The Special Issue

by Loren Martell

Photo credit: Ted Heinonen
Photo credit: Ted Heinonen

I’ve beaten up our local paper of record over the years, but I’m still rooting for it to survive the social networking world that is taxing all mainstream media. I walk past the Duluth News Tribune’s long-time home near city hall every night and am bothered by the for-sale sign in the window, the same way I would be troubled if a stodgy old uncle of mine was leaving the house he’d lived in next door for many years. The sign in the Tribune’s window is a blaring announcement that the world is changing. 

It is odd, to say the least, that the paper of record and the school district, both struggling entities, are trying to sell properties using the same real estate agency. I’m not trying to pile on, however. In fact, I want to give the Duluth News Tribune some credit. There is no way the paper of record would replicate an error the broadcast news station, KBJR, recently made. There is no way the Trib would run a picture of Old Central and mistakenly identify the iconic old castle as the one building remaining to be sold from the Red Plan. 

I called KBJR after the station misinformed the public on both its five and six o’clock newscasts, and got the young reporter responsible for the story on the line. 
“That was my fault.” The nice young man admitted with admirable frankness. “You are going to get it right now, though, correct?” I lectured. “This is a fairly important point.”

“I’m changing it right now. We’ve got it.” 

The station finally showed the right video footage — of new Central — on its ten o’clock newscast, but the anchor still referred to the building as “Old Central.” KBJR cycles its news stories through two network broadcasts, NBC and CBS. This two-headed affiliation, run out of the same building, controls the lion’s share of the local television news marketplace. 

If you want to know how this town got run over by Keith Dixon and the Red Plan stampede, you need to look no further. 
 
Back to Uncle Trib

Our local newspaper hasn’t fallen to the depth of ineptitude required to make an error on a fact that is common knowledge for practically every citizen in the city, but the News Tribune is clearly struggling to hold the standard it once had. The paper has pulled its beat reporter from the school district. Often the only media presence in the boardroom now is yours truly: the gumshoe scribe from the back forty of the Fourth Estate. A school district with a budget of well over a $100 million, a public institution paying off nearly half a billion dollars worth of bonds on a failing capital project and fervently chopping millions from its operational budget to avoid slipping into statutory operating debt status, is functioning almost completely free of media watchdog scrutiny. 

When the cub broadcast reporters do occasionally show up, they are so clueless they don’t know the difference between Old and New Central. 
Sidestepping gingerly around the Trib’s coverage of the Red Plan and the related Johnston affair, I will state unequivocally that the paper’s former beat reporter, in terms of her knowledge of the school district and the process, always stood head and shoulders above the broadcast reporters. I personally think any criticism of her reporting should be primarily directed at her employer, which did not give her adequate time and resources to do such a big job in depth. 

Back in the days when newspaper stock was a golden investment, the Tribune employed three beat reporters who covered education: one for K-12, one for higher education and a regional reporter that covered neighboring cities, including educational organizations and issues. In recent years one reporter was expected to cover all of this, including all the complexity and turmoil of the Red Plan, while also writing stories on the Pike Lake Fourth of July parade and euthanasia at the Lake Superior zoo. 

Board meetings often went on for more than four hours, forcing the paper’s reporter to write articles in real time to make her deadline. All carping and criticism--especially in regard to undue credence given by the paper to the piffling Rice Report — left aside for a moment, I want to simply give credit where credit is due. Former education beat reporter Jana Hollingsworth wrote some good articles, especially when she examined the Rubric’s Cube of Special Education. Her last Special Ed article, printed 3/25/18 and titled, “Who Should Pay?” is one of the best articles I’ve read on any subject in Duluth. 

This is my long way of saying I am in part drawing on Ms. Hollingsworth’s excellent work for this article. 
 
Look at that, not at this 

The complex, Byzantine world of special education allows district leaders to toss a few slivers of truth into the mix and employ their favorite public relations tactic: deflect and scapegoat. 
The deflective part of the strategy is to build a wall of plausible deniability and immunize the Board’s controlling majority and the Superintendent from the current fiscal mess. When it comes to public policy, the best way to operate is to come clean and admit the truth, but district leaders always go back to the same playbook and try to scapegoat district problems. They point a finger and pin all the blame on another party, like the state of Minnesota and the Federal government for not properly funding mandates, or other educational organizations — especially Edison Charter — for excessively running up special education bills that ISD 709 is forced to pay. 

