A Conversation with Bob Harvey

Bob Harvey is the president and CEO of the Greater Houston Partnership, the chamber of commerce for Harris County. It’s often referred to as “the voice of business,” and that voice has a great deal to say about public education in the state of Texas.

Bob Harvey: Public education has become an increasingly key priority of the Partnership and of the business community. You know, we pride ourselves in Houston and in Texas as being an  opportunity state. But when we look at that issue today, we say, how can we say we're the opportunity state when so many of our young people really don't have that opportunity, by virtue of the failings of our public education system. So whether it's an issue of inequity or it's an issue of how do we just support a vibrant economy, how do we create the state we want to create, public education is at the heart of all that.

Joshua Kumler: Absolutely. So in addition to your work on the partnership, you're also involved in a number of nonprofits, you're on the board of several, including Good Reason Houston, which is sort of the sister organization to Commit. Can you talk a bit more specifically about your work with that organization and what it is that you guys are doing here in Houston?

Bob: So we in Houston have recently formed an organization called Good Reason Houston, patterned quite explicitly around Commit, the Commit Partnership in Dallas. It's intended in many respects to go down the- I'll call it the same trail, that Commit has gone down very successfully, influencing, in Dallas, initially, DISD, but expanding, obviously, broadly to the county and beyond. So we want to go down that path. Now, what does that mean in practice? It means we want to be oriented towards data and to be data-driven, fact-driven, not simply hypothesis driven, not move immediately into programmatic activity. Let's diagnose the issue. Let's establish some benchmarks of success. Let's establish that baseline. Now, as we do that, we're, again, following that path of Commit, we're focusing first, I would say on third grade literacy. Now, we had launched an initiative in Houston some years ago called Early Matters, which was our birth to third grade literacy initiative. That has now been folded into Good Reason. But that was where we went first in Houston, noticing that frankly, if we don't get the kids off to a good start in third grade literacy, there's very little opportunity further down the road to reorient that trajectory. So we've been working on that, again following many of the same mindsets of being data driven, being broadly inclusive of the community. And, you know, with a narrowing of focus even within that sphere towards Pre-K as that un-exploited area of opportunity. We should be getting more of our kids in Texas into, initially, four year old Pre-K, now we would say three and four year old Pre-K, and ensuring that the Pre-K access they're getting is quality Pre-K, because it's one thing to say Pre K, that's another thing to say is it's quality instruction, a quality environment with the right curriculum and materials and what have you. So that's been our focus. Early Childhood, birth to third grade literacy. That element has just moved into Good Reason Houston. What Good Reason is adding to that is a discussion of the teaching profession, let's say K through 12, how do we attract and retain and support teachers in that system. And then the third element of our Good Reason Houston initiative, but one which, up to this point, has not really moved into Good Reason, it's still here at the Greater Houston Partnership, is looking at that transition into college and career. Now here the Partnership has been active with another program called Upskill Houston, which is all about helping kids identify pathways to success that don't require a four-year degree. And our tagline is success doesn't require a four year degree and we say that in front of audiences. Most audiences we say that to react violently to that suggestion. I mean it's just amazing how much we have convinced ourselves over the years that success does require a four year degree. And then when we point out, well, if that's the case and only 20 percent of our young people are completing any form of postsecondary credential, two year or four year, then how can we say success requires a four year degree if only 20 percent of our young people are having that opportunity for success? So we're spending a lot of time talking about- whether it's in high school or post-high school, how do we provide visibility into career paths that don't require a four year degree, at the same time, provide visibility into, how does one gain the skills in order to be successful in those career paths. Hence the name Upskill, because it is, at the end of the day, all about skills. It's about education. We haven't moved away from education, we're just pointing it at something other than a four year degree as the end point. So all those pieces are now hovering around Good Reason Houston. But as I said, for the moment, Good Reason is focused more on the early childhood end, up to third grade literacy, and on the teaching end, how do we work to attract and retain and support teachers.

Josh: That's awesome. And then additionally, you're involved on the board with another organization that I was just learning about as I was preparing for this, the slightly confusingly named Reasoning Mind. So what kind of work are you guys doing there?

Bob: Well, Reasoning Mind, I will go right to the end point. We recently sold the assets of Reasoning Mind to a for-profit math instruction company. Years of operating reasoning mind as a nonprofit- and it was all about bringing kind of modern instructional approaches to math education and bringing that into public schools as a very sophisticated online system. What we found ultimately is the money it took to both create that product and then market that product nationally was just more than a nonprofit could do. So after years and years of raising tens and tens of millions of dollars each year to advance this, we finally decided that the best way to accomplish what we were intent on accomplishing was to provide this asset to a for profit company that had the resources to take it the rest of the way. That was just done in the last few months. So you're right, it's another intersection with education. Another area where we could stand to improve, in the US education system, is how we teach math.

