insight
12.04.08
by erica wohlleben
oakton
The Evolution of an Economic Crisis How we got here and how it impacts you
Crisis to Curriculum...
Economics course provides insight for students to gain better understanding of nation-wide crisis. ellie kaufman academics editor
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elena.kaufman@oaktonmedia.net
or senior Todd Chatlos, math homework and economics homework are two entirely different affairs. While he knows that, in the end, his math homework will benefit him and make him a more well-rounded student, the material he has been covering in Economics for the past few months pertains to his life in a way that math cannot.
“The economic crisis made me nervous about usually the price of silver goes up when inflation goes whether or not I’ll be able to get loans for college and up,” Chatlos said. “It showed me that no investment is how expensive they will be,” Chatlos said. “In class we safe.” have been reading a lot of articles that better explain the Economics class lessons have also taught students economic crisis.” about how to be savvy consumers in the difficult While average Americans have watched the economy markets they face today. spiral downward for the past few months, economics “It makes them wiser when it comes to students like Chatlos have been given the chance to look investing,” said social studies teacher at the crisis from an entirely different perspective. Jason Lucus. “We talk to them about “We do daily rewhy consumers make caps of newspapers the decisions that they We were on top of the economic crisis as it do.” and stock-market began to unfold while most Americans were competitions The additional where the person lessons in unaware of it. who makes the - Tim Hudenburg, teacher economics most money is have answered exempt from the many questions final,” said social studies teacher Tim Hudenburg. “We for students who just keep were on top of the economic crisis as it began to unfold hearing that the economy while most Americans were unaware of it.” is doing badly but who are The stock-market simulation competitions have unaware of the cause. allowed Economics students to learn more about the “I didn’t really know the economic crisis from an investor’s perspective. For cause before when it was Chatlos, his participation in the simulation gave him just on the news but then we valuable insight into many problems faced by the actually learned about sub prime modern-day investor. mortgages and conglomerates that “I invested in silver for the competition because failed,” Chatlos said.
Social studies teachers Tim Hudenburg and Jason Lucus go over material concerning the economic crisis while teaching a 60-student class of Current Affairs and Economics. The double class is taught by both teachers to educate students on the current downfall.
anna xie
The making of a crisis: by Matt Johnson
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Lenders and mortgage companies start extending deceiving “sub-prime” loans to buyers with bad credit who actually cannot afford the money.
December 4, 2008
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The housing “bubble” of high property prices collapses as debts add up to more than buyers can handle. Some houses worth less than the money owed.
3
Companies lose money in investments as housing and mortgage industries fall. Panic strikes the stock market and banks, causing great losses and more panic.
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Budget cuts trickle down...
County adjusts to $220 million defecit by increasing class size The county budget $13,407
Amount of money Fairfax County pays per pupil,
73 Percent of budget derived from local county taxpayers
2,330 Number of new students in 2009
88
Cents from each dollar in Fairfax County’s budget goes to schools
167,329 Students in Fairfax County Public School System
0 New programs added to 2009 fiscal year
$65,403,792 Dollars that pay for the guidence department in all schools
$2,300,000,000 Entire budget for Fairfax County Public Schools in 2009 fiscal year source: fcps.edu
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umbers are scary in times of economic hardship. $700 billion dollars, 5.7% unemployment rate, 777 points in the Dow Jones industrial average. The lists of daunting numbers in the economic crises are piling to heights that seem almost imaginary. For high schoolers, all those numbers are dwarfed by one figure. Twenty. Twenty positions will be cut from the school in order to adjust to the $220 million projected shortfall. An increase between 0.5 and 2.5 students will mean more papers to grade, students to look out for and SOLs to pass for teachers across the board. Teachers, who are already feeling the crunch from last year’s increase in class sizes, are wary about the adjustment “If you look back in other locations with overstuffed classes, progress goes down, achievement goes down. There is a welldocumented correlation,” said Lynnette Elis, English teacher. “With classes of 30 this year, the dynamic in classrooms has already changed. We will see if it continues to change with bigger class sizes next year.” The estimated shortfall for Fairfax County’s budget next year is due mainly to a drop in housing prices and property taxes. With the budget currently running at $2.2 billion dollars, Superintendent Jack Dale and his leadership team have spent the last 3 months crafting a plan to outline spending cuts.
fast facts
By the Numbers...
