How Long Must Parents Wait?

In a recent news release, Governor Terry McAuliffe heralded the fact that 86 percent of Virginia schools were fully accredited – “a record high” for his administration and a five point improvement over last year.

He neglected to mention that 88 schools failed accreditation – a 203 percent increase in unaccredited schools over last year, and more unaccredited schools this year than in the previous ten years combined.

In a new poll by Christopher Newport’s Wason Center, the most important issue most voters want the next Governor to work on is “improving K-12 education.” Improving educational quality for the children in those 88 schools ought to be a top consideration.

Thirteen schools have failed accreditation for three years or more. Despite throwing hundreds of thousands of dollars in extra “Executive Leadership” funding at Petersburg, the students of Vernon Johns Middle School are attending an unaccredited school for the twelfth consecutive year. Despite a new $44.2 million school building, the child who entered first grade six years ago at Alexandria’s Jefferson-Houston Elementary has now spent her entire school career in an unaccredited school.

If anything, this year’s accreditation list points up two things –

First, the divide in education is growing. Good schools on the right track with the right leadership are getting better. Poorly performing schools without the right kind of leadership continue to decline. And continued geographic concentrations of poverty and wealth have all too often meant different tracks for the schools those children attend.

The second is that the state seems powerless to do anything to help the children in these schools. And while that may seem like an excuse, the reality is that the Virginia Constitution requires that “the supervision of schools in each school division shall be vested in a school board.” Worse, past court decisions have given local school boards nearly unfettered control over buildings, budgets, curriculum, and personnel – even if they run it into the ground.

To its credit, the State Board of Education’s proposed new regulations ratchet up the consequences for non-performing schools and school divisions, including the threat of withholding a limited amount of state funding. But the process is long, case by case and thin gruel compared with the dramatic and decisive action so badly needed. Besides which, “state takeovers” have a spotty track record — partly because states rarely take the time to rebuild school culture.

One alternative is to authorize new quality public schools run by successful educators, but outside the traditional system. And there are such schools defying the “demography is destiny” mantra. The problem: They aren’t in Virginia.

Today, 7,000 public charter schools serve 3 million students. While not a panacea, their track record with low-income children is striking: According to Stanford’s Center for Research on Education Outcomes (CREDO), after four years in a charter school, urban students learn 50 percent more per year than demographically similar students in traditional public schools.

In New York, 95 percent of Success Academy’s students are children of color whose families have an average income of $32,000 per year. In math, 95 percent of them passed the state exams and 84 percent passed reading, outperforming every school district in the state, including those with median family incomes of $290,000.

KIPP Academies educates 88,000 students in 209 schools – 95 percent of them black or Latino and 88 percent of them on Free and Reduced Meals subsidies. Eighty-one percent enter college and they graduate college at a pace four times the rate of their peers.

But these and other successful charter schools won’t come to Virginia, citing the Commonwealth’s “restrictive charter school law that limits autonomy and makes it impossible for high quality charter schools to fulfill their mission.” And without alternatives, parents will never be able to send their children to a public charter school opening the doors of opportunity for Virginia’s neediest students.

A measure earlier this year might have cracked that door a bit, had it been signed into law. It would have allowed the State Board of Education to authorize a new school board – an overlay of sorts – that could only target areas with one or more schools that repeatedly failed accreditation.

And while it would not have touched existing schools or local funding, it would have empowered the State Board to meet its own constitutional responsibility for the “supervision of the public school system,” taken steps toward the constitutional aspiration of “an educational program of high quality,” and helped several thousand low-income children who now have no quality choices.

Sadly, the bill was vetoed by Governor McAuliffe, shooting down educational justice for the children of places like Petersburg, Norfolk and Newport News.

As the voters who place a premium on K-12 education think about the issues, they should consider this: The parents of children in high-performing schools are rarely concerned about choices: They’ve already made theirs.

But how long must the parents of children in persistently low-performing schools wait to have better opportunities for their child? Four years? Six? A dozen years? How long?

(A version of this commentary first appeared in The Virginian-Pilot on October 1, 2017.)

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Do Remedial College Classes Need Reform? In Virginia, Probably Not

How do you handle a situation when a student is admitted to a college but isn’t academically prepared to do the work? Traditionally, colleges and community colleges have required students who fail basic readiness tests to take remedial courses. Nationally, students spend an estimated $7 billion a year on such courses, according to the Wall Street Journal.

Percentage of students enrolled in remedial classes at Virginia community colleges, 2016-17 academic year.