Josh: Totally. You have had this very rich, varied career in the private sector for a long time now. How did you get involved to the extent that you are now in the nonprofit sector and specifically in education?

Bob: The short version of my story was going on the United Way board 16, 17 years ago, and ultimately chairing the board of the United Way, but more importantly, leading the strategy effort back in 2006 and 2007, where at United Way, we basically concluded here locally, United Way of greater Houston, that we needed to move from simply funding programs that impacted people's lives in some moment of need, to a more systemic or systematic approach to improvement. And we then asked ourselves what area should we focus on? And of course I was thinking that we would focus on education. How could we not? Kind of the issue of our day. Interestingly, we decided initially at United Way not to focus on education, but to instead focus on family financial security, which ended up leading towards this Upskill. So when I arrived at the partnership six years ago, having been grounded in this issue of family financial security and what it takes for families to feel secure, which is to say, typically, higher income is a key piece of that. At the Partnership, we were able to take that knowledge and move forward with Upskill. Now back at United Way, after five or six years of focusing on family financial security, they asked themselves, alright, what's the next area in which we want to make some systemic change happen. And education became the focus of the second major initiative. So that's really where I got a grounding in the issues facing public education. Now, in both of these respects, both of these efforts at United Way were built on this theory of change called collective impact- and of course that's probably a term you're familiar with- but collective impact is when you bring many segments of the community together to work on a problem together, to set a collective objective, to share data, to share best practice, to try to move a system through that kind of broad involvement. So Upskill was built around collective impact. The two United Way efforts I mentioned were built around collective impact. And then Early Matters, the early childhood effort, was also built around collective impact. And you would say, I think you would say, that Commit in Dallas is based on collective impact, or what's now, the terminology has evolved to this Strive Together communication, where we've taken collective impact in the education space, nationally, and brought all the players together so we can share best practices nationally and in that context, Commit's probably seen as one of the leading players. Good Reason Houston, again, is following down that same path to apply this collective impact thinking. The beauty of collective impact is, it says, many, many people need to be at the table together to affect systemic change. But we also need to agree to be data driven. We need to agree to all adhere to a common overarching objective, which is to say we all need to get on the same page about what it is we're trying to do. So it's proven to be very powerful. But the long answer to your question, it really all started years ago with my involvement at the United Way. Almost forgot what question took me down this path.

Josh: It's all great stuff. Talking about really working towards systemic change, we're about to go into another legislative session. We currently have a Commission on Public School Finance going on. What are some systemic changes that you would like to see be made at that level?

Bob: Having had the opportunity to look at the report, which I guess you'd call a draft report at this point, of the outcomes working group, I am very pleased at where they have chosen to focus and the degree to which they have chosen to focus. Now, let me step back. There's a lot of debate in Texas about public school finance. Everyone believes it's in need of improvement, or reform. But when you get beyond that simple statement, everyone's got a different idea of what the real problem is in public school finance and how should we reform it. So there's this debate at this very high level, almost superficial level, because people aren't really delving into the issue deep enough to really affect, or to come forward with policy suggestions that are meaningful. So that's going on. But I'm very pleased that another group- in terms of the outcomes group, specifically- has said let's let's look at a much, much more granular level on where we should focus our early efforts to make improvements in public education. So again, very similar to what I described for Good Reason Houston, third grade literacy. Let's start with third grade literacy. Surely that's a place where we can agree on the measurement. We can agree on it's significance. We can agree on an objective, that all children should be reading at grade level in third grade. So by coming forward with a focus on third grade reading as an outcome by thinking about incentives. Some incentives can be simply applied to that area, almost gratis. In other words, here's some additional resources to focus on this issue, but other resources can be tied to performance so that we get an incentive element. I mean, I think they're bringing the essential recommendations to bear on that issue, third grade literacy. Now, the second idea that they have put forward, which I support, is also accountability of teachers and rewards for teachers that perform at a high level. And the way in which they're doing that, to avoid a lot of controversy, is to give a tremendous amount of discretion to the school districts as to how they would implement such an idea. But at some level I agree with the suggestion that we should simply insist on some level of accountability for teachers for their performance. Now, one reason I support that, frankly, is because I think if we know who the best teachers are, we can also provide incentives for them to teach in the poorer performing schools, but you can't talk about putting our best resources in the most difficult schools until we know who the best teachers are. So I like the fact that even though that's not so much an explicit objective of that element of the outcomes report, I think it lends itself to that over time. And then third, you know, the outcomes report has said, we need to put some incentives and support and financing behind college and career opportunities, postsecondary. So it's interesting how that outcomes report in so many ways kind of mirrors the initial focus of Good Reason Houston, the areas where we've chosen to focus happened to be, I'll say, the areas in which the outcomes report is choosing to focus. We hope to avoid a lot of side battles and skirmishes in this upcoming legislative session. And we can have skirmishes about charter school funding. And is it comparable to more traditional public school funding? You know, public charters, public schools, all public money. But there's always arguments about, you know, do we have the formulas just right? But those become almost minor skirmishes in the scheme of what we're talking about. We can debate vouchers, and we can debate vouchers ‘til we're blue in the face. We hope that energies in the legislative session will be directed more towards the report, not just the outcomes report, but all three reports when they come out, and rather than going off and having one more fight one more time around, some of these issues which I think are kind of no-win issues for moving the system of public education forward. Public school finance could be the same problem, but for a different reason. I don't think the state is really ready to take on public school finance in a serious way in this session. Most things in Austin take multiple sessions or even a special session when you're dealing with a particularly difficult issue. That's not to say we can't lay some groundwork in this session and move the public school finance discussion forward, but I'm not one who thinks that this is the session that we're going to wrestle that issue to the ground.

Josh: Well, probably have to edit that out, because we're-

Bob: That's what your about! Just get right up to that point.

Josh: But I also am starting to get that sense, even as we are truly working towards making some movement happen, it very much seems to be laying the groundwork for something that will probably take a longer time.

Bob: Well, you've got, honestly- and you can use this or not. There are two very fundamental problems with public school finance in Texas. One is the sheer scale of public school finance means any modest percentage increase in funding equates to a large proportion of the state budget. So people say, well that's, you know, if you were to say, oh, we should increase public school funding out of the state budget if I get this right, you know, well this would probably be the total of local funding and state funding, but five percent would be about $3,000,000,000 if I'm not mistaken, five percent of $60 billion. I mean, and you might consider five percent additional resources in a system to be a pretty modest increment if you're trying to change the system. But finding $3,000,000,000 in a state budget is truly difficult. I mean, I say that from experience, I mean, you know, a billion here, a billion there. So one issue is the sheer scale of it, and the fact that any increment above current funding is a substantial bite for the state. The other issue is people keep wanting to tweak the formula and the model either for equity reasons or other reasons. And then you realize that every dollar associated with public education has a proponent, a beneficiary, someone who clings to that dollar, and will fight vigorously to keep you from moving that dollar to some other purpose. So there are some of us who feel like urban public education is not funded equitably, relative to the overall state. We should perhaps increase the weighting, if you will, in urban public education. Well, the rural public education interests are every bit as organized, every bit as vocal, every bit as effective in Austin as the urban interests. So you know, if you think you're going to move dollars from rural to urban, good luck. There are those of us who would like to see more money put into low income schools, schools with a preponderance of low income kids, but it's the same way, alright? Where's that money gonna come from? We've seen in Houston that when you start suggesting that we need to put more money into non-magnet schools and we take the money from magnet schools, well guess what? There's a whole constituency organized to support those magnet schools. So, you know, I'm not sure we have the answer yet in Texas as to where we're trying to take public school finance. I know the Partnership does not yet have an answer that we're prepared to advocate for, but I also believe, frankly, that while we need to have a discussion, progress is only made by having some discussion, I don't think this will be our opportunity to get some fundamental resolution on that point.

Josh: Well, specifically when you talk about, you know, finding that additional three billion that just a five percent increase would incur, and speaking on the work of the commission, the one committee whose report we're waiting on is the revenue committee to try and find the source of that funding. You, as the voice of business, do you feel like businesses in Texas would feel that an investment that was made in education, even if it came at a cost to them, would ultimately pay off?

