Wall Street Went To Homeroom And Stole The Whiteboard with David I Backer

What if the real story of American education isn’t test scores or culture wars, but air you can breathe, roofs that don’t leak, and the invisible money pipes that decide who gets both? We sit down with David I. Backer, associate professor of education policy and author of As Public as Possible, to follow the cash from property taxes to Wall Street and back again—and to sketch a better way forward.

We start with how school finance became hyperlocal. Once, statewide property taxes aimed at broad access; over time, home rule and municipal boundaries pulled control downward. That shift tied school quality to real estate markets, creating districts that can tax less and spend more next to neighbors who tax more and get less. State aid helps unevenly, federal support is thin, and court victories often stall when legislatures refuse to act. Then there’s the four-trillion-dollar municipal bond market. Districts borrow for buildings, HVAC, security, and disaster repairs, paying fees and interest that quietly shape decisions about class sizes, salaries, and programs. Credit ratings become a cudgel, and information asymmetry leaves public officials outgunned by financial intermediaries.

Facilities emerge as the missing protagonist. Decades of reform ignored basics like ventilation, temperature, and mold. Data shows over half of schools need significant repairs, and climate stress—from floods to heat to earthquakes—raises the stakes while schools double as community shelters. We explore how costs balloon through compliance, legal mandates, healthcare premiums, pension liabilities, and security measures, all while teachers shoulder unfunded social work. Against that backdrop, David outlines practical options: decarbonize and modernize buildings, revive low-cost public lending modeled on the Fed’s pandemic facility, reform Title I allocations, and create a national investment authority to finance public goods. We dig into tax-base sharing from the Twin Cities, regional joint authorities that share both revenue and debt risk, and even pension funds underwriting school bonds to keep value in public hands.

This is a map for organizing as much as policy. Cross district lines, learn how the money actually moves, and translate moral urgency into precise demands that land where decisions are made. If schools mirror society, then changing the money can change what they reflect—safer, greener, and truly public. If this conversation sparked ideas, follow David at “School Daves,” share this episode, and leave us a review so more people can find it.

Musis by Bitterlake, Used with Permission, all rights to Bitterlake

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Meet David Backer & The Big Question

C. Derick Varn 0:48

Hello and welcome to Varmblog. And today we're actually talking about something close to my day job, which is public education and its funding. I'm here with Dr. David I. Backer, associate professor of education policy at Seaton Hall University, author of, I believe, four books, Elements of Discussion, The Golden Edroast, Office Air for Educators, Office Air in Education, Reassessing Critical Education, and then most recently and pertinent to our discussion here, as Public as Possible, Rackle Finance for America's School, America's Schools, plural, not singular. And I know Dr. Backer's work actually separately. I realized I'd read you your work on office air and pedagogy separately from reading your more recent work on educational finance and had not put that it was the same person together. That's so cool.

SPEAKER_02 1:46

Well, I mean, thanks for having me on. I it was the invitation. It's great uh to be here with you. I'm I'm a big fan of how you mix all these things together, and it's so cool. I mean, you're one of the very few people, if I can think of any, who had encountered my work on Alcesair, and then I could imagine, yeah, that there's a bit of dissonance between those two.

C. Derick Varn 2:05

Yeah, a little bit. Although, as a person who has been thinking about public education for now 20 years, and um I I am in the unenviable place of being a teacher leader, which means that I have responsibility but no power. Right. And I understand, unlike a lot of my colleagues and comrades, how schools are laid out and how they function and how their finances go, but again, have no control over them. And realize a long time ago how much they varied from state to state. So you wrote uh as public as possible last year. What got you interested from moving from kind of abstract pedagogy to very specific policy?

SPEAKER_02 3:02

Yeah, well, it's it's a good question, particularly your your little anecdote of not realizing that it's the same person writing these books. I mean, the thing is, I was a high school teacher first. I mean, I studied philosophy, you know, as an undergraduate philosophy, mathematics, actually, and then I was a high school teacher. And there was something about the combination of teaching in high school and having studied philosophy and thinking about philosophy in the classroom as I was becoming a teacher. I actually taught in a Catholic school for my first time teaching, and they really, depending on the school you're at in particular, they'll let you do whatever. And I I found myself drawing from the philosophy to do stuff, if that makes sense, to really, it's not, it wasn't just about what you know Sartre said or what uh Frega said or or whatever. It was actually about what they said and what it meant for me in the classroom with my students and my response to them. And it, you know, philosophy was really about how to increase the possibilities, uh, widen the horizons and the imagination when it comes to practice. And which is why when I encountered Paolo Freire and the theory of praxis and stuff, I found it very compelling later on. But I was always interested in the ways in which the concepts lived, if that makes sense, you know, the ways in which they activated the world. And, you know, when I got involved in organizing and movements when I was a teacher, and then after that, I really found that, you know, drawing from drawing from philosophy again, you know, kept help kept helping me. But when I was in the movements, particularly in Philadelphia, I was finishing up this project on Al Tousser when I got my first this first tenure track job. I was in a place called Westchester University. I was living in Philly, I was involved with the education movements there in Philadelphia, and what they were super concerned with was the state of the buildings and toxic school buildings in the city. A teacher had sort of infamously been diagnosed and then would later die of a mesothelioma from untreated asbestos in the school buildings, and there had been decades of organizing around it, and I, you know, got involved with these coalitions who were demanding more funding for the buildings. And I didn't, so I'd gotten this job and I was actually beginning to teach classes in policy, and I was trying to think to myself, like, what would be an interesting topic to teach on at a high level at the doctoral level in education policy? What would be cool to apply Altusser to in a way, but also what would be helpful for the movements? And I realized, I mean, I'd sort of been wanting to, you know, as someone who studies Marxism, critical theory, you know, political economy, like obviously get really deep into the numbers and finance and stuff, but I I hadn't taken that deep dive. I was like, well, I actually don't understand how the money even works. Like, you know, if I'm organizing a campaign and I need to fix something up in the school building or whatever, where and I'm demanding more money, who exactly controls that money and how? Where does it flow? How does it flow? And I was just like, wouldn't it be kind of wild? Wouldn't it be kind of unexpected or messed up if I just started reading finance, school finance, and getting involved in finance? I mean, I found that a lot of people didn't understand. And I found that I could be helpful as a writer, as a thinker, as someone involved in the movements, but also as someone with a lot of time as a researcher to devote myself to figuring this stuff out publicly. So I just started keeping a newsletter, and it was the shutdowns of 2020. And my partner was pregnant at the time. I was looking for a way to distract myself from you know everything that was going on. And I just started, I just started going in real deep. And I think I think that the Al Tusarian theory really lends itself to that kind of work, actually, to going very, very fine-grained into the social structure. Because, you know, that theory is very is one about uneven development, it's about contradiction, it's about at the level of practice and you know, the unlike

From Philosophy To School Finance

SPEAKER_02 7:07

the effectivity of the forces of certain actions and complexity and stuff. And I I found that the the the school finance was a very like fascinating area, but it also like it scratched a niche for me because going way back, I had an interest in mathematics and and numbers and and and that kind of thing. So it it it it made sense to me to make that change, but it it is a pretty far jump.

C. Derick Varn 7:33

Yeah. As a person who uh I my my story is actually in some ways similar to yours. I even taught abroad for a long time. I I've worked in uh public schools, private schools, charter schools. Now I'm at a fully online, fully public, not a charter school. I could talk, you know, I don't want to get too into that because it's a risking time my day job in. But uh education funding struck me a long time ago. I I taught during the Great Recession, that's when I actually started. I moved from being an adjunct professor and you know, community college lecturer into being a public school teacher and a community college lecturer in 2007. And I saw the finances of schools like fall apart, and we dealt with absurdities about finance lines, like and they vary greatly from state to state, but you know, we had a property tax line for staffing, which is 93 percent ish of most schools' cost, but then we had a separate line for building funds, both local, but they came out of different sectors of taxation. So one came out of property taxes, yeah, and then the buildings came out of sales tax and we could yeah, and what I very quickly saw there is in 2009 we had to open schools that we could not staff because we had the building allocations but no staffing allocations for them. Right. And there was no way to fix this because property taxes were tanking and we couldn't just we were legally prohibited from asking for a temporary sales tax for staffing. There was it's just not legal in the state of what state are you in?

SPEAKER_02 9:38

I was in Georgia. You're in Georgia, okay. Interesting. Yeah, Georgia does the S the S P to the penny sales tax thing.

C. Derick Varn 9:45

Right. Well, I now currently am a public school teacher in Utah, and the structure is completely different. We do still primarily fund on property taxes, but the property tax unit uh decision makers are actually interestingly school boards who do not correspond in the main to either a municipal or county level government. Right.

SPEAKER_02 10:12

They're their own fourth thing, right?

