CAES...and without CAES, or _some_ effective power storage mechanism, wind and solar can never be more than a small fraction of the total because we can't count on them to be producing when we need them.

and finally, rather than expound on points like banks not wanting a mortgage on leased property (a very good thing to think about if you're thinking about signing a lease, and a reason for land-owners to join coalitions like ours rather than signing company leases, but not really part of this discussion), or points like "no benefit" (no benefit? BTUs are cheaper. That's a benefit!) or points like "NOT intended for local use" (the pipeline already connects from end to end, and is already being sold for low prices to homeowners in the areas that do have connections, in fact in much of the US -- 62 million homes?)... I simply pass on to

my final point: Trust No One. Well, I already said that. Don't trust companies or regulators or activists or me. Each of us lives largely in a world of our own invention, having limited contact with any "real" world that may or may not be out there. And that's okay.

And in fairness, here's the point of view with which I'm disagreeing; I've edited nothing except formatting, inserting <br/> elements.

The Dirty Dozen (received as email forward)

1. Shale gas is NOT green. The Village Board tells us shale gas is cleaner than other fossil fuels, and that piping it into the heart of town will reduce our carbon footprint. But shale gas is just another highly polluting hydrocarbon. It's dirtier than oil and dirtier than coal when you add the environmental cost of the huge amounts of (imported) oil needed to explore for it, drill for it, hydrofrack it, process and transport it, then store and/or treat the wastewater. Further, methane, the chief component of shale gas, is a greenhouse gas 20 times more potent than carbon dioxide.
2. Shale gas is NOT safe. The Village Board tells us shale gas is extremely safe, and that its distribution has an excellent safety record. But Tennessee Gas Pipeline, one of the Texas-based corporations the Board is considering for gas transmission into the Village, is responsible for one of the deadliest gas transmission pipeline explosions in US history. And in Feb 2011, one of TGP's pipelines shot flames 200 feet in the air that were visible for 40 miles. In Nov 2011 two more of TGP's pipelines exploded. This past Jan there was a major leak in a TGP compressor station that caused nearby residents to evacuate.
2a. Shale gas is NOT safe. Methane bonds with naturally occurring radium (R226) in the Marcellus Shale. The gas, along with the radioactivity, will run through the pipelines into the Village. The pipeline itself will be constructed of heavy duty plastic to deter corrosion by the methane. In Germany, plastic pipe is allowing benzene, a proven human carcinogen for which there is no known safe level, and other hydrocarbons, to diffuse through the plastic pipe itself.
3. Shale gas will NOT create local jobs. The Board says this project will employ local residents, but pipeline construction will employ out-of-state workers with special expertise. A portion of their money will flow into the community for rent, food and gasoline, but the bulk of it will benefit their home states, keeping local unemployment high. Dominion Transmission, the second Texas-based corporation the Board is considering for gas transmission into the Village, has a history of importing workers from Texas, Florida, Oklahoma and Louisiana to work on local Marcellus Shale projects.
4. The shale gas industry is ABOVE THE LAW. The Village Board tells us shale gas distribution is a highly regulated practice. In fact, the gas industry helped to shape those regulations and is exempt from the Clean Air Act, the Clean Water Act, the Superfund Law, the Emergency Planning and Community Right-to-Know Act, the Resource Conservation and Recovery Act, and the Superfund Amendments and Reauthorization Act of 1986.
5. The Village of Hamilton may become a gas hub. The Board tells us there will be "4 or 5 city gates" positioned throughout the Village. Gas coming into the Village from a larger pipeline will enter via a "city gate," where pressure is tamped down and the gas then flows through a smaller pipe to users. New York City, with millions of residents has six city gates (NY Times). Why would our Village need four or five of them if it were not intended to be the "hub" for several incoming and outgoing pipelines? In fact, we are surrounded by gas-leased properties (and existing wells) ready to use us as a transmission hub.
6. Many banks REFUSE TO GRANT MORTGAGES for properties with gas leases on them - even for properties adjacent to leased properties. (NY Times) And many insurance companies will not insure leased properties, or else substantially raise their premiums. We are surrounded by such properties. What will you do when you can't get insurance, or when you can't sell your house?
7. Shale gas may NEVER be available to Village residents, small businesses and agricultural users. The Board admits that aside from the Airpark, Community Memorial Hospital, Hamilton Central School and Colgate University, the rest of us will only be connected "as resources allow," perhaps not for 20-30 years. And since the US Geological Survey has slashed its estimate of the amount of gas in the Marcellus Shale by 80%, residents, small businesses and agricultural users may NEVER be connected.
8. Shale gas is probably NOT intended for local use. The Tennessee Gas Pipeline stretches from the Gulf of Mexico to New England. Once we are connected, it's possible to transmit Marcellus Shale gas to the Gulf of Mexico, and from there to Europe and Asia, where the price of gas is four times what we pay. If you were the gas companies, where would you sell the gas?
9. Shale gas has been kept "secret." The Village Board has been planning a Municipal Gas Utility for over two years, but only in Feb of this year notified residents. In addition, the Board has spent $50,000 of taxpayer money to pursue the creation of this utility without voter notification - or consent.
10. Shale gas delays the use of renewable energy sources. While the Village Board agrees there is an "urgent need to explore and develop sustainable energy sources," they propose using shale gas as a "bridge" fuel. According to MIT, this will suppress the market for renewables - by 20 years! By taking the "easy" way out, the Board is neglecting to prepare a landing on the other side of the bridge. Why spend money on a gas delivery infrastructure and retrofitting buildings when they will soon need to be replaced? Why not save money now by using it to fit the Village for renewable energy?
11. Shale gas may NEVER pay off. While the Board says there will be no cost to taxpayers (aside from the $50,000 already spent) because the project will be financed by $2.5 million to $6 million in municipal bonds, where is the benefit? Any proceeds from gas bills paid by the airpark, the hospital, the school and the university will go to pay the bond holders first. How long will it take for the Big Four users to pay up to $6 million in gas bills, in particular, when the university will only retrofit approximately one-third of its buildings for gas?
12. Once we vote to allow the issue to go forward WE HAVE NO FURTHER SAY in the matter. When an Environmental Impact Study, and other studies, are conducted we have to trust the Board to do, what in their judgment, is best for us. Even if these studies have a negative outcome as far as we, the residents, are concerned we will have no say in what happens to us, our environment and our community as a result. And while the Village Board says they're not taking a position on hydrofracking, their actions endorse it. At the last meeting of the Town Board, the Mayor told its members that the Municipal Gas Utility would use hydrofracked gas. When the Town Supervisor asked how a gas utility would benefit Town residents living outside the Village, the Mayor said they'd be connected "as resources allow." If Village residents may have to wait 20-30 years, Town residents will have to wait much longer. There is no benefit for Town residents, and very little, if any, for Village residents. In reality, the creation of a Municipal Gas Utility will benefit, primarily, the transnational gas corporations doing the hydrofracking. If you wonder where all this is leading, please check the Mid-York Weekly for a schedule of free showings of Josh Fox's film "Gasland" at the Hamilton Center for the Arts. And please register to vote ASAP at Town Hall, 16 Broad St. You need to have lived in the Village only 30 days to be eligible. New York is a home rule state. Don't give up that right. You are the Village. You are sovereign. On April 17, just vote "NO!"