But educational officials are souring on the practice, saying that remedial classes are typically taught by the least-experienced teachers with little training in remedial teaching methods, that student motivation is low in classes that yield no college credit, and that remedial students graduate with six years at a lower rate than their peers. Colleges in California, Colorado, Indiana, Tennessee and West Virginia are experimenting with an alternative approach, teaching supplementary classes targeting specific skills needed to pass specific classes. Thus, a student taking a sociology class who needs help with statistics would learn only the math applicable for that class.

It will be interesting to see where this experiment goes. I’ve long expressed concern that many colleges, desperate to pump up enrollment and tuition revenue, are too lax with the admittance standards. Under the guise of ethnic and socioeconomic diversity, they accept students who aren’t academically prepared for college. These students are disproportionately likely to fail to graduate and rack up large student debts that hobble them financially for years. Thus, for many, higher ed has become a source of social injustice rather than liberation.

Virginia colleges and universities are often accused of being excessively picky about who they admit, with the consequence that they provide less “social mobility” for poor and minority students. The flip side of that accusation is that the Virginia higher-ed system has the second highest six-year graduation rate in the country, meaning that fewer poor and minority students wind up saddled with debt they cannot repay because they failed to win the workforce credential needed to get a higher-paying job.

Perhaps the idea of teaching targeted skills required for specific courses has merit. Let’s face it, we all learned a lot of stuff in college that we never needed later in life. Speaking for myself, I barely passed a course in calculus, and, beyond retaining the fact that there is such a thing as “differential” calculus and such as thing as “integral” calculus, I remember nothing of what I supposedly learned. Maybe remedial classes teach a lot of stuff that students will never need.

On the other hand, I worry that replacing remedial classes with “basic skills” represents one more step in the watering down of college curricula, and one more step in the degradation of the value of a college degree. Businesses already complain that many college graduates are incapable of thinking critically and communicating clearly as it is. Will scrapping remedial courses make things better? I’m not holding my breath.

According to Virginia Council of Higher Education for Virginia (SCHEV) data, only one of Virginia’s four-year institutions, Virginia Commonwealth University, provides remedial education, and VCU enrolled only 68 undergraduate students in remedial classes in the 2016-17 school year. By contrast, the community colleges enrolled 36,000. That strikes me as entirely sensible. If students need remedial work, they should get it in a community-college setting where they will incur far less cost than in a four-year college.

For what it’s worth, the number of remedial students in Virginia community colleges is down from 44,400 ten years ago. Either Virginia high schools are graduating fewer students who are academically unprepared or the community colleges are relaxing their standards. I pass no judgment as to which is the case. Either way, remedial education does not appear to be a burning issue in Virginia’s higher education establishment at the moment.

(This column first ran in Bacon’s Rebellion on September 28, 2017)

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EPA Inspector General criticizes EPA for foot dragging

EPA’s Inspector General (IG) claims EPA has not developed emission estimation methods (EEM) to determine whether concentrated animal feeding operations (CAFOs) comply with the Clean Air Act (CAA).

The IG Report, while not receiving much publicity, will eventually impact animal feeding operations throughout the country. The report on September 19, 2017 is on EPA’s website at www.EPA.gov/oig. It is an opinion of the Inspector General and does not reflect EPA’s position.

Environmental groups have been using petitions to force regulation of ammonia, for example. Millions of dollars were spent by livestock groups and others to develop EEMs for “estimating emissions” from animal production facilities.

EEMs are difficult to determine and consequently EPA has never set a timeline for completing its work. Even though this effort began in 2005 with an agreement, EPA has suggested that it will have a plan on how to estimate emissions from animal operations by the beginning of 2018.

In the 40-page report, IG declares EPA is years behind schedule. EPA estimates there are approximately 450,000 animal feeding operations (AFOs) scattered throughout the United States. It also estimates there are approximately 18,000 large CAFOs in the United States.

For some time, EPA has recognized it does not have sufficient data about air emissions coming from AFOs or CAFOs.

EPA has looked at regulating animal facilities under the Clean Air Act ( CAA), the Emergency Planning and Community Right-to-Know Act (EPCRA), and the Superfund Act, known as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

EPA and the environmental groups have sought for years to determine a way to regulate ammonia. EPA claims ammonia “Can cause severe cough and chronic lung disease. It also contributes directly to the formation of PM2.5 and deposition can impact sensitive ecosystems.”

Because EPA staff has little or no understanding of agriculture, they seem to not understand how rapidly ammonia dissipates in the atmosphere. (Cases I have tried for the CAFO industry clearly demonstrate through expert testimony that EPA’s concerns are not well founded.)

EPA has also found it extremely difficult to measure actual number of pounds of ammonia coming from an AFO or CAFO because of varying conditions and varying growth rates of animals.