This tactic is as old as time: if you’ve screwed up, find a scapegoat to take the heat off yourself. The big screw-up district leaders want you to turn your eyes away from is colored RED. They would like you to forget that Bill Gronseth was Keith Dixon’s assistant and one of the biggest cheerleaders of the Red Plan, and that the plan was forced down our throats without a vote by the predecessors of our DFL-controlled school board. They desperately want to mask over the connection between the plan’s multiple failures (a thousand students below enrollment projections, savings claims nowhere near the $122 million promised, “excess” properties a dog on the market) and the district’s current fiscal problems. 

They also want taxpayers to turn their eyes away from all the unaffordable bennies and pay raises the DFL has been handing out to its union comrades despite the school district’s evident fiscal instability. 
The leaders of ISD 709 instead want you to see them solely as victims, ragged little orphans put-upon by a cruel, cheap world. That cold, uncaring world, crushing in on them from every side, is populated by all kinds of meanies — evil entities like Edison Charter, which has managed to slip a sneaky hand in under the door and is grabbing bread from the table!

Poor, poor little orphan child

Governor Dayton tried to push through $138 million in “emergency aid” for the state’s school districts during the last legislative session. Duluth would have received $1.3 million had the governor’s plan gone through. 59 districts, or 17.5% of the 336 districts in the state, were experiencing budget shortfalls. District leaders want us to see this as proof that ISD 709 is not alone in experiencing fiscal problems. 

The same numbers can be turned around and looked at in a different light. 277 out of 336 districts, or 82.5%, had balanced budgets. Why, after running up a bill of half a billion dollars on a “long-range plan” — a huge, ambitious investment we were told would produce an educational Shangri-la — is Duluth’s school district still floundering in the lowest, loser percentile, in dire need of emergency assistance? 

On top of all the predictable problems stemming from a foolish investment, the school board has failed to hold the line on some other key expenditures, most notably employee compensation. As Carla Nelson, Chair of the Minnesota Senate Education Committee, put it during the legislative session: “The truth is: some school districts (like Duluth) have entered into union contracts that are squeezing classroom budgets.”

An increase in special education expense is also undeniably part of the budget shortfall, but district leaders tend to exploit the subject as a smokescreen for all other issues. That’s why it was so refreshing when some of the smoke was lifted by this truthful passage in the Duluth News Tribune last March: “(Superintendent) Gronseth in December, however, overstated the district’s (special education) expenses for Edison, citing a number much larger than the actual $400,000 increase from 2015. The $1 million shortfall he cited included the overall increase in what the district paid for all of its students receiving special education services elsewhere.”

Edison Charter is the favorite scapegoat of the school board and the superintendent. They pile on and beat the organization up every chance they get, especially on the issue of special ed. When the district’s 2017 audit revealed that ISD 709 had completely blown its reserve fund (a healthy nest egg of over $30 million when Dixon came to town,) and that the district was in the red — in fact, so broke that it had to cut $1.5 million from operations mid-year just to avoid slipping into statutory operating debt status--the majority Board members and Super G. went to work. 

Former Board member Harala ruffled up her feathers and led the pecking party. (Sorry about the twisted syntax. Especially when Harala got her dander up, she tortured linear composition.) 
“I just want to be clear: so they (Edison) doubled their spending in one year; we didn’t know that was going to happen? I know that we — I’ve heard from staff--that we’ve reached out to be part of (their) planning. I understand that there’s been no response, and that we are not, that is like handing — I remember getting a credit card for the first time, and that was from my mom, so I had a card if I needed gas — and she said, ‘You don’t just get a credit card and just spend it; you have to have a conversation about it, when we’re looking at our family budget.’ And so you are saying (looking at the superintendent) that in regard to what our community is investing in education, we had another institution spend over a million dollars without having any discussion with us?”

