Does Oakland have too many schools?

7 Facts to Consider

It’s a new school year, and OUSD still faces major financial challenges. We are picking back up on our #OUSDBudget series. Superintendent Kyla Johnson-Trammell has prudently named “Fiscal Vitality” as priority #1 in her draft workplan for the year. The work plan also prioritizes creation of the district’s Blueprint for Quality Schools, intended to be kind of a master plan for the district. Both these priorities raise the big question: Does Oakland have too many schools?

IMHO, the answer is: YES.

But, like so many other aspects of public education, the answer is actually not so simple. It is possible to have a city-wide portfolio of many small schools (like OUSD has) and be financially viable as a district – but it requires flexibility, prioritization, and purposefulness, none of which are strong suits of large bureaucracies. The real issue is under-enrollment of many schools, combined with a persistent failure to make trade-offs.

Here are seven facts to consider:

FACT 1: Oakland has more schools than comparably sized cities.

In its 2016 report, Educational Resource Strategies provides the numbers: OUSD operates nearly double the number of schools as districts serving comparable numbers of children. Getting to the median would require OUSD to reduce its portfolio by approximately 30 schools.

FACT 2: More schools typically require more central office staffing to oversee.

In the state bureaucracy, every public school has a unique, 14-digit California Department of Education-assigned County-District-School (CDS) code, which is used to report Average Daily Attendance, disburse funding, and report on student outcomes. Each unique CDS code represents a different budget to keep track of, a different code to use for classifying employees, additional reports to file, additional row or columns on every spreadsheet for every activity where information needs to be gathered, analyzed and reported. It means an additional principal or office manager to contact and inform and support and follow-up with. This all results in additional work – and therefore additional staff – in every central office function: more budget analysts, more HR generalists, more IT people. This can be mitigated through technology, but unfortunately, because OUSD has not historically invested in technology, many tasks are unnecessarily manual (and time-intensive) processes. And certainly, there are some central office activities that cannot be automated, like coaching principals. The relatively high number of schools is one of the reasons that OUSD spends more on its central office compared to similar-sized districts.

FACT 3: Small schools can be more expensive to operate (on a per pupil basis) than large schools.

On average, OUSD spends one-third more per pupil at its small (<350 students) schools than at larger schools. The difference is much bigger at the middle and high school levels than at elementary schools. Again, from the 2016 ERS report:

In some cases, small schools are operating in buildings that could house many more students – in which case we’re paying for heating and lighting and maintaining more space than we really need for that number of children. But this is not the main driver of the cost difference between small and large schools. In any school, personnel (i.e. salary and benefits) comprise the vast majority of the budget, so it should be no surprise that this is where the difference lies.

In classic “factory model” schools (which, let’s face it, most of our schools still are), specialization and economies of scale go hand in hand. Secondary schools require subject-specific teachers (i.e. different teachers for math, English, science), and these subject-specific teachers are more likely to be “fully utilized” at a large and fully enrolled school with a typical schedule (i.e. where you have enough students for a Physics teacher to teach 6 periods of Physics, and each Physics class is enrolled at maximum capacity). In contrast, a small school may end up employing teachers who teach fewer periods or smaller classes (which is arguably better for teachers and students, although it is not fiscally “efficient”).

FACT 4: Small schools can be financially viable, even at relatively low California per pupil funding levels.

Small schools are not necessarily more expensive than large schools. Within Oakland and across the state, there are many examples of small public schools that are financially viable on the average per pupil funding levels. To do so, they must be frugal and flexible with their resources. For example, a small school might hire a part-time teacher as a reading interventionist, partner with a community organization to provide art or music lessons in exchange for weekend space, or ask a math teacher to teach coding in addition to algebra. This can be hard to pull off (can you find a teacher who is credentialed to teach both biology and art?), and labor contracts might constrain some “creative” arrangements. It also usually means making some trade-offs. For example, it can be very hard on teachers to prepare for and teach multiple courses, cross-subject collaboration is harder with part-time staff, and limited funds may mean fewer special subjects and extra-curriculars.

FACT 5: School districts can be financially viable at all levels of enrollment and numbers of schools (up to a point).