EPA also relies on outside studies to conclude that air emissions from AFOs and CAFOs impact property values. These studies claim “Residential property values were reduced by an average of almost 23 percent within 1.25 miles of a large swine AFO.” (I have been involved in 13 major CAFO cases and I have never seen this charge substantiated.)

EPA also relies on a study which claims “The closer children go to school near a large AFO, the greater the risk of asthma symptoms.” Another study EPA cites claims, “living in close proximity to large swine AFOs may result in impaired mental health and negative mood states, such as tension, depression or anger.”

The IG’s report reviews the provisions of the agreement between the livestock industry and EPA. Approximately $15 million was collected to fund emissions estimation studies and develop a framework for field sampling. EPA entered into 2,568 separate agreements with owners and operators of livestock facilities in 42 states. EPA believed that the 13,900 animal operations represented 90% of the largest operations in the United States.

The IG interviewed animal operators and of course, spent time interviewing “agriculture” experts such as the Sierra Club, Food and Water Watch, Earth Justice, Waterkeeper Alliance, and the North Carolina Justice Network.

There is also a section in the report indicating the EPA Science Advisory Board (SAB), which criticized EPA’s data and methodology used to develop emission numbers. The IG concludes that EPA’s air emissions proposals after 11 years are mainly on hold.

Chapter three of the IG report, in typical bureaucratic fashion, claims “EPA needs to implement systematic planning to ensure that EEMs have sufficient quality.” Chapter three is worth reading and deciphering.

The one ominous recommendation on page 29 of the report suggests EPA notify all participants in the EPA study “…that the release and covenant not to sue for those emission sources and pollutant types will expire in accordance with paragraph 38 of the 2005 air compliance agreement.”

Paragraph 38 in the Federal Register Jan. 31, 2005, p. 4965 seems to suggest a CAFO can be sued 120 days after the agreement expires.

This issue is not going away.

(This column first ran in Farm Futures on September 26, 2017)

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Your Government Will Take That!

Suzette Kelo bought what she thought was her dream house, a little pink cottage in Connecticut with a great view, where the Thames River flows into Long Island Sound. She lovingly restored the home, but her dream didn’t last. When a pharmaceutical plant was built nearby, the City of New London decided the residential section would generate a lot more tax revenue if occupied by larger and more expensive commercial buildings. So, the town council turned over its power of “eminent domain” to a private development company, all the homes in the neighborhood were condemned, the residents forced out, and their homes torn down or moved away.

The developers went broke and abandoned the project, so Suzette’s quaint neighborhood is now a parking lot. She and several neighbors, some of whom had lived there for generations, sued the city, which had used its right to condemn private property, not for public use, but to transfer ownership to a different private owner. In one of its most controversial decisions, the U.S. Supreme Court sided with the City, ruling that economic development (i.e. upgrading the value of a neighborhood) is a “public use” under the Fifth Amendment.

That was 12 years ago, and it sparked enough public outrage that 43 States have now strengthened protections for private property against local condemnation powers. The Fifth Amendment is an essential part of the Bill of Rights, ensuring among other things, “nor shall private property be taken for public use without just compensation.” The founders understood, of course, that sometimes private property stands in the way of public progress, such as when highways are built. The public good cannot be held hostage by one owner, whose refusal to sell might otherwise block needed transportation or other infrastructure projects. Thus, all governments have the right of “eminent domain” to handle such cases, and they must pay owners the fair market value of land thus taken for public use.

What is a “public use” under the law? The Supreme Court determined in the 1950s that elimination of slums and blight could be considered an important public purpose, in another landmark case involving the slums of Southwest Washington, D.C. It’s hard to imagine now, but at the time, 64 percent of the homes in that quadrant were found to be “beyond repair.” Over 60 percent of them had no bathrooms and some didn’t even have outhouses. Almost a third had no electricity, 82 percent had no laundry tubs, and 84 percent had no central heat. A comprehensive plan was created and the local government’s eminent domain powers were used to tear down blocks of slums, which are now occupied by government buildings and hotels. But isn’t there a difference between the public’s interest in eliminating slums, and a city’s desire to enhance its revenue by turning over one person’s property to another owner who promises to build something bigger?

The Supreme Court said there is not a difference, but public opinion has clearly said otherwise, which is why most States now prohibit what the city of New London did to Suzette Kelo. But some towns don’t actually take away a property’s deed, just its value.

