Cut dropouts and win, N.C.

RALEIGH -- As the General Assembly wrestles to balance the budget, here's a way to raise at least $1.4 billion for North Carolina that won't take a tax increase -- cut our state's dropout rate in half.

A sophisticated cost-benefit study released this month by four eminent economists found that converting a dropout to a high school graduate would net $127,000 per student in public benefit over that student's working life. That benefit comes from higher tax revenues that each graduate would produce and lower government costs for public health, crime and welfare that historically are higher for dropouts. A dollar spent that actually cuts dropouts creates $2.50 in public benefit, these economists determined.

Multiply that $127,000 by 11,000 young people -- roughly half the number of North Carolina students who drop out each year -- and the state gains $1.4 billion over the next four decades. Keep in mind that an additional $1.4 billion would begin to accrue as well in every subsequent year that 11,000 dropouts become graduates instead.

The economists behind the study and others who have examined it call that benefit estimate conservative, because it includes only public benefits. Census Bureau figures show that the increase in lifetime earnings for high school graduates compared to those of dropouts ranges from $200,000 to $3.4 million, depending upon educational attainment after high school. Those additional earnings raise more tax revenue, which the new study calculated. But they also create more spending in the private sector on everything from flat-screen TVs to more expensive homes. That private sector spending creates more jobs and expands the economy, which these economists did not add into their estimates.

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North Carolina stands to gain even more than this new study projected. Over the last three years, the N.C. New Schools Project and school districts have worked to create nearly 90 innovative, highly effective high schools across our state. Some examples: the East Wake School of Information Technology, South Granville School of Health and Life Sciences and Clement Early College High School.

They are designed explicitly to ensure that all students graduate fully prepared for the demands of high-skills work and college, to deliver learning that is relevant to keep students engaged and to build relationships between students and teachers that provide the support young people need to stay in school.

Not only do these schools fully expect to graduate all students, they expect to ready them for the fullest possible range of choices -- whether that means higher education or training to get a good job. That's a far more desirable outcome than simply reducing the dropout rate.

While North Carolina has pushed farther faster than any state in pursuing high school innovation, the state isn't chasing a pie-in-the-sky vision. As part of our work, we've taken hundreds of teachers and principals to schools across the United States that have been delivering results for years.

Consider University Park Campus School in Worcester, Mass., where the poverty rate is 73 percent, the English-as-a-second-language rate is 67 percent and the graduation and college-going rates are 100 percent. Or New Technology High School in Napa, Calif., where 89 percent of graduates over eight years have gone on to higher education or technical training. The graduation rate for the Class of 2006 in 14 innovative high schools opened in the Bronx just four years ago was 79 percent, compared to 58 percent across the rest of New York City.

All of these schools arguably are more cost-neutral and have had a quicker impact than the interventions such as smaller class sizes and better preschool that were placed on the cost side of the ledger by the economists from City University of New York, Columbia and Princeton who wrote the recent report. That potentially means greater public benefits adding up more rapidly.

The first step in reaping this billion-dollar high school graduation windfall doesn't cost a dime. It is creating the belief in every corner of North Carolina that all students deserve to graduate from high school ready for what this century holds for them, and that we adults must guarantee that they get that education. We've begun to take that step and we must see it through for all children. If we do, the gains to our state -- social, economic, democratic -- will be incalculable.

(Tony Habit is president of the North Carolina New Schools Project.)