Well, I think I sympathize with the motivation here, but I think their facts are wrong. The political material at the end looks rather odd -- I don't believe our local politicians are that easy to buy. (I admit I haven't tried.) Still, there is always a risk of things going wrong; I believe natural gas is less dangerous than propane because it's lighter than air and won't slowly accumulate in your basement, but the explosions they talk about are real. Still, they're  rare -- and I don't think they're random. I think natural gas explosions mostly come from (a) old installations, placed and corroded long before safety was taken as seriously as we take it now, and (b) incompetent installers/maintainers. I think our village utilities people take their jobs and safety training seriously, and I think they're competent. I expect to vote "YES!" -- and maybe save a couple of teachers' jobs, as well as helping attract businesses. Helping some neighbors save money sounds good, too.

Or then again, maybe not. :-)

update: I may have been taking this too seriously; at the meeting, some of these issues were raised but they were dealt with very simply..."five city gates? No, we'll have one gate that steps pressure down to get gas from pipeline into our distribution system, and a few pressure regulators." "Use us as a transmission hub? No, we're putting in low-pressure plastic-only pipe, which physically can't be used as a transmission system -- that requires plastic-coated steel, and compressors, and federal regulation." And so on. And we had Bob McVaugh of the Village planning board expressing enthusiasm about the fact that new developments based on gas heat won't keep raising our electricity rates, which are among the cheapest in the nation but only as long as we keep it down. Natural gas heat is slightly less expensive than electric resistance heating, even here -- my heat is a whole lot cheaper still, but only if I ignore capital cost. (sigh)

Two Hundred Trillion Dollars

There are some silly songs on Youtube about the $46,000 debt we're giving each new child at birth; the songs are supposed to make you feel guilty about what we're doing to our children, and I think they're supposed to energize you against the debt-ceiling rise and for the balanced budget amendment. Well, the debt ceiling is stupid, and the balanced budget amendment is a really bad idea, and $46,000 is a ludicrous figure; the correct figure, the figure that the average kid needs to pay (or pay interest on, or pass on with accrued interest to the next generation,) is probably well over half a million. Nobody can know exactly; it depends on future growth of expenses and revenues and population, but $46,000 is a very small fraction of the total.

In April 2010, after the health-care bill's passage, I wrote a "One Hundred Trillion Dollars" context post in which I quoted the Dallas Fed:

Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent. ... all we would have to do to fully fund our nation’s entitlement programs would be to cut discretionary spending by 97 percent....defense and national security, education, the environment ... All of them [forever]

Today I noticed on Yahoo a more up-to-date and more complete and therefore more scary view of the same concept, from BusinessWeek, in Why the Debt Crisis Is Even Worse Than You Think:

A more revealing calculation is the CBO’s measurement of what’s called the fiscal gap. That figure is conceptually cleaner than the national debt—and consequently more alarming. Boston University’s Kotlikoff has extended the agency’s analysis from 2085 out to the infinite horizon, which he says is the only method that’s invulnerable to the frame-of-reference problem. It’s an approach used by actuaries to make sure that a pension system doesn’t contain an instability that will manifest itself just past the last year studied. Years far in the future carry very little weight, converging toward zero, because they are discounted by the time value of money. Even so, Kotlikoff concluded that the fiscal gap—i.e., the net present value of all future expenses minus all future revenue—amounts to $211 trillion.

How does that work? Well, let's think about the Smith family and the Jones family, each expecting the same future expenses spread out over time. Joe Jones intends to pay as he goes; he hasn't borrowed anything. Sam Smith has borrowed enough money from a bank to fund an investment account which will pay exactly the same expenses. In fact, aside from the issue of bank profit, he had to borrow exactly the net present value of those future expenses. (He has a triple-A rating, of course. For now.) You can think of various ways that they're in different situations, but the Smith and Jones families are basically comparable: the payments on Smith's loan will not over time be appreciably different from Jones' direct expenses. So we can think of both of them as having the same financial future: if one is in trouble, they both are. And right now, the US has the same financial future as if it had made no unfunded promises but had borrowed a grand total of $211,000,000,000,000.00. So far.

Is that exact? No, of course not. Things might not be quite that bad, they could be even worse: as the article says, the calculation is quite sensitive to assumptions about future events and policy. But it's accurate enough to say that the "debt" is not what we should worry about; we should worry about the "fiscal gap".

Of course, if you worry about the debt, then it makes sense to talk about the deficit: $850 billion dollars last year. What if you're worried about the fiscal gap? Does the deficit become irrelevant? Yes, really; as Kotlikoff says:

The gap was $205 trillion last year, measured in today’s dollars. That’s an increase of $6 trillion. ... Hence, the real deficit we should be worrying about is more than six times larger than the $850 billion official deficit capturing all the attention.

In other words, Congress and the president’s administration could agree to run a balanced budget, making this year’s official deficit zero, and the nation’s true indebtedness would still rise by $5.15 trillion!... the main reason is that we are one year closer to having to pay 78 million baby boomers roughly $40,000, on average, per year in Social Security, Medicare and Medicaid benefits. Because the fiscal gap is a discounted present value, one year makes a big difference.

If you think back to the Smith and Jones family, and imagine the fiscal gap as an implicit debt, then the $5 trillion is mainly the result of our failure to pay even the interest on the $206 trillion we owed last year -- we do have a really good interest rate as long as we keep the AAA rating, but it's not zero.

So, should we balance the budget anyway, even if it's inadequate to do so? No -- not in years with high unemployment. I'd agree with Calculated Risk: Debt Ceiling Update

A politician can say "We should have a balanced budget". It sounds good, but why aren't they challenged about operating vs. capital budgets? And about business cycle spending (obviously revenue falls during a recession - and spending increases)?

What they really want is a balanced operating budget over the business cycle. You can't put that in the Constitution. It requires effective government and constant vigilance.

But even capital vs. operating budget doesn't quite do it for me: I want the fiscal gap, over the business cycle, to remain a limited multiple of GDP. Fifteen times GDP? Okay, fifteen times GDP. (It would be nice to shrink it.) But don't let it keep growing (as a multiple of GDP) from one business-cycle peak to the next.

And with all that, should my taxes be raised? Yes, emphatically so -- my taxes should be raised as part of a plan to deal with the fiscal gap. I can and should pay more taxes than most people; that part's understood. I'm not in Kerry's league for lifetime income, not even in Obama's, but I can pay more taxes than I do -- it won't even cut my consumption until taxes get quite a lot higher. What I don't think most raise-taxes people understand is that even though a fairly substantial tax hike won't be a "hardship", won't seriously cut my consumption, it will cut my reinvestment. It has to. So it will reduce the money available to future generations of taxers; in fact a dollar of tax revenue increase now is somewhat more than a dollar of tax revenue decrease later, because you'll have spent the money before it grew. So it's crucial, when you take my money, to take it as part of a plan to deal with the fiscal gap--otherwise the gap grows and you've taken some of the resources we'll need to deal with it. (I tried to go over this in the aforelinked One Hundred Trillion Dollars post.) In any case, if you actually want to fix things, focus on consumption, not income. (I'll still pay more than average, I promise.)

And is it hopeless? Not at all. We still see, e.g. Foxconn to replace workers with 1 million robots in 3 years. We still see Sarcos Exoskeleton Bringing Iron Man Suit Closer To Reality and the beautiful Watch Festo's SmartBird Robot Soar Over TED Conference. We still see Loss of memory due to aging may be reversible and, for young and old, How Khan Academy Is Changing the Rules of Education. We may even see Could 100 Kilometer high towers usher in the next space age?

