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Private sector shapes education reform

Oregon’s business community scored a triumph in education reform this session, an effort that spotlights how the private sector — sometimes controversially — is shaping education reform and funding.


On July 20, the day Gov. John Kitzhaber signed into law Oregon’s Higher Education Restructuring bill, Duncan Wyse was in his office in the Standard Building in downtown Portland, expounding on the bill and other education reform legislation. “This was the most productive, significant session on education in 20 years,” said Wyse, president of the Oregon Business Council. The 14 education bills, which included expanding online degree and charter school options, cutbacks to educational service districts and the consolidation of state K-12, community college and higher education boards into a single “education investment board,” represented “a big win” for Oregon students, according to Wyse. “The legislation was also a watershed for us,” he said, referring to the business council. “It represents the fruition of work we’ve been doing for 20 years.”

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Although a broad coalition of educators, business people and politicians supported and helped pass many — but not all — of the new education laws, the passage of the collective education reforms represented a triumph for the business community. Under the auspices of economic progress plans such as the Oregon Business Plan, Wyse and other business leaders have produced numerous policy papers over the years, advocating the need for specific education reforms. But those efforts languished until this legislative session, when a receptive governor and escalating concerns about the state’s stagnant economy and rock-bottom education investments intensified advocacy efforts and helped catapult Oregon Business Plan Power Points into education law.

The growing prominence of business leaders in education policy reflects concerns about educating, recruiting and retaining workers in a state that ranks 46th in per capita higher education spending and depends on ever-diminishing state dollars for K-12 funding. In the 21st century, the rise of the “knowledge worker” is also closing the gap between public education and business sectors.

But there are more than economic issues at stake. In an era of constrained resources, the more visible business presence also spotlights the sometimes-controversial ways in which private sector models and rhetoric are helping shape the conversation about education reform and funding. Consider one of the key principles animating the Higher Education law: universities will be given more freedom from state regulation in return for meeting “performance targets” such as graduation rates.

“Autonomy, flexibility, performance compacts. Those are all business principles,” says Matt Donegan, co-founder and co-president of Forest Capital Partners and president of the state board of higher education. “We’re tightening accountability but also loosening micro-management and allowing qualified professionals to do their job.”


Not everybody is enthusiastic about that model or the outcome of education laws. As Gail Rasmussen, president of the Oregon Education Association, the teachers union, points out, most of the new reforms focus on streamlining and reorganizing education hierarchies instead of resolving the sector’s most glaring problem: lack of financing. “That was the biggest disappointment,” Rasmussen says. “We moved a lot of deck chairs around, but the bottom line is how do we adequately fund those services.”

During the recent legislative session, “it was quite clear there wasn’t going to be any more money,” responds Wyse. “We had to focus on getting greater value for our dollar.”

But if business scored a big win, it is not resting on its laurels. The next step, business leaders say, is actually implementing the education redesign, then tackling the negative, long-term public financing trends such as skyrocketing health care and prison costs that are sapping money from K-12 and higher education.

Ask Ryan Deckert, president of the Oregon Business Association, why business has a stake in education reform, and he’ll outline a downward trajectory in which low student achievement and graduation rates in the state lead to “more importation of talent, more outsourcing of jobs and less economic activity.”

Concerns about economic growth fueled business interest, but Kitzhaber’s leadership was the spark that lit the fire, Deckert and others emphasize. “In the past, many business groups have been supportive of education reform,” says Ron Saxton, executive vice president of Jeld-Wen and a member of Kitzhaber’s Education Investment team. “But when the governor said this was his priority, those groups became more enthusiastic.”


Last year for example, Associated Oregon Industries, the Oregon Business Association and the Portland Business Alliance created a joint task force on higher education, one of the first initiatives to bring together all three business associations. Another new and pivotal player was the Oregon Idea, a year-old nonprofit founded by Portland lawyer Jim Francesconi that waged an unprecedented email and social media campaign, mostly from businesses, in support of the Higher Education Restructuring bill, as well as higher appropriation levels for the Oregon University System schools, community colleges and Oregon Health & Science University.

Stepped-up advocacy is one sign of growing business influence in matters of education policy. The adoption of business-supported principles and policy platforms is another. The Oregon Proficiency Project, a program of E3: Employers for Education Excellence, an Oregon Business Council spinoff, contains a blueprint for the state’s new proficiency-based education law, which aims to reorient student learning around mastery of material rather than credits or hours in a classroom.  This is not a new idea, but one that gained traction with the involvement of E3.

Another example is the 40-40-20 law, which states that by 2025, 40% of all adult Oregonians will have a bachelor’s degree, 40% an associate degree and 20% a high school diploma or equivalent. The private sector connection is perhaps most apparent in the online and charter school laws, which will allow for-profit, out-of-state schools such as Connections Academy to educate more Oregon public school students.

Curt Johnson, a nationally recognized education reform consultant retained by the Oregon Business Council, describes Oregon’s education laws as “real world,” be it the new K-20 budget model oriented around student outcomes and achievement instead of enrollment, or the expansion of learning options for K-12 students. The new reforms are also part of a larger trend in which the gap between education and the marketplace is narrowing, some educators say.

“Traditionally, there have been two visions of education,” says Rep. Michael Dembrow (D-Portland) and a Portland Community College English instructor. “One says education is useful and leads to jobs; the other is that education develops the individual and creates critical thinking.” But with “the change in the nature of work,” Dembrow says, “We’re seeing some elimination of the barriers between these two visions.”


The 21st century knowledge economy may be pushing business and education closer together. And yet, the specter of privatization is one of the controversial aspects of Oregon’s new reforms. As Donegan puts it: “The challenge is how do you preserve the public mission that we hold sacred while also enabling new sources of funding in response to disinvestment?”

Although Donegan was referring specifically to the higher education restructuring act, such concerns run especially high in the K-12 arena, where many educators balk at the idea of outsourcing teaching to for-profit schools, “an idea that at the core cuts against public education as a responsibility of the whole,” says Dembrow. Touting more efficient governance as the solution to student achievement also diminishes the role money plays in shoring up the state’s educational system, says Rebecca Levison, former president of the Portland Association of Teachers. “Businesses talk about giving people more choice and autonomy,” she says. “But real choice, real reform, means actually funding music and physical education.”

Now that most of Oregon’s education reforms have become law, policymakers must begin to consolidate boards and create new ones, set achievement goals, and redirect funding to targeted education sectors. Business leaders say they will continue to be active players in the process. The Oregon Business Association’s Angi Dilkes has taken a part-time postion with the governor’s office to help with the transition, and the Oregon Idea is considering a variety of strategies going forward, including “creating more of an army to focus on the 2012 Legislature,” advocating for specific higher education appropriation levels, and targeting particular capital projects, says Francesconi. (It is no coincidence that U.S. Secretary of Education Arne Duncan will be the keynote speaker at the OBA’s annual Statesman Dinner this fall).

Another goal is to address what Deckert refers to as “the cost drivers robbing education: unsustainable growth in corrections and health benefits.” Economic growth is the best way to bring money into the system, Deckert adds, noting that a key objective of education reform is to create lots of high-wage “knowledge workers,” who then pay higher income taxes. “That’s your funding source,” he says.  So far, that kind of market-based approach to shoring up Oregon education has prevailed.

But even business leaders wonder whether the new real-world reforms will actually produce the desired educational and financial results. “The business community has made education their issue and that’s reason for optimism,” says Donegan. “But most of the work is still ahead of us.”

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