— Budget shortfall comes from low property taxes and — The entire 2009 fiscal year budget is online at fcps.edu — School board is holding public budget hearings Jan. 26-27 and May 12-13
ThreePronged Approach Moderate $42,478,569 Five positions at academies (Chantilly, Edison, Fairfax, Marshall, and West Potomac) will be eliminated. Funding for school library materials will be reduced by $0.3 million or 12 percent, reduction in library staff from 4.0 to 3.0
“We anticipate a “I do not believe that Increase in class sizes is a detrimental loss in 50 million Fairfax County will in state funding, we be able to maintain solution to the budget problem. anticipate a potential - lynnette elis, english teacher its high standard of 10 thousand new nationally if we have students next year, to make very severe and we are also opening two elementary budget cuts. It would take decades to recover schools to deal with overcrowding,” Dale said. as we slowly bring programs and people back “We were planning on giving our employees a in place. If you cut something in one year, it salary increase to deal with the cost of living. may take ten years to bring it back.” When you add all of that against our potential This uncertainty echoes through school revenue, we are looking at a large deficit.” administrators, who are bracing for a cutback The first step in dealing with this issue came in the luxuries that high property and sales when Dale introduced three tiers of spending taxes have afforded in the past. cuts, the largest shaving off $219 million, to “I am confident that although we may not cope with this situation. Along with making be able to buy a lot of bells and whistles, the broad cuts in the county administration, tools that we like to have to enhance learning; principals and schools are feeling the shortfall however, we will be able to buy the textbooks, at the locally. pens and paper that we need to drive this “We will buy what we need, our operating engine,” said Chip Comstock, Assistant budget wont take too much of a hit. But Principal who helps oversee the distribution of really we are focusing on personnel at the school funds to department chairs. county and school levels,” said John Banbury, Although the situation may seem gloomy, principal and main dispenser of countyBanbury holds confidence that the school will allocated funds to the school. “We will lose remain successful despite the loss positions about 20 people in the building, staff, custodial and money for materials and supplies. workers, office assistants and faculty. That is a “It is my goal that the students don’t notice a significant downsize in staff.” difference in their instruction. I will find other Larger class sizes, along with eliminating things to cut, but anything that is necessary to sports, after school and academy programs be in the classroom for the teachers to teach and transportation will offset the cost of and the students to learn; we will find a way new students and property and sales taxes to get it there. Depending on enrollment, they declining. Tier three of the plan especially will see more kids in their classes and there represents a drastic cutback that Dale believes may be electives that we need to cut,” Banbury will impede the growth of the county. said. “But as far as I am concerned, we have to “My fear is that with this economic situation, cut any program in order to keep up the high we will be making cuts so deep that they adjust quality of learning.” not just in Oakton, but the core of what we have valued in Fairfax around the county.” such as small class sizes, AP and IB courses at high schools, athletics programs, bus services, ethan doyle editor in chief counselors and a whole series of tiers that get ethan.doyle@oaktonmedia.net increasingly less pretty,” Dale said.
Below are the highlights that students will see in the three tiers of spending cuts to adjust to the predicted shortfall.
Drastic $123,456,383 Class size will be increased by a 0.5 student, resulting in a loss of 37.2 teacher positions
Class size will increase by 2.5 students, resulting in a loss of 173.58 teacher positions
Reductions will eliminate planetarium funding that will result in a loss of planetarium staff and planetarium maintenance
Per pupil instructional allocation reduced from $144.51 to $123.96
Elimination of girls gymnastics
Proposed budget reductions in major funded areas including general office supplies by $5,000.
The student-to-school counselor ratio will go from 270:1 to 300:1 in high schools.
Discontinuation of academy transportation for runs with five or fewer riders
10% reduction in college partnership program
Reduce to one late bus per week
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Extreme $219,115,941
Summer school, including 5.0 support positions, will be eliminated. Indoor track for all athletes will be eliminated “This reduction will impact every high school in every department and could have an adverse impact on student achievement if adequate materials are not available” - Jack Dale, Superintendent
Economic Crisis
DSA answers budget questions peter douperrouzel director of student activities
How much is the activities budget and where does the money come from?
The budget I submitted to Dr. Banbury for this year is around $160,000. Fairfax County only provides for the salaries of the coaches and transportation within 50 miles and some officials. Everything else comes from our Booster Club and gate receipts. Those are our only source of revenues. Every ball and bat that we provide the county does not pay for.
How will the Booster Club and individual teams have to adjust to the economic downturn?
We are going out and raising a lot more money than we have in the past. We are not only looking to cut the costs, we are looking to find revenue sources we haven’t tapped into before.
y a M u o Y t Wha
WIth the economy on the decline, sacrafices are going to have to be made. Here is a list of things that may be the first to go.