The SpaceShaft concept isn't as ambitious as the space elevator but it is much more feasible. For 130 million Euros we could design and construct a 100 kilometer tall SpaceShaft within a decade. Once we have SpaceShafts up and running, the frontier of space will finally be open to humanity.

Or then again.... maybe not.

update: Fixed silly typo which had billions instead of trillions.

Thoughts on Greece, and us

A large part of what holds Greece back, and us as well, is fairly described as rent-seeking--manipulation of public power for private profit, one way or another. In Greece, as in the Latin America of my childhood, it's much more likely to take the form of simple corruption: imagine (as I was told in Greece last week) an underpaid government official who approves environmental permits, and who provides faster service for those who provide extra money. And then he slows down the uncompensated permits sharply, to encourage the trade. It's not that he is lazy or works few hours, it's not even that there are too many such officials -- all that is often said but seems to be wrong. It's simply that his work product tends to detract from actual GDP, even as it's added at "cost" to official GDP. If he weren't doing that, Greece would be richer.

Other kinds of rent-seekers include those who profit from government-imposed monopolies, like the Athens taxi-drivers now striking, unpredictably blocking port and airport. Rent-seeking is a pretty broad category in my mind. I suppose that all countries end up with issues of regulatory capture and indeed of crony capitalism; government makes rules, and these rules will tend to promote the interests of those who have something to offer to the rule-makers, or some credible threat they can make. That interest-promotion is "rent," paid to the people who've managed to make some government power into their own property, legally or not.

I spent last week on Spetses, with various extended-family events relating to my granddaughter's baptism. It's interesting and educational to listen to Greeks and Greek-Americans talking about their fiscal crisis; I'd hoped to get some time specifically listening to Yannis Ioannides and Anna Hardman, and did, but not enough for real understanding. Yannis' basic Greece-is-not-bankrupt statement surprised me considerably (see Ioannides Says Greece Not Bankrupt, Must Change Economy: Video - Bloomberg). He thinks Greece really can pay its debts -- and he thought that even before the ’Restricted Default’ deal of this week, so I presume he thinks his case has been strengthened. He's an advocate for the austerity measures, which I suppose makes him one of the Serious People of whom Paul Krugman said this week in 1937! 1937! 1937! - NYTimes.com that

OK, so we’re going to demand harsh austerity in the debt-crisis countries; and meanwhile, we’re also going to have austerity in the non-debt-crisis countries. Plus, the ECB is raising rates. So demand will be depressed in both crisis and non-crisis economies; this will lead to a vigorous recovery through … what? The Serious People are determined to destroy all the advanced economies in the name of prudence.

I'm mostly on Krugman's side there; we're combining monetary policy from the ECB which may be reasonable for Germany but not for Greece, along with drastic contractions of an uncomfortably the-beatings-will-continue-until-morale-improves flavor. Or so it seems to me. But Yannis isn't supporting austerity to reassure bond markets as Krugman says; Yannis thinks that the "austerity" (including the deregulation of taxi medallions being protested) is part of breaking or at least limiting the rent-seeking system. Well, I'm not sure he or Anna ever said "rent-seeking" but that's my understanding of what they did say, and when I look for related material online I find things like BusinessInsider's querying a member of the `professional "elite" class' of Greece, who said

We want the Greek economy reformed. An end to the of unimaginable waste of taxpayers money,...cronyism and corruption. A much smaller and reformed public sector... A pursuit and prosecution of presently wide spread tax evasion practices. The above would immediately provide us with a considerable primary surplus, enabling us to keep repaying our debt, an obligation we wish to honour. ... Unfortunately it appears that the average Greek, does not view things the same way.

That certainly sounds like the viewpoint of the Greeks with whom I spoke. And how big is the corruption problem? Well, Transparency International said

The Greeks paid an average of €1,355 ($1,830) in bribes [in 2009] for public services such as speeding up the issue of driver's licenses and construction permits, getting admitted to public hospitals or manipulating tax returns, ... Bribes paid for private sector services such as lawyers, doctors or banks were even higher...

So really, Yannis and those he supports (to the extent that I understand what's going on here) are not so much engaged in economics as in political action aimed at restructuring Greek culture. Otherwise, the bailouts fail. In The Painful Arithmetic of Greek Debt Default | e21 - Economic Policies for the 21st Century I see

How does corruption limit the capacity for tax and spending reform? Tax avoidance, which relies on bribery to avoid prosecution, is a national pastime in Greece – the envelope used in the bribe even has its own name, the “fakelaki,” confirming the age-old adage that the Greeks “have a word for it.” Bribery is so rampant in Greece that real estate developers’ method of obtaining cheap land is to burn down public land, squat on the burned parcels, and pay off public officials to permit this. Greece’s forest fires, particularly in the Peloponnese in 2007, have been a source of public outrage for years, and yet the developers continue to squat on the land with impunity. Is a society that permits that sort of lawlessness capable of tax reform?

Maybe. Maybe not. I respect Yannis, but if the average Greek doesn't believe in it to begin with, I don't see a happy ending to this story.

Corruption is by no means the only problem, and an end to rent-seeking would not necessarily make Greece fit comfortably into the Eurozone. Clearly, little Greece will never be the target of the ECB's monetary policy. Krugman, in Anatomy of a Euromess, said that

Spain’s troubles are not, despite what you may have read, the result of fiscal irresponsibility. Instead, they reflect “asymmetric shocks” within the eurozone, which were always known to be a problem, but have turned out to be an even worse problem than the euroskeptics feared.

David Beckworth took Krugman's analysis and extended it in "Optimal Currency Area" terms within Eurozone Periphery and the Euro, saying

If a region’s economy is not in sync with the currency union’s business cycle and the above listed shock absorbers ("flexible wages and prices, factor mobility, fiscal transfers, and diversified economies") are absent then it does not makes sense for a country to be a part of the currency union. Instead, the country should keep its own currency which itself will act as a shock absorber.

It's no great surprise to see that in his graphs, Greece ends up as the most ill-placed. But I believe that part of the "austerity" program is intended to increase the flexibility of the job market (by pruning job protection programs, as has been tried before) and maybe, if the austerity programs are accepted, maybe things will work out. For a while. Public Pensions and Labor Force Participation: The Case of Greece

The pension system of Greece is a representative case of the “Mediterranean welfare state”, which is characterized by extensive segmentation, very high payroll tax rates, and yet inadequate pension benefits. In order to explain this paradox we construct an economic–demographic model. We show that in the period 1980–2000, the segmentation of the system and the very low labor force participation rates of the Greek economy have resulted in very high payroll tax rates in relation to the current level of benefits. On top of these problems, the expected adverse demographic developments in the period 2005–2050 will render the pension system completely unsustainable.

Still, the near-term need is to cut the rent-seeking (including corruption) and collect the taxes and shrink the regulatory/welfare state. Maybe. And can it be done? Well, my own approach in Greece, even more than in the US would be:

automate, eliminate, simplify, outsource.

Almost all of a government's functionality should be virtual... Well, maybe I will make a separate post about that, sometime.