“Right.” Super G. responded. “The increase that we experienced was $1.2 million. So the increase in (their) spending had to be more than that.”
As the Duluth News Tribune reported, this attack on Edison Charter was greatly exaggerated. Relentlessly smeared by the DFL/union power clique than dominates Duluth, Edison is actually a well run organization. The Head of the School informed me in an email: “We have received the MN Dept. of Education School Finance Award for the last several years.” 

Harala impudently compared Edison to a thriftless child with its first credit card, but after is fiscal performance over the past ten years, ISD 709 couldn’t shovel enough bribe money under the table to receive such positive recognition. 
  
The truth

One of the biggest users of the deflect/scapegoat strategy over the past decade has been former 2nd school district representative Judy Seliga-Punyko. “There was a huge discussion this spring about the cross-subsidy mandate,” she lectured a few years ago in the boardroom, “which is Federal and State mandates for Special Ed. It’s regularly for Duluth schools $8 million a year. $8 million right out of the General Fund, and it’s supposed to be covered and it’s not…” 

In 2004, with a $4 million expenditure for special education coming out of its General Fund, district 709 was still sitting on a multi-million dollar reserve. In other words, the $4 million earmarked for special education was being handled responsibly within the budget. The cost for special ed has gone up since then, doubled, but another big expense was also not plaguing ISD 709 in 2004: withdrawals from its General Fund to pay for buildings. Millions drawn from the fund to pay Red Plan bills has been a more debilitating, downward-spiraling fiscal crisis in Duluth’s public school district. 

While Seliga-Punyko complained about unfunded mandates, she ignored the fact that the huge drain from the General Fund to pay for her pet swimming pools and other Red Plan facilities went from zero in fiscal year ‘09, to $7,518,527 in fiscal year ‘12.
Make no mistake, special education is an expensive obligation and a very complex terrain. District 709 is responsible for the education of all special ed students within its continuous geographical boundary from birth to 21, no matter where they attend school. 
Only a portion of the expense the district incurs from following special education mandates is covered by the federal government or the State of Minnesota. In a 8/12/16 information-request response, the district’s former CFO gave me an estimate of the percentages, based on an average of three preceding years: “State and Federal revenues cover about 63.6% of our Special Education expenses. That leaves about 36.4% uncovered.” 

Charter and private schools reimburse 10% of the uncovered portion, leaving ISD 709 holding the bag for the rest. Until recently, however, according to reporter Hollingsworth’s article, the Duluth district actually earned more than it was losing from this arrangement, because it also educates children from other districts.

The charge leveled against Edison by district 709 leaders is that the charter school takes advantage of the situation and spends excessively. During the same boardroom speech referenced earlier, Judy Seliga-Punyko charged: “Edison can go one-on-one with (special education students and) paras. The problem is the Duluth schools pay for that.” 

The Trib’s article debunked this misinformation: “In 2016, Edison employed the full-time equivalent of just under seven (paraprofessionals) for the 256 students it served.” 
One question always rears its head in this debate: would it cost ISD 709 less money if all Edison’s special education students attended the district’s schools? According to the Duluth News Tribune report, in 2016 Edison Charter spent on average about 25% more per student for special education: $22,000 compared to $15,500 in the district. 
The paper also reported that the portion of Edison’s special education bill not covered by the Feds or the State of Minnesota — the part paid by the district — is currently running at $2 million. (The district’s CFO told me he was “relatively certain” the 10% Edison is required to pick up was “baked into” this figure.) Most people find numbers a bore, but there is an easy way to calculate how much of this $2 million ISD 709 would save if all the students were in its own schools: using the differential in per/student costs. 25% of $2 million is $500,000.

$500,000 is a fair amount of money, even in an organization with a budget of over a $100 million, but how much of this “savings” would really materialize if all 256 special education students Edison currently serves suddenly poured into ISD 709’s schools? All kinds of additional problems (and unforeseen expenses) would undoubtedly create a lesson on being careful what you wish for, especially for an organization already problem-prone. 

If Edison had to pay its full bill, or disappeared entirely from the special education marketplace, would all the fiscal troubles plaguing Duluth’s public school district be cured? Not a chance. 

The issue is largely a scapegoat.