Charity
The crisis has led to many wage cuts and job losses, which has led to an increase in poverty. Some of these newly impoverished families are experiencing the need to look towards charitable organizations for help for the first time. Over 700 families have applied for the Angel Tree toy drive, an annual holiday program sponsored by the Salvation Army. This number is up from last year’s 600 families. Unfortunately, this newfound need will most likely not be met. Families, looking to restrict their spending, are projected to cut back on the amount they donate this year. In addition, big corporations, like Freddie Mac and Fannie May, which give millions to charity each year, are also expected to give more conservatively.
College
Applications to state universities are likely to increase dramatically this year. With tuitions that are often tens of thousands of dollars less than private four-year colleges, state universities offer an attractive alternative to parents and students on a tight budget as well as those who can no longer depend on once readily available students loans or grants. This means that competition for acceptance into state schools will get even tougher, forcing some students to either attend community college or explore options different than a four-year institution.
How does each sport maintain its own budget?
Each team has an individual booster account, which they are free to fundraise for, and a school account. In March we went to zero-base budgeting for sports, which requires school to provide for every sport to get on the field or court. Those are the needs; everything else is the wants. We really haven’t gotten to anybodies’ wants this year, but we have answered everyone’s needs.
What are some of the immediate effects the county budget cuts will have on activities?
Gymnastics is a tier-1 spending cut item; after this year gymnastics is all but gone. If we have to resort to teir-3 of cuts, which I believe we will, Winter Track is also gone. That is what the county has decided for now. Their other option is to cut events and games from sports individually without removing whole sports.
What are some of the most costly aspects of the county activities budget? How will that change? Transportation is costly, especially for teams like basketball with three levels that compete at three different times. In the past we have been able to send three buses so that the team doesn’t have to be there from 3:30 until 9 pm, but with the new budget, they might just send each team one bus instead of three.
Do you support a pay-to-play initiative?
The pay-to-play initiative will really hurt our booster clubs, which provide a substantial piece of running our activities programs. If we charge $50 per activity, we are going to hurt people who have tight budgets, and the booster clubs would be hurt substantially because people will not want to buy booster passes. We have tried to make the case to Dr. Dale that this will hurt us, and it is not on the table currently and I hope it will stay that way.
ethan doyle editor in chief ethan.doyle@oaktonmedia.net
December 4, 2008
Jobs
Brand Names
To restrict superfluous spending, many families will need to take more consideration when purchasing gifts and essentials. Goods that people normally splurge on, like designer clothes and jewelry, are expected to decline in sales. The jeweler Tiffany & Co. has already felt the repercussions of the economic crisis. They posted a 5 percent sales drop in their normally profitable Manhattan flagship store. On the other hand, Wal-Mart has seen a 2 percent increase in sales. Consumers are becoming increasingly frugal as the economic crisis continues.
The collapsing economy will not only affect the jobs of Detroit automaker employees or those of mortgage giants. Teenagers have already felt a blow to employment. Teen employment is at the lowest rate it has been in over 60 years. Teens looking to enter the job market can expect to find a harder time getting employed as more and more adults are willing to work for wages once only accepted by teens. Teens who are already employed are likely to see the amount of shifts available to them cut as retailers and restaurants feel the effects of the crisis. Internships have also become harder to come by as major corporations cut back spending.
erica wohlleben insight editor erica.wohlleben@oaktonmedia.net
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1 day, $5
To simulate the sacrifices some students will need to make when faced with the economic crisis, three students attempted to spend one friday as normally as possible while only spending $5.