C. Derick Varn 10:15

They're their own fourth thing, which then also means it's harder to organize to alter them in any way. So there's it's much harder for there to be community engagement to push on, say, a administration or a school board or a super, because in Georgia we got written with you know the community actually chased supers off. I that does not happen in Utah, partly because of the way the urban districts have structured their school districts and property tax boundaries where they don't correspond, usually there's a few exceptions, with any other form of government. We also fund schooling through an equalization at the state at the state level by per student. It's this thing called FTE, yeah, which we did not have in Georgia, and that that is slightly more weirdly, it is slightly more progressive than the Georgia model, but we still have many problems that replicate the Georgia model because it is still the richer schools that get more FTE, right? So and that's this two models. I'm also familiar with Pennsylvania where you used to live, which has a completely different funding model, but it's still local. Yeah, I do think people realize what your first chapter is about. I do think most people understand now, because even liberals get it, that like local funding of education replicates class and racial biases in and almost in extreme and makes makes it to where you know it even affects property values in a major way. Like like you know, it's school value and property value are tied together, so so even free public education becomes a class good like a private education would. So but you know, you argue that this isn't an accident, this is not you know, I'm from the South, I'm I'm pretty sure it isn't an accident, but the the but you know, some of the worst examples of this actually aren't in the Southeast because there was priorly some mitigation by civil rights law, but in New York, where it's like extreme. So how do you think this developed and and like what does this tell you about the way we fund public services in general?

SPEAKER_02 12:42

Yeah, well, the the way it developed, it's a very, it's a very long, complicated story that I don't definitely fully under. I mean, I I have to say I don't fully understand everything about school finance. I have to say a lot of a lot of my work is sort of publicly saying that I'm like just trying to understand myself because the stuff is so complicated and uneven. The my okay, the the story that I tell of the local funding, you know, thinking about local funding, the story that I tell in the book is one that involves like a few ingredients, you know, and the first ingredient is really the property tax, which develops actually as a kind of working class, like white working class demand in the mid-19th century, early 19th century, to try to combat a previous and actually much more unequal way of funding schools through rate bills, uh, trying to have people had to like declare themselves poor and then pay tuition into a state program that then you know funded their, funded this these sets of schools, like poor schools basically. And the the property tax was kind of seen as this like almost redistributive thing that was going to take up and take on like sort of you know powerful property-holding people to be able to provide education for everyone, whether you had property or not. And the thing of the the thing is that property tax was collected at the state level. Okay, so it was collected and then redistributed accordingly. But uh Matthew Gardner Kelly, this historian, just published this great book called uh Dividing the Public. He tells a history, at least in California and in the in the West, of how the local property tax became the local property tax and not the state property tax, which is to say localities started to say, we want to collect our own tax to fund our own education. We don't want to be told by the state what to do with the money that were allotted. We want to raise what we want to raise and do with it what we want to do. And, you know, at a certain point, most property taxes for education were collected by the state at the state level. Now, it is interesting to note historically that taxes on property to fund education go way back at least to like, you know, what was before it was Germany, like a series of kingdoms in Germany during the Protestant Revolution. It was the Protestants that really thought, you know, that there should be schools and that those schools should be teaching everyone to read so they could read the Bible. And also as Germany was becoming like a nation, they thought, okay, we're gonna fund the property, we're gonna use a property tax for it, which actually then goes back, you know, property taxes to pay for public services goes back, you know, in European history to to Rome and Greece to very so this is like an old, old practice. You know, even in even the even the Puritans, you know, in colonial uh United States and the colonies were were trying to they were trying to tax property to fund their public schools to comply with the this law they passed called the Old Diluter Satan Act in 1647, which was it was passed because they wanted you know people to go to school so that they wouldn't be diluted by Satan. Okay, like this this practice goes back a long time, but I I'm jumping around. After the uh property taxes collected by the state, localities start to want to have that power, and that is sort of parallel with the home rule charter movement, which also happens in the mid-19th century, where suburbs who are within the orbit of large cities want to be able to control their finances municipally more. They want to have city charters. And as like localities sort of rise in power, get their own city charters, they start demanding to pay for their own municipal services, like education. And then in pro in California, the first ever proposition after the California adopted this sort of prop system, you know, where you could vote on referenda like that, the first one ever in California was to devolve the right of collecting the property tax to the local school district away from the state. And it passed. And that was, I think, 1901. So I think, you know, this structure, and then those school district lines, you know, those are also very old, the way that they're drawn. But then when they're redrawn, it really gets to some of the stuff, you know, very like very tense elements of our social structure. And, you know, essentially, since the civil rights movement, you know, there was a kind of first civil rights movement in reconstruction after the Civil War. And a lot of in the South, speaking of the South and the Southeast, a lot of the school finance structures that you have in place there are as a result of reconstruction, specifically the coterminous boundaries of school districts and counties and the power of the county government in determining things having to do with school finances. It was thought that if you prevented small

How Local Funding Took Over

SPEAKER_02 17:33

little school districts from you know forming and then get becoming these kind of fortresses that you could help integrate by keeping it to the whole county. And but then you know, in the second big civil rights movement, there was this legal strategy by that was sort of championed by the NAACP to take it to the courts, say this violates the 14th Amendment, the way that this all works out with the local property tax. They're sort of defeated at the federal level, the Supreme Court, but then they have a series of significant victories at the state level thereafter. And state governments start collecting more money largely through sales taxes, uh, to try to compensate for the huge inequalities that you know were seen. And, you know, states have surpassed the localities by a point or two in on average of providing for a public education, you know, I think as a result of that civil rights strategy, you know, but like those averages and the way that right-wingers will try to say, like, oh, well, the inequalities of of property taxes are no longer relevant because of the state governments, you know, like the the the average is really high, very unequal situations because a district with high property values only has to tax a little bit to get a whole lot. They don't need money from the state. But the next door district that's been de-industrialized, that's mostly diverse working class, they have to tax 10 times higher to get 10 times less money, and they need a ton of help from the state, and it's still not enough. And the federal government's essentially out to lunch. It's been that way, you know, basically the whole, the whole of the system. It's an extremely decentralized system. That's that, you know, my understanding, that's that's how we got to where we are now, where we have we have significant state contributions that don't compensate for the inequalities of that previous fully local system that itself had been actually a state-level system that was more redistributed, that was dismantled by this sort of movement of local control in the mid-19th century.

C. Derick Varn 19:34

Yeah, I think that's actually really important to point out. I was actually very interested when I was studying the common school movement back way back with Horace Mann, that yes, he wanted property taxes based off the Prussian model, because we seem to have, you know, yes, we have the Puritan and the English model in our other schools, but uh a lot of our schools even are you know down to Kidney Garden are based off the German Prussian model. That's what Horace Mann was really modeling things after. That's for good and ill, but it was very public-minded. And I remember being surprised that it was a statewide property tax, you know, initially. I believe the very first pushback on that was actually in Pennsylvania in like the ear early mid-1800s. And then, you know, it was not completely really crushed to the 20th century, as far as I understand. To explain to people how we did things before that, it was kind of a it was even more piecemeal. You had a user fee model. I think you mentioned this in your book, yeah. Which was you know, you basically pay to play. It was like a it was like a a tuition charge to to to parents based on how many school days they attended. I remember like reading some Southern literature from the 19th century and them mentioning like you know, you had to bring your penny per day. And I'm like, what like what do you thought about? How did it work?

SPEAKER_02 21:18

Yeah.

C. Derick Varn 21:19

And then they started like subsidizing that, but through like random stuff like syntaxes and insurance taxes, and like we still do in Georgia, uh, where I'm from, like there's a there's a fairly progressive higher education grant. Used it used to be more than it is now, but how's it funded? Lotteries.

SPEAKER_02 21:42

Lotteries, or you'll have uh like fines and fees, you know, tickets and and uh seizures. I mean North Carolina in particular, there's a revenue stream for public education that comes from the comes from mass incarceration, it comes from fees associated with that. So yeah, yeah. And then in famously in Philadelphia, the soda tax, you know, you tax gambling, tax cigarettes. Gas tax is one of the things we use here. So gas, gas tax, yeah. I mean, taxation. You asked, you sort of asked in your previous question too, like what does this sort of story of school finance say about the the financing of public goods in general, you know, and that's a very interesting question because when you start to when you start to try to unravel what's going on in education, then it you start seeing what's going on with water, with streets, with uh sanitation, public health, what what you know, how you know stadiums get built, and how higher education, universities, you know, what their what their you know reverse revenue streams are like, police, fire, like all of these parks, all of these provisions, you know. United States, all of the things that the left, you know, really wants to be able to provide on a massive scale in a new way, the that flows that finance these things are arcane, decentralized, hyper local specific with their own histories and their own practices and their own little strange boards and people who are in charge at different like multiple layers of government, not to mention the whole borrowing, you know, the borrow municipal bond market and borrowing authorities that have emerged. Like I was intimidated and impressed in a sort of negative way at the sprawling, you know, kind of chaotic nature of this quote-unquote system we have. I mean, I wouldn't even call it a system because a system is a fantasy of an image that it's somehow all networked together and it and it technically the flows all work out and everything gets to where it needs to go in the network or in the system. It's not how it is. It's it's an extremely uneven set of articulated and disarticulated structures that people don't really understand, that then comes to provide a good, and you get accustomed to the provision of the good, the way that it's provided. But like you start, you lift up the hood, and it's like, oh my god. Um to actually see the flows. And when something's going wrong, to be able to figure out this is like being a mechanic to some degree, you have to figure out where the hell this thing is going, where's the choke point? What happened? Who who dropped the ball where in the flow, or or where where could it be expanded? And I think there's a big disconnect between organizing and movements and those intricate kinds of policies, which I think then does the movements sort of disservice because you lose moral and political legitimacy when you appear not to know what you're talking about. And you actually maybe make demands, and those demands maybe even are conceded in a negotiation through the other side that you're pressuring, but ultimately those demands will oriented at some other place in the structures that don't address what it is that you're trying to address.

