It's that time of year again--time for the School Board to put together the budget for the 2010-11 school year. The same forces will drive the budget as they did when I was on the School Board, and the low hanging fruit to cut without impacting the classroom has been picked pretty well in prior years.
For those of you who aren't up on how our schools are funded and what drives our need to make cuts, here goes Ahmed's five minute "School Economics 101" lesson.
The school system's total income per year is about $102 million. Our income comes to us from the State of Michigan, and is based on an allotment of about $11,000 per student per school year. Our enrollment is declining year after year at the rate of about 130 students, which in rough numbers means our funds to spend decline about $1.5 million per year ASSUMING that the State doesn't cut our per student allotment.
Unfortunately, the State did cut our per student allotment this past year, and they did it MID YEAR in October 2009 after we had completed our budget back in July 2009. This unanticipated cut forced us to use our "rainy day" account (Fund Equity) to the tune of about $2.5 million to make it through the end of the 2009-10 school year without having to cut class offerings and staff mid-year. Many school systems were more aggressive than we have been, and made mid year cuts. Troy, for instance, cut $1 million mid year by eliminating two contracted assistant principals at their high schools and other cost cutting moves that would not impact the students mid year.
In contrast to declining income, our costs are going UP, UP, UP by virtue of the cost of our most important asset, our staff. You see, about 85% of our expenses every year are payroll related. With that high a percentage of our costs being payroll, increases in the cost of health care, union contract longevity pay increases and State mandated retirement cost increases are burning a hole in our wallet. Add these increased costs to the declining income outlined above, and that hole in our wallet will be about $7.3 million wide for the 2010-11 school year. With 85% of our budget going to human resources, guess where the vast majority of cuts need to come from?
That is the challenge facing the administration and the School Board. A first stab at a budget was presented to the School Board by Brendan Walsh at the February Board meeting in a 34 page PowerPoint entitled, "2010-11 Budget Draft #1". Brendan followed up this draft budget with a 38 page PowerPoint entitled, "2010-11 Budget Draft #2" at the March Board meeting. Individual Board members and the public will have an opportunity for input on these proposals at the Monday, April 12th Board meeting, which will be held in Grosse Pointe North's Library at 8PM. This meeting is especially important, as the Board must provide layoff notices to teachers for the 2010-11 school year by the end of this month.
Being a bit of a spreadsheet addict, I took apart the Draft 2 proposal and created a one page budget cut spreadsheet which outlines (as best I could extract) the staffing cuts proposed in Draft 2. I have to thank Chris Fenton and Isha Smith at the Board Office for answering my questions on Draft 2. Their help in putting together this spreadsheet was invaluable.
As you can see from my spreadsheet, about $6.3 million in staffing cuts have been proposed. That leaves $1 million to be found elsewhere, either in additional cuts to staff and operating costs and/or the use of Fund Equity. With fund equity being chipped away at to the tune of $2.5 million so far this year, I don't think another $1 million use of Fund Equity is going to be a palatable solution to the School Board.
Over the past few weeks, I have been asked more times than I can count what I think the School Board and the administration should do. Frankly, it's the reason I did the budget cut spreadsheet referenced above--I wanted to see the entire picture on one page. After looking at it, I would recommend the following to the School Board:
1. Start Making Cuts in Building Level Management. In all the years I have been watching and/or served on the Board, the building level management has never felt the budget axe. We have wonderful people in these positions, some of whom I consider true friends. Unfortunately, like in every other company in the State, middle management positions need to be reduced along with the other staff and the remaining middle management job desriptions need to be redefined. The Board should be looking at the sharing of principals at our under-populated elementary schools, and the sharing of assistant principals in the middle schools. While sharing Athletic Directors is not feasible at the high school level, creative concepts being used elsewhere like having assistant principals teach a .2 or .4 FTE in their subject area would lighten the middle management budget load. Sharing an assistant principal by making them a Dean of Students should also be explored along with these other options if we truly want to keep cost cutting away from classroom programs. Conservatively, thinking outside of the box in this area alone could generate $600,000 in savings.
2. Redefine the High School Department Chair Job Descriptions. In each of our high schools, we pay about $5,000 per year extra to a teacher who serves as the department chair for that subject area. Under Budget Draft #2 referenced above, the high school department chair positions are being eliminated to save $220,094. In my mind, it is foolish to think that the work the Science Department or any other department chair can be taken over by administrative staff, some of who have never taught in a classroom in the last decade, or for that matter, ever. This cut can be restored by redefining the job descriptions of the department chairs to include some of the duties of the Central Office Curriculum Department (like selecting textbooks) and the elimination or reduction of the contracted staff we utilize in the Curriculum Department, thus saving the $220,094.
3. Raise Class Size in the High Schools. According to the schools system's financial manager, Chris Fenton, for every ONE student we raise class size at the high school level, we save 5 teachers which (at the average cost per teacher being used by the Board in its budgeting) is about $600,000 in teacher salaries. That is a staggering number. I wouldn't think twice about raising our class size at the high schools by an average of one student, thus garnering $600,000 in much needed savings.
If the Board were to take even a conservative approach to adopting the three suggestions above, it would solve its shortfall for the 2010-11 school year. It doesn't solve the long term problem we are facing, which will be the subject of my next article, so stay tuned!
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