Even though winter has set in on Chicago, there's been a few reasons to believe we could have an early thaw in January. By most accounts the last fifteen months have been rough for the economy, but a couple of unexpected customer calls are raising my hopes that we may see some improvement after the new year. That's a welcome change.
On Monday night I will be presenting "Transforming your business with the Lean Six Sigma toolkit" to the University of Chicago Business School's Entrepreneurial Roundtable in Naperville, Illinois. Some people believe that these techniques don't apply to small and midsized businesses, especially those that are not making or moving products. They might say something like, "We're in sales, not operations." My usual response is to ask them if they ever think about how they serve their customers. I then ask them if they're concerned about the value of their work. If they answer yes, then I shrug and tell them we're all in operations businesses.
It's good to do these presentations periodically, because it reminds me of why I do this for a living.
Friday, December 18, 2009
Tuesday, December 15, 2009
For what kids?
For several years my community has been debating the cost per student of our K-8 school district. In fact, the rising costs of public education seems to be a growing topic of debate in many parts of the country.
There are those who would simply raise taxes to fund school systems, because "it's for the kids" and besides, public education to our democratic society and economic power. Opponents argue that teachers, administrators and a burgeoning educational-industrial complex are bilking the taxpayer while school performance declines nationwide. Who is right?
We can argue back and forth about bang for the buck, but it’s pretty clear that there is indeed some bang going on here. Despite all the challenges that our culturally-inclusive society foists on the education system, our schools still manage to compare pretty well even against smaller, homogeneous countries. We aren’t without issues, but with the glaring exception of schools in poor environments, quality education isn’t an immediate concern. On the whole, OUR kids are getting a good education here in the USA.
But what about tomorrow’s kids? Will they find the same good schools, or will their experience be something less than ours? It is in preserving that quality education for future students where the system breaks down, and that’s where the “buck” comes into the conversation. In many communities, key components of the expense budget are growing faster than tax revenues.
For example, our local school district's 5-year financial forecast projects salary increases of around 5% per year, health insurance benefit increases of about 10% per year, and increasing retirement fund contributions of about 10% per year. Adding to this problem, changing demographic factors, such as additional instruction for growing numbers of English-learning students, will continue to drive up costs for a given standard of educational performance. On the other side of the ledger, our tax revenues are projected to increase only 3% - 3.5% per year.
That's not a sustainable fiscal situation, and sooner or later we will be forced to either raise tax rates or run out of money.
This isn’t axe-grinding or posturing, it’s just simple math.
Someone recently explained to me that Illinois' current education system relies on tax increases to cover rising costs. However, I fear that our local communities may be approaching the “peak oil” of taxation, a tipping point where new revenues will be increasingly difficult to find. Continued tax hikes will eventually change the fabric of our communities and place greater burden on households. Likewise, job cuts and other cost reductions may buy us some time but won’t solve year-over-year cost increases that exceed tax cap mandates. Besides, in case someone slept through the last 15 months, most government agencies and many communities are already flirting with insolvency. We can't expect to tax our way out of this problem.
A community member suggested that our local school board should do more than "just listen to the whims of the public." That's actually not true in the strictest sense, as school boards have fiduciary responsibility to serve the public by assuring that the district educates well and operates efficiently on an ongoing basis. Those responsibilities usually extend beyond the scope of any narrow constituency, and I believe most school boards are honest enough to keep it that way. School boards must be good stewards of a quality public education system for their entire community: the kids in the schools, the adults who fund them, and future generations of families who hope to find the same educational opportunities as we enjoy today.
We school board members must address this situation quickly, or the problem will continue to grow until it’s too big to fix with reasonable solutions. We must find a way to align our expenditures with sustainable tax revenues. That requires frank discussions with administration, teachers, and the public. It means cooperation, fiscally responsible behavior and good choices about the programs we offer. If we avoid these realities, we risk declining school performance or an eventual tax revolt.
To those of you who resist any notion of cost containment, you are living on borrowed time. This is a matter of leadership and duty. If we see this trouble on the horizon, then it's our responsibility to avoid it while we can. We can't continue to allow our problems to snowball onto future genertions.
After all, public education is for ALL the kids, and it’s unconscionable to sacrifice their future for our own benefit.
There are those who would simply raise taxes to fund school systems, because "it's for the kids" and besides, public education to our democratic society and economic power. Opponents argue that teachers, administrators and a burgeoning educational-industrial complex are bilking the taxpayer while school performance declines nationwide. Who is right?
We can argue back and forth about bang for the buck, but it’s pretty clear that there is indeed some bang going on here. Despite all the challenges that our culturally-inclusive society foists on the education system, our schools still manage to compare pretty well even against smaller, homogeneous countries. We aren’t without issues, but with the glaring exception of schools in poor environments, quality education isn’t an immediate concern. On the whole, OUR kids are getting a good education here in the USA.
But what about tomorrow’s kids? Will they find the same good schools, or will their experience be something less than ours? It is in preserving that quality education for future students where the system breaks down, and that’s where the “buck” comes into the conversation. In many communities, key components of the expense budget are growing faster than tax revenues.
For example, our local school district's 5-year financial forecast projects salary increases of around 5% per year, health insurance benefit increases of about 10% per year, and increasing retirement fund contributions of about 10% per year. Adding to this problem, changing demographic factors, such as additional instruction for growing numbers of English-learning students, will continue to drive up costs for a given standard of educational performance. On the other side of the ledger, our tax revenues are projected to increase only 3% - 3.5% per year.
That's not a sustainable fiscal situation, and sooner or later we will be forced to either raise tax rates or run out of money.
This isn’t axe-grinding or posturing, it’s just simple math.
Someone recently explained to me that Illinois' current education system relies on tax increases to cover rising costs. However, I fear that our local communities may be approaching the “peak oil” of taxation, a tipping point where new revenues will be increasingly difficult to find. Continued tax hikes will eventually change the fabric of our communities and place greater burden on households. Likewise, job cuts and other cost reductions may buy us some time but won’t solve year-over-year cost increases that exceed tax cap mandates. Besides, in case someone slept through the last 15 months, most government agencies and many communities are already flirting with insolvency. We can't expect to tax our way out of this problem.
A community member suggested that our local school board should do more than "just listen to the whims of the public." That's actually not true in the strictest sense, as school boards have fiduciary responsibility to serve the public by assuring that the district educates well and operates efficiently on an ongoing basis. Those responsibilities usually extend beyond the scope of any narrow constituency, and I believe most school boards are honest enough to keep it that way. School boards must be good stewards of a quality public education system for their entire community: the kids in the schools, the adults who fund them, and future generations of families who hope to find the same educational opportunities as we enjoy today.
We school board members must address this situation quickly, or the problem will continue to grow until it’s too big to fix with reasonable solutions. We must find a way to align our expenditures with sustainable tax revenues. That requires frank discussions with administration, teachers, and the public. It means cooperation, fiscally responsible behavior and good choices about the programs we offer. If we avoid these realities, we risk declining school performance or an eventual tax revolt.
To those of you who resist any notion of cost containment, you are living on borrowed time. This is a matter of leadership and duty. If we see this trouble on the horizon, then it's our responsibility to avoid it while we can. We can't continue to allow our problems to snowball onto future genertions.
After all, public education is for ALL the kids, and it’s unconscionable to sacrifice their future for our own benefit.
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