C. Derick Varn 25:01

Yeah, I mean, I think this is important. I mean, we'll talk about the bomb market in a minute. You you also your chapter two relates also to a piece you wrote in The Baffler about the likely problems that Zoran Mondani Mandani is going to hit in New York eventually. He has so far managed to scare enough of the progressive part of the New York Democratic legislature and and governor to get some, albeit probably extremely temporary and provisional uh concessions, but he has gotten them. But you know, I study, I got obsessed with this kind of I would almost say metabolic as a metaphor way in which leftists hit walls with the national government for for reasons of federation and everything else. So then they turn back toward things like sewer socialism, but have forgotten you know the structures that were emerged to block it. I mean, like when I was trying to tell someone, like when you talk about sewer socialism in the 1920s, you public finance and the fight, you know, and the markets and the legal obligations of cities, and even how they handle that finance and who they tax and how they tax it, is totally different. And one of the things that you just have to deal with is at the level of a certain level of sovereignty, and this is not a concept I I love, but we just want to talk about it. They have a right to print currency, they can base or debase, although there's no there's no actual basis for base and debasement anymore. They're currency, it particularly in an economic hegemon that is at least of regional size. I think it's a little bit more complicated for small states to do this because they have to buy so much outside of their own production zone, but nonetheless. But when you think about how America is set up, the United States is set up, and actually Canada is kind of too, and so is Mexico, so maybe America's appropriate. Most of the funding for things that are that are necessary are hard to scale up because we fund them at the provincial, state, or municipal level, areas in which there is no currency sovereignty necessarily. That's right. So you can't decide to like debase, and that's for people listening in quotation marks, your currency to to fund projects, you know, even if it wouldn't lead to that much inflation, etc. etc. It makes the in the United States, it makes the federal government kind of weird because it's like a an insurance program that just murders a bunch of people. But it can't do a lot of the things that governments in Europe do around public goods, partly because there cannot even be a discussion constitutionally about the role of currency in that, even though we inflate and deflate our currency all the time, it's for industrial policy, it is not for domestic social policy 99% of the time. There are a few exceptions, COVID being one of them. But in general, we don't do that. The other thing that you you you talk about is Wall Street bonds and Moonies. I got into a debate with some socialists when I read your first your your Baffle article to my channel and talked about it. And I was like, there's a whole lot of levels of bonds, but one of the things you have to deal with with municipal bonds is even though they're municipal bonds, and even if you do price for the fact that they're a tax rebate and that you know, because they're tax rebate, there's ways in which it's smart for corporations to use them to offset their stock costs, etc. etc. etc. Most people don't understand this, but I worked in insurance before I became a teacher, so I kind of already go, then then that'll give you some familiarity, right? And they're like, oh yeah, but you price for the for the tax rebate. I'm like, but but not completely. And also there's more than one level of bonds, municipal bonds aren't the only bonds being tied up into this, right? And once you tie bonds into this, you are no longer dealing with local and domestic law, you are also dealing with international finance law and international treaty

Property Values, Inequality, And The State

C. Derick Varn 29:27

agreements.

SPEAKER_02 29:29

So because the investors in these bonds are across the world, right?

C. Derick Varn 29:33

So they can sue your government and have. So uh I was surprised. I actually knew about this in general. I did not know that this affected schools as much as it does. Ah like that was actually surprising to me. I knew this from studying, like, why did the Dennis Kucinich mayorage go up in flames?

SPEAKER_02 29:53

Yes, that the Kucinich, the Kucinich and New York City in 75 are talked about, you know, right in the literature as being big, big moments.

C. Derick Varn 30:01

And then if you look contemporaneously, Brandon Johnson has hit this wall multiple times in in Chicago. That's right. That's right. And it's actually dramatically affected his popularity. And you know, but I was surprised how much it affects schools. Can you talk about how it affects schools? Because that was a kind of a shock to me.

SPEAKER_02 30:23

Yeah, yeah, yes. Like what you were saying before, I just wanted to touch on, I think is a really important point and doesn't come up in conversations that I have around the book as much as you know, I would want it to, is the sort of you know, monetary theory, monetary, you know, policy element of this, particularly like, you know, the idea that of current of sovereignty of a currency and the relationship of the federal government as the sort of monetary sovereign to its subnational governments, the states and the localities. It, you know, I I come I come at the book from a kind of semi-modern monetary theory perspective. I I wouldn't call myself a modern monetary theorist, but I have pretty deep sympathies with the outlook and a lot of the insights there that I think are basically right. But when it comes to the provision of these goods at the state and municipal level, what the insight it what the insight does is it reveals the, and this is the image, you know, actually it was in reading uh Scott Ferguson's book, Dependencies, a state of dependence, you know, it's what is it again? Declarations of dependence. You know, it was in reading his book and like thinking about this, how to characterize philosophically this system, that it's a straitjacket because, you know, with the with the federal government able to print its currency and budget in the way that it could to provide all kinds of resources, even in this sort of very strange, as you said, insurance company that kills people, like you know, there's a book called American Bonds by Sarah Quinn, who's a sociologist, and she she she's her thesis, which I think has influenced me too, is that the way that the federal government works in terms of its policy making is essentially incentivizing state and local policy through credit conditions, right? If the federal government can offer credit incentives, borrowing incentives to make borrowing cheaper or easier than to for states and localities to do a thing, that's how it legislates in the context of federalism. And that's that's how it's been able to influence things at certain points. We even saw that, you know, with the with the the Biden administration, you know, through the Inflation Reduction Act and other things. But now even in the in the second Trump administration with the National Voucher School Tech program, uh National Voucher Program, it's the same. It's a tax credit program. It's a and and so that that that that element is coming back. And you know, the fact that the school districts, that's a sort of almost context or kind of prequel to the answer to your question of like how this affects schools. Everyone is sort of in this straitjacket because your school district, your public school district, most school districts uh in the United States have to borrow as borrowers, issue their own bonds as borrowers in the municipal bond market to get the liquidity that they need for infrastructural projects, high cost projects, things we call capital projects. If you're managing that school district, you need a new elementary school, you need a new HVAC system, you have to repair your schools after a climate disaster, you have to, you know, you have to put in new cybersecurity programs because you your your data has actually been hacked and ransomed for millions of dollars, as happens like across the country pretty frequently. You need to borrow. Now, where do you go to borrow? You go to this private credit market, which means you need your own consultants and lawyers, and you need a credit rating for your school district, and you need to issue a bond that you have to sell on a market at a rate of interest, uh, promising to pay out a percentage yield to the bondholders who ultimately will buy your product, your buy you as a product. And they you have to pay them back with interest over long periods of time. You have to constantly refinance to try to take advantage of fluctuations in the interest rate. And like it puts these kinds of pressures on the school district. First kind of pressure, I think, is a huge you know, the the debt service is on average between eight and ten percent of every yearly budget of the public school district. And even though it's eight to ten percent, that eight to ten percent exerts an incommensurately large source of anxiety for the school district budget official, because the rest of the 90% of the budget of expenditures will come to bear on what ends up being perceived as the quality of the education that the school district is offering, but also it's fiscal responsibility. And if it's perceived to be fiscally irresponsible, it hurts the credit rating, which then makes it more expensive for them to borrow next time, which increases their debt service costs, which means that they can't allocate more money to the other 90% of stuff that they have to do, like salaries, materials, and the like. And uh, or or when it has to increase sales taxes and make people more mad by taxing them at the point of consumption with this excise tax, you know, in the case of Georgia. Like the the school, the school district budget official has to worry any given change, could be a curricular change, could be any larger expenditure that typically movements and unions are always pushing for in their negotiations and in their demonstrations and in their actions. The district and thus the superintendent and the school board have to worry about their credit rating. Is their credit rating healthy? Are they going to be able to borrow? They use this as a cudgel to argue against so many different kinds of demands that, you know, like that it it's it is true to some extent that it exerts this pressure on them, but also like there are a lot more breathing room in the system, but it but it creates this game that they have to play where they're constantly measuring any given fiscal action against the possibility that it's going to impact the credit rating, that it's gonna impact the borrowing costs, which then if if you're if your school district sinks a ranking on that credit rating, it could impact property values, which is ultimately your boss, right? Your boss are the are the the ways in which the uh the property owners in your school district are happy or not happy with the service that you are providing that would attract or repel people from per purchasing and holding property within the boundaries of that district. If people don't think the schools are good, maybe they're not gonna buy the houses there. And if they don't buy the houses there, the price of the houses go down. And if the price of the houses go down, you can't tax it to get as much money for your schools, and like it goes on and on and on. But the other thing I think is it's so complicated that there are information asymmetries between the public servants who are just trying to keep the books for these school districts and trying to pro trying to you know manage the fiscal situation of the provision of this public good education, and the the like roiling waves of energies and technical knowledge and complexities of credit markets. There is a huge informational asymmetry between the people who are responsible for issuing, planning, issuing, and then implementing and then you managing the expenditures of these bonds and then repaying them, refinancing them, and the people who are on the side of the provision of that liquidity on the municipal market uh side and the credit market side. Like the thing, like for instance, in the lead up to the 2008 financial crisis, what was super popular? Variable rate instruments, like auctions, auction rate sales kinds of bonds. Like, and those variable rate instruments where the the interest rate of your bond changes weekly, according to at that time LIBOR, which ended up being a big scandal. It was super corrupt. Now it's pegged to sofa. Like those bond statements, I've seen them in the school district of Philadelphia, those bond statements take up four massive hard-bound volumes. Literally, there's a bond statement that I think reaches 800 pages, trying to lay out the exact mechanics of how this variable rate instrument is going to work. Public servants just trying to finance public education don't have all the information that the people selling these complex credit instruments, derivatives of various kinds have. And that's that's the variable rate. But even the standard general obligation bond at some kind of market rate is so complicated to have to navigate that like stuff just slips through. People don't understand, they don't know their options, they don't know about, you know, if it's bid out to underwriters, you know, are are they getting the best deal that they possibly can, or are they just using the bank that they've always used? How much is the underwriter taking in the under in the discount? In that, like it's just it's a complete category mistake, is is how I think about it, to try to expect entities like a public school district to be able to operate in a rational, efficient, and you know, generous way as you know, borrowers on a complex credit market like this. And then, you know, ultimately, like the sort of the sort of pressures that all of this exerts come to bear the ability of these public servants to provide the public service that they're supposed to. And then the other thing about it, the informational asymmetry in in those uh who are actually having to engage it is one thing. The opacity of the system to those who are impacted by it, you and me, students, parents, school people in general, is a huge issue. People don't understand at all how this works. And sometimes those people are even becoming superintendents. They're they're running and winning school board seats. They're they're the ones actually with their fingers on the button to some degree to figure out how these things should be structured, and they never received any education about it, which is why in the classes I teach, I teach bond statements, right? I just have my students read bond statements so that they can understand. I when, you know, when I was more active on Twitter before it was so terrible, you know, people would reach out to me. I I got a message from a superintendent in Indiana who was just like, I became superintendent and I didn't realize how much of my job was going to be taken up by trying to get bonds passed and then manage them. But I never learned about that. So how are you supposed to, how are you supposed to, you know, like run this? So it to me, it's a it's a this is a we're talking about a four trillion dollar market in municipal bonds, 27% of which are are for education. Like it's it's a huge, huge regime that comes to bear on education that I feel like nobody knows about.

