A premium for change: Negative effects on New Orleans schools

By Dr. Andre M. Perry
The Louisiana Weekly Contributing Columnist

The Louisiana legislature’s appropriations committee is cutting Gov. Jindal’s budget in ways that can have profound negative effects on New Orleans schools. Everyone must sacrifice during these lean times. However, there is a premium to be paid for improvement.

In the aftermath of Katrina when the legislature voted to takeover the failing New Orleans district, it simultaneously created a system in which the State had to pay for the expanded Recovery School Dis­trict’s insurance premiums on pro­perties it consequently ac­quired. Typically schools districts have the autonomy to find competitive prices on its policies. RSD schools have to get insurance through the State’s Office of Risk Manage­ment, which is not very competitive.

Insurance purchased by schools through the Office of Risk Management costs approximately $350 per student, which is between $100 to $150 more than it would cost on the open market. If legislators cut $11 million from the RSD as proposed, schools will have to pay the entire $350 per child. To put this in perspective, for approximately 400 students, a school will have to account for an additional $140,000 annually.

The irony is that legislators voted for reform after the storm and made themselves responsible for subsidizing it. However, the legislature should change policies that lock schools in the state’s expensive insurance policy and then wean the RSD off the subsidy.

New Orleanians are very familiar of the costs of living along the Gulf Coast. Insurance bills reflect many of those costs. Orleanians also accept the responsibility of paying higher rates because of the associated risks. School leaders should expect to pull their own insurance freight. However, the State should also share the costs to reduce the rate to market value. In addition, legislators should seriously find ways to offer more competitive premiums for their own agencies.

We all know how difficult the economy has been on families and various state agencies. Executing austerity measures forces legislators to prioritize their political and personal values. Legislators must protect essential values by sheltering infrastructure. When will schools be considered infrastructure?

Insurance is just one of the many rising costs for schools. Trans­portation, special education services, facility maintenance fees and teacher training costs are all rising. The state should be in the business of helping schools reduce these expenses because improving the educational environments of our children is worth it.

Louisiana set a feverish pace for education reform. In particular, the state pushed New Orleans to set the tempo for the rest of Loui­siana’s districts and arguably the country to follow. However, if the legislature wants sustained academic growth for our students, it must protect its consumers from its own inflated fees.

The state took on schools at great risk. The RSD’s recently reported academic growth provides legislators assurance that it was worth taking. There is a premium on positive change. I hope our elected officials and school leaders find ways to pay for it together.

This story originally published in the May 30, 2011 print edition of The Louisiana Weekly newspaper.