California has about 1,000 school districts, ranging in size from 6 students in Little Shasta Elementary to Los Angeles Unified at nearly 640,000 students (see ) [1]. The 20 CA districts closest in enrollment to OUSD operate an average of 47 schools, representing a wide range: from 20 to 76 schools. OUSD operates the most schools by far: 93 (including Adult Education and other specialized schools) –22% more schools than the next highest district.

[1] In this link, as in some of the CDE data sets, they include in-district charter enrollment.  Notice OUSD shows up at almost 50K students.

As far as we know, all these districts are financially solvent, although some (like our neighboring Fremont) have also made budget cuts. So while OUSD’s enrollment and budget may be smaller than it was 10 years ago, theoretically it should be able to structure itself so that expenses don’t exceed [1]revenues. Of course, that will take organization-wide fiscal discipline and doing lots of things differently.

[1] In this link, as in some of the CDE data sets, they include in-district charter enrollment. Notice OUSD shows up at almost 50K students.

FACT 6: Smaller schools can be good for students, families and community. So can bigger schools.

Nearly 20 years ago, Oakland embarked on a deliberate strategy to improve the quality of schools by making them smaller, based on the belief that smaller schools could become more tight-knit communities in which students and families were known well and supported. Known as the Small Autonomous Schools Movement, this effort subdivided large schools into multiple small schools, each with a school leader that was given flexibility with budget, staffing, and program decisions to execute a vision collaboratively created with teacher leaders and the community. Many (but not all) of these schools outperformed their predecessors, creating nationally recognized proof points of the benefits of this approach.

Subsequently, OUSD launched its Full Service Community Schools initiative. This brought other public agencies and community organizations into schools to provide a host of additional services to students – health and wellness, counseling, family engagement, etc. This work has also gotten results and is viewed as a national model. It is also a model that requires scale: partnering service providers of all types need to serve many families to be financially viable.

Lucky us; we have two effective models for serving our families. But they are different approaches and both require resources to implement well. This is why the work to create the “Blueprint” is so important: how are we going to decide which schools and communities need a Full Service Community School, and which need a small school, and which need something else?

FACT 7: Not all small schools are small for the same reasons.

Some were deliberately designed to be small; if they are serving students well, can they grow without losing what makes them special? Some can’t get bigger because of the physical constraints (e.g. a small building); can we add another floor to an existing building? Some are in hard-to-get-to locations with fewer children in the area; can the district or city provide transportation?

Financially, some schools have the “luxury” of remaining small because they are getting extra dollars per pupil – through district subsidy or parent fundraising or philanthropic grants (although these sources don’t always address the additional central office burden). The district’s practice of cross-subsidization means that school and district leaders may not make the same financial and program trade-offs as they would if they had transparent information and direct access to the public dollars generated by their students.

But some schools are small because very few families are choosing them. Often, but not always, it’s because families have legitimate concerns about school safety or academic performance, despite years of hard work to improve them. Sometimes, they are also important neighborhood institutions. Often, even when students have gone elsewhere, these schools are staffed as if they were fully-enrolled – so they end up with more expenses than the revenues warrant. These under-enrolled schools contribute to the district’s financial woes and present a real conundrum for our leaders and community.

If we, the citizens of Oakland, want the district to be financially viable, AND we want many good schools representing a variety of models to meet the needs of different families and communities, we need to ask a different set of questions. “Does Oakland have too many schools” over-simplifies the challenge. Instead, we need to ask what mix of schools (of varying sizes and models) do we need as a city to serve all our students well? What types of school, at what quality levels, will ensure full enrollment at the schools we do have (whatever the size)? What trade-offs will we need to make to operate a mix of excellent schools AND be financially viable as a system? And what will we do together to make this new approach a reality?

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The Eclipse, Alignment, and Hope

Last Monday, as our sun was being eclipsed by our moon, another sun was born: OUSD opened a brand new dual-language immersion middle school called Oakland School of Language, shortened to Oakland SOL. (“Sol” is Spanish for “sun.”)

Being at OSOL on its first day was inspiring. Unlike our cloud-obscured and fleeting view of the eclipse, OSOL provides a vivid picture of what is possible in public education. Specifically, OSOL’s opening shows the power of alignment – when individuals, organizations, systems, and community come together. I’d love to see the Oakland public education community embrace this lesson from OSOL as we face the challenges ahead this school year.