David Lucas bought two lots on a barrier island near Charleston; then the South Carolina Coastal Commission changed the zoning laws, prohibiting the two houses he planned to build. His lawsuit went all the way to the Supreme Court, which re-affirmed the Fifth Amendment prohibition against government taking private property for public purposes without just compensation – even when the “taking” is of the land’s value, rather than its actual title.

Just four years later, though, Jim Wickstra bought a 3-acre parcel on Lake Michigan, intending to build a beach home. A few months later, the Legislature passed a law to stop development along the lakefront. Mr. Wickstra’s permit was then denied. The State tax agency ruled that the property was worth $200,000 with a building permit and only $500 without it. Yet he spent more than a decade fighting to get compensation for the loss of his property value, unsuccessfully. The courts ruled that $199,500 was an insufficient decline in value to justify compensation.

Courts have been all over the map on this issue, so legislatures need to address it. Property values may be substantially reduced for perfectly legitimate public purposes (such as open space preservation). But a society willing to take away that value must also be willing to compensate the owners from whom it is taken. It’s one of America’s founding principles.


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Fed Financing Act Not at Risk from SH 130 Bankruptcy

Speaking of populist critics of P3 concessions, one of the oddest is a Virginia writer named Randy Salzman. In pieces written for various media, including Thinking Highways, Salzman has put forth the view that P3 concessions are actually scams that harm taxpayers. The opening sentence of his Feb. 9, 2017 commentary for the “Bacon’s Rebellion” blog in Virginia, was the following: “The history of American transportation ‘public private partnerships’ indicates that virtually all P3 shell companies go bankrupt before paying back federal loans and the ‘private activity bonds’ which they sold to finance part of the debt.”

His target in this column was last year’s bankruptcy filing of the concession company for SH 130 (Segments 5 & 6), a toll road sponsored by Texas DOT to relieve growing congestion on parallel I-35 between Austin and San Antonio. The northern sections, through Austin’s suburbs, are doing fine, but the rural Segments 5 and 6 (the only ones developed under a revenue-risk P3 concession), fell far short of projected traffic and revenue.

Salzman wrote this piece before the final bankruptcy settlement, which I have recently researched to see who won and who lost. The original SH 130 Concession Company lost its $220 million equity investment, as is typical in a bankruptcy, in which providers of debt have priority over equity investors. Instead of Private Activity Bonds, the largest debt provider was a consortium of eleven Spanish banks, which loaned $686 million. And the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program provided a loan of $550 million.

The banks and TIFIA negotiated the bankruptcy settlement, which became final on June 28, 2017. Under that settlement, a new concession company was created, to manage and operate the toll road for the remaining years of the concession, and the existing debt was wiped out. The banks and TIFIA now own about half the equity in the new company, and TIFIA also holds a new $87 million subordinated loan. A slight majority of the equity in the new company is owned by Strategic Value Investors. SVI has hired a company to make some needed pavement repairs and has contracted with Louis Berger Services for operations and maintenance on the toll road. SVI also negotiated a $260 million credit facility with Goldman Sachs, to provide working capital.

It is widely believed that once the repairs are completed, the TIFIA office will offer most or all of its ownership stake for sale—and my guess is that there will be many bidders. SH 130’s traffic has recently increased by 16%, attracting about 10% of the traffic on I-35. And Berger is projecting annual traffic increases of about 6% a year, based on continuing increases in congestion on I-35.

So who are the winners and losers from this bankruptcy? Cintra and Zachry were the equity investors, and they lost their equity in this project—a risk they were willing to take. TxDOT got the final sections of its long-planned alternative to I-35 at no cost to its budget. Motorists got a high-speed, uncongested alternative to I-35 that has remained in service during the bankruptcy process. And TIFIA is expected to come out whole once it sells its new equity interest in the toll road.

And for those who worry that the TIFIA program is a risk to federal taxpayers, an update on the overall TIFIA portfolio, from the Transportation Research Board’s 2017 Annual Meeting back in January, found the portfolio to be in good shape. Of the projects generating pledged revenue (mostly tolls), 76% were either well above base-case forecasts or somewhat above base-case. Some 20% were below-case by 20% or less, and only 5% were well below base-case. As for credit ratings, 78% were unchanged from financial close, 19% have been upgraded, and only 3% have been downgraded. The report also noted that “Some of our best-performing projects are currently green-field toll roads,” such as Houston’s Grand Parkway, Dallas’s SH 161 and Chisholm Trail Parkway, and various express toll lane projects.

The bottom line, contrary to Randy Salzman’s fever dreams, is that toll-financed P3 concession projects are doing well. And even in the case of the occasional bankruptcy, taxpayers have not been put at risk.

(This column first ran in the September issue of Surface Transportation Innovations)

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