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Rhee Says Consultant's Report Shows Pay Plan Is Sustainable

By Bill Turque
Washington Post Staff Writer
Tuesday, March 3, 2009

D.C. Schools Chancellor Michelle A. Rhee has said a financial consultant's report shows that her plan to pay teachers as much as $135,000 a year in salaries and bonuses can be sustained with District dollars after a promised five-year, $100 million contribution by private foundations is spent.

The District's long-term ability to pay for such an unprecedented compensation package is one of several important questions surrounding Rhee's proposal. Leaders of the Washington Teachers' Union have expressed concern about the risks of signing a contract with the District based in part on private funding, given the troubled economic climate.

"What we want is funding that is sustainable," said WTU President George Parker.

Appearing recently on WAMU's "Kojo Nnamdi Show," Rhee said an outside consultant, whom she did not identify, had vetted her compensation proposal.

"When we engaged initially in this effort, we brought in a consulting firm to do some financial modeling for us, and basically what we're able to show is after a five-year period we will be able to sustain this with city dollars," Rhee said.

Rhee's spokeswoman declined a request for a copy of the report, saying that documents related to the District's talks with the teachers union on a new collective bargaining agreement are confidential.

Rhee said that $200 million in private commitments -- about $100 million for salaries and $100 million for teacher professional development and other improvements to District schools -- remain intact despite the shrinking economy.

She has declined to name prospective donors publicly, saying that their funding is contingent upon securing a labor agreement that allows the District to reward individual teachers with merit pay, and to identify and expeditiously remove underperforming instructors.

The Washington Post reported on Aug. 3 that people who attended private meetings with Rhee said she named several foundations prepared to underwrite the plan: Bill and Melinda Gates, Eli Broad, Michael and Susan Dell and Robertson. The organizations have invested hundreds of millions of dollars in efforts to improve K-12 education nationwide.

The Gates Foundation said it has had no discussions with Rhee about teacher pay and said so again last week. Dell, which did not respond to a request for comment last summer, said recently that they were briefed on the proposal last year but took no action. Robertson and Broad have declined to comment.

Another major philanthropic group has been mentioned recently as a possible donor by two sources, one familiar with the contract talks and another with knowledge of the private foundation world: the Walton Family Foundation of Bentonville, Ark. The organization contributed more than $100 million to education initiatives in 2007, much of it to charter schools and groups promoting school choice.

A Walton spokesman declined to comment. But in a November interview with Education Week, James C. Blew, Walton's director of K-12 education reform, said the foundation was looking for opportunities to work directly with school districts.

Union officials, who asked for anonymity because of the sensitivity of contract talks, said they were concerned that the prospective donors' identities are being so closely held. They're also concerned that the prospect of heavy foundation financing may be driving the inclusion of certain elements in Rhee's proposals, such as merit pay and the dimunition of teacher tenure.

The Walton Family Foundation, created in 1987 by the late Sam Walton, founder of Wal-Mart, has invested heavily in nonunion charter schools, and critics say many of its contributions reflect an agenda that promotes privatization of public education. Blew told Education Week that the foundation is "totally agnostic" about whether a school is public, private or charter, as long as it is effective.

A collective bargaining agreement based on private funding would pose questions for the D.C. Council, which faces an $800 million revenue shortfall next year and an uncertain long-term budget outlook. The District's chief financial officer, Natwar M. Gandhi, has told council Chairman Vincent C. Gray (D-At Large) that the council would be obligated to assume the foundation commitments if private donors were unable to follow through.

"The District of Columbia government would remain obligated to provide funding to uphold the collective bargaining agreement in the event the private funds became unavailable," Gandhi wrote to Gray on Oct. 14. Gray asked for the opinion after receiving a query from Randi Weingarten, president of the American Federation of Teachers, the national parent of the Washington Teachers' Union.

Rhee told potential private donors last summer that the District would be able to sustain the foundation funding because she planned to save $300 million over the next five years. About $90 million of that total could come from bringing special education students now in private schools back to the District, she said, saving tuition and transportation expenses. An estimated $28 million might be gained by relocating the school system's central offices, which occupy leased space on North Capitol Street, and $121 million would come from last year's school closings and consolidations.

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