For the students, community, parents, and educators who were part of the OSOL design team, last Monday was a triumph– the realization of three years of dreaming, hard work, late nights, overcoming setbacks, and belief in what is possible when a community works together. On opening day, two parents – Yessenia Copado and Che Abram – spoke eloquently (one in Spanish, one in English) about why they chose to be part of the school design team and how they felt, now that the school was open. Their words reminded me of my own life-changing experiences opening schools. It also made me want to hug every one of them and tell them that the sacrifices were worth it.

I also wanted to remind them that there is still a lot of work to be done– because getting to opening day is only the beginning. Lots of research reveals that the launch year of a new school is critical in determining its long-term success. The OSOL team has years of continued hard work ahead, designing and redesigning different aspects of the school to create a healthy climate, a robust and well-rounded education program, and operational systems that run smoothly, with student needs front and center.

Fortunately, OSOL has many assets already aligned: a visionary leader, a talented team, a strong and growing base of families, support from local partners like Oakland Community Organizations[1], and district leadership that is aware of the need to embrace innovation (even when it struggles to do so).

New Superintendent Kyla Johnson-Trammell and Board president James Harris both visited on the school’s first day. I hope that seeing OSOL inspired more ideas for what can happen when the District listens to parents, empowers a talented school leader, and invests in the future. I also hope that the District can modernize its back-end systems like hiring, budgeting, and enrollment to support this unique school and all district schools going forward.

I know that some are wondering why OUSD would open a new school when the district is in financial distress and already has so many (maybe even too many) schools. It’s a valid concern, heightened with last week’s release of a report on OUSD’s poor fiscal health by the state’s Fiscal Crisis & Management Assistance Team (FCMAT). We’ll address this question in an upcoming #OUSDBudget post. But the short answer is simple: Oakland does NOT have enough quality schools. If we seek to increase enrollment to restore financial vitality, then we must provide more families with excellent schools.

OSOL and many of the best schools across our City emerged when families raised their voices to demand quality– and either changed the system or built new schools from the ground up. District leaders must seek out and engage diverse parents, guardians, students, and community as they examine and make decisions about the future mix of schools, which they appear to be doing through their Blueprint for Quality process.

OUSD faces big challenges ahead – not only financial risks but also a teacher shortage, continued toxicity in the public arena, and strong institutional inertia. The solutions cannot rest completely on the shoulders of our District leaders. While I am optimistic that our new Superintendent and her team can provide leadership that our schools need, community-based organizations like ours and community leaders from all over the city have an obligation to both support and continue to push too. We have to send clear and sustained signals to the Board that tough decisions are needed, and we’re ready to make them together.

The sun, moon, and earth aligned for the historic eclipse last Monday. OSOL’s founding team aligned to create a new school. Now families, educators and community must align for the future of Oakland public education. Who’s ready to jump in?

[1] Full disclosure: Educate78 also contributed to the development of the school through our School Design Lab.

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OUSD Budget – Long-Term Obligations; Near-Term Impact

In case it hasn’t already become clear, the challenges of the current 2016-2017 fiscal year are not the end of OUSD’s financial woes. Among the biggest of the looming issues: benefits and ballooning pension costs.

Robust benefits and the opportunity to participate in the State’s defined benefit pension systems can help OUSD attract talent and are an important investment in the people serving our children. Nevertheless, OUSD has limited resources – and expenditures for employee benefits come from the same pool of funds as base salaries and books. Over the next several years, increasing pension costs in particular will require increasingly difficult trade-offs, in part because of factors outside of OUSD’s control.

Current Expenditures on Benefits & Retirement

OUSD offers very generous health and welfare benefits. For example, OUSD pays the complete cost of health, dental, and vision insurance for the entire family of each employee. Compared to other similar districts, OUSD benefit costs are 50% more per full time equivalent employee. (See slide 110 of the ERS report from June 2016.)

Nearly all OUSD employees also participate in one of two state pension systems: California’s State Teachers Retirement System (CalSTRS) for teachers, principals, and others with a teaching credential, and California’s Public Employee Retirement System (CalPERS) for everyone else (e.g. buildings and grounds, noon duty staff, office administrative staff).

