The Prize (22 page)

But nothing revealed the dimensions of the power struggle as vividly as Booker, Christie, and Zuckerberg's quest for what they called a “transformational” teachers' contract, one they hoped would become a model for attracting the nation's most talented college graduates to teach in distressed cities. The goal was to apply business-style accountability to teacher pay—abolishing the long-standing system of basing salaries on years of service, instead making student performance the measure of a teacher's worth. They wanted the contract to ease the removal of teachers with the worst evaluations and to reward the best ones with pay raises, handsome bonuses, and more remunerative career opportunities.
Unlike the other battles, this one played out almost exclusively behind the scenes—in elected officials' private offices, union halls, tony corporate meeting spaces, windowless warrens in the district headquarters, and phone calls between politicians and billionaires.

In early 2012, Cerf made a trip to Washington to meet privately with Randi Weingarten, president of the American Federation of Teachers, the parent of the Newark Teachers Union. For more than two years, Newark teachers had worked without a contract and without raises. Negotiations with the previous superintendent had gone nowhere. Cerf and Weingarten had developed a cordial relationship when he was Klein's deputy in New York and she was president of the city's AFT local. Despite philosophical differences, she viewed him as an honest broker who respected the work of teachers; he viewed her as a leader who wanted to challenge the public's notion that unions served adults at the expense of children.

In Washington, Cerf was blunt. He made clear that he and Christie could use Zuckerberg's money in one of two ways: to underwrite
a teachers' contract that imposed consequences on the worst and rewarded the best, or to “charterize” the city, ultimately leading to the collapse of the district.

“My view had been that the trajectory was for Newark to become a charter district like New Orleans,” Weingarten said. New Orleans, which was transformed into an almost all-charter system after Hurricane Katrina destroyed the vast majority of its schools in 2005, was the ultimate threat to teachers' unions. Teachers in the school district were unionized; those in charters were not. After talking with Cerf, she saw the contract—despite the compromises involved—as a path to save the district, and with it, union jobs.

Weingarten had been national president of AFT since 2008, but having worked in New York for decades, she was painfully aware of the failure rate in Newark schools and was convinced that the district's teachers had to unite behind an improvement strategy. “One of the first things I did when I became national president, I went to Newark and met with Joe, and I said we have to help. We need to do something to help you.”

“Joe” was Joseph Del Grosso, president of the Newark local for almost twenty years. A relic of Italian American hegemony in a now black and brown city, he had helped create the system the reformers wanted to dismantle, having won his members handsome raises, sizable pay “bumps” for longevity, and enough paid sick and personal time to cover almost one in ten school days. A onetime firebrand who in 1970, as a second-grade teacher, went to jail for three months for participating in a strike, Del Grosso was now sixty-five, with a white hatband of hair. He still delivered blistering speeches against state control and the charter school “conspiracy,” but he was visibly tired, struggling against Crohn's disease. “Joe and I thought this was an important step,” Weingarten said of Cerf's proposal, “to get the principals who controlled the district to be willing to invest and support as opposed to destabilizing a public system.”

Weingarten was wary of Christie, who had rocketed to national fame as basher in chief of the state teachers' union. But she and the
governor had a chance encounter at a New York ceremony on the tenth anniversary of the 9/11 attacks that made her think perhaps they could do business. She recalled that Christie took her aside, told her of living in Newark as a young child, and said with seriousness, “I really want to do something” in Newark. “I was incredulous,” Weingarten said, “and I looked at him and asked, ‘Are you telling me you don't want to do something ideological? You really want to do something about the Newark
district
schools?' And he said yes.” They saw each other again the following February in Washington, at the White House Correspondents' Dinner, when negotiations were flagging, and Christie said they resolved to push their two sides harder. “What a story that would be,” the governor recalled saying, “if Chris Christie and Randi Weingarten stand next to each other at a press conference in Newark, New Jersey, and announce a new teachers' contract.”

