Council of Chief State School Officers

November 19, 2010
Prepared Remarks by Bill Gates, Co-chair and Trustee

Thank you for this welcome. I want to thank Gene for that kind introduction. And I want to thank the Council for inviting me here today. Melinda and I have enormous respect for the work you do. Not only for leading your state’s school system – but for using your office as a pivot for change.

I especially want to recognize your work in establishing Common Core State Standards. Let me extend special congratulations to Alabama, which just became the forty-first state to adopt the Common Core. The Common Core builds a foundation for defining and measuring excellence – and that will give traction to many reforms that follow.

Others have asserted standards before, but yours are better. They are more relevant – because they’re based on the knowledge and skills people need. They’re clearer – so you can test whether a student knows them. And they’re consistent across the states that adopt them, so educators can work together to improve our schools. 

Some states are already aligning their teaching with the common core. Here in Kentucky, teachers are designing classroom tasks that align with the new standards. Next door in Tennessee, teachers are testing a new set of math problems that get at the deeper comprehension called for in the common core. I hope these early adopters inspire others to follow quickly.

Aligning teaching with the common core – and building common data standards – will help us define excellence, measure progress, test new methods, and compare results. Finally, we will apply the tools of science to school reform.  

As state school chiefs, you face two conflicting demands: raise student achievement – and do it on a tighter budget. This conflict has always been at the center of your work -- but never more than now.

K-12 expenditures this year have stagnated for the third year in a row. Federal funding has delayed some of the pain from this. When that funding stops, the budget gaps will get worse. But the truly scary thing is this – even when state revenues start to grow again, the budget gaps don’t go away. The longevity-based pay raises, COLAs, and benefits embedded in the budget will make school spending grow faster than state revenues. Other state budget categories, particularly health care, will keep growing. So even when things start getting better for the economy, things will still be difficult for school budgets.

I wish reform could be done with incremental dollars. Our foundation is against reductions in K-12 spending, but the reality is that most states will have flat or reduced budgets. If education weren’t the most urgent and important issue in this country, we might consider waiting to take action.

Schools are doing all they can to get through the year with federal funds, furloughs, layoffs, and hiring freezes. But when you apply short-term fixes to long-term problems, you can do more harm than good. Furloughs are a prime example. That’s just saving money by closing schools. It’s quitting on the kids. And while it saves money this year, it leaves the baseline budget in place – so it makes next year’s budget gap even bigger. Another harmful approach is to cut “anything but personnel.” Some schools cut out all instructional aids, including software, even though software can help teachers do more for students. Other schools stop buying new textbooks to save money.

These efforts to close budget gaps make it harder to meet your other challenge – raising student achievement. 

Our high school scores in math and reading have been flat since the 1970s. Our graduation rates have plunged from 2nd in the world to 16th. We now rank behind 16 countries in science and 23 countries in math. 

You know these figures better than I do. Improving them is the central challenge of your work. But the budget crisis has put you in a corner. You can’t improve schools without reforms. You can’t fund reforms without money. And there is no incremental money. 

This graph shows how costs since the 1970s have increased.

This graph shows how achievement over the same span has been flat.

Together, they make a vivid case that whatever we may have bought with that money – we did not buy higher achievement. We have to flip these lines. For more than 30 years, our costs have risen while performance stayed flat. Now we need our performance to rise while spending stays flat.

There is only one way to do that: Innovation.

True innovation pivots off a fresh insight into what’s relevant – and a new ability to measure and deliver it.

In our schools, what’s relevant is what raises student achievement. For a long time, though, we couldn’t measure achievement, so we poured money into proxies – areas we thought might help students learn. But now the common core and data standards will help us measure student achievement directly – and this new ability to measure excellence can spark an age of innovation in our schools.

Some new innovations are in use right now. The company Wireless Generation features something it calls “Burst” technology. Teachers have handheld devices that take in data about how students are progressing – and then offer specific advice on what each kid needs to do next.

The company “Reasoning Mind” has rolled out an on-line learning system for grade school math. It gives each student a lesson that adjusts moment-to-moment, based on what she’s getting right and what she’s getting wrong. It’s a continuous progress check without the pressure of a test. Teachers can follow the program, supplement it, or override it – and they can instantly view reports on how each child is doing.  

