Cutting Class cont'd.

Citing concerns businesses have for work force development, Carlson says, “Companies are looking for youngsters who exit the system trained in 21st century skills.”

To accomplish that, Arizona needs to draw on teachers from the top 10 percent of academia.

“That costs money,” Carlson says. “You have to be able to compensate teachers so they want to come to Arizona and work in this environment.”

A role for the business community, especially in these tough economic times, is being part of public/private partnerships — arrangements that enable schools to cope as best they can with budget cuts.

“It’s one of the interim strategies in the next several years,” Carlson says. “The business community should ask the schools what they need. The schools are trying very hard to keep the cuts as far from the classrooms as possible. That’s almost impossible anymore.”

Areas that businesses have expertise in and could come to the aid of schools with special contracts involve maintenance, transportation, food services, and even marketing and public relations. Perhaps businesses could act as consultants, offering suggestions on how to run schools better and cheaper, Carlson says.

Essigs of AASBO says any assistance from the business community should be viewed as an enhancement to the basic level of funding provided by the state.

“It should not replace basic funding that schools need to operate on a day-to-day basis,” Essigs says. “Ironically, during tough economic times, businesses are pulling back in those kinds of efforts.”

He mentions the possibility of partnerships with utilities, giving schools special rates for shutting down power after 3 p.m., and installing solar panels on school roofs.

But not every business leader is high on such partnerships. Barry Broome, president and CEO of the Greater Phoenix Economic Council, was asked if public/private partnerships should be established to help schools deal with their economic woes.

“Absolutely not,” he says. “It’s a responsibility of the state to fund education. There is no subtle or clever way to work around it.”

Broome says states need to be able to manage their own affairs.

“Just like in California, nothing causes a business to lose confidence in a market more quickly than the message that state officials can’t manage their basic affairs,” he says. “Sometimes, demonstrating that you don’t know how to work together on your challenges can be as damaging as the challenge itself. If this state allows itself to go into a structural deficit and is not able to meet basic functions — like schools or libraries — that will be a very significant reputation hit for Arizona.”

Broome is “very concerned” that budget cuts to schools and universities will have a negative impact on economic development, adding that businesses view education from two perspectives.

Initially, businesses considering the Arizona market size-up the availability of talent, which is usually driven by the performance of the universities and community colleges.

“Once they’re here, they start realizing the effects of the K-12 system,” Broome says. “Because we haven’t produced the broad-based K-12 system that most people covet, companies tend to have some backlash from their employees that they brought here. School quality is not what it should be.”

Broome recalls rare instances in which a business pulled out of the state because of dissatisfaction with K-12 schools. Yet, the key elements of economic development remain the cost of doing business, the availability of a qualified work force and financial incentives, he says.

But Professor Dennis Hoffman of the L. William Seidman Research Institute at ASU’s W. P. Carey School of Business, disputes the notion that businesses move into an area because they are attracted primarily by tax breaks.
“Businesses stay in an area where they can make the most money,” Hoffman says. “And a key component of being able to make money is to attract and retain a high quality work force.”

Unfortunately, well-educated young people are moving to places like Chicago, Los Angeles, and Austin, Texas, he adds.

Rey of State Farm says the insurance company is committed to working with policymakers, educators, parents and students to achieve positive results in education. To that end, State Farm has invested in ASU’s Rodel Community Scholars service-learning program, and the American Dream Academy.

“One important component of these programs is exposing K-12 students to the university experience so that pursuing a college degree becomes an obtainable goal,” Rey says.

Mittelstaedt, dean of the ASU business school, says the question is not how much more can be cut from education before economic development suffers.

“The question is: How much more do we have to invest before people begin to believe that this is a state that has a decent education system?” he says. “Cutting more doesn’t make a lot of difference. We’re already at the low end of the scale nationally.”

The dean says Arizona needs to diversify its economy, which can be accomplished by having stable and reasonable tax rates for businesses and individuals.

“That’s one of the biggest things businesses look for,” he says.

Carlson of ABEC says business leaders have wanted to assist with improving schools for a long time.

“They tell us, ‘We’re not educators. We can’t tell you how to educate kids. But we do know we need to have students who have the skills we need in the workplace.’ Businesses are really concerned about additional cuts to education,” she says. “They recognize that cutting into the bone is not helpful in attracting a knowledge-based industry.”

Hoffman of ASU refers to what he calls “tax populism,” and the “notion that we have to deliver tax break after tax break.”

“Those people worry that Arizona will become California,” he says. “That’s like worrying that Earth will become Mars. This is a limited-government state, and education is key to growth and prosperity.”

Increased interaction between the education and business communities may be the answer to surviving the recession for both entities.

“The more the business community knows how schools operate and the challenges schools are facing, the more supportive they are, says Essigs of AASBO. “And schools need to have a better understanding of businesses’ challenges. If we understood more about each other’s challenges, maybe we’d be able to work together better, enabling schools to contribute to the economic future of Arizona.”