Providence Goes Bust
Senator Rand Paul of Kentucky appeared on David Letterman’s show the other night, where the following exchange took place:
Rand Paul: Yes, we can agree. We can agree to the problem, but here’s the rub. In Washington, D.C., we spend $20,000 per pupil and we still have a crummy school system. It’s failing our kids; our kids are dropping out. Half of them are dropping out before they finish high school…their scores are abysmal…and we spend more and more money. So money’s not always the answer. You have to do something, but I think part of the problem is we’ve taken education from the local sphere and now we control it from Washington and I think that’s been a mistake.
Letterman: Well, something has gone haywire because it’s not working and I’m sure I agree with that argument but if we’re going to throw money at something, why not education? Let’s just see if it improves somehow.
Paul: Well, I think competition makes things better. You have to compete with other late-night comedians; I have to compete with other physicians. I think competition makes us better. Think if you didn’t have that guy, what’s his name, you have to compete with?
Letterman: You know, I think he’s wrong about some of these things. I just can’t tell you why.
If Letterman wants to continue his quest to find out why he’s “wrong about some of these things,” I suggest a trip to Providence, Rhode Island.
The Associated Press describes the situation: “Financial problems in Providence, the state’s biggest city, have caused enough alarm at the state level that Governor Lincoln Chafee has instructed two of his top fiscal officers to meet with city officials. A recent audit showed Providence, which has about 175,000 residents, had nearly depleted its rainy-day fund and overspent its budget last year by more than $57 million.”
Providence is in trouble because public unions have ridden it into the dirt. As blogger and Cornell law professor William Jacobson puts it, “in Rhode Island, public sector unions are the state,” and they’ve created an environment where public employees can “spend almost as much of his or her life on a state pension as working for the state.”
Rhode Island is one of the most heavily unionized states in the nation. Decades of lavish pension benefits have created $7 billion in unfunded liability. Taxes have been jacked up to fund union benefits, producing one of the nation’s worst recessionary death spirals.
The city of Central Falls, only a few miles to the north of Providence, was taken over by the state last July, prompting state police to confiscate the mayor’s cell phone, car, and keys to City Hall. The mayor who drove Providence into insolvency, David Cicilline, fared much better – Rhode Island voters actually promoted him and sent him to Congress.
The teachers union in Providence was so intransigent in protecting the spoils of collective bargaining that today the school board was forced to take a remarkable step, in order to gain “maximum flexibility” to deal with the financial crisis: it fired almost all of the teachers. As school superintendant Tom Brady explained in an email, “Since the full extent of the potential cuts to the school budget have yet to be determined, issuing a dismissal letter to all teachers was necessary to give the mayor, the School Board and the district maximum flexibility to consider every cost savings option, including reductions in staff.”
The Providence Journal notes “state law requires that teachers be notified about potential changes to their employment status by March 1.” That means the school board basically had to revert all of their employment statuses to the default setting of the Obama economy right away. Later, it can decide which teachers it wants to keep, and offer their jobs back.
In a demonstration of the intransigence which caused this crisis, not to mention a level of historical ignorance that doesn’t bode well for the test scores of Providence students, teachers union president Steve Smith compared this move to the Japanese attack on Pearl Harbor. Actually, he just used the date, but the Providence Journal felt compelled to remind its readers what happened on December 7, 1941. At least Smith didn’t compare the superintendant to Qaddafi, the way union protesters in Trenton spoke of New Jersey Governor Chris Christie today.
David Letterman asked Rand Paul, “If we’re going to throw money at something, why not education? Let’s just see if it improves somehow.” The answer is plain to see in Providence, where they threw all the money in the world at education. Now the money is all gone, and they have nothing left to throw except pink slips.
“Collective bargaining” for public unions is a process in which unions and the government strike a deal to make each other larger and richer, while the people they both work for are barred from the room. In Providence, it produced a system the people can no longer afford, and now it’s gone. Imagine where they’d be if Rand Paul’s wisdom were followed, and education had been a competition to deliver the best product at the most affordable price.