In a document given to Booker on the day of the
Oprah
announcement, Zuckerberg had made clear that he wanted to use half of his gift—$50 million—to win a game-changing teachers' contract.
He was influenced by a labor agreement Michelle Rhee had reached with teachers in Washington, D.C., in 2010, which electrified the reform movement. It allowed her to lay off teachers based on merit, without regard to seniority. And with $64.5 million from four venture philanthropists—Eli and Edythe Broad, Laura and John Arnold, the Walton family, and Julian Robertson—the Washington contract provided hefty bonuses for the highest-rated teachers, who could earn up to $100,000 by their fourth year if they agreed to forfeit tenure protections.

Zuckerberg's document laid out similar goals: “Restructure pay scale to increase base salaries for new hires . . . Abolish seniority as a factor in all personnel decisions and incentivize the removal of poor performers.”
He also wrote that he wanted the best teachers to receive bonuses of up to fifty percent of their salary, the kind of incentives paid to top workers in Silicon Valley.

The young philanthropist was unaware, however, of a key difference between Newark and Washington: tenure and seniority pro
tections were enshrined in New Jersey state law, and contracts alone couldn't eliminate them. Cerf and Christie were working to change that statewide, but this required them to win over a legislature in which horse-trading Democratic political bosses called the shots and the New Jersey Education Association, the biggest teachers' union—a subsidiary of the National Education Association—was by far the largest contributor to political campaigns. The NJEA and Christie were already at war. The union had spent millions of dollars trying to defeat him in 2009 and recently had lost a bruising battle against his fiscal austerity package, which required public employees to contribute more to their health care coverage. Buoyed by his victories, Christie ramped up the attacks, casting the NJEA as New Jersey's version of the evil empire, a selfish, greedy “playground bully.” Polls showed state residents were increasingly siding with Christie, and Democratic lawmakers were caught between restive voters and their richest patron.

After arduous negotiations, in the summer of 2012 the legislature did pass a measure that made tenure harder to achieve and much easier to lose—an example of laws then being passed in many states to qualify for the Obama administration's Race to the Top education grants.
Modeled in part on a recent Colorado reform measure, the New Jersey law empowered districts to strip tenure from teachers with two consecutive years of poor performance ratings and made student growth on standardized tests a factor in their evaluations. In return for union support, however, New Jersey lawmakers kept seniority protections intact. Union leaders had argued that in a time of tightening school budgets, many districts otherwise would lay off their most expensive (read: senior) teachers, without regard to merit. “It would've put this union and all unions out of existence,” said Del Grosso. The measure passed both houses unanimously, with strong support from the NJEA and Weingarten's AFT, which included few New Jersey locals other than Newark's.

At the time, there was growing skepticism nationally on the validity of grading teachers based on the annual growth in their students' test
scores.
In fact, one of the leading skeptics of this brand of high-stakes accountability was Dr. Damian Betebenner, a statistical analyst who developed the system used in New Jersey and about thirty other states to measure that growth. Reached in his office at the National Center for the Improvement of Educational Assessment in Dover, New Hampshire, Betebenner said the system, known as Student Growth Percentile, was designed to measure student gains or losses, not to assign blame or credit for them. “Simply focusing on teachers as being the only potential cause of growth of students is pretty obviously myopic,” said Betebenner. The data would be more useful, he said, as a starting point for discussions with teachers on the reasons individual students are improving or losing ground, which could include many factors in and out of school. “A lot of high-stakes accountability has become self-defeating—focusing solely on the identification of bad schools, the bad teachers, as opposed to creating a signal and involving teachers in processes that lead to investigations and changes,” he said.

Nonetheless, test-based teacher accountability for student performance remained a primary goal of the reform movement, and Christie touted the law nationally as yet another bipartisan victory in a blue state. But the law's preservation of seniority rights dealt a blow to Zuckerberg's vision for the Newark contract. Negotiations were under way at the time among Cerf, Anderson, and Del Grosso, and seniority protections for teachers were suddenly off the table. “If this is our one shot at reform, this is a terrible disappointment,” Cerf told lawmakers. With charters expanding, district enrollment shrinking, and the pool of excess teachers swelling, Anderson would have no way to downsize except to lay off the most junior teachers and keep all senior ones in place, regardless of who was better at reaching kids.

