Mike Klein Online

Wanted: Really Good Ideas for Scaling Back School Budgets

Close your eyes, listen carefully and you can hear doors slam shut as more than one million Georgia public school children race headlong into summer.  You can also hear thousands of teachers and other personnel simply saying, good-bye, and administrators asking themselves, have we done enough with budgets to ensure that we can get through next year?

When the Savannah – Chatham County school board met last week it stared at a gaping hole. Rebecca McClain is the district’s chief financial officer.   “We estimated revenues based on everything we knew and we had a gap of $37 million,” McClain said.   The Savannah – Chatham district has 36,000 students.  “We’re at a point now that we can probably live with where we are and move forward.”

Where they are now is, they are getting smaller, like everyone else.  Georgia Association of Educators president Jeff Hubbard predicts between 6,000 and 10,000 classroom teachers, administrators and central office personnel will lose jobs because of reduced budgets.  The state Department of Education says there will be a $1 billion gap between what it should provide and what it can provide.

Savannah Sought Community Input To Guide Decisions

The Savannah – Chatham board cut 132 positions that include four assistant principals, 11.5 elementary school guidance counselors, five fifth grade band specialists and six paraprofessional campus monitors.   The rest are teachers.  The district also adjusted the contribution rate to its self-insurance workers’ compensation fund and the board approved a millage rate increase to help improve local revenues.

Savannah did something very smart, and it helped to focus the eventual millage rate strategy.  The district posted an on-line request for community revenue and cost-savings ideas.   There was strong support to increase the millage rate which, in turn, would increase local property tax revenue.

“This was coming from people who aren’t employees, who may not have a family member who is an employee and who just think this is the right thing to do for the next generation,” McClain said.  “I don’t think we would have heard that kind of support had we not been in this kind of budget crisis.”

“You’re Not Going To Cut Athletics … It’s Very Frustrating”

The Savannah – Chatham board also eliminated a program that provides support to middle school students who are mothers or pregnant.  Yes, you read that correctly, middle school students.  The parenting support program for high school students was left intact.   About 40 students participate but McClain said that is fewer than the total number of students with babies or who are pregnant teens.

Savannah staff asked the board to consider reductions to athletics.  That was ruled out-of-bounds.  “One of the things I learned is, you can talk about cutting a lot of things, but you’re not going to cut athletics.  It’s not going to happen,” McClain said.  “That seems to be at the top of the list and it seems to come ahead of academics and I don’t quite understand that.  It’s very frustrating.”

But that is not unusual.  The Georgia High School Association said it has not been told about any budget-related sports program cancellations for next year.  A spokesman said GHSA will know the budget situation has become extreme when schools begin to cancel football games.

Cobb Creative Solutions Include Reserve and SPLOST Funds

Versions of this scenario are everywhere in Georgia.  Savannah will wait until June 30, the final day of the current fiscal year, to approve next year’s budget.  McClain said, “There are a lot of places where you can cut nickels and dimes but I think most school districts have to cut a whole lot of dollars.”

They know that in Cobb County, home to the state’s second largest district with 106,000 students.  Cobb helped to balance its current budget with a 2% pay reduction for all employees, three teacher furlough dates, four non-teacher furlough dates and increased class sizes.  Cobb drew down $10 million from its reserve fund, reduced central office positions by 11% and eliminated technology support positions.

That will not be enough going forward.  When school ended last week, some 579 teachers were laid off.  Other personnel layoffs could total a couple hundred.   The next school year will be shortened from 180 to 175 dates.  An alternative high school was closed and will be converted into a digital academy.

Cobb class sizes will grow again but district communications specialist Doug Goodwin said, “We were well below maximum class sizes so now we will be closer to the maximums.”

Separated by hundreds of miles, and distinctly different in size, Cobb and Savannah are both impacted by changes they cannot control in federal stimulus dollars.  Cobb is trying to be creative with SPLOST dollars but Savannah does not have that option because of how its dollars already are being used.

“This is Bad Choices and Worst Choices”

This year Cobb received $25.7 million in stimulus funds.  What Washington gives, Washington also takes away.  Cobb stimulus dollars will shrink to $8.7 million next year; that creates a $17 million hole.  Cobb will try to fill the stimulus dollars hole by shifting $26 million in SPLOST surplus funds to the general revenue fund.  That one-time fix for 2011 might help avoid some teacher lay-offs.

“Whether we can rehire is going to be based on the difference in our local tax digest and what we have available if this shift for SPLOST surpluses goes through,” Goodwin said.  “That’s not final at this point.”

Federal stimulus funding numbers in Savannah are smaller; $7 million this year becomes $2.5 million next year.  McClain said the $4.5 million gap equals salaries and benefits for about 90 teaching positions.   Savannah has no SPLOST flexibility because it uses those dollars to pay down capital debt created by earlier bond sales.   New capital improvements are also funded with SPLOST dollars.

Georgia House Speaker Pro Tem Jan Jones recently told an Atlanta luncheon that K-12 expenditures represent 45% of the state government general fund.  Jones also said Fiscal 2012 federal stimulus dollars will be reduced by $2 billion.  However you learned to do math, that’s not a good sign for education.

Savannah – Chatham schools CFO McClain summed up what nearly everyone is thinking:  “This is not the year to choose between good choices and bad choices.  This is bad choices and worst choices.  My position is that until we see major improvement on unemployment, we’re not going to see any light.”

Mike Klein is Editor at the Georgia Public Policy Foundation.

May 24, 2010 - Posted by mikekleinonline | Uncategorized | Cobb County School Board, Georgia Association of Educators, Georgia Department of Education, Georgia High School Association, GHSA, Mike Klein Online, Savannah - Chatham County Schools