Meanwhile, a little more time has been bought. The Economist remarks that

the biggest risk to the euro zone is that its leaders will begin thinking that they've solved the problem. As growth figures worsen in coming months, markets will once again become antsy. Euro-zone officials had better be preparing for a way to convince them anew that they want this thing to work.

And I go back to the pattern I established last winter, of exercise and education

This morning I spent 45 minutes trying to pound a few modern Greek words and phrases into an aging memory; until a month ago, this would have required a major effort of willpower, but lately I've been doing it every day with no problem...

As I commented to my son's mother-in-law, see-gah-see-gah mah-THAY-no, which I think means "little by little I'm learning;" since her response was "bravo, Tom, ah-krih-VOS!" (precisely), maybe it does. And maybe I will eventually learn some economics too. Or then again, maybe not.

It's all about healthcare. Well, and signaling.

This afternoon I was sitting in the third row, right behind the woman who placed the winning bid -- $13,000 -- on the auction of Harry Potter's bow tie. Well, of J. Pierpont Finch's bow tie, Finch being the lead character of How to Succeed in Business Without Really Trying; Finch is played by Daniel Radcliffe, a talented young actor/singer/dancer (well, a bit weaker as a dancer, I thought, but I'm no judge) who will probably be plagued for the rest of his life by people who can't help but think of him as Harry Potter. And he and his co-star were trying to raise money for a Good Cause, namely healthcare, after the performance. (Okay, a specific healthcare cause, but I'm still fussing about healthcare in general.) So....

So I would call the winning bid rather impressive; I think most people would. Radcliffe commented that we were "well over the record", some time before the auction closed---I presume he does this with a fresh bow tie for each performance. But I couldn't help but be reminded of the cost of my own appendectomy, not quite a year ago: it was in fact a little over the bow tie's price. Consider what that audience pays for healthcare each year...the auction was a Good Thing to Do, an Exercise in Nobility, a demonstration of the Brotherhood of Man (that being the last song&dance) but as a contribution to healthcare it was a teaspoonful in a lake.

Yes, I understand that's not the point. It's not really about healthcare, even healthcare is not really about healthcare. Robin Hanson put it rather well, some time ago, in his argument that it's about Showing That You Care:

I can explain these puzzles moderately well by assuming that humans evolved deep medical habits long ago in an environment where people gained higher status by having more allies, honestly cared about those who remained allies, were unsure ... These ancient habits would induce modern humans to treat medical care as a way to show that you care. Medical care provided by our allies would reassure us of their concern, and allies would want you and other allies to see that they had pay enough to distinguish themselves from posers who didn’t care as much as they.

That makes sense to me as the beginning of a model, and it certainly isn't a criticism of the woman who paid so much for the bow tie. She evidently does care, and presumably cares that it's evident that she cares, and that's a good thing.

Nonetheless, if you want to use healthcare provision to show you care, I think it would be a good idea to spend some time looking for actual ways to provide actual healthcare; a few more teaspoons of water in the lake won't do it. So I'd like to go back over my proposal of a bit more than a year ago. I'd organize it a bit differently now, but I don't seem to have moved all that far.

If I were (heaven forfend) In Charge, I would crowd-source as much as possible of the decision-making by pushing it into a market, with participants being given as much data for decision-making as possible, and being simultaneously milked for as much data as possible. I want incentives for innovation, to reduce the death-rate for billions yet unborn; I also want incentives for good performance now, not for the sort of regulatory capture our current system maximizes. Specifically I would:

1. Allow unlicensed health care, wherever it's clearly labeled as such; it won't get public support but people can choose to spend their money on it. The argument against this is apparently that people will make bad choices. Yeah, some will, probably including me and you. So? I've never understood the way some people believe that they (or those they select) can make good choices for others; in fact I'm moderately cynical about licensure requirements as they are now structured, whether for medics or morticians or cosmetologists.
2. Require transparent pricing, uniform no-bargaining pricing, from all providers of licensed health care. (The services producing my appendectomy really don't do this.)
3. Require that "licensing" be independent of geography; if the best/cheapest supplier of a particular treatment is two states over or on another continent, that's fine. As I've said before, I believe that telepresence medicine can enable the specialization and trade that has made markets work in other contexts since before Adam Smith wrote about it, so I expect this as the usual case, not an exception.
4. Take away the employer-based tax exemption; health care shouldn't be an employment issue.
5. Add a universal tax-funded "insurance" policy (insulation, actually): if your expenditures for "proven procedures" from licensed health care providers exceed the overall 16% (of GDP) average, then the taxpayers contribute some. Maybe if your cost is 30% of your income, then the taxpayers kick in (30-16)/2=7%, half of the overage, and the maximum you can pay is 50% of your income whether that's $0/year or $10M/year. Is that too generous? Not enough? I dunno. The point is to combine protection from catastrophe (but not from serious pain) with making sure that market prices are set by people or groups who are actually bargaining in that market, i.e. the better-off people for whom procedure X will not be covered. I want to do that combination with some simple, less-than-perfect-but-better-than-nothing rule with which I can trust a government. (Democrats and Republicans trust government on different things; just figure you want a better-than-nothing rule with which you'd trust a politician of the party you despise.)
6. If you want "unproven procedures" and you can pay for them, that's fine too; the licensed health care providers should have a strong motive to come up with new stuff and document/publish that it works. The FDA should not be able to keep you from paying for these likely-to-fail treatments, but it should keep you from charging it to the rest of us. If procedure X has no accepted studies supporting it, then it's up to you to pay for it.
7. Whatever additional insurance/insulation you want to buy for proven or unproven procedures is just fine, and can be bought across state lines. It's your problem. You want to save your money in a special bank account? Feel free.
8. Any care that has been paid or partly paid by public funds goes into an anonymized public database, so that we learn more about which treatments have what effects on which conditions. Organizations promoting not-yet-approved treatments will be encouraged to contribute data.

And that's really it, for me. I'm even less confident of this than I was when I wrote the first version, but I still don't see anything else I like as well. I think that the market I'm describing would probably evolve rather quickly into a market in which people choose and buy packaged health plans from "insurance" agents, and web sites build up crowd-sourced ratings of those health plans; there would be quite a bit of overlap with the better parts of what we have now. I hope. And I care, and I suppose I'd like to signal that I care.

Or then again, maybe not.

update:I never actually mentioned that this post was prompted by thinking about Mark Thoma's Economist's View: Discussion Question: How Can We Reduce the Growth of Health Care Costs?

there is far too much discussion of cutting services, and not enough about how to control costs without affecting services (e.g., using the government's purchasing power to reduce the amount the government pays for drugs, reducing the cost of insurance companies fighting over who pays bills, etc.)

You see, I doubt the premise: if you use government power as I believe Thoma wants, you are increasing the incentives for regulatory capture, crony capitalism, rent-seeking... you are putting yourself on a path where you have signaled your concern but healthcare is not what you're rewarding. Of course government power needs to be used -- to collect the money for treatments which research results say are crucial and which markets say are expensive. And government power needs to be used to maintain a context for innovation (rather than squelch it, as I believe our recent trends in "intellectual property" law tend to do.) But if bargaining-on-prices-with-the-government is the multi-billion$ activity you focus on, then that's what companies will have to invest in. That's a bad bad bad bad thing. I commented here.

Well, it's Easter morning. Maybe we're all saved?

Or then again, maybe not.

Colgate v. Consolidation -- maybe. For now.