C. Derick Varn 40:48

Yeah, I mean it it it was massive, it's more massive than I thought. Yeah, it actually there's there's a parallel that I realized about like clugs in education and in capitalist civic policy generally. You said clues, clues, clues, like things that are just grafted on other things that are just grafted on other things, so no one can really like understand their complexity, and they can't retroengineer it either. Right. So I was you know, I was thinking about this as legal regimes, like the bizarrity of legal regimes and special ed. If you've ever dealt with that, you probably sure I'm sure I'm sure you know what you do in policy, but like and how that's tied up into like regional case law rulings, of which the people who are supposed to enforce this school board members and administrators know nothing about the the you know. I I I went and looked at the administrative requirements, you know, to get your license as an administrator. It has one class on law, you know, here in Utah.

The Bond Market’s Grip On Schools

C. Derick Varn 41:57

One. I will I will actually tell Georgia on this. As a teacher, I had two classes on education law. But I was looking at this and I was going, okay, so the people meant to enforce rights can only do it by often relying on teachers who have slightly more education or more recent knowledge of the law, none of whom know the case law. Right. You know, like the I like know some specific rulings and interpretations of FERPA between court districts just because I moved across the country. You had to encounter it, yeah. Right. But when I explain, like, hey, and in this court this in this district court back south, this is interpreted in this way, particularly in light of the Civil Rights Act. Whereas out here, we don't we're not under jurisdiction of the Civil Rights Act, and also your court interprets this is a completely different way, and it goes down like percentages of certain kinds of like disabilities you can have in a classroom at any given time, etc. etc. etc. No one knows this. Now you might go, okay, what does that matter? That is actually the explanation for the massive explosion in invisible administration in public schools, which is probably the largest cost increase that we have. People go, oh, that's that's bullshit jobs, that's just PMC serving PMC stuff. I'm not gonna get into that, uh but it's not what it is, is that nobody has the knowledge to deal with all the law, so they hire various specialists and subspecialists to handle each thing as it comes to them. But these areas don't necessarily talk to each other, like the people who deal like it's not an I it's not an institutional review board, but we have an IRB-like department set for research, both internal to ourselves and for when we work with academics. It has in the district or at the school, at the district level, right? Like at the district, we wouldn't have one at the school level, yeah. That would be interesting. Yeah, but they don't know what the what the lawyer knows and what the SPED, what the SPED specialist, sub sub uh assistant dean or assistant uh super knows. And they're not, they're in communication, but they're not. I live in an actually fairly under administered in this way school school district in Utah. Utah's kind of notorious for keeping that somewhat lean. And yet we have four buildings, four very large, larger than school campuses of just administrators at this point that we have to pay. That's interesting. And there's a strong incentive for teachers to become them because it's the only way to get out uh uh beyond a certain pay bracket at a certain point. And so this is an ever expanding cost that no one understands. They know about it in universities because because it's on the on the price ticket. They do not know about it in public yeah.

SPEAKER_02 45:08

It's all lumped into expense salary expenditure. It's all right, you know, and the it's and and it said, well, we pay teachers so much. This actually becomes important with pensions, right? Because the pension contribu the the pension contributions and then defined benefits for superintendents, former superintendents and administrators, is orders a level higher than than that of the the beneficiaries like that are teachers. And so people say, oh, we're paying teachers so much. Very few of them, as you're saying, there are very few studies, at least that I've seen, break this out by administration versus teacher, right? They're not interested in the ways in which this class of educators, maybe generally speaking, is but Altuser has this distinction that you you do have to break the working class down into at least two subcategories, the people who toil and the people who goon them. So he calls them the goons and the toilers. And you know, it's it's rare to break out the toilers from the goons when we're talking about salary expenditure in public education. But you're absolutely right. I mean, the the more complex these policies, structures, and laws get in terms of their compliance, the more you have to hire people to kind of manage them. Those people who are managing them are the actually the ones ultimately who are kind of in charge of whether or not such jobs like should exist. They don't want to get their, they don't want to write their own jobs out of existence. So then you have this ever kind of growing sort of tower of babel kind of thing going on where people are working on all kinds of different things that are arcane, have different kinds of knowledge, and you're trying to provide this good, and you know, the overall structure becomes pretty unstable, I would say.

C. Derick Varn 46:52

My favorite stat to try to illustrate this to people, and weirdly, libertarians used to talk about this, then it really didn't they realize it hurt their politics, they shut up about it. They used to talk about it in terms of cost disease, but I would be like, but I would say, okay, the cost of of educating a student, even adjusted for inflation, has doubled in the past 20 years. The the pay of the average teacher has declined relative to to that number. I know I know I know that there's been some studies, oh, you know, teachers might make more than it than beginning engineers. Yeah, that's true because we've also been overflowed in the STEM fields with people by lying that we had a STEM shortage and creating an overglutted market. But nonetheless, that's yeah, but relative to what teachers made made in like the 1990s was probably the high point, we've seen we've seen in real value decline, and yet the percentage of any taxes taken in that goes to payroll has been fairly stable out of between like 90 and 93 percent for I don't know, since we've really been like counting this stuff, and people go, Well, then how is that true? If how are teachers making and I'm like, because there's this whole other category of workers that are not like office staff people, those people make less than teachers. In fact, in my area, they're probably the lowest paid people, like they make less than the average person who works at Target or Walmart. We're basically dependent on female retirees for those positions, or people who are married well. But so you have this entire complex where the people you interface with don't make that much money, are are you know, a teacher's gonna like I make about median, I make median income for the area, but less income for what my education requirements are, blah blah blah blah blah. People know about this. But then they're like, Well, why is school costing so much more? I'm like, well, there's there's there's two reasons. One is is the servicing of that, two is the servicing of contracts you don't know about, and then the biggest one is cost disease in administration because of the complexity of managing the first two things: the the uh the contracts and the debt servicing and keeping up with it, and also legal compliance and documenting the legal compliance.

