Dalio’s secret pet project

Ray Dalio is well known in Connecticut as head of a profitable hedge fund, Bridgewater Associates — whose profits have been fueled in part by generous state tax breaks and subsidies. His Dalio Foundation has been involved in Connecticut charter and public schools, with mixed reviews from the communities involved.

Dalio’s newest venture is the Partnership for Connecticut. Using his influence, he had a law passed creating a nonprofit corporation in which his foundation contributes $100 million, the state contributes $100 million and together they attempt to raise another $100 million. The laudable but vague goals of this partnership include “strengthening public education” and “promoting upward mobility” in underserved communities. The contributions, while generous, represent a small fraction of what is needed to meaningfully address even one of several goals of the law.

According to the law, the membership of this corporation consists of directors appointed by the Dalio Foundation and the governor, the governor and members of the General Assembly. No one from the law’s targeted underserved communities leads this effort.

Controversially, the Partnership insists on being exempt from Connecticut transparency and ethics rules. Supporters maintain that “innovation” is required to solve entrenched problems like poverty and struggling public schools, and addressing these sensitive issues can only be done in private.

When it comes to public education, the issues have already been addressed in a public forum the CCJEF trial. The trial judge made thousands of public findings of fact in his 2016 decision in Connecticut’s school funding case, all based on evidence presented during the monthslong public trial.

Among his findings are that Connecticut’s poorest districts have significantly lower levels of children who attend high quality preschool, and that preschool provides significant lasting benefits, particularly for poor children, such as: reduced grade repetition and special education identification rates, decreased behavioral problems, higher graduation and employment rates, higher lifetime earnings, reductions in involvement with the criminal justice system, reductions in the probability of being on welfare, and improved health measures.

The evidence at trial also proved that, despite higher need, Connecticut’s poorest districts could not afford an adequate supply of guidance counselors, social workers, psychologists, reading interventionists, special education teachers, and teachers and services for bilingual students. The lack of these essential services prevented these districts from successfully serving their neediest children. Districts often had to spend their Alliance District money, funds intended to be “extra,” to try to pay for at least some of these basic services and staff; and had to divert money intended for general education to cover growing special education costs.

This persuasive public evidence came from people who work in and belong to the communities shut out of the secretive Partnership for Connecticut leadership. They are the ones with the knowledge of what these communities lack and need.

The trial court findings paint a picture of districts in triage mode, trying to plug gaping holes caused by inadequate state education funding.

Unfortunately, the court found that though these severe resource gaps exist, Connecticut has no constitutional duty to fill them. While this ruling was a blow, the reality is that even in states where school funding plaintiffs score judicial victories, those wins must be translated into real increases in school funding through the legislative process. So, despite the court loss, if Connecticut had the political will, it could still reform its school finance system to help our neediest children.

In fact, a wealthy Connecticut financier recently acknowledged in a highly publicized paper that “underfunded public schools are suffering in quality.” He observed that “across states, there is a strong relationship between spending per student and educational outcomes,” and “(s)chool finance reforms show that a 10% increase in perpupil spending can have a meaningful impact on educational outcomes for lowincome students.”

Who was that financier? Ray Dalio.

School finance reform is not an innovation. Nor is it accomplished in private. It is achieved through the open, democratic legislative process. And it costs money — more than the projected annual $40 million Partnership disbursement, which represents about 2 percent of yearly state education funding.

Rather than use his money and influence to galvanize a statewide public school finance reform effort, something he admits garners significant results, Mr. Dalio instead has diverted the public discourse on the fate of Connecticut public education to a secret pet project that is unlikely to move the needle for Connecticut’s neediest children.

Dalio’s effort has provided one valuable lesson: when it comes to Connecticut’s public problems, private philanthropy is not the answer.