Guest Column

Driving Local Tax Effort Through Stakeholder Focus

by Denison Gallaudet

The Baldrige Award criteria for education include the important category of stakeholder focus. Stakeholders in this context are “all groups that might be affected by the organization’s actions and success.” Not included are students, who have a category of their own. Meeting and exceeding stakeholder expectations has long been a central tenet in the quality movement. In the private sector, where I previously worked for 25 years in commercial and investment banking, the importance of focus is supported by study findings that high-quality products and services often command a higher price, thus enhancing the profitability of the firm. Can these findings be extended to public education? Although public schools reside in the government sector, they nevertheless operate in a marketplace of consumer demand. Demand is expressed in two primary ways—through voting and through citizen mobility. School administrators are intimately familiar with the strengths and weaknesses of consumer demand expressed through the polling booth, the annual budgeting process being the high (or sometimes low) point. Consumer Choices Less visible but extremely important is demand expressed through mobility. In deciding where to reside, consumers are in part shopping among localities with different packages of taxes and services. Richmond, Maine, for example, is within easy commuting distance of the state capital. Families moving to the area can choose to settle in my district or at least 10 others, each with different configurations of size, programs and local tax burden. In Maine, local property taxes are a critical source of revenue for public schools with roughly 46 percent (versus 39 percent nationally) of school funds coming from this source. A good chunk of these funds is considered “local option” over and above the match required for state funding. Because Richmond is a rural community with little business tax base, it receives an extra portion of state aid so our local share is closer to the national average. Being adherents of total quality management, my administrative team and I devote quite a bit of time to seeking stakeholder input. An especially helpful mechanism has been an annual citizen survey that we mail to a random sample of taxpayers. For the last two years I have included survey items that allow us to explore the connection between stakeholder satisfaction and local tax effort. Without becoming overly technical, let me say that the items specify the standard demand function for public goods including variables for tax effort, price, income and—for our purposes— stakeholder satisfaction. To explore the latter we use the Phi Delta Kappan convention of asking respondents to assign a letter grade to the overall quality of the schools. This we take as a proxy for whether we are meeting stakeholder expectations, with grades of D and F representing failure to satisfy, and so on. Quality Pays Analyzing these results yields several interesting and gratifying conclusions. The data fit the underlying economic theory, lending credence to the assertion that public schools are not exempt from the laws of supply and demand. (Voucher supporters take note.) For example, respondents with higher incomes tend to support more tax effort. Those facing higher tax bills, namely with more expensive homes, tend to support less. Also, we found little difference of opinion between parents/grandparents and all other taxpayers. Most importantly, stakeholder satisfaction has a positive and statistically significant link to tax effort. In statistically precise terms, the standardized regression coefficient is 0.2. In lay terms, school administrators in the average Maine district might reasonably anticipate a one-half mill rate increase in local tax effort for each standard deviation increase in stakeholder satisfaction. Quality does pay. Anecdotally, I can report that as we have increased our stakeholder focus in recent years, our budget approval process at the annual town meeting has become noticeably smoother. So how does a harried school administrator tackle the job of increasing stakeholder satisfaction? The key in my view is to break it down into manageable parts—the so-called dimensions or drivers of quality. In Richmond, we have adapted the quality literature to our own circumstances and conceive of stakeholder satisfaction as having three primary drivers: outcomes, safety and caring. Student outcomes are straightforward enough and include standardized test results, postsecondary matriculation and the like. Student safety is obvious as well but underappreciated outside of the schoolhouse. Our staff is on top of safety every minute of every school day. The third quality dimension, caring, perhaps requires more explanation. Carol Gilligan of Harvard, Nel Noddings of Stanford and others have written extensively on the ethic of caring. For us, it means knowing each student well, striving to individualize his or her learning experience, reaching out for family support and a host of other efforts. Sadly, the caring dimension seems largely lost in the current wave of policy talk around standards and accountability. The Care Factor Superintendents especially can take a leadership role in refocusing their districts on the caring dimension. My own experience is that staff members are open to such initiatives. Caring for our young people is often what brought them into teaching. Creating the vision is, of course, the first step. High-impact initiatives include student-led conferences, extended narrative report cards, adviser/advisee programs, adequate teaming time to consider the needs of each student and so on. Lest you doubt the benefits of prioritizing such initiatives, try this brief experiment: Keep an informal journal of exemplary student achievements you have noticed while visiting your schools. When you next encounter a parent whose child’s work has been captured in your journal, make a point to tell the parent about the specific activity that impressed you. Then observe the glow of pride and satisfaction your comments induce. Consider how this exchange might influence the parent’s opinion of the school and his or her vote on the next budget. Each school district likely will have its own unique stakeholder emphasis on the dimensions of quality. In our small, rural district, it is the caring dimension that is ascendant. Outcomes are important, to be sure, but we are really in trouble if our stakeholders form the perception that students are cogs in an impersonal machine. Stakeholder focus is a Baldrige criterion for good reason. Striving to meet and exceed stakeholder expectations continually challenges the school administrative team to understand and rebalance the quality drivers unique to its community. Such an effort is crucial to ensuring sustained financial support of our public schools. Denison Gallaudet is superintendent of the Richmond School Department, P.O. Box 190, Richmond, ME 04357. E-mail: