Stacy Mitchell

Is Your Stuff Falling Apart? Thank Walmart

This article is part of a series on Walmart's greenwashing at

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How Tax Avoidance Is a Big Reason For Amazon's Success

A new study finds Amazon’s sales drop in states where it is required to collect sales taxes, revealing what Jeff Bezos has undoubtedly known for years: the company’s success, its track record of shuttering local businesses, is as much a product of government favoritism as it is of its own ingenuity.

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Goldman Sachs Tries to Look Small Business-Friendly - But It's All Image

For years Goldman Sachs gave only a tiny fraction of its profits, less than 1 percent, to charity.  Then the depression hit and the huge bank was in the public’s crosshairs for its role in that collapse and the billions it continued to give out in bonuses.

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Is Your Stuff Falling Apart? Thank Wal-Mart

This article is part of a series on Walmart's greenwashing at

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Are We on the Brink of a New Deal for Local Economies?

Let me begin by sharing some good news. Scattered here and there, in my country and in yours, the seeds of a new, more local, and more durable economy are taking root.

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Why Congress Wants You to Shun Your Local Bookstore and Shop at Amazon Instead

Portland, Maine -- It's always a relief this time of year to find that my local bookstore has emerged from the crucial holiday retail season still standing. Longfellow Books, named after Portland's famous 19th century poet, is the only bookstore selling new, general-interest titles left in this small city. I can hardly imagine getting through Maine's long winter months deprived of its weekly author events or the pleasure of an hour spent browsing the latest staff picks. Longfellow Books nourishes Portland's cultural life and also its economy. The store anchors a key downtown block, has helped many a budding local author, and provides a livelihood for six of my fellow Portlanders.

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The Resurgence of Local Shops Is a Great Strategy for Fighting Global Warming

What I find most striking about my mother-in-law's memories of the neighborhood where I live, and where she spent her childhood in the 1940s, is how many businesses our little residential section of town once boasted. Back then, there was a grocery store, hardware store, barber shop, two drugstores, a tailor, and several corner stores.

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Acres for Wal-Mart

My local newspaper, the Portland (Maine) Press Herald, reported last week, in glowing front-page coverage, that an effort to protect a tract of northern forestland from development had "taken a huge step forward" thanks to Wal-Mart.

Similar stories of treasured lands gaining protection with help from Wal-Mart ran in hundreds of newspapers across the country under such headlines as, "Wal-Mart grant will help fund Squaw Creek conservation plan," and "Wal-Mart to aid in effort to protect Grand Canyon."

Known for squeezing every last dime out of employees and suppliers, Wal-Mart has even managed to get a rock-bottom deal on corporate green-washing. For just $35 million--less than one percent of last year's profits--the world's largest corporation has burnished its environmental image and garnered a cascade of laudatory press coverage.

Under the deal, dubbed "Acres for America," Wal-Mart will donate this money--doled out over the next 10 years--to the National Fish and Wildlife Foundation, an outfit created by Congress that counts among its "partners" ExxonMobil and Alcoa. NFWF will use the funds to purchase land or secure conservation easements on wildlife habitat across the country.

"Acres for America will permanently conserve at least one acre of priority wildlife habitat for every developed acre of Wal-Mart's current footprint, as well as the company's future development over the next 10 years," NFWF's press release said.

One acre conserved for every acre developed. That's a clever construction, designed to leave the impression that Wal-Mart's donation fully mitigates its environmental impact.

The press release goes on: "This puts the minimum total acres to be protected at 138,000." If it's one-for-one, then this is also how many acres Wal-Mart intends to occupy by 2015. That's an astounding figure. Currently Wal-Mart's 3,600 U.S. stores and 100 distribution centers, including their parking lots, occupy roughly 75,000 acres. Apparently the company intends to almost double its footprint over the next 10 years.

In Maine, even as Wal-Mart secures easements on northern forest land, it's also cutting down forest and filling wetlands elsewhere in the state. In the town of Scarborough, Wal-Mart plans to abandon one store--leaving a carcass the size of two football fields surrounded by acres of asphalt--and clear-cut a wooded site across the street to build an even bigger supercenter. The "old" Wal-Mart opened in 1993.

"Protecting our environment is simply the right thing to do," Wal-Mart vice president Mike Duke said in announcing the Acres for America deal.

This from a company that spent the last few years trying to pave the Penjajawoc Marsh in Bangor. Identified by state officials as "the single most significant emergent marsh for waterbirds in Maine," the Penjajawoc is home to numerous rare and endangered birds. Wal-Mart fought hard to develop the marsh, but was ultimately blocked by a tenacious citizens group that persuaded the state to intervene.

But even more than the individual examples, it is the totality of Wal-Mart's impact on our environment that must be weighed against its $35 million donation. No other company has done more to make running our daily errands an ecologically hazardous activity.

Wal-Mart has destroyed tens of thousands of neighborhood and downtown businesses. Situated in multi-story buildings that did not require acres of parking, these stores took up comparatively little space and provided goods and services a short distance from homes and apartments.

Today, even the simplest of errands, like picking up a gallon of milk or a box of nails, often requires driving several miles to a big-box store. Indeed, American households log 50 percent more vehicle miles each year for shopping than we did in 1990.

In addition to the damage to our air and climate, polluted runoff from parking lots now ranks as a top threat to rivers and lakes. According to the Center for Watershed Protection, no other land use produces a larger volume of toxic runoff than big-box retail.

It's not that excessive land consumption is simply a side effect of the growth of companies like Wal-Mart, Target and Home Depot. It's a core part of their business strategy. Bulldozing undeveloped land is not only cheaper than adjusting their cookie-cutter stores to fit an infill site or, worse, an existing building, but flooding the market with excess capacity by erecting multiple giant stores also makes it easier to capsize smaller competitors.

Since Wal-Mart opened its first store in 1962, the amount of retail store space per capita in the U.S. has grown tenfold. We now have five to six times as much store space as other industrialized nations.

Do we really need all of this retail? Hardly. A staggering amount of it now sits empty. Hundreds of vacant strip shopping centers and malls, and thousands of abandoned big-box stores now litter the landscape.

Wal-Mart alone has more than 300 empty stores nationwide. Most were abandoned after the company opened larger stores in the same market. Wal-Mart's annual report says that it plans to "relocate" (i.e., vacate) up to 150 stores this year.

Environmentalists are not the only ones sounding the alarm about this fast-spreading blight. In a recent advisory report to real estate investors, PricewaterhouseCoopers declared, "The most over-retailed country in the world hardly needs more shopping outlets of any kind."

Yet they continue to build. Wal-Mart, Home Depot, Target, Lowe's and other big-box retailers plan to unroll thousands of new stores in the coming years, many slated for fields, forests and wetlands. It's high time we put a stop to this.

Some communities already are. They're adopting planning and zoning policies that limit large-scale, auto-oriented development and channel investment into downtowns and walkable business districts.

As consumers, we can back a greener economy by doing more of our shopping at local businesses, especially those that source goods locally. We ought to strongly object to Wal-Mart's propaganda and to NFWF's shameless assertion that Wal-Mart is "raising the bar in conservation." Acres for America is less about conservation than it is about smoothing the way for many more acres for Wal-Mart.

Home Shopping Networks

When Ames, a chain of discount department stores in the northeast, went belly-up last year, closing all of its 327 stores, towns like Middlebury, Vermont were left with no place to buy many basic housewares like sheets and shower curtains. Residents began driving north to Burlington or south to Rutland to shop. Concerned about hemorrhaging retail sales, city officials called in RKG Associates, an economic consulting firm.

RKG concluded that Middlebury consumers are spending nearly $7 million elsewhere each year. The firm recommended that the city stem the leakage by enticing Wal-Mart to build a supercenter in this town of 8,500 people. Wal-Mart had in fact already been snooping around Middlebury. After a bruising battle with Vermonters ten years ago, which forced the company to scuttle plans for some stores and dramatically reduce the size of others, the relentless expander has returned to the state and intends to build as many as half a dozen supercenters.

But many Middlebury residents refuse to accept the inevitability of the low-wage retailing giant. Allowing Wal-Mart to build would ignore a vital lesson about local self-reliance well illustrated by the closure of Ames. It would render the community even more dependent -- for goods, jobs and tax revenue -- on a single absentee-owned corporation that might use its power to raise prices, suppress wages, extort a tax break, or simply pick up and leave one day.

These residents have their own ideas about solving Middlebury's dilemma. They want to open a community-owned department store in the center of town.

There are a growing number of successful community-owned retail enterprises operating around the country. Last week, at an event organized by the Middlebury Business Association, more than seventy residents gathered to hear from a panel of speakers and discuss the idea. The panel included environmental author Bill McKibben; Bob Fuller, owner of the Bobcat Café in nearby Bristol; Bob Rottenberg of the Greenfield, Mass.-based Cooperative Development Institute; and me.

There are three ways to structure a community enterprise. Consumer cooperatives, which have a long and successful history in food retailing, are one possibility. Another involves the community putting up the start-up capital for a business that is owned and operated by a local entrepreneur. The Bobcat Café is a good example of this. It was financed entirely by three dozen Bristol residents, who saw a need for a local watering hole and put up $5,000 each, which was paid back over two years with a modest return and a dining discount.

Finally, there are community corporations. These are capitalized through stock shares sold to local residents (bylaws typically stipulate that stockholders must live in the state) and are run by an elected board of directors. Investors generally expect that much of their return will be in the form of community benefits, rather than financial gains.

A small but growing number of community corporations are operating stores and restaurants around the country. In Swanville, Minnesota, for example, some sixty families share ownership of the town's only restaurant, Granny's Café, which opened three years ago financed by more than $300,000 in community capital. When the general store and lunchtime gathering spot in Hebron, New Hampshire, closed a few years back, more than half of the village's four hundred residents chipped in to buy and re-open the store as a collective enterprise.

Perhaps the most relevant examples for Middlebury are community-owned department stores that have opened over the last few years in about half a dozen towns in Montana and Wyoming. Much like Middlebury, these communities faced a gaping hole in their local economies when a regional department store chain called Stage folded in the late 1990s. Rather than allow their towns to decline, residents got together and launched their own homegrown stores.

One that's representative of the others is the Mercantile in Powell, a town of 5,500 in northwestern Wyoming. After Stage closed, a group of residents hit on the idea of a community-owned store. They drew up a business plan, filed incorporation papers with the state and began selling shares priced at $500 each. Much to their surprise and delight, within a few months, they'd sold over 800 shares, raising more than $400,000 in capital.

The Merc opened in July 2002. The store sells affordably priced clothing and shoes for the whole family, and may expand into housewares one day. With a Wal-Mart supercenter just 20 miles away in Cody, some Powell residents predicted that the Merc, like most small town stores focused on basic needs, would struggle and fail.

But so far, the store has been remarkably successful. It has met vital local needs, boosted sales at other downtown businesses and even turned a profit. During its first year, the Merc took in $500,000 in revenue, outpacing projections, and generated a profit of $36,000. The earnings were reinvested and used to expand the store from 7,500 to 10,000 square feet.

Founders cite several factors in The Merc's success, including top-notch customer service and a board made up of experienced local businesspeople. With no debt to service or stockholders demanding high rates of return, prices can be kept relatively low. "We're probably not quite as low as Wal-Mart," said store manager Paul Ramos, "but we're close and we usually do better than the mall up in Billings."

Another significant factor in The Merc's success, according to board member Ken Witzeling, is the community's sense of ownership. "When you walk down the street and talk to people about the store," he told me, "they all refer to it as 'our store.' Not 'the store,' or 'that store.' It's 'our store.'"

Back in New England, Middlebury is not the only community struggling with the loss of Ames and weighing the merits of a homegrown solution. In Greenfield, Massachusetts -- which rejected Wal-Mart ten years ago in a voter referendum that drew national notice -- a committee has formed to explore the idea of a community-owned department store.

Although modest in scale and few in number, these models deserve wide circulation. As the consequences of Wal-Mart and other big chains become ever more apparent, communities must not only counter their growth, but offer viable alternatives by expanding established local businesses, supporting new entrepreneurs, and, where necessary, stepping in to fill the gaps.

Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance and produces The Hometown Advantage Bulletin, an email newsletter on effective strategies to curb the growth of chains and strengthen locally owned businesses.

Mad in the USA

More than 1,000 people attended a rally a few weeks ago in Connecticut to demand fair trade and denounce the sweatshop buying habits of big retailers like Wal-Mart. The speakers were passionate, the crowd pumped. But this rally differed from the usual fair trade gatherings in one key respect: It was not organized by labor, student, or environmental groups. It was organized by an alliance of small and mid-sized manufacturers.

"The major retailers and big manufacturers are doing us in," explained rally-organizer Fred Tedesco, owner of Pa-Ted Spring Co. in Bristol. "They're destroying small- and medium-sized businesses. They're destroying jobs. They're destroying the middle class. . . That's the dirty secret of this whole thing."

Giant retail chains like Wal-Mart, Target, and Home Depot, have been muscling large manufacturers to move their factories overseas, primarily to China. With more than nine percent of U.S. retail sales and a third of the market for numerous products from dog food to diapers, what Wal-Mart says, goes. The company does so much business in China that it ranks as the country's 8th largest trading partner, ahead of Britain and Russia.

The retailers' cost-cutting strategies have precipitated 34 consecutive months of U.S. manufacturing job losses and an unprecedented crisis among thousands of small firms, like Tedesco's, which make parts for large companies that have abandoned their domestic operations. Tedesco believes job losses will accelerate over the next year as corporate decisions made this year cascade through the economy. Next on the chopping block, he says, are more white-collar jobs in computer programming, insurance, and accounting.

The members of Tedesco's coalition are angry -- the group's name is Mad in the U.S.A. -- and they're not alone. The rally was backed by prominent trade associations, including the Manufacturing Alliance of Connecticut, and several local chambers of commerce. Organizers say the turnout included both owners and employees. Several unions have contacted Tedesco to get involved. He has also heard from disgruntled small business owners across the country. Many are now organizing locally and working to build a national network that will culminate in a march on Washington, D.C. -- the "Million Manufacturers March."

None of this is good news for Bush and Party. Tedesco emphasizes that Mad in the U.S.A. is nonpartisan. The coalition's policy agenda includes trade reform and incentives for U.S. investment, and they are reaching out to Congresspeople on both sides of the aisle. Republican House member Nancy Johnson spoke at the rally. But he also notes of his fellow manufacturers, "I've never seen so many diehard Republicans say they are going to vote Democrat."

The Bush Administration has been using small business as cover to push a big business agenda of regressive tax cuts, deregulation, and race-to-the-bottom trade. Just count the number of times Bush says "small business" when defending his tax cut. Right-wing groups like the Federation of Independent Businesses -- which represents less than five percent of all small business owners -- have promoted the notion that what's good for GM is good for small business.

But it's not. The notion of a single, unified business interest -- as in "a pro-business policy" or "business vs. labor" -- is long gone, if it ever existed. The natural allies of small business today are not those advancing corporate interests, but those fighting consolidated economic power: organized labor, environmental groups, and consumer activists. These unfamiliar allies are beginning to work together. And when they do, the combination is potent.

Earlier this year in Taos, New Mexico, a coalition of more than 400 business owners and dozens of unionized grocery store employees orchestrated a successful campaign to block a Wal-Mart supercenter. For Fritz Hahn, owner of the Taos Herb Company, it was an obvious partnership. "They're seeing their wages cut and their jobs thrust out of the country," he explained, "while small businesses are being ground underfoot by the same corporations." Hahn's employees and unionized grocery workers earn about double what Wal-Mart pays. The coalition's message resonated with residents, who voted 61-to-39 percent against the supercenter in an advisory referendum before the Town Council voted it down.

Coalitions of labor, environment, and small businesses are beating Wal-Mart in other cities as well. The activity has opened rifts in traditional business groups. While some chambers of commerce have given heed to the plight of their independent members, many remain mouthpieces for big business. In about a dozen cities, including Austin and Salt Lake City, small businesses have broken ranks and formed their own independent business alliances. They want city officials to stop subsidizing big box stores and adopt land use policies that favor small-scale enterprise. Back at Pa-Ted Spring in Bristol, Fred Tedesco says the growing indignation of small manufactures is causing a "bellyache" for the National Manufacturers Association, which represents both small and large manufacturers.

Democrats in 2004 have a golden opportunity to reestablish themselves as the champions of small business. They will have to prove themselves. After all, many have had their hand in ruinous trade policies and corporate giveaways. What's needed is enough backbone to stand-up to corporate America and its campaign contributions, and a strong small business platform.

Trade reform should be one plank, tax fairness another. Large corporations receive lavish tax benefits unavailable to their smaller rivals. Major retail chains are skirting billions in state corporate income taxes through loopholes that allow them to move profits from local stores to subsidiaries in tax-haven states like Delaware. Federal policy exempts internet retailers from collecting sales tax, giving companies like and a 4 to 8 percent price advantage over Main Street businesses.

Democrats should call for end to the state and local subsidies that routinely flow to big box retailers. Billions in public dollars have fueled chain store expansion and done little for employment -- other than trade jobs at shuttered small businesses for jobs at Wal-Mart that typically pay less and offer fewer benefits.

We need to revive antitrust enforcement, especially in those long-dormant areas that are of most concern to small businesses: predatory pricing, an accusation commonly made against Wal-Mart, and buyer power, i.e., big retailers pressuring manufacturers for sweetheart deals that ultimately harm both small retailers and small manufacturers.

These are just a few of the policy issues that could inspire small business owners. Their vote is up for grabs to a degree it hasn't been for decades. It's an exceptional opportunity for Democrats, not only to build a new constituency, but to offer an appealing economic plan focused on spurring America's entrepreneurial energies rather than enriching global corporations.

Stacy Mitchell is a researcher with the Institute for Local Self-Reliance and author of "The Home Town Advantage: How to Defend Your Main Street Against Chain Stores and Why It Matters."

Jack and the Giant School

On October 4, 1957, the Soviet Union launched the first artificial object into Earth's orbit. Dubbed Sputnik, the satellite measured only two feet in diameter, but it had a profound impact on the American psyche. Sputnik provided an undeniable demonstration of Soviet technological superiority and, more significantly, the power and reach of Soviet rockets.

Among its many impacts, Sputnik galvanized a movement to modernize and enlarge America's schools. The best and the brightest agreed that small schools burdened our ability to win the Cold War. The campaign to abolish them was led by Harvard University President James Bryant Conant, who contended that those who resisted school consolidation were "still living in imagination in a world which knew neither nuclear weapons nor Soviet imperialism"

State and local governments began aggressively closing small schools and herding kids into larger facilities. In 1930, one-room schoolhouses accounted for nearly 70 percent of the nation's public educational facilities. Between 1940 and 1990, the number of elementary and secondary schools decreased from 200,000 to 62,000, despite a 70 percent rise in U.S. population. Average enrollments skyrocketed from 127 to 653.

The trend toward giantism continues. The number of high schools with more than 1,500 students doubled in the last decade. Two-fifths of the nation's secondary schools now enroll more than 1,000 students. Some schools have as many as 5,000 students and enrollments of 2,000 or 3,000 are common.

Proponents argue that big schools allow for more courses, advanced equipment and significantly lower cost, per pupil year, than small schools. But, a growing number of critics are asking, do big schools produce better students? In the 1970s a handful of educators began to question whether the failings of the nation's schools weren't directly related to their size. Large schools, they believed, bred alienation and isolation, which in turn fostered poor student achievement, violence and high dropout rates.

Today, riding on a wave of real-world success and a mountain of empirical evidence, a full-fledged small schools movement has emerged. It's transforming public education in several big cities and, in rural areas, reinvigorating a long-standing fight to wrest local schools from the jaws of consolidation.

The movement has received endorsement from high offices. In May 1999, prompted largely by the shootings at Columbine High, a school with 2,000 students, Vice President Al Gore criticized the practice of "herding all students into overcrowded, factory-style high schools" A panel of school security experts was convened by Education Secretary Richard Riley. Their top recommendation had nothing to do with gun control, metal detectors or police on the premises. Rather, they said, reduce the size of the nation's schools. Small schools are a powerful antidote to the sense of alienation that can lead to violence.

In September, Riley told the National Press Club that the nation needs to "create small, supportive learning environments that give students a sense of connection. That's hard to do when we are building high schools the size of shopping malls. Size matters." According to the U.S. Department of Education's report, Violence and Discipline Problems in U.S. Public Schools: 1996-97, more than half of small school principals report either no discipline or minor discipline problems, compared to only 14 percent of big school principals. Furthermore, compared to schools with fewer than 300 students, big schools (1,000 or more) have 825 percent more violent crime, 270 percent more vandalism, 394 percent more fights and assaults and 1000 percent more weapons incidents.

The federal government now provides a small amount of money to districts seeking to restructure large high schools by breaking them into small learning communities or autonomous schools housed within the same building. But the real action is at the local and state level, where the notion that large schools offer superior learning opportunities persists, despite substantial evidence to the contrary.

The Empirical Record

In 1996, Kathleen Cotton, a research specialist with the Northwest Regional Educational Laboratory, reviewed the results of over 100 studies on school size. "Student achievement in small schools is at least equal and often superior to achievement in large schools," she concluded. "In addition, a large body of research in the affective and social realms overwhelmingly affirms the superiority of small schools."

Aside from financial resources, many teachers and researchers believe that school size is the single most important factor in the success of public schools. In her 1999 review of school size studies, Mary Anne Raywid of Hofstra University writes that the relationship between size and positive educational outcomes has been "confirmed with a clarity and at a level of confidence rare in the annals of education research."

There is no standard definition of small. Generally, small school advocates suggest no more than 400 for elementary schools and 800 for secondary schools, although many recommend smaller sizes of fewer than 300 in elementary and 500 in secondary.

Achievement: Small school students equal or outperform large school students. Indicators used include grades, test scores, honor roll enrollment, subject-area achievement, higher-order thinking skills and years of education attained after high school. In Nebraska, 73 percent of students in districts with fewer than 70 high school students enrolled in a post-secondary institution, compared to 64 percent of those in districts of 600 to 999 high school students. These findings hold even when other variables, such as student attributes or staff characteristics, are taken into account. Many small schools are in rural areas, but researchers have concluded that it is the smallness of the school, not its setting, that makes it successful.

Sense of belonging: Large schools function like bureaucracies, small schools more like communities. Small school students are less likely to feel alienated and more likely to report a strong sense of belonging. Teachers in large schools might have 150 students each semester. Students tend to be relatively anonymous and easily slip through the cracks. Small schools enable teachers to work more closely with a smaller number of students. This encourages teachers to go the extra mile and enables them to respond to individual needs. The result is that both students and teachers have a more positive attitude about school.

Parental involvement: Kids are not the only ones who are alienated by large schools. Parents are as well. Studies have found that small schools parents are more likely to be involved in their child's education and to volunteer at the school. In rural areas, this is due in part to the fact that small, local schools are close to home, while consolidated schools may be many miles away.

Attendance/Dropout: Closely connected to a strong sense of belonging, students at small schools have higher attendance rates. Students who transfer from large to small schools also exhibit improved attendance. Small schools graduate more of their students. In Nebraska, only 3 percent of those attending high schools with fewer than 100 students dropped out, compared to a statewide average of 15 percent.

Extracurricular activities: Studies have found that participation in extracurricular activities improves attendance and academic performance. Students at small schools exhibit higher rates of participation in extracurricular activities and individuals participate in a wider variety of activities. In a school of 2,000 students, only the most talented will be recruited for the basketball team or the drama club. The result is that a small number of gifted students dominate the sports and activity rosters, while the vast majority are relegated to spectator status. In small schools, sports teams, musical groups and clubs depend on broader participation.

The number of extracurricular opportunities does increase with school size. But a twentyfold increase in population produces only a fivefold increase in opportunities. That is, as the school expands, an increasingly smaller percentage of students are needed to fill the available slots.

Poverty: Research has consistently shown that poverty exercises a substantial negative effect on student achievement. The impact of poverty is significantly reduced when kids attend small schools. In fact, the larger the school, the more likely poor students are to fail; the smaller the school, the more likely they are to succeed.

Craig Howley of Ohio University and Robert Bikel of Marshall University recently studied this relationship in Georgia, Montana, Ohio and Texas. In all four states, smaller schools cut poverty's "power rating," or impact on test scores, by 20 to 70 percent, depending on the grade level. Researchers concluded that one-fourth of schools serving moderate to low income students in Texas, one-third in Georgia and two-fifths in Ohio were too large to maximize student performance. Interestingly, the researchers controlled for class size and found that it did not impact their results. That is, poor students are better off in small schools, even if the class sizes are larger.

Curriculum: Even the smallest schools (100-200 students) are able to offer core curricula comparable to schools of more than 1,200. Moreover, small schools tend to be more flexible and allow teachers to exercise greater control over curricula. As a result, small schools more often apply innovative teaching methods, such as team teaching, integrated curriculum and multi-age grouping, all of which have been shown to improve student achievement.

Very small schools may not be able to offer many advanced or specialized courses, but bigness does not guarantee breadth. Researcher William Fowler concluded, "Above 400 students, increases in enrollment made little difference in improving students' access to courses or in offering teachers the opportunity to teach more specialized classes."

Collaboration and advances in technology continue to broaden curriculum at small schools. Three rural schools, for example, can each hire a language teacher and, by broadcasting classes through fiber optic connections, enable their students to choose among three languages. Collaboration is even more feasible in urban areas, where schools can share course materials and even teachers.

Small Schools, Big Cities

The small schools movement traces its roots to 1974 when Deborah Meier opened Central Park East, the first of about two dozen small elementary and middle schools in the East Harlem district. By 1982, the district's ranking on reading tests had moved from 32nd, dead last in the city, to 15th.

In 1985, Meier went on to found a secondary school, also known as Central Park East, with 550 students in grades seven through twelve. More than half of the students qualify for free lunches and the school has twice as many students with learning disabilities as the average New York public school. Despite these challenges, Central Park East has a graduation rate of 90 percent, compared to 55 percent citywide. Even more striking, between 85 and 95 percent of its graduates go on to college.

These successes spawned an explosion of small schools in the 1990s, driven in large part by the efforts of the Center for Collaborative Education. Today, 150 of New York's 1,000 public schools have fewer than 600 students.

Julia Richman High School is a good example of the impact of these changes. In 1992, this school of 3,000 had the highest rate of violence in the New York school system. Only one out of three students graduated in four years. Following the advice of small school advocates, the Board of Education and the teachers' union broke the school into six separate high schools.

Today, the Julia Richman Education Complex houses four of those schools, along with an elementary school and daycare for toddlers. The building now has one of the lowest rates of violence among the city's schools. Gone are the weapon scanners and the police patrols. According to Columbia University researchers, students in the complex's high schools are poorer than the students of the former Julia Richman High. Yet they have higher attendance, fewer dropouts and better achievement. One of the schools, the Urban Academy, sends 90 percent of its students to college and has won a U.S. Department of Education award for excellence.

Despite their successes, New York's small schools have struggled to justify themselves. In late 1997, facing stiff budget cuts, Schools Chancellor Rudy Crew questioned the cost-effectiveness of small schools. Staff at the Board of Education floated a preliminary proposal to set minimum enrollments at 400 for elementary schools and 800 for high schools. The proposal shocked small school teachers and administrators, some of whom noted children would be better served by a ceiling, not a floor, on enrollments.

A few months later, New York University researchers released a study that silenced the critics. Although smaller schools had higher per pupil costs, "their much higher graduation rates and lower dropout rates produce among the lowest cost per graduate in the entire New York City system." Schools with fewer than 600 students spent $7,628 per student, or 23 percent more than the cheapest schools, those with populations of more than 2,000. But lower dropout rates meant small schools spent slightly less per graduateÐ$49,553 compared to $49,578.

New small schools have been launched or are in the works in cities across the nation. In Boston, the teachers' union and school district have worked together to launch several successful small schools. Chicago's Board of Education has contracted with the nonprofit Small Schools Workshop to decentralize its large schools. In Oakland, the Board of Education will soon adopt a policy creating ten small schools and plans to create more in the future.


Small schools may revive the role of parents and neighbors in the governance of their school. Over the years, large, centralized school systems have steadily eroded this role. The number of citizens serving on school boards dropped from 1 million in 1930 to fewer than 200,000 today (while U.S. population doubled). In many of the new generation of small schools, parents and community members are actively involved in running the school.

Mark Gordan, of the Bay Area Coalition for Essential Schools, points out that although the movement for downsizing and decentralization has come from education professionals in many cases, elsewhere it has risen from the ground up. In Oakland, parents tired of sending their children to distant, impersonal, failing schools demanded that the school board offer small, autonomous, close-to-home alternatives. They feel that with control over the school, they can create a learning environment where their children will succeed. Research has suggested that the greater the degree of local control, the more likely community members are to vote in school board elections and to authorize additional spending for education. This participation has a spillover effect: those who vote on school issues tend to exercise their vote on other matters and to take a more active role in democracy.

Rural Schools

While small schools are undergoing a rebirth in urban neighborhoods, many of rural America's remaining small schools are struggling against the forces of consolidation.

In small towns, more is at stake than educational quality. When the local school closes, the town loses a major industry with a significant annual budget and payroll. A Nevada study found that retail sales decline by 8 percent when the local high school closes. Often the school is a critical component of the town's collective identity. Nowhere is this more evident than affiliation with the school's sports teams. Schools are important community institutions; they provide a common connection and a gathering place for events and services, including political forums, community theater and health care clinics.

For children in rural areas, consolidation often means going to school miles from home, spending as much as three hours a day on the bus and missing after-school activities as a result. The nation's 400,000 schoolbuses travel 21 million miles every day.

Until recently, the size, structure and location of public schools was exclusively the domain of local governments. Although public education is a state responsibility, local governments were given substantial control over their schools. School revenue was primarily derived from local taxes, particularly property taxes. Those districts that chose consolidation did so (and still do today) for many reasons, including declining populations, lack of resources and the feeling that large schools provide a better education.

Today, the size and structure of public schools is as much a function of state policy as it is of local policy. Over the last 30 years, states have exercised increasing control over education. Many states, for example, have adopted statewide standards for student achievement. States are now the single largest source of education revenue.

For many small rural districts, state financing has been a lifesaver, providing desperately needed resources. But state control of the purse strings has also been problematic for small schools. In many states, funding formulas have given priority to maximizing efficiency (as measured by annual per pupil costs). These states have devised policies that favor big suburban districts and pressure rural schools to consolidate. Meanwhile, a few states have recognized the effectiveness of small-scale, local education. Two statesÐNebraska and VermontÐillustrate each approach.


Nebraska is home to many small schools. In fact, the state has the largest number of school districts per capita in the nation. During the 1950s and 1960s, Nebraska resisted the trend towards consolidation. After a 1968 report concluded that the Midwest's schools were too numerous to be effective, Nebraska's neighbors (Iowa, South Dakota, and Missouri) embarked on a major reorganization. But Nebraska residents chose instead to oust the state education commissioner, who had endorsed the report.

Today, however, Nebraska's small schools are struggling to survive. Beginning in 1996, the state adopted a series of policies aimed at forcing small schools to consolidate. The state increased its share of school funding from about one-quarter to one-half. But unlike the old funding formula, which had doled out funds based on each school district's costs, the new formula provides a flat rate per pupil. This rewards the state's largest school districts, which have low per pupil, per year costs, and penalizes the state's smallest school districts. Ninety small rural districts have lost more than 10 percent of their state aid. Meanwhile, the largest school districts saw their funding increase by $78 million.

Nebraska's small school districts now face a difficult choice. To survive, they must either slash school budgets or raise property taxes. But the schools affected by funding cuts are in some of the poorest areas in the state. The farm crisis has further aggravated the situation.

Dozens of small school districts are now considering consolidation. According to the Nebraska Alliance for Rural Education, the state is losing some of its best schools. Those who attend high schools with fewer than 100 students are significantly more likely to graduate and go on to college.

By narrowly focusing on short-term efficiencies, the state is missing the bigger picture: the cost per graduate for the 90 school systems that have lost funding is $6,717 per year, only 7 percent more than the state's largest schools (1,000 or more). Add to this the societal impact of college educated citizens and the community impact of having a local school and Nebraska's small schools easily provide the best value.


Like Nebraska, Vermont has many small schools. The average school in the state has only 310 students. But with regard to its smallest schools, Vermont has taken a very different approach than has Nebraska.

In 1997, following a court ruling that concluded that the state's method of financing education was inequitable and unconstitutional, Vermont adopted Act 60. The law replaced local school taxes with a statewide property tax, ensuring that every citizen pays the same tax rate ($1.10 per $100 of value) and that each district, rich and poor, receives a basic per pupil grant for education.

On top of this, lawmakers provided additional funds to cover the higher costs of the state's smallest schools. Act 60 allocated $1 million annually to those school districts with fewer than 100 students. Initially, this was meant to be a temporary arrangement. Many legislators favored consolidating small schools. Act 60 contained a section (known as the "base closing" section by small school supporters) that directed the Education Department to determine which schools, if any, should continue to receive the extra funding. The department was to recommend "alternative physical arrangements for those small schools."

But early in 1998, the department's report came to a surprising conclusion. "Small schools in Vermont cost more to operate than larger schools but they are worth the investment because of the value they add to student learning and community cohesion." Academically, small school students do as well or better than large school students, despite living in communities with higher rates of poverty and lower education levels.

Rather than suggesting "alternative physical arrangements," the department urged the legislature to increase the small schools grant and expand the number of districts that qualified. The state responded by increasing the grant to $4 million and extending it to districts with fewer than 20 students per grade level. This year, one-third of all school districts qualify. The additional funds provide an average of 5 percent of their revenue.


The effort to create small urban schools still faces a long road and many challenges. "When we talk with school officials and local politicians about restructuring large high schools," says Deborah Meier, "the first thing they worry about is what will happen to the basketball or baseball teams, the after-school program, and other sideshows; that the heart of the school, its capacity to educate, is missing, seems almost beside the point." Nevertheless, the urban movement for small schools has gathered significant momentum in the last decade. The future of rural small schools is less certain. In many states, the push to consolidate continues. In South Dakota, the state legislature is considering abolishing the state's small school funding adjustment, which provides 20 percent more aid for schools with fewer than 200 students.

In West Virginia, a group of parents in the town of Circleville sued the state School Building Authority (SBA), which controls funding for school construction and repair. The SBA allocates funds only to those schools that meet minimum enrollment requirements (1,050 for schools with grades 7-12). Since the SBA's creation in 1990, one-quarter of the state's schools have closed. Circleville's school was one of these. The town's children spend up to two and half hours on the bus each day. Parents contend that this amounts to an unequal education. The state Supreme Court ruled against them, concluding that they did not provide enough evidence of the harm caused by lengthy bus rides.

But the parents may get the last word. Their cause has ignited a statewide grassroots movement, which is backing a bill to limit the time kids can spend on a bus each day.

Stacy Mitchell is a Research Associate with the Institute for Local Self-Reliance.

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