This school year, OUSD is contributing to 12.58% to CalSTRS and 13.89% to CalPERS for eligible employees. (Employees themselves also contribute a mandatory amount: 9.2% or 10.25% for CalSTRS depending on hire date, and 6% for CalPERS). This all adds up: in 2015-2016 OUSD spent $30.4 million total on contributions to CalSTRS and CalPERS – 6% of the General Fund.

What’s Coming [Cue Ominous Music]

Unfortunately, both CalSTRS and CalPERS don’t have enough funds to cover payments to future retirees. This is a result of years of overly optimistic projections on investment returns that have not materialized and show no signs of doing so soon. So, both have mandated that employers (such as  school districts) steadily increase their contributions each year, to 19.5% for STRS and 28.2% for PERS by 2021. In other words, over a 10-year period, the district’s pension contributions rates will double.

For OUSD, this means that next year, at least $10 million more of the general fund will go to pensions. By 2021, if total salaries are the same as in 2015-2016, it will be a total of $26 million more than today – 11% of the general fund. If total salaries continue to go up, then the benefits contribution also goes up. And remember, the current year budget cuts aimed to reduce expenses by $11 million.

These required pension contributions will likely constrain the district from spending money on anything else, including field trips, classroom supplies, extra services for high-need students, technology, and raises, which is unfortunate because our teachers remain underpaid compared to the average across Alameda County school districts .

A Perfect Storm

CalSTRS and CalPERS contributions are climbing at precisely the same time that state funding is expected to plateau – a recipe for financial disaster for districts across the state. The recent California Schools magazine published by the California School Board Association had a piece on this issue with this sobering infographic:

Even wealthy districts like Piedmont are worried. Former Piedmont Unified School Board President Richard W. Raushenbush recently wrote a clear and compelling – but largely overlooked – opinion piece, published in the East Bay Times:

School districts spend about 60 percent of their budgets on teacher and staff compensation, so a 10 percent increase in retirement contributions means roughly 6 percent of the entire budget has to be reallocated from educating children to paying off underfunded pension plans.

Oakland is in an especially difficult position. David Crane, formerly with the California Governor’s Office, recently wrote a brutal analysis of San Jose, which has a “Positive” rating for its finances. In it, he notes:

Worse off are “Qualified” certification districts, which host more than 1 million students, including in LA, San Diego and Oakland. They expect they may not meet financial obligations for the current or next two fiscal yearsand thats after already shortchanging students and teachers.

In other words: this year’s budget cuts were just the beginning. Despite painful cuts this spring for both schools and central office, OUSD is expecting to dip into its state-required 2% reserve to end the 2016-2017 fiscal year in the black. To balance next year’s books, OUSD will need to cut enough to cover previously-committed salary raises, make the higher required pension contributions, AND restore the reserve.

Clearly, district leadership will need to make some tough decisions ASAP, including: restructuring central office and making better use of District facilities and assets. We also need to push for state-level changes that will help cities and students across California. These are some big rocks, and the only way they are going to move is if we push together.

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Equity & OUSD Budget

So far in our #OUSDBudget Real Talk series, we have asked and answered the following questions:

  • How much money does OUSD spend overall and per pupil?
  • How much does it spend on schools versus centrally?

Now we look at the question of equity.

“Equity” is a frequently used term in Oakland; some might even say it’s over-used and misused. OUSD’s Deputy Chief for Equity, Chris Chatmon, provides a definition that is succinct, free of jargon, and spot-on: Provide everyone access to what they need to be successful.

So, when we ask if OUSD’s spending is equitable, we’re asking: is OUSD allocating more resources to students who need more support to be successful? This is a complex and challenging question, but fortunately, last year’s ERS report was quite illuminating. And unfortunately, the answer is: not really.

The key slide is #36.

This slide shows the per pupil spending for schools at each grade level, after weighting the spending based on the student needs at each school, arranged by grade level and then by percentage of Free/Reduced Lunch (FRL) participation, the most commonly used indicator for the poverty level of students need. In a perfectly equitable system, the weighted per pupil spending would be even across all schools in the system.

It’s worth noting that the variation in per weighted spending in OUSD is less than the variation without weighting, suggesting that the incremental supports for needier schools are creating a somewhat more equitable environment, but there’s still a surprising amount of variability and certainly no obvious trend showing needier schools getting more.

