Virginia Gov. Mark Warner took office in January 2001 facing a $3.8 billion budget shortfall that quickly grew to $6 billion in the declining economy of 2002. He has confronted the deficit by aggressively cutting government spending. But he has managed to protect funding for education. In fact, Warner has rolled out a broad package of new education initiatives called "Education for a Lifetime," adding $80 million to the state's education budget so far in his term, and committing to add another $525 million in the next biennium. A former investment banker, Warner says he expects those investments to produce measurable payoffs.
BP: How can you justify spending any new money on education right now?
Warner: I use a business analogy: Great companies distinguish themselves during tough times. They do two things: One, they cut, streamline, and economize. We've done that in Virginia. We've not only cut $6 billion, but we're using this as a chance to reform every part of state government, from how it uses information technology services, to its vehicle fleet management. But at the same time, great companies invest in their core asset, and in Virginia our core assets are people and their ability to compete in a knowledge-based economy.
BP: How did you decide which initiatives to include in your Education for a Lifetime package?
Warner: There are a couple of things that are key to each of them: They are all reforms that enhance educational accountability, and most of them are self-financing, in that they can save the state money, usually with a defined pay-back period.
BP: What's an example of the payoff?
Warner: More important than any other factor in a child's educational success, other than the family, is a good-quality teacher. But 50 percent of all young teachers leave the profession within the first five years, and that number goes up in hard-to-staff urban and rural schools. It costs, on average, about a third of the total salary and benefits to replace a teacher -- about $10,000 in Virginia. So we are putting in place a mentoring system targeting 1,500 first-year teachers in hard-to-staff schools. If we can cut their attrition rate from 50 percent to 25 percent -- so 375 teachers leave, instead of 750 -- we'd save the state around $3.75 million. And the initiative itself only costs about $1.5 million.
BP: Your senior-year reforms for high schoolers have captured a lot of attention.
Warner: Too often, the senior year of high school is the most wasted year in a young person's education. So we want to offer two alternatives. One is for those students not going on to higher education. We want to enter into a contract at the end of their junior year that says, "Choose an industry-level certification and we will work with you to get that certification and your high school diploma, even if it takes classes at a community college after you have graduated high school." We're going to guarantee up to a semester of community college as long as they finish their industry certification by the end of the calendar year in which they graduate.
These certifications will take a high school diploma that earns about $22,000 a year, and raise that person's immediate earning power and job prospects by about $8,000 to $10,000. The state has the potential of picking up anywhere from $300 to $500 in community college costs per student, but we're going to more than recoup that by the additional earning power of that student within the first year or two of work.
For those students going on to college, we want to offer the chance to earn a full semester's worth of college credit. If that student graduates [college] in seven semesters instead of eight, they save the family, on average, about $5,000 in tuition, room, and board. We also hope it will help alleviate the overcrowding problem in our colleges and universities. And we can save tax dollars, because state subsidies are about $3,000 per student per semester in tax credits. This saves the parents, it saves the state, and hopefully makes the senior year of high school a more meaningful experience.
BP: Beyond aiming for tangible returns on the state's investments, have you
used other business ideas?
Warner: The concept of turn-around specialists. We want to recruit ten principals and give them educational and business training, the idea being that a great principal is probably the single most important individual in the performance of the school. These principals would go into consistently low-performing schools with increased powers in terms of hiring and firing.
BP: Those sound like good business plans. But how will you verify that the overall education budget is in fact well spent?
Warner: We spend about $9 billion a year on our 1.2 million students in public education. In any enterprise of that size, I'm sure there are dollars that are not well spent. So we're borrowing from the Texas model, where the state comptroller used management and audit specialists to go in and review school divisions. We're going to try that in Virginia, starting with three school divisions -- one urban, one rural, and one suburban. We're going to make these reviews available to policymakers, school boards, local elected officials, and the public at large.