“There is no way we can have a transformational contract without eliminating
LIFO
,” Anderson said at the time, referring to the seniority system known as Last In, First Out.

With a crucial goal now out of reach, Cerf and Anderson nonetheless won significant teacher accountability measures in the contract,
again thanks to the power of Zuckerberg's purse. As long as anyone could remember, Newark teachers—like most teachers nationally—had received virtually automatic pay hikes regardless of performance. “Keep breathing another year and you get your raise” was the way Cerf and many other reformers derided the status quo. Del Grosso, with Weingarten's blessing, agreed to Cerf and Anderson's demand that his members no longer would get pay raises unless they were rated effective or better under a new and much more rigorous evaluation system. All others would have their pay frozen. In addition, teachers rated at the top of the scale would receive merit bonuses ranging from $5,000 to $12,500—the first use of merit pay in New Jersey. But as his price for all this, Del Grosso demanded $31 million in back pay for the two years that his 3,600 members had worked without raises. In fact, he made it a condition of even staying at the table, on a bet that the reformers wanted a contract at least as much as he did. He turned out to be right. After conferring with Zuckerberg's representatives, Cerf and Anderson added $31 million to the philanthropists' tab.

The cost of labor reforms was growing increasingly extravagant. Anderson put the price of the teachers' contract at about $50 million—with back pay by far the biggest component and the rest going to merit bonuses and one-time stipends to encourage teachers to switch to a universal pay scale. The existing system had three scales, with higher pay for teachers with master's degrees, and still more for those with PhDs. Under the universal scale, teachers would no longer receive higher pay for earning degrees. Instead, they would get tuition support, but only for graduate programs Anderson deemed relevant to their effectiveness—adding another $8.5 million to the bill. Anderson also asked for a $20 million buyout fund to encourage weak teachers to leave, and another $15 million for an anticipated new principals' contract modeled on the teachers' agreement.

Anderson estimated the total cost of the labor agreements at $100 million, far more than Booker and Zuckerberg had expected. This came to half the anticipated philanthropic bounty of $100 million
from Zuckerberg and $100 million in matching gifts. The FNF staff's strategic plan had called for investing heavily in ongoing community organizing around reform efforts and also in early-childhood programs. But these plans were canceled to make way for the labor costs as Anderson had calculated them.

Also gone was a plan to spend $50 million on programs for an estimated four thousand teenagers and young adults who had dropped out of school, with few skills and less hope, becoming a recruiting pool for Newark's proliferating gangs. Booker had made “disaffected and at-risk youth” his personal project—Zuckerberg hadn't committed to it—and he spoke eloquently of the urgency of connecting young dropouts with learning and economic opportunities, lest they swell the school-to-prison pipeline. But he ended up not raising the money to pay for the initiative, which was quietly shelved, even as intensifying gang violence seemed to validate the mayor's concern.

This meant the contract would be the signature play to transform the Newark district. But as the deal came together in the summer of 2012, Booker hadn't raised enough money to match the young billionaire's gift—the condition for unlocking his dollars.

At the time of the announcement on
Oprah
in September 2010, Bari Mattes, Booker's chief fundraiser, had predicted Booker would raise the full $100 million by Thanksgiving or Christmas. He didn't. “We're almost there,” he said in early 2011. The following summer, Booker said he believed the Texas-based John and Laura Arnold Foundation, major donors to charter schools and to the Washington, D.C., contract, was on the verge of donating $25 million. But the Arnolds didn't give. “The truth of the matter is I'm not that concerned about that now,” Booker said in an interview as the one-year anniversary of the announcement approached. “When Facebook goes public, Mark is going to create about ten billionaires, and there's a lot of interest among them in helping out.” Facebook went public in May 2012, but the new billionaires didn't donate to Newark.