At last night's budget meeting, Superintendent Bowers had very good news to announce. As Radio Free Hamilton put it, Colgate Contributes $300,000 More to HCS

HCS is able to restore the equivalent of 3.5 teaching positions scheduled to be cut from the 2011-2012 budget thanks to a $300,000 contribution from Colgate.

The state had planned to cut $486K; a last-minute cut reduction had restored $94K of this; now we're back within $92K of last year's situation, except that various expenses have risen. But the immediate layoffs of teachers are deferred. Yay!

RFH continues

Colgate's donation, which will be followed by a similar one next year, was announced at the HCS Board of Education budget presentation Tuesday night. Superintendent Dr. Diana Bowers said Colgate is willing to make two more similar donations in the future depending on need and the outcome of a potential merger with Morrisville-Eaton Central School.

Actually I'm not sure she mentioned M-E by name, but the point was clear; Colgate's extra support is not forever, but might continue for two more years, unless the Hamilton district had become part of a larger district "funded in a different way." Colgate has an interest in supporting HCS as the kind of school it now is.

This doesn't take consolidation off the table, even in the short run; it does provide a substantial incentive counter-balancing the state pro-consolidation incentive, at least for now. For me as a parent whose youngest child is an 8th grader, whose grandchildren will almost certainly grow up elsewhere -- gee, I can reasonably hope that takes care of it. Probably. We'll probably muddle through for several years.

For me as a local citizen, one who wants things to go well even for current elementary school students and maybe even for those who haven't been born yet....hmm.... the upstate NY demographic prospects are still what they were. Things that can't go on forever, won't.

Is there an answer? Sure. This local school, like many similar local schools, will not go on as it is -- that's a given. But that doesn't mean that there will be no local school, just that there will be no local school based on the current model of school organization. Personally that thought doesn't bother me, because even without financial pressures I would expect the current model of schools to change. It's really not a great model; it's a 19th-century factory model, as stretched in various directions by good people trying to work inside that model.

If I were trying to get a community school model that would last for a while, I'd try to follow the people in this region and others that I talked about in Budgets, Consolidations, Charters. A charter school might work better against consolidation pressure; might be better able to adopt the sort of technology that would help it work at a smaller scale. I'd like to know what my neighbors would think about that. Of course most of the ones I know are parents of 8th-graders, or older -- maybe they'll settle for a solution that will last a few years. “Après moi, le déluge.”

Or then again, maybe not.

Budgets, Consolidations, Charters

The NY budget aftermath is not quite as painful as expected, but that's the best that can be said for it. N.Y. prepares for sharp pains from budget:

As of Friday, roughly 240 districts had announced plans to lay off 15,783 teachers and staff, said Carl Korn, spokesman for New York State United Teachers. Yonkers said this week it would lay off 732 employees.
The final number is expected to be between 18,000 and 20,000, Korn said.
A recent state School Boards Association survey found that many districts plan to increase class sizes, reduce or eliminate sports and other extracurricular activities, and offer fewer electives.

Some people think that consolidation will help a lot, and that even districts much larger than ours are simply too small to exist. Consider the NYT op-ed at How State Cuts to Education Affect Rich and Poor:

No district, no matter how wealthy, that has but 1,600 students in 13 grades, or roughly 125 students per grade, can offer as many AP classes as a much larger district.
The extremely small Ilion district should not exist, for both financial and educational reasons.

But even much larger districts are in trouble. Fulton school district budget cuts positions, programs

The proposed budget includes using up to $2 million in reserves and cutting about 21 staff positions, including the director of universal pre-kindergarten, a teacher on special assignment and nearly 15 teachers and teaching assistants....
Also being cut is $400,000 in software program purchases, all public relations from Oswego County BOCES, teacher aide positions at all buildings, totaling about $100,000 and some extracurricular activities.
He also is reducing... ... Lynch also said all of the unions were approached about taking pay freezes for the coming year. Five of the unions are still talking about the move, while the teachers union declined.

There probably isn't any "good" answer for most of this, but, well, we have to try. We have to try new things. One context for innovation is the charter school, like The Equity Project: "a New York charter school, that opened in September 2009". This week the Utica Observer-Dispatch reports Charter schools — idea praised, funding criticized:

The Mohawk Valley Charter School for Excellence last week submitted its book-sized application to the state...The district...is worried that funds siphoned off by a charter school would make a bleak situation worse.
Charter schools are independent, like parochial schools, but are funded by taxpayers, like other public schools. They have been heralded by supporters as leaders in education reform because they allow big ideas to be tried out quickly. Detractors say they take resources, successful students and involved parents away from traditional public schools....
The school wants to give Utica parents a small school alternative to the Utica City School District. It would have longer days, a longer school year, and be math and English intensive. Students would wear uniforms, and each would have an individualized education plan called a “plan for excellence.”

There are obviously real advantages and disadvantages to the charter-school approach; it's an option, something to be remembered. It may be that charter schools have a natural advantage when districts shrink. From Michigan we hear Why are charter schools not part of the consolidation debate?

Each of the state’s more than 200 charter schools is smaller than the smallest Kent County school district.
But ... leaders from President Barack Obama to state Superintendent Michael Flanagan have included expanding the role of charter schools as part of their Race to the Top education reform measures.
About 111,000 Michigan students attend 243 charter schools, including 7,500 students in Kent County and 2,760 students within the Ottawa Area Intermediate School District. Charter school backers said their operations are efficient despite their small size.

Also in Michigan, charters are growing -- Sound Off: What's Your Reaction To Detroit Public School Plan

DPS Emergency Financial Manager Robert Bobb on Wednesday released a list of 45 Detroit public schools that could be converted to charter schools. It's part of the district's Renaissance 2012 Plan.

In Oklahoma school consolidation, it seems okay for closed schools to become charter Vacant TPS schools to go up for bid after Project Schoolhouse closings | Tulsa World

"Our plan is to try to be sensitive to what the repurpose would be. If a charter school asked for a building, we would probably consider that to be an acceptable reuse of the building," he said.
Previous consolidation efforts in TPS have resulted in long-term vacancy at some former school buildings, but McCarthy offered several examples of how old schools have been successfully converted for other uses....

And in Obama's home state, his ex-aide seems to be pushing charters in the context of consolidation -- CPS brass considers school consolidation - Chicago Sun-Times

The discussion comes as Andrew Broy, head of the Illinois Network of Charter Schools, complained that one dozen to 18 charter schools that share buildings with traditional public schools “are on the cusp of outgrowing their facilities and need a solution.” Consolidating an underused school into another school would theoretically free up a building for a charter.
... Mayor-Elect Rahm Emanuel is a charter proponent and has packed his education transition team with charter operators, funders and supporters.

Obama is not the first President to like charters. The DOE in 2004 reported on Innovations in Education: Successful Charter Schools -- TOC

Elements of effective charter schools and stories of eight successful charter schools are presented in this report, the third in our Innovations in Education series.

My thoughts are obviously going to focus on charters that emphasize technology, in a variety of ways. A charter that made heavy use of online resources might run into regulatory trouble, as seems to be the case Colorado Charter Schools: Blended or Hybrid?

There is a broad array of online educational options for students. The type of online education delivery models has changed as school leaders realize that most students, particularly at-risk students, do better with a combination of online learning and meeting face-to-face with a teacher. People call this either blended or hybrid learning ...
In Colorado, hybrid/blended schools cannot get funding to operate.