New York City has selected several learning systems and is now testing these products against each other – and against traditional classes – to see what works best and why.

These approaches can change schools the way diagnostic tests and treatment protocols changed medicine. You send information to the lab, and the lab comes back with a diagnosis and expert instructions on how to treat it. This technology could help end decades of stalled achievement.

But these innovations satisfy only one of the demands on you – the demand to improve student gains. What about the other demand – how can you manage your budget without making tradeoffs that hurt students? Secretary Duncan addressed this question in a terrific speech he gave this week at the American Enterprise Institute. I hope you’ve had a chance to read it.

This budget crisis is a challenge your predecessors didn’t have. On their watch, state revenues were rising, so they could push reforms with big price tags. Schools hired new staff, added more specialists, and reduced class sizes. We went from one adult for every 19 students to one adult for every 8 students. I don’t question the good intentions behind it, but these have been costly changes, and they have not led to better student achievement.

Many of the most expensive features of school budgets became entrenched long before we had the tools to test their value. The most prominent example is the way we structure teacher pay. 

We know today that the single most decisive factor in student achievement is excellent teaching. It’s amazing how effective the great teachers are. We should be making the most of their skill. But we don’t.

Our pay structures don’t identify or reward great teaching, and they don’t support it through training or new technology. Instead we spend a lot of money on things that have little effect on teaching or learning – like seniority. It’s reasonable to suppose that teachers who have served longer are more effective – you only have to assume that skill improves over time. But the evidence says it’s not true.

This chart shows that teacher seniority has only a modest effect on student achievement over the first five years and none thereafter.

Yet, seniority is the single most expensive teacher-contract provision. The pay increases that teachers get for years of service account for 10 percent of total school expenditures. On a budget of $500 billion, that means $50 billion is paid out every year for something that has little correlation with student achievement.  

Another feature of school budgets is a bump in pay for master’s degrees. But a master’s degree has almost no impact on achievement.

Nevertheless, my own state of Washington has an average salary bump of nearly $11,000 for a master’s degree – and more than half of our teachers get it. That’s more than $300 million every year that doesn’t help kids. And that’s just one state. As a country, we spend $9 billion a year for master’s degrees. 

When we need higher student achievement on lower budgets, we’re obliged to review all the money we’re spending and ask: does this buy better student achievement?

There are two books I’ve read on school budgets that I have recommended to others: Stretching the School Dollar and Where Do School Funds Go? These books review all the expenses schools face, and get readers thinking about impact-per-dollar.

One of the most crucial areas is pensions. Pensions are complex. I had to do a lot of reading before I started to understand them. But the most striking thing I found is easy to understand. The variation in pensions from state to state is huge. 

Some plans let you retire with a defined benefit at age 48. Others don’t let you retire before 62. For some states, pensions account for more than half the increase in future costs. Of course, we have to help teachers with their retirement. But we can’t afford to put so much money in the retirement system that we crowd out teacher salaries – and talented entry-level teachers stop showing up for work.

The situation is worse than people realize, partly because the accounting is complicated and the crisis is out in the future. But one thing is certain: you’re all going to be asked to set aside more of the school budget for pensions in the future than you do now.

There is a lot of money in schools that can be used to improve student achievement – but it’s locked up in current pay structures. We have to unlock it.

How do we start? The most inspiring thing we’ve got going for our schools is how phenomenal our great teachers are. It’s astonishing what great teachers can do for their students. But the remarkable thing about great teachers today is that in most cases nobody taught them how to be great. They figured it out on their own. This is both amazing and troubling.

Great teachers are a precious natural resource. But we have to figure out how to make them a renewable, expandable resource. We have to figure out what makes the great teachers great and how we transfer those skills to others. These are vital questions for American education.

Our foundation is working with a number of districts, including Hillsborough (Florida), Memphis, and Pittsburgh, to advance comprehensive teacher reforms, and we are engaged with nearly 3,000 teachers in six school districts on a project called “Measures of Effective Teaching.” These teachers have opened their classrooms to visitors, to video cameras, to new assessments, to discussion about their practice. 