SPEAKER_02 49:26

Oh, yeah. Um the only other thing I'd add to that list is the retirement benefit. Oh, yeah. The the the pension contributions post 2008 financial crisis after the market tanked, you know, all these pensions are they're they're managed by people trying to fulfill what they understand to be their fiduciary duty, which is just to invest the money to get the highest return to be able to get you know inflows into the pension. You know, not only were they, you know, they got a wrecking ball in the form of that market crash, but then in the wake of that crash, the austerity that followed, you know, restructured the contributions to those those those pensions such that you know the contribution requirements were much less like the contributions were much less generous, the pensions were underfunded, there's much more under there's much more liability, unfunded liability that the pensions require. And so you have to spend more and more on that to be able to pay out your defined benefits, which is a program I believe in. But certainly the cost of that goes up right in this sort of austere, austere universe.

C. Derick Varn 50:32

Yeah, well, and and Utah they handle that by we have a defined benefit into a 4013b. Yeah, of course. Like so they give us they they do give us a defined benefit. We're gonna deposit this amount of money into a 401b.

SPEAKER_02 50:45

It's a defined that's your defined contribution, yeah. It's not it's not a defined benefit, right? Because you don't no, we can't ensure it. They just they just contribute to the account, they don't know how they don't know how the market's gonna go.

C. Derick Varn 50:57

Absolutely, and and so this is the situation that we're in. So like we have in Utah, if you entered in a certain year, you have a true pension. If you entered, I think in the aughts, you have a hybrid system. And if you entered after that, you can choose between like 30% defined benefit, 70% four or three B are all four or three B. Uh, because also if you leave the state, you don't get your defined benefit. So right, and you're not vested for four years, which is specific because 50% of teachers quit at year three. So you vest four. Investing in four is isn't bad from what I know. No, yeah, it's not terrible.

SPEAKER_02 51:44

In Georgia, it was 10. 10. Yeah, most people have 10, and then they create these new tiers where it's almost like you never vest, and right that's how it is in New York.

C. Derick Varn 51:53

And then the other thing is I remember someone telling me that teachers have great have great medical insurance. I'm like, on it in all seriousness, it's the worst medical insurance I've ever had in my life.

SPEAKER_02 52:04

Um the medical insurance cost now is is is gonna go through. I mean, it's gonna, it's already these insurance costs are already going up because guess what? Post-pandemic, a lot of people are more have many more medical issues than they did before. And so the costs are going up in terms of the uh the premiums that and the school districts are paying, and that's coming out of the budget that needs to be going to salaries, materials, and other things too.

C. Derick Varn 52:28

Yeah, absolutely. I mean, I was shocked. My my paycheck does tell me what they actually pay into the full cost of my medical benefit. And somebody's like, Well, people, I was talking to a boomer recently, and they're like, Well, people's employers pay that. I'm like, I know no employer, including the state, that pays the full cost of the of the medical benefit. But also, let me tell you what that cost is. Between my portion and their portion, it's about $1,600 a month for a plan that is not stellar. You know, the the the lowest deductible you can possibly get is is like three thousand dollars.

SPEAKER_02 53:04

Most of them are okay.

C. Derick Varn 53:06

Yeah, most of them are seven.

SPEAKER_02 53:09

What's a copay?

C. Derick Varn 53:10

The the the copay varies and there's coinsurance on everything, so you're always going the hook for at least 20% of the bill, unless you hit your out of pocket maximum, which is like 20k.

SPEAKER_02 53:20

20k, which and then you make it, yeah.

C. Derick Varn 53:23

Yeah, I mean, which is which is crap. Honestly, after I've seen some Obama, some some current O ACA plans, isn't that bad, but it is not good. Like when you wouldn't call that good, no. No. And this is this, you know, some of it's I'm in a I'm in a very red state. I'm in a red state with a good economy, which is not the case, like when you're in the southeast. Right. Uh to to to talk to tie this in though, I also thought about this in terms of something that you that I've always noticed, and uh, that's who got new schools and who got new school infrastructure. Right. The what even out here in Utah, where none of the schools are super old, because well, I mean public services. Yeah, nothing's that old. I think the oldest school we have here is like from the 1920s. Right. But most of the things were built in the 70s and 80s. But you can see that both because of the we have this inner-outer effect, which you know, I mean, urbanists can talk about the re the the gentrification or the our money coming back into the cities actually in a European Saturn. So we have these these rings of suburbs that are dilapidated and rings of suburbs that that are super nice. But what changes that from the old municipal model, and this affects schools too, is that at least you had the pooling of a lot of people together in cities, so you had infrastructure built for a pool for pooling, like and you still see this in a place like New York. But like out here in Salt Lake, you have rich areas, poor areas, rich areas, poor areas, and like concentrated donuts. And since the poor the poor areas are getting pushed further and further out from the city, you don't have any of the municipal capacity, like public buses and city trains and walkability that you used to have, even for urban people in places like Baltimore or New York City. And that means that also the cost for these poorer schools has gone up, and these schools are always old. So, so most of the schools of color where I'm at, and I know people think Utah is Lee White, it isn't, um are like you know, former school, former farmer schools that were built in the 70s and 80s that now have mostly let's say they're like 50 percent uh brown, more than so Latin, indigenous, uh Polynesian out here, etc. And these schools

Complexity, Compliance, And Admin Growth

C. Derick Varn 56:07

are old. They do they they do sometimes retrofit them, they do uh try to fix them up to some degree, but when there's a crisis like in 2020, we got particularly hit. We got hit with with a with a series of earthquakes in the middle of the pandemic. Yes, earthquakes, yeah, which also affects about that. Yeah. The older schools more, but which are more of color, which you know were were built also for non-urban populations and now have urban populations in them. And so I was thinking about this when you were talking about like the infrastructure, which it's really bad. Like when in in urban areas in Georgia, you'll hit schools that are like they were built 120 years ago. Right. They have the last renovation was in the 70s. Yeah, and they luckily recently had air conditioning put in so people could go to school in August. Like yeah, you know, most don't. Yeah, most don't. And you have all the you have all the you have all this, you know, when there's new buildings in some of these school districts, uh these new buildings tend to go where the property taxes are, which means they go where the money is. So right, so there's newer facilities uh for the richer areas almost always. Yep. And what they do with the with the poorer areas, and this is also because of this urbanization pattern I described, they just get the leftovers a lot of the time. They they get the old you know, the the school that was nice in the 80s, in the 1980s. Like, so you know what have you seen with this? Because this this really is particularly as climate change and these these buildings aren't uh equipped for their environment, rain messes up our schools here, and we have a lot of it now because we're not getting snow, yep, you know, stuff like that.

SPEAKER_02 58:07

And I mean, to to add a sort of insult to the injury, a lot of times school buildings are the crisis centers for for catastrophes. And if your school building isn't well set up, then your crisis center is going to be susceptible to the crisis that you're trying to protect people from. The story, this one of the stories I tell about Utah in the book, in the bond section, I try to hit every state at least once in some way, but it's really difficult to do. But I there I did encounter a school district, I I believe it was the Alpine School District, although I think the Alpine School District has been broken up.

C. Derick Varn 58:46

Yeah, it's it's the opposite. We have mega consolidated districts in the in the in the areas outside of the urban core in Salt Lake. And they're finally being broken up. Alpine is my neighboring district, so I know all about it. Go ahead.