The state of California’s new Local Control Funding Formula (LCFF) is intended to provide more resources to students who need more support. So OUSD receives more dollars per student for high need students – low-income, English learners, and foster students. OUSD also receives more dollars for the schools that have a high concentration of low-income, English learners, and foster students.

So why would we see so much variability in per pupil spending between sites? Because the money all goes to Oakland Unified as a district, not to each individual school, and district staff use internal allocation formulas to determine the resources that each school receives. At OUSD:

  • schools receive a certain allocation of Full Time Equivalent (FTE) people of different job types (e.g. teacher, assistant principal) based on student-to-staff ratios;
  • Those FTE are added to school budgets based on average salaries, not actual salaries.

The result of this “base allocation” approach is that the district spends less per pupil in schools that have a higher proportion of beginning teachers (i.e. those with lower salaries). And unfortunately, in general, schools with higher poverty levels tend to have more novice teachers. You can see this information yourself- look up teacher experience data by school on OUSD’s public dashboards.

And, while there are exceptions, schools with a higher proportions of English Language learners also tend to have fewer experienced teachers and thus lower per pupil expenditures, as visible on Slide #26:

According to OUSD, the reason they use average not actual salaries in the base allocation is to prevent principals from hiring new teachers instead of experienced teachers for financial reasons– although actual salaries were used several years ago.

After the “base allocation” of staffing is completed, OUSD then distributes remaining funds available to each school via several district-created allocation formulas– based on the grade levels served

($175-$300 per pupil), number of “LCFF eligible” students,[1] current School Performance Framework tier ($70-$215 per pupil), and on “Z score,” which the district uses to measure challenging “environmental factors” such as neighborhood crime ($25K – $100K per school). This part of the budgeting process is commendable, delivering on an intention that students with higher needs should receive some additional resources. But, because running schools requires a lot of people, the “base staffing allocation” uses up more than 85% of unrestricted General Fund resources,[2] leaving less for this equity-driven redistribution. And, school sites end up with less flexibility on how they spend the governmental funding that their students generate for the district.

When talking about school site funding equity, many people wonder about the impact of parent fundraising as well. Parent fundraising tends to exacerbate inequity, since schools with more affluent families are able to raise much more per student. Here’s a slide similar to what we’ve seen before, but ordered by total school funding, including private fundraising. With few exceptions, the biggest raisers seem to extend their “lead” in terms of funding:

There are some nascent efforts to address this inequity in private fundraising, but nothing on the multi-million dollar order needed to truly tackle the problem. We hope to see more efforts, but any will likely face serious challenges as described in this recent NY Times article.

In any case, sharing the wealth of bake sales and walk-a-thon dollars isn’t enough to get schools to an equitable distribution of resources. And, these

patterns of funding inequity are not unique to OUSD. Researchers recently found that LAUSD has diverted money from high need elementary students, and Public Advocates filed a complaint against Long Beach USD for not equitably using resources to serve high-need students. The highly regarded Oakland-based research and advocacy group EdTrust-West recently released a report highlighting the challenge.

However, some California districts have found ways to use their budgeting and internal resource allocation process to increase equity and ensure students get “access to what they need to be successful.” We call on OUSD’s leadership to do the same for Oakland students.

Next in the series: unpacking some other big financial challenges, including Special Education, pension obligations, and the impact of facilities. We’d also love to hear what questions you’re hoping we’d write about. Please let us know by commenting on our Facebook and Twitter– or just e-mail us. We’re also open to elevating the voice of others who would like to offer a perspective on the #OUSDBudget as a guest author. Let us know if you’re interested!

[1] After reviewing OUSD budget presentations, we found formulas for most of the allocations but couldn’t find the formula for how LCFF supplemental funds are allocated, nor Title I and other federal categorical monies. These funds can be significant for some Oakland schools.

[2] Thank you to OUSD for their work to increase fiscal transparency; this calculation come from OUSD’s new Fiscal Transparency website. Click on “Budgeted Expenses Dashboard,” select “General Fund” from the “Fund” drop down menu, select “Unrestricted” from the “Resource Type” drop down menu, and add up the Certificated salaries (43.3%), Classified salaries (17.5%) and Employee Benefits (25.6%).