In Tennessee, there seems to be some experimentation in progress -- Memphis Parents May Have New Charter School Options

“[We want to] build a stem elementary school - stem meaning science, technology, engineering, mathematics,” Wingood said. "The design of this school will be to focus on science and mathematics, in addition to literacy and social studies and so forth, but with a real emphasis on science and math at an early age to get students interested in and excited about mathematics and science.”
It's a busy year for charter school applications in Memphis.
Charter schools are still public schools, but they often have smaller classrooms, and a specialized curriculum. The schools have been “very well received” across the state, ... “We have individuals that oppose charter schools or aren’t sure what they are, but when they open, [the schools] fill right up,” ... In Tennessee, local school boards authorize new charter schools, and funnel money to them.

As underused schools consolidate and people start charter schools, emotions rise in New Jersey -- NJ Spotlight | Newark's Public Schools: Overcrowded or Underutilized?

As much of Newark’s education and political community has gone into a tizzy in the last month over a plan to consolidate some of these schools and potentially move charters into others, these numbers lay bare the heart of the matter.
The bottom-line claim... on the consolidation plans: There is room to spare in the New Jersey’s largest school system, why not share it and save money at the same time?
But even in a district that has lost 5,000 students in the last 15 years and could lose another 3,000 next year alone to new charter schools, the discussion about whether there even is extra space is not a calm one.

Even after a transition, it's not necessarily clear which caused what. Lessons from Erie County's charter schools:

When charter schools came to Pennsylvania in 1997, advocates said school districts would make up any lost funds by not having to spend that amount of money to educate charter-school children in regular schools.
Erie School District officials said that's not the reality, and that charter schools leave the district at a disadvantage.
Local charter-school leaders say the opposite is true. They argue their schools have been doing more with less and avoiding the politics they say plague the Erie School District. Their success, the charter school officials said, isn't the reason for the school district's failures.

Well, maybe not.

Budget Notes

The NY budget has actually passed, Albany Approves Budget – On Time | FrumForum

The Assembly closed its gallery because it did not have enough people to handle crowd control. One protester was arrested for reportedly hitting a legislative staffer in the head with a cymbal....
The budget restores about $230 million of the $1.5 billion reduction in education spending that Mr. Cuomo proposed. The majority of that restoration, $134 million, will go to counties north of New York City. Another $53 million will go to New York City, and $43 million will go to Long Island.
Senator John J. Flanagan, a Long Island Republican and the chairman of the Senate Education Committee, said the restorations were aimed at “achieving a regional balance” in school financing. “We took a bad situation and made it better,” he said. “It’s not perfect.”

From Syracuse, we hear Budget gives Onondaga County schools $24 million less:

Because the Legislature restored some aid, the district expects to eliminate 500 positions from its payroll instead of the 584 it would have had to trim under Cuomo’s budget proposal, Lowengard said.

How much state aid will your school district get? | syracuse.com

Under the approved cuts, the Fayetteville-Manlius School District will sustain an 11.6 percent cut in aid, the biggest drop in Onondaga County. Under the governor's proposal, the district would have lost 20 percent of its aid compared to last year. Not counting building aid, F-M will receive $12.6 million from the state, nearly $1.7 million less than last year.
The Liverpool School District will see the smallest drop in school aid, 1.5 percent, in Onondaga County. Under Cuomo's plan, the district would have lost 14.7 percent.

And Hamilton goes down to $3,218,215 in state aid, a cut of $141,124 or 4.2%.oops, see update below.

Also from Syracuse, unions make concessions to save three percent of the jobs being cut according to North Syracuse School District unions offer concessions to help budget - NewsChannel 9 WSYR

11 unions in the North Syracuse School District agreed to several concessions in an effort to ease the tax burden on their community. The union's move will enable the district to save 15 positions.
Most of the concessions they made involved their health care plan. They say the concessions will save the school district $1.2 million.

Generic info on the budget at Governor touts “historic, transformational” budget | Politics on the Hudson

The budget realigns education financing to meet New York’s fiscal reality and provide sustainable and predictable funding while reaffirming the commitment to improve educational outcomes in the classroom. Prior to this budget, education spending was projected to grow at an unaffordable rate of 13 percent for the 2011-12 school year.

Comments on the disparate impact of budget cuts on upstate schools at Our view: Make equity in education aid a priority - Utica, NY - The Observer-Dispatch, Utica, New York

The average tax levy needed to fill the gap left in budgets in Oneida-Herkimer-Madison BOCES schools, based on proposed reductions in aid for 2011-12, is 11.80 percent. In wealthier Rockland County, where the same aid reduction is a smaller percentage of the budget, the average tax levy needed to fill the gap is 3.03 percent.
That means local districts need to either raise taxes by an unacceptable amount or, much more likely, slice more meat out of their programs. As a result, area students get less than their counterparts in wealthier districts.
“Downstate is cutting specialized programs,” Mettelman said. “We’re cutting English teachers.”

Of course, that doesn't mean that everybody downstate is happy. State Budget Gives City 'Very Modest' Restorations, Says Bloomberg Administration - WNYC

The Bloomberg Administration is still looking at the city's share of the state budget, but officials say it appears as though the legislature restored only about 1/3 of the $600 million the mayor relied on his budget — which already included agency cuts and nearly 4,700 teacher layoffs.
Director of State Legislative Affairs for the city, Micah Lasher, said the city wasn't treated fairly by Albany lawmakers.
"When they cut revenue sharing for other localities, there was a 3 percent cut," he said. "For New York City, there was a 100 percent cut.

NY Budgeting: worse for everybody than for anybody else!

update: Apparently things aren't quite as they seem; how unusual. Our Superintendent comments/corrects the values cited above on ...What it means for HCS

In the new runs, they took the Jobs money out so it looks like districts are being cut far less that they are. The numbers are deceiving and look much more favorable. They show Hamilton losing -3.38% in aid (with building aid) instead of 11.03%.
The new run also increases projected expense driven aids....In reality, even with an increase in projected expense driven aids, we are now at -8.38% in aid loss, using the original values as they were depicted in February.
All in all, the good news is that we are $94,000 to the good in real figures.This will certainly help!

Consolidation News

From the Finger Lakes region, Watkins Glen Looks For Input:

Phillips says two ways to close the gap are almost guaranteed. One is a consolidation of schools to one main campus. The other, laying off employees.
Phillips said, “If things do not change in spite of the governors claim that this is a game and education is simply threatening, this is not a game and this is real. Eleven people in this district, instructors, teachers, will not be employed in Watkins Glen next year.

I'm not sure I see how consolidation will avoid the layoffs, unless he means that the state incentives provide enough money to keep paying the same salaries for a while.

Near them, in Auburn, Jordan-Elbridge school district’s budget situation called ‘severe’:

The proposed budget is currently $27,596,582, a 4.7 percent increase over the current budget, he said. The current projected tax levy increase is 7.3 percent, but Zacher stressed that cuts can still be made to lessen this amount. Included in the proposal is the elimination of 29.7 staff positions. Of these, 26.7 are teaching and non-instructional support and three are administrative,...

And big districts get hit too, as in Proposed Rochester schools budget would cut 900 jobs

The city school system could lose 900 jobs — about 15 percent of its workforce — if a budget unveiled by Superintendent Jean-Claude Brizard wins approval from the school board.
The job losses come as the district looks to bridge one of the largest budget shortfalls in recent memory, with administrators planning for an $80 million deficit as expenses continue to rise and funding sources dwindle. The 2011-12 proposed budget of $678 million is down from $708 million for this year.