sen
n Tesla Je
Dani
Junior
$1.0
om real fr e c x i r Free…T home
0…Sa
$0.2
r dogs fo t o H … 0 $2.5 lunch at hopping s w o d n Free…Wi mall the On ue (Cox l C … 9 9 . $1 Demand)
el C
omor hait e
Soph
5…Ba
ndwi
ch
g of Chip s 0…Ap ple
$0.1 Free
$0.9
…Wal ke Oakm d to wo rk a a t driv rr inst ead ing of
9…Ri
$0.9
9…Gr
ce
een Tea re i F d … r e a e y r k F F c r a b e e…Wa pit in tch ds n e i r f Bond ed an o with ld J DVD ames Free …Pla .49 ye TOTAL $4 at h d air h o ome with ckey TOTA a fr L $3.3 iend 3
Michelle Chu Sophomore
hool inFree…Walked to sc stead of driving water $1.60… Sandwich, bottle, chips ockbuster Free…Biked to bl es $2.00…Rented movi ur (split between fo friends) the gro$1.35…Chips from cery store
pro vide d by
mic
hell
e ch
u
TOTAL $4.95
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“I had to sacrifice a lot of the things that I wouldn’t even think about on a routine basis. I always considered driving to school a necessity, but now I realize it’s definitely possible to walk. A lot of the activities individuals perform on a daily basis seem like luxuries after going through a day spending less than $5.” -Michelle Chu
Economic Crisis
How to Cut the
et
commentary by:
chris weil feature editor chris.weil@oaktonmedia.net
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hen it comes to budget cuts, especially school budget athletic programs. Every other county, from Arlington to Prince cuts, there is always going to be someone who George’s county, has found other ways to deal with the economic gets the short end of the stick. In the case of the crisis and resulting budget shortfalls. Fairfax County budget cuts, which will encompass While this is noble, I tend to agree with Fairfax County in approximately $550 million, $219 million coming that it is not realistic. As Fairfax County Director of Student from the FCPS budget, there will be many people Activities Bill Curran stated in the recent Washington Post feeling the short end of the stick. Article, “It simply isn’t realistic to think we can operate with In the current economic crisis, it is absolutely unrealistic vast budget cuts and not talk about the athletics. It’s all got to go to resist across-the-board cuts. The fact remains, however, together.” that there are other prudent and practical choices for budget I believe that while some sports should be cut, it should not reduction that the county could explore. include those sports (like indoor track) in which their cost of Adam Schaeffer of the Cato Institute proposed a method to operation is proportional to the number of student participants. “save big bucks for taxpayers” without Students participating in indoor track across incorporating the county’s current plan county amounts to 2700 students; 125 In the current economic crisis, it the to deny teachers their cost-of-living students participate in gymnastics. They raises and increasing class size by the is absolutely unrealistic to resist cost roughly the same to maintain. Do the proposed ratio of 2.5. According to math; one doesn’t make sense and should, by across-the-board cuts. Schaeffer, if the Commonwealth of all means, become a club sport. Virginia were to provide for education One of the principal arguments made by tax credits for students who attend the county against indoor track is the cost private schools, the county would save more than $10,000 for of transportation, since there are no local indoor track facilities. every student who chose to attend private instead of public This can be easily addressed: eliminate county-provided school. transportation. Allow indoor track programs to maintain their Since the idea of handouts from the Commonwealth is VHSL sanction, but require individual transportation. If that is somewhat farfetched, the county has to focus on local sources. not an option, then require teams to provide for transportation So if you are looking local, why not start small? The Virginia through fundraising. The Oakton running program (including sales tax is roughly four percent, and the county adds another cross country, indoor track and spring track) raised $16,000 one percent. That meager one percent provides an annual during the 2007-08 academic year, and so far this year has revenue of $159.1 million. What if the county were to hike the raised another $16,000, with a realistic year end goal of $25,000. sales tax up to two percent? Prices would not be drastically They don’t need county money; all they need is the VHSL changed by any means, and, in theory, that figure would double, sanction necessary to participate in District, Regional and State providing for $318.2 million. Not so small after all. championships. Eighty-five percent of the current county budget is devoted On the topic of busing, 5.1 percent of the county budget is to instruction. Instead of freezing teacher salaries and denying devoted toward transportation. Sixteen-hundred buses carry them the cost-of-living raises they need, perhaps the county approximately 110,000 students every day. If the county were to needs to simply monitor overtime payments made to all FCPS eliminate certain extraneous bus routes and lengthen remaining employees. They could do this by requiring employees to ask for routes, this would drastically reduce the cost required to pay for permission prior to taking it upon themselves to earn time-andtransportation employees. Although this would be at the expense a-half. of student sleep time, perhaps this is a necessary action. Another one of the more controversial issues in the current Inevitably, there is also room to cut superfluous schoolbudget reduction plan is the elimination of athletic programs in sponsored programs. Classes and after-school programs that their entirety, namely gymnastics and indoor track. I would like have limited attendance and interest should be eliminated. In a to point out, first of all, that Fairfax County is the only county time of such limited economic room to wiggle, everything that is in the metropolitan area that has decided to eliminate specific not of absolute importance must get the axe.
4 Ways to Cut the Budget If Fairfax County were to increase the sales tax by one percent, it would result in a
$159.1 million gain
If Virginia offered education tax credits for students who attend private school, the county would stand to gain approximately
Instead of cutting indoor track (as outlined in one of the county budget proposals) the county should require teams to pay for transportation to track facilities. The Oakton running program raised
for every student who chose to go private over public
already this year which could go toward paying for buses
$10,000
$16,000
Economizing bus routes would help reduce the
5.1%
of the county budget that is currently spent on transportation
source: chris weil
December 04, 2008
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