Bob: You might expect me to say yes, but I'm going to say no, because I think the business interests are not convinced that the public education system is being run in a fashion that warrants putting additional money in it in its current form. If we don't create the metrics and the accountability that they would expect to see in any other area of business, they're not going to quickly get behind the idea of more funding. I mean, do they suspect that more funding is going to be needed? Yes. I mean, we all see the data comparing Texas with the rest of the country. They understand that financial resources are often critical to move a system forward. But they're also convinced that this system of public education, we shouldn't go immediately to pulling the revenue lever. Frankly, businesses come to Texas, to no small degree, because they perceive this to be a low tax and favorable regulatory environment state. So set favorable regulatory environment aside. We're not talking about that, but the low tax piece. So before we start adding property taxes or sales taxes or other taxes to the business community burden, they're going to want to make sure that we have created a highly accountable public education system, and I don't think they necessarily believe that today. Now you would have, on my own board and within my own membership, you would have business people who would stand up and champion today raising taxes to put more money into public education , but I would say the center of gravity of that group is not there yet. And you know, public education, public school, adding additional funds to public school finance is for some people a shorthand to saying we need a state income tax. Now very few of the people who are advocating for more public school finance funds are running around saying, and I want it to be in the form of a state income tax, but let's recall: we have property taxes, we have sales taxes, and we have franchise taxes, and that's pretty well it. So unless you think we're going to raise property taxes, which is a nonstarter today. Almost any public is going to tell you we've pulled that lever about as hard as we can pull it. Sales tax, no one has yet out there bravely saying that we need to raise the state sales tax. You know, the state sales tax plus the local tax in Houston, adds up to eight and a quarter, it's, you know, it's non-trivial. And then the franchise tax, if anything, the legislature has been moving to kind of pull that one off the table, having moved in that direction, not having found it to be very successful in many respects, it hadn't generated the funds people thought it would and it's just become a huge irritant to the business community. So I will remind people that until you're brave enough to stand up and advocate for a state income tax, be careful advocating for a material increase in public school finance because I don't know where the money's gonna come from. You won't use that either.

Josh: No, that's great! I’m not fishing for any specific answer here. I appreciate your honesty. That's exactly what we're looking for. So I just want to talk for a little bit longer. We've talked a lot about some of the issues with the finance system statewide, but now what does that look like in Houston today? You guys have entered recapture, just as Dallas is now beginning to enter recapture. And you had some issues with the vote that was around that. So if you could just sort of speak to the issues you guys are facing here locally as a result of some of these larger problems.

Bob: Well, if there's an issue that has energized communities, it's been the recapture issue. You can talk about public school finance for a long time and not raise people's blood pressure too high, but the minute you put recapture on the table, the minute a school district starts writing a material check to Austin, everybody kinda comes into the debate. No one likes it. So I have to go back and remind people: we created recapture. We created it because there was an inequity in public school funding across the state and the way to get around the constitutional prohibition against a statewide property tax was to create this scheme, this mechanism to, initially, take the handful of school districts that had grossly high property values per student and somehow find a way to shift money from those schools to the opposite school districts. So we all loved recapture back in those days, it was a clever solution that got us around the constitutional prohibition against a statewide property tax and it achieved the equity outcomes that we were seeking. Now, over time, what's happened is, obviously, with property values going up, it has put more and more school districts into the recapture boat. And just like elsewhere when Houston entered it, there was a huge outcry. How could this be? Now, what frustrates me a little bit is people love to say, how can HISD be in recapture when we have so many low income children? That is a great line, you might say a great question, but it's a complete non sequitur. Complete non sequitur. HISD is a high property value district, irrespective of the fact that it's got a large number of low income kids. Now, would we love to take that high property value and the property taxes associated with it and put it into the schools of the low income kids to try to create some meaningful change, we would love to. Sure we would. Interestingly, it's not clear that we were doing that even when we weren't under recapture, but we would love to do that today. But recapture exists for a reason. We haven't found any other way to deal with the statewide inequity, and at the end of the day, cities like Houston do have high property values relative to the number of students. Now, we went through a strange and interesting experience by initially voting down the recapture, which is to say, voting down making the payment to the state. You know, it required a local vote. We voted it down. We at the Partnership realized too late running up to that election that that's the path we were on, that the public figures we're all going to champion voting against recapture, making the payment. We even then thought it was a terrible idea to vote it down because we knew that the consequences of voting it down would be much worse than just writing the check. But what we did was recover between November and the following May, and helped convince the public that as much as we might not like writing that check to Austin, that's a lot better than the alternative which is moving individual properties out of the HISD tax base and literally giving those specific properties to other school districts. And the net economic effect on HISD would have been worse had we not ultimately voted in favor of recapture. So that's where we are. The magnitude of the check that HISD writes grows every year, and it grows in leaps and bounds. I mean that number gets very large very quickly. Now, you know, as a percentage of the overall HISD budget, it's beginning to approach 10 percent. It's material. But, you know, sometimes people who talk about that figure don't acknowledge that the overall scale of the HISD budget. I mean, it's a big recapture payment, but it's also a very big budget. So that's where we are. But, wishing it weren't the case isn't a solution and you really can't solve the recapture issue except in the broad context of public school finance reform. You can't just, “let's just do away with recapture.” Huge amounts of money are moving around the state by virtue of recapture. Now this will also energize some people. We love to say that the recapture payment does not go to other school districts, does not go to property-poor school districts. That is true. All money when when it comes to public education in effect, goes through the state treasury, so higher payments from a property rich school districts like Houston ends up accruing to the benefit of the state treasury. The state has already made the decision as to how much support it's going to give the low income districts. Our making the recapture payment really just enhances the state treasury. That is true, but that's, you know, money's fungible and that's just how the system works. The state makes the decision as to how much every district is going to have available to it in the way of financial resources, separate from the decision as to how much money HISD is going to send Austin. So people put a lot of arguments against recapture. Some of them are just again, non sequitors. They're really irrelevant. The real issue is we need some system in Texas to deal with the gross inequity between resource rich districts and resource poor districts. And right now recapture is the only thing we have to do that. And I don't think it's going to go away. That does put stress on the HISD budget. There's nothing like every year sitting down to develop the HISD budget and starting with the fact that a bigger amount of money is heading to Austin this year than last year for recapture. That may put some stress on HISD to raise its taxes. DISD is going down the process right now of raising its property taxes. HISD has, to my knowledge, not even considered such as yet. But to some extent, what recapture may compel the property rich districts to do is to raise their tax rates. Now it's problematic because some percentage of that higher tax rate’s going to go to Austin. It's not gonna all stay locally. But that's really the only tool left to the individual school district to affect its resource balance, is to consider raising its tax rate, which the state has made difficult. The fact that you have to go to the public for that. You've got to be brave and we're going to see if DISD is successful. I hope they are. You know, when we're talking about public school finance, and additional funding, and particularly when we start thinking about directing additional funding at the poor performing schools, which tend to be the schools with a disproportionate number of low income students. But let's talk about the poor performing schools, heretofore rated, you know, improvement required, will be called F or D, but let's say F. We've looked outside at the LA partnership in Los Angeles, the Partnership for LA Schools, and what's remarkable about the improvements that have been made in LA for a relatively small number of their schools, but where they have focused their efforts on, I'll say 15 to 18 schools, is that they've only applied just over about $650 per student incrementally to that model and achieved meaningful reform. So what that says is, is there a place for money in this system? Will money help? Do you need some more money to make reform happen in these schools? Yes, but it's money that's alongside changing the principals. It's money that's alongside attracting the best teachers to the schools. It's money alongside the community coming together to provide more support to the schools. Then $650 can make a huge difference. You could even say it's critical. The LA Partnership model would not have worked without that $650 per student. But it just shows you that in the scheme of things, the financial piece of it is a critical, but in some ways modest piece of the overall equation to how to affect school performance.