New Jersey news includes Red Bank Board of Education OKs tentative $19.33M budget:

The district was spared the 14 personnel cuts that had to be made in the current budget, predicated by a loss of state aid. Staff cuts that were made for 2011-12 were absorbed by attrition, Morana said. The proposed budget came with other reductions, such as putting off a new roof on the primary school, repainting ...Also cut or reduced were middle school sports — which a nonprofit foundation has formed to raise funds for — computer, technology and music supplies; replacement classroom furniture; and student assemblies and field trips.

NJ also produces a pro-consolidation editorial from Asbury Park, at It shouldn't be all about the money:

It's past time to test the hypothesis that school district consolidation would save money and raise test scores of the disadvantaged. With regionalization, there would be enough money and resources to absorb students stranded in historically underachieving districts.

And there's a pro-consolidation note struck in Michigan under Opposing points of view: School district consolidation provides efficiencies to help cope with funding cuts

The economic situation in Michigan is forcing school districts to consider multiple approaches to more efficient use of their funds. The rising cost of fuel, food and health services, as well as student support services such as special education teachers, school psychologists, counselors and nurses, make it very difficult for small districts to afford.

New York also has a pro-consolidation editorial from the Gotham Gazette, at New York Needs Real Reform, Not Higher Taxes

New York's two biggest areas of spending are Medicaid and education.... New York's Medicaid program has the most generous eligibility standards in the nation and provides patients with "Cadillac" health care plans. It also ... This is why our Medicaid costs are double the national average. ...
When it comes to education, 21 percent of the $52 billion state school budget goes for non-instructional purposes. The state has far too many local school districts, each insisting on running its own transportation system and maintaining a gaggle of administrative employees, consultants and turf prerogatives. New York's education spending is 67 percent higher than the national average, without a commensurate advantage in student outcomes. Districts resist consolidation, but their parochial concerns should not trump taxpayer interests.

Meanwhile, the Governor of Maine says Post Posts: Arundel company among stops on governor’s tour

“I feel bad for teachers and state employees. You’ve been sold a bill of goods.”
LePage said teachers and state employees were “promised the Brooklyn Bridge.”
“The promises made were so rich the state could never afford it,” he said
LePage said Democrats caused the pension shortfall with support from teachers’ unions...
LePage said he supports allowing Mainers to purchase health insurance across state lines and buy insurance plans to cover specific issues.
“I could never understand why a nun in the state of Maine is required to buy maternity insurance,” he said.
When asked by Brett Davis of Hollis Center about school choice and vouchers, Commissioner of Education Bowen said both he and LePage “are moving in the direction of school choice.” He said they also want to change the school consolidation law. He said there are savings to be had by consolidating some services, but the “one-size-fits-all model” does not work for Maine.

And what can you do? Well, you can write letters, as reported from Syracuse lately in Letter-writers raise concerns about Gov. Andrew Cuomo and New York state budget. Some of the letters that get out there are really, umm, interesting, e.g. Watertown Daily Times | Change procedures for voting on school budget

Grossly inflated school budgets have prevailed for decades, mostly to meet the requirements of liberal contracts negotiated between powerful and greedy public service employee unions (notice that I said unions) and state politicians. Any excuse to increase the size of local budgets routinely prevails with minimal, if any, benefit to the educational process. Unbridled power of these unions...

Well, I think a lot of people feel that way; it's not just him and the Governor of Maine. Sometimes officials write letters too, as reported in Local Democrats from across New York attack Governor Cuomo's budget cuts

ALBANY -- More than 40 elected Democrats -- all local officials -- made a rare attack on Gov. Cuomo and his proposed cuts to education and health care as the state tries to trim a $10 billion budget deficit, according to a letter obtained by The Associated Press.

I'm not sure the letter-writing on any side does any good, but then, here I am collecting links. Does that do any good? Probably not.

Update:The budget in question has actually passed, --- and I moved this section to be its own post.

Khansolidation

As our schools run out of money, we look for ways to make better use of the resources we have: mainly, the teachers. Consider the Khan Academy approach, as now funded and promoted by Bill Gates, and described by Salman Khan in a TED talk video that everybody interested in education ought to watch whether they're thinking about consolidation or not. Salman Khan: Let's use video to reinvent education

Salman Khan talks about how and why he created the remarkable Khan Academy, a carefully structured series of educational videos offering complete curricula in math and, now, other subjects. He shows the power of interactive exercises, and calls for teachers to consider flipping the traditional classroom script -- give students video lectures to watch at home, and do "homework" in the classroom with the teacher available to help.

The system he's describing is not just a big set of short video explanations with self-tests; it has software by which a teacher can see exactly what a student has mastered and when, and which questions are still not getting answered. It has been (and is being) developed with feedback from teachers in actual classrooms,

By removing the one-size-fits-all assumption .... these teachers have used technology to humanize the classroom.

Instead of the the teacher delivering a lecture to everybody including those who aren't ready for it and also those who don't need it, the teacher assigns the lecture material which students can watch as many times as necessary, and then the teacher can spend time one-on-one with students. We change what we worry about:

not student-to-teacher ratio, but student-to-valuable-human-time-with-the-teacher ratio.

And he claims that

We got a million people on the site already, so we can handle a few more...No reason why it really can't happen in every classroom in America tomorrow.

Well, I suspect quite a few classrooms could benefit greatly; others involve material not yet covered by the Khan Academy. Even those might use Khan's original formula, developed in tutoring his cousins: just break the explanations into small pieces, record, and post to YouTube; the FAQ says he uses

Camtasia Recorder ($200) + SmoothDraw3(Free) + a Wacom Bamboo Tablet ($80) on a PC. I used to use ScreenVideoRecorder($20) and Microsoft Paint (Free).

I would think it's worthwhile to have a transcript of each piece, posted with the video. And the transcript should be annotated with a list of prerequisite knowledge, I suspect. And I suspect that in the end, there should be a lot of Khan-style academies with different lecture styles for different kinds of student. I suspect that this is what Isaac Asimov would have been doing for some years past, if he were still alive. I suspect -- well, I suspect a lot of things. But everybody ought to watch that video, and think about what he's doing right, and what he's doing wrong.

Or then again, maybe not.

Update: shrank video a bit.

Consolidation News

Recent news listed on my consolidation bookmarks on delicious.com include New York's new budget: the New York Daily News says

The budget enacts initiatives Governor Cuomo proposed to make districts more efficient and improve student performance. Funds totaling $500 million will be awarded competitively to districts that demonstrate significant improvements in student performance and to districts that undertake long term structural changes to reduce costs and improve efficiency. The budget also restores $270 million in education related funding.

Hmm. Smaller budgets have to work around that one, including a neighbor: The Fayetteville-Manlius School District is proposing a budget that would cut about 14 staff positions. And as always it's not just NY; from Kansas we hear that Lawrence school board members vote to close Wakarusa Valley School / LJWorld.com

The task force also calls for consolidating a list of six schools — Cordley, Hillcrest, Kennedy, New York, Pinckney and Sunset Hill — down to three or four within three to five years, with construction of new or expanded schools through a bond issue.