SPEAKER_02 58:59

Oh, okay. Well, when you said earthquakes, it brought me to the it the story I tell about Alpine, right? Which is that which is that there was a state report saying, like, oh shit, the earthquakes endanger these schools, particularly in the entry schools. Uh, you better do something about it. So Alpine School District said, well, to get our schools safe from these earthquakes, we gotta we gotta renovate them. To renovate them, we gotta issue a bond. To issue a bond, we gotta have a bond referendum. To pass the bond referendum, we got to get a supermajority vote of the property owners, the taxpayers, the people who vote in these elections to be able to agree to it. Guess what? They voted it down. They didn't get they didn't get the supermajority that they needed, and so and so the district was like, well, we can't make our school building, our little kids safe from earthquakes because we didn't get the vote we needed to go sell ourselves as an investment commodity on Wall Street. And so it ended up being that the school, like multiple other families who would like voted for the bond and wanted to the renovation because they didn't want to send their kids to a school that wasn't earthquake, would say, dude, the school district. And the school district then had to pay legal fees to fight them in court, right? So the expenditure for the legal fees to fight the people suing them for not passing the bond are the are the is the expenditure, not the renovation of the school to make it safe for earthquakes. It's an example I to I bring up a lot, you know, because it's just absurd. It's absurd. There's another there's another school story of these school buildings falling apart. You know, the stories are actually very, very deep. And school building stuff is actually some of the most vivid when you ask people about actually school finance, but when you think but you like very few of these conversations actually come up because if a system of financing is so inscrutable. But you know, there's a school that I think of Ohio in the 1990s that was found to be sliding down a hill an inch a year, the whole building. And the, you know, the the way that they were trying to rectify this problem in Ohio was using that civil rights strategy of going through the courts. They got a court victory in Ohio that that said, okay, you got to fix this. But essentially, what happens when you have a state supreme court case victory? If the plaintiffs win, then the the judge or the state supreme court goes and points over at the state legislature and the governor and says, you got to do something about this. But, you know, it's not like the state police are gonna go arrest the entire state legislature and the governor, you know, for not doing anything. And Ohio sat on its hands for 14 years. They didn't they didn't do anything. So the school building continues falling down the hill. You know, there's there's stories abound, like there's the story in the Pennsylvania State Supreme Court case that actually was just decided in 2023. You know, there's a a teacher out in a rural school district who could see the uh sky through a hole in the roof of the classroom. You know, there's a there was a school, a story from a school in Virginia where it wanted to make uh cop copies using the copying machine. It overloaded the electrical system and then the lights went out in half the classrooms in the school. The the you know, flooding, mold, asbestos, like I mentioned before. It's like on the most recent government accountability office report, we don't have good data on uh national data on how the school buildings are, frankly. We have reports like the the American Civil Engineers that comes out with a report card every two years that measures the expenditure gap. So they they they actually they do pretty good work sort of assessing the needs of the infrastructure across a municipal infrastructure, schools, electricity, whatever. And the needs versus the expenditure, and they come up with an expenditure gap and then they rate it according to A through F. And you know, the most recent one, the the city's uh school, the the country's schools are I think a D or a C minus in terms of the gap between the you know the expenditures and the and the and the needs. There's a new National Center for School Infrastructure, actually, that's headed up by that's headed up by Jeff Vincent, California. That's really cool. And you know, there's they're gonna start collecting this data. And the State of Our Schools report, you know, has has started to do some of this stuff. But you know, and if you want good reporting on it, American Schools and Universities has a newsletter and they do reporting on bonds and and school infrastructure stuff, and and you can find out some of these stories. But it's um I think like oh, I did the GAO report found, the GAO report found that I think 54% of schools were in need of significant uh infrastructural repair in this country. And I what I what I continually come back to on this is like there was a there was a generation, sit a set of decades coming out of the Reagan administration that basically created this narrative, this discourse that said, well, you know, the schools are failing, the test scores are bad. We basically need to like put pressure on teachers and schools and threaten their funding to be, you know, to fix this problem. We need accountability, you know, high-stakes testing, and uh we need we need uh market solutions, we need privatization, we need uh vouchers, we need charters uh to fix this problem or whatever. But like there was no talk of the facilities, okay? There was no talk of how easy it is to breathe. There was in the school of buildings. There was no talk of whether the light was good, there was no talk of whether or not there was good air tone turnover, whether or not there was mold, whether or not the the the ceilings were were proper, whether or not the ventilation or the the heating was was proper, whether or not there was air conditioning. If you don't feel good, if you don't, if you can't breathe, you're not gonna be doing well on your standardized tests. You're not if you if you if you if you so if you're so hot you can't focus that you get tired and sluggish, you're not gonna be able to learn algebra or or the state capitals or whatever the hell it is. And so I think basically the educational reform discourse just you know, the this thing was right under its nose. It was staring at them right in the face. It was in the very walls, the drywall of this problem, but but they didn't solve it at all. And so now we're left with these facilities that I think it became very much more apparent to people in the pandemic. You know, like they left the school building and they weren't in the school buildings for a while. I think a lot of people felt better. They just they were like, Why do I why do I feel a little better? And I think it's because they realized that there was so much stuff going on in their school buildings that they felt differently about it, and this got a lot more attention because of airflow and air turnover and you know and the like. So I think honestly, like if there's if there's a gonna be an initiative that I think, you know, the left, or maybe liberals at least in general, should take, it's fixing up the buildings. That's the sort of one of the things I come down to in the book. It's let's let's let's rebuild, let's have massive infrastructure projects, which I think matches nicely with the Green New Deal and decarbonization, because you can decarbonize, fix up the buildings, make them really nice, and then not put carbon into the atmosphere to ruin the future that you're supposed to be preparing the kids for.

C. Derick Varn 1:06:10

Yeah, I think about when I have seen massive infrastructure investment like in the southeast in schools, you know what we spend it on. Athletic fields. No, I mean, yes, we did that too, but that was actually paid for by private money, by those massive booster clubs. Don't get me started on the massive booster clubs.

SPEAKER_02 1:06:27

Oh, well, yes, yeah, the parent associations and the booster clubs.

C. Derick Varn 1:06:30

Yeah, shadow economy. A trillion dollars, it feels like, on football stadiums, and yet we can't get these same people to pay for any money for schools. But in Utah, we have issues like we're Not allowed to even we have to cover for uh extracurriculars, people on free money to launch their costs, but we're also not allowed to increase the charges on anybody else to do that, uh, which means that we just kill programs. Yeah, we just squash the entire program and it becomes a private program. But the building stuff got me, you know, really thinking about it because when I remember that they did some building restructuring in the southeast in the 90s, you know what they did? They made those schools like prisons to protect against mass shooters or whatever. So, like, there's they all put the security complexes.

SPEAKER_02 1:07:28

That takes money too. I mean, now that's a huge, huge realm of expenditures now.

C. Derick Varn 1:07:33

Putting razor wire around the high school I started teaching out 20 years ago, and then making sure they had three three locked entrances to come in through during the school day.

SPEAKER_02 1:07:44

There's a great documentary called Bulletproof about school shootings and the security, the surveillance security required at a Texas school district that is really revealing uh what they're trying to do. And and you know, he he's very clear that doesn't go deep into the finance of it, but they had to take out a whole bond just for that.

C. Derick Varn 1:08:06

Right. I mean, we we I could think about all the the money that we spent, even here in Utah, which is not as security focused, but they've done stuff like we've done stuff like as opposed to deal with other problems. We took federal grants and put divots in our walls, you know, so that so that there's no straight line of sight, so that you know, for mass shootings, which we have way too many mass shootings, but actually statistically, it does not affect most students directly, it affects them indirectly by the fear of it.

SPEAKER_02 1:08:39

Yeah, yeah.

C. Derick Varn 1:08:42

Um you know, we have another weird expense. This is unique to Utah as far as I know. We give a one-time stipend to individuals to volunteer to carry a gun on campus, and it can't be faculty. And we just pay somebody 500 bucks to have a gun and come on campus randomly. Yeah, we don't know who they are. Yep, that's an expense we have. That's an expense. I mean, like, because the legislatures, yeah, the legislatures will do stuff like this, or they'll do stuff like censorship boards or or stuff like that, which also are an expense. I actually was I was telling someone,

Pensions, Health Costs, And Budget Squeeze

C. Derick Varn 1:09:17

yeah, like all this weird culture war stunting we've done around schools, yes, um, is incredibly expensive.

SPEAKER_02 1:09:25

Um there was there was research published on it actually, and they they estimated the cost of of this, which includes security for school board members whose life's life is threatened, you know, you know, because of anti- anti-woke stuff. People people are people are scared of trans kids, so so they threaten the lives of the school boards. You know, it's I think it's around $3.5 billion, I think, is the is the cost of of that.

C. Derick Varn 1:09:49

It's absurd. I mean, we have a cost of warehousing books that are censored because we cannot throw them out for fear that some kid picked them up randomly without their parents' permission.

SPEAKER_02 1:10:01

Interesting.

C. Derick Varn 1:10:02

Yeah, warehousing. Yeah, we warehouse we instead of destroying and or uh throwing away a remainder in books that are that are banned, we have to box them up and warehouse them at our expense. Yeah. So so I just f I I find that people just like they have no idea what we're like some of the absurd things we're wasting money on doing by legislative fiat.

SPEAKER_02 1:10:32

It's not stuff that schools would would choose to do. It's called unfunded mandate uh is is the the term for it. There's a ton of unfunded every time there's another demand for a school district to do something and there's no extra line of funding for it, it's an unfunded mandate.

C. Derick Varn 1:10:50

So we can get to the positive part of your book a little bit. I want to jump to chapter five before I get to chapter four, because this was something that I liked your vision for, but I currently hate. So I'll tell you what I mean by that. I like the idea of the school as a public site. I hate that currently that is how we backdoor do social safety systems where I personally need to be a psychologist, an emt a community school idea. Yeah, like I'm I'm I'm big on schools as social centers, but I I have literally I have had to be an emt. Like luckily, I had corrections training from a from a bad career I don't know what to talk about, even before that. So I knew like I knew CPR and stuff, but I've had kids have heart attacks in my classroom. Like and we didn't have a school nurse, we had a district nurse, and they were 45 minutes away. So like it was my job to keep this kid alive for 45 minutes, which I had zero formal training on. Uh excuse me, no, I got told how to use a defibulator once and not to touch blood. You know, that you know like so that and that was my second year as a teacher. That was a long time ago.

SPEAKER_02 1:12:12

But it was like how about that beginning for the career?