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Central Office Spending

If you read our last blog post, you know how much money OUSD spends every year. Now you might be wondering: How much gets to schools and classrooms? The short answer is: not enough.
The long answer involves how much is spent centrally, and we’ll get into that in a second. First we want to again ground ourselves in a challenging reality: Behind the vast majority of “central office” spending are real people who work hard every day in service of our children. So when we talk about “cutting” central or even re-allocating resources, people’s jobs and livlihoods are involved. Nevertheless, we must confront this challenge, which brings us back to the question of this blog post…
To answer the question of how much funding gets to schools and classrooms, we need to dig back into the largely overlooked report by Education Resource Strategies, presented to OUSD’s Board in June 2016. This was a comprehensive and detailed look at OUSD’s resource use (from 2014-2015) in comparison to similar districts in California and around the country. ERS is a well-respected not-for-profit group, OUSD paid a lot for the work, and staff spent a lot of time providing the underlying data – so let’s put it to use!
The ERS report confirmed what many have suspected: OUSD spends much more on the central office – about $30 million more – than comparable districts. Here’s the most striking slide to ponder:

Some details to note:

  • The comparison is among California districts, all of which are operating in a similar state funding and policy context (and, as we know, most of education policy and funding in the U.S. is driven by states).
  • These districts have similarly high-need populations, with many low-income students, and English language learners.
  • Many are also urban districts.
  • The comparison group includes comparably-sized cities such as Santa Ana and Sacramento.
  • Oakland has the dubious distinction of rivaling Los Angeles Unified and Stockton Unified with nearly the highest central office spending per pupil.
  • OUSD spent TWICE as much per pupil on central office as a district like Riverside, which has a similar student population and somewhat better outcomes on some measures, according to the new state dashboard.
  • If OUSD reduced its central office spending to the comparison group average, it would produce almost $14 million in savings: enough to completely close the current year budget gap and then some.

The ERS report makes the specific reason for this higher-than-average central spending even clearer in this slide: OUSD has more people and higher cost per person in several central office areas.

Those of you who have seen District financial presentations might be surprised by this information. The District has reported that over the past few years they’ve been directing more money to sites and away from Central. Some of you might not be surprised; other than long-overdue and much-needed double-digit salary raises for teachers and other school staff, school sites probably have not felt this shift.

We believe the disconnect can be explained by looking at a different set of publicly available numbers. Specifically, we think that the “shift” to reduce central office expenditures over the last few years have been achieved mostly through accounting decisions, rather than substantive changes in budgetary control to move dollars closer to students. We’ve reached this conclusion by looking at the Fast Facts provided by OUSD over the past few years:

In 2013-2014, the District had about 37,000 students served by 1,911 teachers, 1,391 “Other School Staff”, and 940 Central Office Staff. Then…

Suddenly, in 2014-2015, Central Office Staff has about 300 fewer people and Other School Staff has that many more! Our conclusion: the District simply changed the budget categorization for some staff from central to “other site”[1]. To be fair, this kind of change can theoretically help district staff feel more connected with and provide tailored service to school sites. We do know, from talking with school leaders, that sites didn’t receive a commensurate increase in budgetary authority. Principals could not say, “Instead of using these central services, we want to use those funds in a different way.”

[1] This is the fiscal year that ERS analyzed, and ERS used transaction-level information to categorize expenses in a way that would be consistent across the districts they studied.

In 2015-2016, there was not much change in the Central and Other School Staff numbers. So, despite the perceived and reported decrease in central office spending, it’s likely that OUSD continued spending significantly more centrally than similar districts.

The current year’s Fast Facts are bit surprising. Central Office Staff headcount increased by 13% or 88 employees, its highest level in three years. There’s not a corresponding decrease in Other School Staff. Did the Central Office really grow that much?


OUSD has been spending too much centrally and not enough at school sites. We hope the District has been making substantive (rather than accounting) changes in this area since the ERS report came out last year, and we would love to hear more from District staff on this.

It’s also probably not surprising that we’re having a budget shortfall if enrollment – which drives revenue – has been essentially flat and yet every year we’ve been adding more staff of all types.

Next week we are going to delve into variances in spending across school sites, exploring the equity question: is more money going to the students and schools who most need extra resources? What’s your prediction?

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