Saving money by constructing new schools. Hmm.. From Canandaigua we get opinions like Town/village systems, not schools, are where to save:

There is no question that New York state wastes ridiculous amounts of money. There are so many areas the state can cut waste and fraud. Remember the New York Times piece about retired Long Island Railroad workers? The reporters discovered that 90 percent are on disability, including accountants, clerks and other nonphysical workers — and the state offers them free golf privileges! Let’s cut nonessential programs before we make our children go to school in dilapidated facilities.

And there are more opinions from Albany, looking for options at

Find ways to rescue N.Y. school districts

All school districts face the reality of less state aid and rising costs, along with the possibility of a property tax cap. ... consider all available options.

It seems logical that school consolidation is the answer. However, in the past 10 years, there have been only four consolidations in the state. Two districts in western New York attempted both a merger with each other and an annexation. Both efforts failed.

What other options do they have? ...

• Is additional consolidation practical?
• Could superintendents and other central office functions be shared among several districts?
• Could central or regional high schools serve the needs of our rural schools?
• Could small rural schools be served through online learning?
• Could districts negotiate regional collective bargaining agreements and health insurance agreements?

Well, maybe. Or then again, maybe not.

Consolidation Links; Cuomo Unfair to Upstate? --Mar 19

I've gotten behind on this, but the links (collected as always on delicious.com) don't link to each other so I will try to catch up; Superintendent Bowers blogged on further Albany budget cuts and Ken Bausch commented in News From Albany [comment by Ken]

While building aid and UPK are exempted,all other aids are reduced by @23% this year. Thus we are not actually receiving transportation aid at 76 cents on the dollar, rather the effective rate is only 59 cents on the dollar. Thus a dollar spent on new vehicles last year costs the district 41 cents, rather than the 24 cents we assumed during the vote on the acquisition of a new bus and fuel efficient vehicle last year.

Radio Free Hamilton reported HCS Budget Cuts Include Positions

The cuts include the equivalent of five and a half full time positions. These include:

    * 1 full time administrative position;
    * 1 full time secondary guidance counselor;
    * 1 full time occupational therapist (these services will be purchased...);
    * 1 full time elementary school teaching position;
    * 1/2 choral music teaching position;
    * 1/2 science teaching position;
    * 1/2 custodial position.

Other cuts totalling $94,000 include:...

Of course it's all over the state; earlier this month, a Rochester-area district about a dozen times our size reported Proposed Greece school budget would eliminate 89 full-time staff positions

Greece, N.Y. — At a Greece school board meeting Tuesday night, interim superintendent John O'Rourke proposed a school budget that would slash 89 full-time staff positions from the Greece school district, reduce music education, and merge sports programs....The proposed $195 million budget would increase the tax rate 1.68 percent, bringing it to $22.92 per $1,000 assessed value. The budget calls for a reduction of elementary classroom time by 30 minutes a day, an increase in class sizes, the elimination of 4th grade music, reductions of instrumental and vocal music, and cuts to elementary art and library. The plan would also consolidate sports programs

The state-wide cuts do seem to have their main impact on rural schools, simply because the aid has been disproportionately directed to them, as argued in the Rochester area Glover: Proposed state cuts would be 'catastrophic' to rural schools:

Understanding that the state is in financial crisis and that everyone must make sacrifices, the superintendent says the proposed cuts in state aid are not fair spread out among suburban and rural districts. Small rural schools stand to lose the most. “We should all share in an equitable way,” Glover said. “Everybody has to tighten their belts, but this takes opportunities away from kids in rural schools.” Data taken from the Statewide School Finance Consortium website shows... Comparatively by county... “The poor schools are getting poorer,” as a result of the governor’s proposed budget cuts.

And smaller districts are being pushed towards consolidation, as in the Ithaca-area Trumansburg, South Seneca schools explore sharing resources:

Trumansburg Central School District officials are considering merger and resource sharing with the neighboring South Seneca Central School District. Spurred by Gov. Andrew Cuomo's public push for consolidation of smaller school districts in New York...

It's really quite a push, with some rather strong statements in which the New York governor hits school districts, defends education cut | Reuters

Claiming local school districts are playing "political games," New York's governor on Thursday defended his $1.5 billion cut to education spending. Governor Andrew Cuomo's proposed cut in state aid to schools -- the largest in history -- is aimed at closing a $10 billion budget gap for the next fiscal year. Cuomo told reporters on Thursday that his cuts average 2.7 percent per school district, and could be offset by rooting out inefficiencies, using reserve funds and lowering the salaries of superintendents.

It does seem that the governor is trying to understate the pain:Most school districts don't have deep pockets:

Andrew Cuomo continues his fiery rhetoric about school districts, claiming they have enough reserves and federal money in their coffers to weather state education cuts. Just Thursday he said districts shouldn't have to lay off teachers because of the aid cuts. But a report by the state Comptroller's Office this week shows that 100 of the state's 700 districts don't have the reserves and one-time federal "Education Jobs Fund" aid to offset the state reductions. Batavia is one of those districts.

The governor's not just making speeches. Capitol Confidential » Save NY now airs on school money

The pro-Cuomo Committee to Save New York is airing its third advertisement, targeting education waste. It quote a statistic that has made school officials bristle: New York is first in education spending but 34th in performance. That 34th ranking refers to the percentage of adults over 25 who have a high school diploma, and educators say it’s not a good measure given New York’s status as a magnet for immigrants. They point to other indicators, like the number of kids taking Advance Placement exams, which show New York doing better. It’s a clever ad. Someone is cutting up an education dollar while ticking off the stats, before Gov. Andrew Cuomo appears as the announcer says, “The governor’s plan target’s bureaucratic waste, and protects our students and teachers. Tell your lawmaker to support the governor’s plan.”

Upstate N.Y. schools anguish over aid cuts | The Ithaca Journal | theithacajournal.com

Among school districts facing the largest cuts per pupil, 97 percent are in upstate communities while 75 percent of those facing the smallest cuts are in downstate suburban communities, according to the Alliance for a Quality Education, an Albany-based union-backed advocacy group.

The cuts are necessary, because the state has run out of money. Why has the state run out of money? Well, quite a few reasons...here's one, as reported in the NYT two weeks back: State Workers and N.Y.’s Fiscal Crisis - NYTimes.com

At a time when public school students are being forced into ever more crowded classrooms, and poor families will lose state medical benefits, New York State is paying 10 times more for state employees’ pensions than it did just a decade ago. That huge increase is largely because of Albany’s outsized generosity to the state’s powerful employees’ unions in the early years of the last decade, made worse when the recession pushed down pension fund earnings, forcing the state to make up the difference. Although taxpayers are on the hook for the recession’s costs, most state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector...

So that's part of it. And what to do about it? I have no idea. Or rather, I have lots of ideas but of two kinds: trivial on the one hand, and politically impossible on the other. I dunno.

Mostly-Irrelevant Update: the NYT has an interesting proposal for partially fixing the long-term pension/budget problem which would have made the last couple of years more equitably disastrous, and would make the future better able to fund education: share the pain.

It is that simple: Just scrap the current indexing of pensions to the Consumer Price Index and replace it with a link to the state’s gross domestic product. We can’t accurately fund traditional pension plans until we have G.D.P.-linked bonds, or “trills,” which I described in a recent column. But it is time to start the transition, so that pensions share risks across generations.

That would be a good thing. It wouldn't fix our impending mainly-health-care financial disaster, but it would be a good thing.