C. Derick Varn 1:12:16

Yeah. Our trauma informed pedagogy are trying to make sure these kids eat, which we're also constantly dealing with the fact they're clawing that funding back. It like when the federal funding ended, like public school kids who choose to get to choose to go online, they don't get food now because the federal funding ended, and now they're like, oh, we don't have to give it to them. And it is bizarre to me how this this plays out, and uh it plays out in weird ways. So, for example, for all the talk about people needing to pay their own way, one of the richest districts in Georgia, and the outside of Augusta, uh, was also used as a model for 100% free and you reduced lunch schooling and best practices, but it was deceptive because it was a school district that had 100% free and reduced lunch, because there was a nuclear power plant in district, and the nuclear power plant settlement with the city was that the that Georgia Power was going to pay for everyone's lunch for forever, but the average income there was actually $30,000 higher than the rest of the state. So, so not only did it lead to completely misleading best practices, uh, which they were using it as a best practice model school deceptively, but it was technically 100% free and reduced lunch. I remember arguing with people about the need for kids to pay for their lunches, and I'm like, but the some of the richer public schools have free lunches for whatever reason. Uh, and these pri and these schools that already have you know 50, 60 percent free and reduced lunch can't get it for the remaining 30 who make way less. And this is not a major cost. It is, I mean, it's you know, it's like a couple of million a year for most districts, and I I'm like, why are we insisting upon this? Particularly now that like I don't school lunch inflation, for example, is a weird thing to be obsessed with, but like yeah, it was relatively stable from the mid-90s to the middle aughts. So, like, school lunch actually was only 25% more when I started teaching in 2007 than when I graduated in the late 90s. It is now like five dollars, and I understand some of that's inflation, but some of that cost increase was way before the inflation spikes of the 2020s. So it this this is maddening to me that we can't handle this or that we have to means test this in absurd ways. Yep. So I I'm with you on the social anklers. I just I hate that that like that because we're understaffed and because these are unfunded mandates, it just kind of becomes my job as a teacher.

SPEAKER_02 1:14:58

Like, yeah, sure, sure. I'm thinking about what where is that I recommended that because I actually uh I I have a similar skepticism of that.

C. Derick Varn 1:15:06

I don't know if I is that in the I think we're talking more about the the the schools as social centers, not in the way that I'm talking about, more in the way of like we could build this out more publicly and we could build this infrastructure there and like put the people there to do it. That's what I took from your from this chapter.

SPEAKER_02 1:15:24

Oh, I see, I see. I mean, I think in my the way that I think about that, the way that I at least tried to write about in the book is more like it's more about the school buildings themselves and how we finance them, making it making them more public and trying to make them, you know, sites where people are proud of the structure, that that is their school. And this was this this sort of gets to like an initiative that I was a part of in the in the pandemic when the municipal liquidity facility was you know in existence and it sort of blew everyone's minds that the Federal Reserve could actually lend directly to municipalities, you know, at term at whatever terms they decided. It was one of my like sort of coming-of-age moments in in school finance was like sort of watching that happen in real time and just like under, you know, when I was just when I was understanding what the bond market was and how it worked, and then seeing during the pandemic that, oh yeah, like like 13 for 13.3 of the Federal Reserve Charter, you could create a structure that just lends directly. And we just don't. You could have the you could have the lowest cost, zero cost, longest term loan from the federal treasury, and it's just fine. We just choose not to because there's a there's a like a a fraction of the ruling class that makes a really good buck on borrowing borrowing and lending to uh lending to municipalities like public school districts. I mean it and so you know, I was I was like at that point in 2020, you know, the the the discourse around the Green New Deal was still very hopeful and visionary. You know, it was only a couple years after AOC occupied Pelosi's office. You remember that with Sunrise, you know, and she made a big stink in her first year, and like everyone was just like, we only have 12 years left, we're gonna get this done. We we need radical transformation. And there was a genre of writing that came out that I thought was very compelling, which was to envision how good it could be if we did a massive decarbonization in industrial policy that fixed up our public infrastructure, made it healthier, safer, and cleaner. And not only that, but taking advantage of the pandemic moment, particularly with school buildings, when people weren't going to the school buildings and they were unoccupied. And particularly with these new kind of groundbreakingly generous, you know, provision provisional, not provisional, but in the sense of providing uh resources directly, you know, from the federal government through the Federal Reserve and through you know, panic relief and the like. Like, how good would it be if this if this were good? Like if if there were suddenly now crews coming in and like renovating these old buildings that people had gotten so used to and they were new and they were clean and decarbonized, there would be a sort of I tried to write about it and talk about it from almost this affective kind of joy and pride, and you know, obviously employment, you know, increases and and and the like. And there was a sort of this this kind of positive, visionary, imagine imaginative way of writing about it. And you know, in terms of that's in the book, what I call the green dream, you know, that's the which comes from Pelosi's, you know, critique of the Green New Deal. Like that, I think that's that's what I was imagining. I think that's the image that I'm that I'm thinking getting from what you're talking about, not necessarily that community school thing, which which you know is one approach, but I I I completely agree with you that that what we do in this country, you know, and part of my reading of Altusser was a rereading of social reproduction theory. And the main punchline of social reproduction theory is that schools like schools don't make society better just as schools. Like schools reproduce society as it is. If you want society to change, you have to fix society. Okay, schools are schools essentially get used as a kind of like it's a distraction. It's a it's a distraction of the meritocracy to say, like, if everyone just has great schooling, then they're gonna have great jobs and they're gonna have well-paying jobs and we're gonna be able to take care of their families. Like, so then you load everything on the school when you have this fantasy of opportunity and meritocracy, you think we just have to have good schools or whatever. But that's what that does is it creates an excuse that you don't have to have good transportation, you don't have to have good healthcare, you don't have to have good housing, you don't have to have good unions and solid industrial policy, you don't have to have good sanitation and and the like. If you can just make it all at the school, you know, but that just then puts everything on the teacher, like you're saying, you know, it is not the teachers, it is not the school's responsibility to save society. It can't be. That's just an excuse for not for adults not changing society. It's a displacement onto the future, it's a it's a a kind of way of pushing it off. So I yeah, I definitely I completely agree with you there.

C. Derick Varn 1:20:30

I mean, to me, it makes schools it schools are always a side of ideological. I'm I'm gonna use some altisarian language for for my ultisare heads. Schools are always a side of the uh the the idea the ideological apparatus of a particular

Old Buildings, Climate Risks, And Repairs

C. Derick Varn 1:20:42

society and or state, but and they're highly contradictory when in liberal society because we're great equalizers and meritocracies, but we're also the great sorters of society into the various classes and gets to decide who gets to move up and down, if they're anybody at all, or who gets the illusion of being able to move up and down, as I as I tell people, I'm like, on paper, I've actually moved two social classes above my parents, but in terms of actual reproductive capacity, no, I have not. Right, um it's it actually becomes a red queen game where we just run in place and make it look like we're making social advancements because we have a white-collar job or whatever, but we can't even we don't even have the purchasing power of a factory line worker in the 50s.

SPEAKER_02 1:21:27

And and I which a school can't provide. A school, it is impossible for a school to provide that wage. That is not the school cannot do that. There's a relationship between the school and the division of labor. The school prepares the person for a division of labor that is thus and so. It's not, it's not, it's not as though the school creates some kind of new division of labor where the wages are distributed in some different way, necessarily. No, if anything, you know, an over-educated populace, that is to say, a mismatch between the educational levels of the populace and a division of labor that's meant to receive these educated individuals, that that's gonna create wage deep depression, right? It's gonna create lower wages because of the uh the cost of the education. The the there's a few there's fewer jobs you know being provided with those, like it's the credentialing process and the relationship to the division of labor is is all out of way.

C. Derick Varn 1:22:23

Yeah, it's weird because uh Cleodynamics slash uh overproduction of elite people almost get onto this, but then they blame it on elite overproduction and not not a flaw in how you are aligning social reproduction in the first place.

SPEAKER_02 1:22:39

This con this concept of the elite is extremely toxic. Uh, I I'll have to say for your listeners, you know, like it's the way, and and I don't know, I I know that Bruce Robbins has written something about this, and I don't know when it's going to come out. It is an excellent critique of the concept of the elite, which essentially removes class structure from the critique of power, such that now what constitutes uh an inequality is just whoever appears to sort of reproduce a certain kind of narrative or discourse, it has nothing to do with the material distribution. So when you have people like Steve Bannon or Barry Weiss looking like this kind of populist critique of the elite or whatever, that it it's it's this it completely divorces the material substrate of the actual inequalities into a fantasy that helps them to target the liberals in the left. It's it's an extremely, extremely dangerous kind of concept that we we really need to interrogate, and that I think Pierre Bourdeau has some responsibility in manufacturing and interpretations of Bordeaux, right? You know, right-wing interpretations of Bordeaux and the concept cultural capital and distinction. When you create an ambiguity with respect to the material realities and the conditions of existence, then suddenly you can just sort of divorce any critique from what actually people have their hands on in terms of resources. And I think you know that critique is is is is spot on.

C. Derick Varn 1:24:13

This is a digression, but and I only agree with you. This is my this is one of my critiques of quote PMC theory, and in addition to it being in generally coherent, incoherent, because I can't figure out what singular mode of production the people being called PMC actually engage in that don't also overlap people who aren't some non-PMC or have some other function. But uh yeah, yes, I I there is a truth to like that idea of a labor aristocracy and like you said, toilers and gooners. I mean, there's truth to that, that's real, but that's not really what PMC ends up being used for. And you even have social democrats sounding like professors of the people who really run society, or or even HR departments are the people who really run society, and I'm like, yeah, look outside. What stops Trump from doing Trumpy things? And it's usually when the bomb market falls, right? Uh you know, like and they're like, you know, individual capitalists may be afraid of him, yeah, but like capital as a whole is not and that's something that people have to grasp when it comes to schools and stuff, too. Like, yeah, and this this absurdity, uh like even doing class analysis in this country is very hard because like you look up, you'll look up working class, and I remember a study that was even like taken on face value by Jacobit magazine talking about working class versus non-working class people, but it was in total vibarian terms, meaning about access, because they talked about non-working class people in the same jobs as working class people, and I'm like, oh, so you mean college and non-college educated, but it's not about what they're doing, the complaint about their possibility of moving, you know, because of credentialing.

SPEAKER_02 1:25:57

Like this is definitely an undercritiqued area, which is the use of educated and uneducated as a proxy for class status, which it is very difficult to measure otherwise. So it is sure if you're out there creating discourse like Jacobin is, etc. But but when those reports come out and they're just using college educated as a stand-in, it's like, no, that that's not that is not that does not map to this uh class, this class structure at all. It's it's it's an important issue. I just wanted to say I will have to jump off at 45.

C. Derick Varn 1:26:32

Okay. So I'll ask you the last question then. You you have you have two chapters on changing finance and also organizing. Can we talk about what you would see as a like minimum program for demands in finance, and then how should we organize and then push beyond that? Yeah, that'll be my final riff question. It's a great, it's a great question.

SPEAKER_02 1:26:56

So, minimum program. Well, I think I mean, we were so close to the Green New Deal for schools in in that sort of froth of the budget reconciliation of 2021, 22. Like it was maddening, uh, actually, when the Progressive Caucus got a spine and suddenly was fighting and you know, was gonna try to, you know, they were trying to do the the oh, let's do the the BIF, the the the bipartisan infrastructure deal first, and then then we'll do the the build back better legislation after that. And they were like, no, we're not gonna do that. And and like, you know, to me, the minimum program is the stuff that's laid out in the Green New Deal for schools at the federal level. Like it's just an infusion of grants and loans. I did help write a very small part of that legislation that incentivizes the formation of tax-based sharing programs like they do in the Twin Cities, which I think you know is one of the only actually existing redistributive municipal finance, uh, socialistic kinds of policies that actually exist in the United States at this moment. It's one of the more powerful ones. It it's one of the only what I would call collectivist, decentralized, redistributive policies at the sub-national level that we have. And I think that encouraging that kind of tax-based sharing setup, I mean, you can set the dials differently wherever you want to do it. So for instance, you know, there's a little bit of conversation in in New York City right now, uh, where I'm based, about the sharing of parent association money, you know, across schools, which can be extremely different. What would it be like to pool parent association money and redistribute it? You know, and obviously the sort of knee jerk reactionary approach to redistribution is like, oh, well, don't take what's mine to give it to them. I don't like that. Lazy, they're blah blah blah. And you know, I worked hard for my money, I'm not going to give it to them. But the but tax-based sharing is a redistribution of the growth in revenues depending on the shifts in revenues across a sort of a region or area. And I think that it's I think it's it's got a great story, it's had success in the Twin Cities. And I think that if we can if we can find ways of proposing that, forcing that conversation, you know, we're gonna make some headway. Now, how do you organize around that? Excellent question. You know, when I was in the Philadelphia area and I would bring up tax-based sharing, everyone would look at me with like a what kind of look on their face. And, you know, there's a reason, but tax-based sharing elicits that opinion. The book that was written about the history of that formation literally is called How Could You Do This? Like you, you what you have to start doing is getting people to work together across these boundaries that racial capitalism inserts and enforces in our society that are extremely potent, extremely local. But I think that they are transgressible. I think that one can one can work across them. And one of the stories I tell in the book at the end of the bond section comes from the early 20th century in the create and the the construction, the financing of Conestoga High School in the Treasurefin East Town School District in Pennsylvania. And here you had two districts, very differently racially and class compositions. Uh, they entered into a jointure to assume the risk and the and the liability of the loan that was needed to take out to build this high school, and they built an integrated high school in 1909, in the early 1912 in Pennsylvania. And the more that we can create moments of financial jointure that then lead to, I would say, tax-based all kinds of revenue sharing. And I think credit, there needs to be sharing. That's one of the flaws of that system that I found in my own research of it, of it in the Twin Cities, that there's no sharing of the debt that municipalities go into. You know, then like like in New York, we're now like we're starting trying to start this conversation, you have to you have to create jointures between catchments of schools, right? The schools have their catchment boundaries, and those lines, you know, they create there, there's all kinds of stuff that gathers, all kinds of the energies of racial capitalism gathering at those lines, you know, the wealth, the demographic distributions of you know, neighbors. Like you have to create jointures across these lines and then create tax-based sharing programs to do it. You know, the another story that I don't tell in the book, but and I didn't know exactly where it would fit, but there's a great movie about it, and I always forget the title of the name of this movie, but it was it was produced by Viola Davis and it has Sam Rockwell in it. And it's the story of Durham, North Carolina during integration, when there was an effort to integrate the schools across the county and the city lines, where the proposal to integrate the schools was essentially to create a jointure between a largely white and white supremacist uh community and a largely black, you know, working class community to try to comply with the federal circuit court's findings with respect to Brown versus Board of Education. And the movie is a is an amazing story about something called a charrette that was created, a three-day community meeting critique that was led to figure out how to get to compliance with the federal circuit court and create that jointure. And it's it's an amazing story of a KKK leader in North Carolina, who is the the representative essentially of the white community, uh, who's against the jointure, uh becoming colleagues and collaborators with the head of the NAACP in Durham, a black woman. And it's about the relationship that they create and ultimately his turn, where he comes to, he he comes to like basically renounce his KKK membership and his community and support the jointure because of what he sees in his interactions with the with the NAACP and the organizing in his personal relationship with the organizers. That's the kind of stuff we have to do in terms of organizing to answer your question. And I I think we have to actually we have to address these boundaries. Like we it's it's all well and good to have a Green New Deal for schools, fight for a Green New Deal for schools and and and and then elect exciting candidates like Zoran, who I whose campaign I helped with, and I'm a ride or die for Zoran. But like you can't just run a successful campaign, actually, just like the bond market, just like these taxation systems, just like all the stuff we've been talking about, there is an entire chaotic set of disarticulated structures that we have to take on to be able to create a kind of American collectivism or socialism. And

Security Spending And Culture War Costs

SPEAKER_02 1:33:57

the more that we can confront those boundaries and create the conditions for jointures that then lead to uh kinds of sharing and pooling, I think that's how we do it. You know, and and the policies that I write about in the book are part of what I call at the end and the conclusion, a pub a plan for public education, which lays out all the policies that I recommend. You know, there's the tax-based sharing program, but then there's Vermont Act 60, which creates high floors and low ceiling high floors for mill rates, low ceilings for per pupil expenditure and a redistribution of the difference at the state level. I think that having a VAT tax could be good at the federal level if you if you want to create revenues. I think we need to actually think about per-pupil allocations for Title I, not just appropriations. You can't just be talking about doubling, tripling the appropriations for Title I. You have to talk about the per-pupil allocations. We need a national investment authority that actually assumes the risk for financing collective goods at the federal level as a third pillar alongside the Treasury Federal Reserve. And we need, you know, we need the obviously the Green New Deal for schools, but also I think we could we could have fiscal mutualism where pensions purchase school bonds. So if you have teacher pensions purchasing school bonds and becoming the underwriters, you can use the public's money to take up and take on the private bank under underwriters that currently determine so much of the flows for the infrastructure. So that's not a basic plan that I laid out, but that's the sort of my overall plan. But if I was answering your question about, you know, a basic plan in organizing, I think it's I think it's jointures and uh and sharing and the creation of the creation of the conditions for the confrontation of these subnational, hyper-local boundaries that uh separate us.

C. Derick Varn 1:35:44

That's all good demands. I think it's important that we get really creative. And I do think if you're gonna make socialist demands and you want to anything like a minimum or transitional program, you actually have to know how finance works. Yes. And that's remarkably difficult to do. I mean, I know a great deal about economics, and I've you know, and like you're talking about here, and I I learned stuff from your book, and I thought I knew a lot of this stuff, you know. So thank you for coming on. Where can people find your work, David?

SPEAKER_02 1:36:19

Yeah, so across social media, school daves at school days. So I'm on uh TikTok. I have a surprising following on TikTok where I take requests to do school district analyses, but I'm on Instagram and and Twitter and Blue Sky. I have a newsletter. If you go to Linktree, I I I can send you my Linktree. I have all these links. Yeah, you know, link to my newsletter and stuff. But uh look me up, School Daves.

C. Derick Varn 1:36:42

All right. And I'll have uh you send me on when you have time that link frame I'll put in the show notes. Thank you so much.

SPEAKER_02 1:36:48

Awesome, thank you so much. This was great, really fun. All right, bye bye.