The Biden Administration’s Securities and Exchange Commission to sue the city of Rochester, New York, arguing that “unrestrained overpayments of teachers’ salaries have plunged Rochester County Schools into ‘extreme financial problems’, misleading investors who have been buying municipal bonds.
Judicial action is unusual. Of course, federal government interaction with K-12 education often went beyond the U.S. Department of Education. The Ministry of Agriculture manages the school lunch program, and the Ministry of Defense manages the schools that serve military children. Under George W. Bush, the Department of Justice had fun the idea use of antitrust law to support charter schools. And in the days of the extinction of the Trump administration, President Trump betrayed executive order permission to provide scholarships for emergency training through the Minister of Health and Social Services.
But despite Bloomberg columnist Matt Levin’s theory
«all – securities fraud”, In practice the educational rhythm of K-12 did not overlap strongly with the provisions on fraud of federal securities laws. At least so far.
Securities laws do not provide a technical definition of “teacher overspending”, let alone “exorbitant overspending”. The SEC may argue that if a city spends so much that market participants question the city’s ability to meet its obligations, and bondholders lose value as a result of downgrading, it is, by common sense, an overspend. The city disputes the action of the SEC Rochester Democrat & Chronicle reported; The newspaper cites a statement from the city stating that “the city does not have access to the finances of the Rochester City School District and therefore cannot be held responsible for concealing financial information from the district.”
How much has Rochester “spent”? Lists Seethroughny.com, an Empire Center for Public Policy project 717 Rochester City School District Employees who earned more than $ 100,000 in 2019. There are about 25,000 K-12 public school students in the area, according to New York State. The cost is about $ 20,000, which is slightly below the state average. Whether this will be an “overspend” probably depends on your idea of how much the children are learning, as well as whether the students could learn more and how much more if more money was spent.
Teachers may note that they earn less SEC staff, which average more than $ 200,000 a year, according to FederalPay.org, which tracks government wages. While the SEC may argue that its lawyers can earn much more at corporate law firms, that may be less applicable to Rochester faculty.
In practice, the legal aspects of the case are likely to be more concerned with disclosure to potential bond buyers than with details of teachers’ salary costs.
Despite this, the mere mention of the Securities Act and bondholders as potential tools to curb “overruns” of school districts is intriguing, especially when the action takes place under the leadership of an election campaign president. promising to increase school costs to pay teachers “competitive salaries”. For years, reformers have complained that teachers’ unions are seizing school boards and running the school system for the benefit of adults, not children. Now another group of influential adults – bondholders – in a sense asserts through the SEC their own claim, which can become an equal force.
It’s intriguing, but not entirely satisfying. The union here represents teachers. The SEC is there to represent allegedly misled bondholders. Securities laws exist to protect bond buyers. However, federal law does not protect parents or students if a child enters a public school and then does not receive the advertised education. As a result, there is no federal government body with robust law enforcement powers students misled about the education they can count on.
Ira Stoll is the editor-in-chief Education Next.