Josh: So it kind of just to sum all of this up, in talking about, you know, wanting to see some inefficiencies rectified before there's a greater investment that's made, if you had the magic wand and could make whatever systemic changes to how we do education in the state of Texas, what would you like to see that that might convince you of making that investment?

Bob: The thing that I think is critical, it's difficult, but it's critical, is this idea of teachers being held accountable and rewarded for good performance. I don't believe that we can attract the most talented people into the teaching profession. I don't believe we can hold on to the most talented people in the profession without some system that recognizes performance. And it has to be designed carefully, it has to be designed in light of all the ways in which financial incentives can work against you. I mean, it's a tricky area. It needs to be designed locally. It needs to be at the end, acceptable to the teachers. But I don't see how we affect performance improvement systemically without this piece. And then the additional benefit that will come by identifying the best teachers is that we can then give a further incentive to the best teachers to be teaching in the most difficult schools, because fundamentally it is hard to take someone from a low income setting, a difficult community and family setting, and give them the same opportunities that other kids have, and that takes the best instructors we have working on that problem, on that issue. But to me, that's where I go first. I do believe- the reason many of us have gravitated to third grade literacy is because one, it's not frankly as contentious as talking about teacher accountability. It's somewhat intuitive. People kind of get it. If you're not able to read at third grade, you're probably facing a very difficult experience beyond third grade. It's also the area, it's kind of the new frontier of education reform. It’s not as new today. We used to say five years ago plus, new frontier. But this recognition that there is a missed opportunity if you don't work with children in preschool and in those early, early years of school to get them caught up. And if you don't get them caught up, it's very unrealistic to expect even a great education system to mitigate that beyond the third grade. So I'm really giving you two answers. I think ultimately we need teacher accountability and incentives. But in the short term, the great opportunity is to focus on third grade literacy, where I think we can all get involved. We can all be supportive. There's just no good argument against a focus on third grade literacy.

Josh: I think that's about all I have. Anything I miss?

Bob: Don’t think so. I covered a lot of ground there.