Right now research teams are analyzing more than 13,000 videos of classes. They’re putting special focus on classes that showed big student gains and trying to map it backwards to identify the most effective teaching practices. MET’s preliminary findings will be released in early December.

Two weeks ago, Melinda and I visited an MET site -- Ridgeway Middle School in Memphis. A teacher named Ms. Davis invited us to join her as she watched a video of her class. We sat in front of a PC and a TV, and she used a mouse to focus the video on one student after another, to see if what she was doing engaged the kids.

She was leaning forward, full of intensity, watching each student. She told Melinda: “I wanted to do the videos because I want to know how I was relating to students. I want to do my job better.” 

Ms. Davis’ passion for self-improvement is the key to change in our schools. She’s not interested in competing with other teachers. She is competing with herself for the sake of her students. She wants to be better than she used to be. That’s the essence of learning. It’s greatest thrill on earth, and we need to harness that for our teachers. 

Our goal is to develop multiple measures of effective teaching that teachers design and endorse, that unions agree are fair, that don’t cost very much, and that help all teachers improve. These measures will help us see which practices are productive and which are not – and that is “breakthrough technology” for making smart budget decisions.

Smart budgeting does not mean paying teachers less. It can lead to new pay structures that let teachers earn more.

This chart shows the major components in teacher pay today. You have base pay, master’s degrees, seniority, and benefits. This shows that we’re paying anywhere from a quarter to a third of teacher compensation for seniority and master’s degrees. What you don’t see is a component that ties compensation to workload or results. 

What if we introduced a new element in the pay structure that builds on the excellence we already see in the system? What if we identified the most effective teachers and offered them extra pay for taking on more students, or teaching kids who are behind, or teaching in the toughest schools?

Obviously, this raises the question of class size. One of the most expensive assumptions embedded in school budgets is the belief that reducing class sizes improves student achievement.  

This has driven school budget increases for more than 50 years. We’ve gone from a student-teacher ratio of 26:1 in 1960 – to 15:1 today. But smaller class sizes have not correlated with rising achievement. California spent $20 billion reducing class sizes, and student achievement did not change.

There is a well known study out of Tennessee that found some increased student achievement from smaller class sizes in Grade 3. But those findings – even if true – do not end the debate. Proponents have to argue that reducing class sizes promotes student achievement better than any other possible use of that money. And there is a lot of money tied up in class-size requirements.

Conservative estimates suggest that we can save more than $10,000 per classroom by increasing class size by just four pupils. If we pay some of that money to our best teachers for taking in more students, we accomplish three goals at once – we save money, we get more students in classrooms with highly effective teachers, and we give our best teachers a real raise, not just for being good, but for taking on more work. 

If we did this nationally, we could put nearly 2 million more students in a classroom with a top teacher—and that’s just in elementary school. Some will object that the larger class sizes would undercut personal attention – so the teachers that are effective with 21 students will not be effective with 25. But the classroom innovations I mentioned earlier answer this objection. Teachers will be able to create customized learning plans for each student. They’ll be able to give their students more personal attention than they do now, and do it for more kids. 

Finally, technology will do for teachers what it already does for so many other professionals – allow them to accomplish more, in less time, at a lower cost.

Our best chance to change budgets starts now. Your appropriations committees will see the state school budgets and ask you to show them an easy way out. I think you can tell them – ‘there is a way out, but it’s not easy.’

It’s implementing common core standards that will let us measure student achievement, identify great teaching, and rebuild the budget based on excellence. You can lead this change, but you can’t be expected to do it alone. You’ll need friends in business and philanthropy to stand with you. You can count on me. 

You’ll also need the support of voters, parents, and school boards. But most of all, you’ll need the help of teachers. And I believe you can get it. There are thousands of teachers like Ms. Davis helping to design and build a system that measures great teaching. Once we start to measure excellence, we’ll unleash the true power of teachers. 

There are a lot of great teachers in America, and many more who want to become great. I have every confidence they can do it – as long as they’re given a clear goal, the tools to achieve it, and the chance to measure it. 

The design of our schools, the way we teach, the way we budget – has kept so much human energy locked up inside. Let’s unleash it. Thank you very much.