The headlines that came out of Thursday's school board meeting were dramatic with the Superintendent suggesting that the top four administrators would take double the pay cut that they were asking teachers to take in order to send the message that they were serious about the school budget crisis. Beneath those sensational headlines is a truth that is every bit as bleak but perhaps not quite as sexy.
The truth is somewhere in between here. The first factor that people need to understand is that in some ways what was discussed on Thursday night was the choice of the school board. They were presented options the previous week and could have chosen to self-qualify.
Self-qualification is a complicated process that was explained on the Vanguard radio show fairly well on Wednesday night. But in short, given the budget crisis, the district could have taken the latest assumptions from the governor's budget, said that they would deal with 2010-11 in due time, and cal it a budget.
The problem as Cathy Haskell current DTA President and Ingrid Salim, incoming DTA President explained on the radio show is that the board was told last year that self-qualification would be a red flag to the county that there were fiscal problems. That is because a large extent of the district's fiscal problems last year were in-house and local. That is not the case this year. There are estimates that 70% of the state will self-qualify. The reason for self-qualification is that the first two years of the budget would be balanced but the third year, 2010-11, would have an on-paper deficit that would need to be addressed. In a state budget crisis year, this is not the alarm bell that it would have been last year.
Nevertheless the board was not comfortable with self-qualification and instead are looking for the three year balanced budget. The result is additional pain of trying to anticipate three years out without even hard numbers for this year's budget. And they must do it by March 15.
As Sheila Allen put it on Thursday:
As we walk quickly through the numbers, all of this suggests that the grand gesture (largely symbolic) made by the top four might actually be a worst case scenario rather than the operating assumption that was suggested in the headlines on Friday.
The budget challenge as laid out by Bruce Colby is how we reduce the cost of delivering our programs without reduce the level of the programs we provide. Moreover, the district has a structural deficit, it is basically eating at least $1 million in reserve each year by these budget assumptions. It is doing that in order to both maintain our programs and avoid the painful layoffs that were proposed last year.
In short, what the district needs to do is to reduce on-going expenditures by $4.9 million or more over the next two years to maintain fiscal solvency. That is $3.3 million in 2009-10 and an additional $1.6 million in 2010-11. And 2010-11 is probably on the low side unless the economy and budget forecast improves. Even with that, the district will continue to have a structural deficit of $1 million which will need to be addressed by 2011-12.
As Associate Superintendent Bruce Colby said:
The district examined the salary breakdown for 2009-10 by bargaining unit. Their proposed cuts are roughly proportional cuts across the three classifications ranging from 3.68% among classified (support staff), 3.88% among certificated (teachers) and 4.15% among unrepresented (management and administrators).
Under this scenario they are taking out three counselors, they think they can find 200,000 by shifting around unused parcel tax money, but $910,000 is coming from increasing the student to teacher ratio for grades 4-12 which are not governed by CSR requirements. That means losing teachings, perhaps as many as 14. Some of that could be obtained through attrition--retirements and transfers.
However, and here is where the real painful decisions come in. Those cuts still leave the district one million dollars short.
So the bottom column on the grid shows the possibilities for accomplishing that savings. One is what was talked about last week, would be federal stimulus package dollars. It is possible the district will get $2.7 million, but we would have to look more closely at the Senate's version. There is also a possibility that the Davis Schools Foundation will be able to raise some of that money, but these days are a bit tougher for raising money than a year ago.
On the other side of the ledger are flexibilities that could be granted by the legislature. The adult education program has a $200,000 that is categorical money, which means that the district could be allowed to use it for general fund if they get flexibility on that. There is an additional $1.1 million in categorical money that could be used if granted by the legislature. And then there is about $1 million in CSR that could be used if they raise the ratio of students to teachers from 20 to 22. However, as mentioned that is going to be a political fight and the DTA seems to believe that there are other ways to get that money.
Now here is finally where we get to the sexy headlines which are not so sexy. If all else fails, one possibility is that the teachers and in fact all employees take a 2.5% pay reduction. That would free up $1.26 million that would cover that million hole.
It is here that we see the offer from the top four administrators coming into play.
Superintendent James Hammond:
As Board President told the Enterprise:
The bottom line here is that while that gesture is appreciated a lot has to go wrong for it to be implemented.
However, we are not done. The cuts in 2010-11 under current assumptions amount to $1.65 million. Remember however those are on top of the cuts that would be implemented for 09-10.
At this point we are really getting into pure personnel unless the district gets stimulus money, gifts, or categorical flexibility. Because the district is looking for a three-year balanced budget, they are looking at 8 teacher layoffs for $520,000 in savings, 12 secretarial layoffs for another half million, and the loss of nearly three site administrators for $295,000. The latter represents a 6.26% cut in funding for the unrepresented bargaining unit, compared to 4.59% for classified, and 1.59% for certificated.
Those cuts however still leave the district nearly $300,000 short of balance.
In short, the district is making a lot of tough decisions right now that they really might not have to make depending on how the budget pans out. Much of this is due to the board's apprehension to do a self-qualification and work toward a balance for 2010-11 with more realistic assumptions.
There are going to be teacher's noticed. That is now unavoidable. It will not be the 100 or so that were noticed last year. But as the DTA representatives said on Wednesday, that took a huge emotional and psychological toll.
As Superintendent Hammond put it:
---David M. Greenwald reporting
The truth is somewhere in between here. The first factor that people need to understand is that in some ways what was discussed on Thursday night was the choice of the school board. They were presented options the previous week and could have chosen to self-qualify.
Self-qualification is a complicated process that was explained on the Vanguard radio show fairly well on Wednesday night. But in short, given the budget crisis, the district could have taken the latest assumptions from the governor's budget, said that they would deal with 2010-11 in due time, and cal it a budget.
The problem as Cathy Haskell current DTA President and Ingrid Salim, incoming DTA President explained on the radio show is that the board was told last year that self-qualification would be a red flag to the county that there were fiscal problems. That is because a large extent of the district's fiscal problems last year were in-house and local. That is not the case this year. There are estimates that 70% of the state will self-qualify. The reason for self-qualification is that the first two years of the budget would be balanced but the third year, 2010-11, would have an on-paper deficit that would need to be addressed. In a state budget crisis year, this is not the alarm bell that it would have been last year.
Nevertheless the board was not comfortable with self-qualification and instead are looking for the three year balanced budget. The result is additional pain of trying to anticipate three years out without even hard numbers for this year's budget. And they must do it by March 15.
As Sheila Allen put it on Thursday:
"It's just so frustrating that we have deadlines that we have to meet and other elected officials are not. So we're working with 'fiction' and we're messing with real people's lives when it's based on fiction, it's very frustrating."In addition to the school board making the situation harder, Thursday's budget also assumed no flexibility. This is probably a wise decision at some level. The CTA has launched a veritable battle against any flexibility in CSR (Class Size Reduction) requirements. Moreover, they have opposed categorical flexibility as well. Still, it appears likely there would be some flexibility.
As we walk quickly through the numbers, all of this suggests that the grand gesture (largely symbolic) made by the top four might actually be a worst case scenario rather than the operating assumption that was suggested in the headlines on Friday.
The budget challenge as laid out by Bruce Colby is how we reduce the cost of delivering our programs without reduce the level of the programs we provide. Moreover, the district has a structural deficit, it is basically eating at least $1 million in reserve each year by these budget assumptions. It is doing that in order to both maintain our programs and avoid the painful layoffs that were proposed last year.
In short, what the district needs to do is to reduce on-going expenditures by $4.9 million or more over the next two years to maintain fiscal solvency. That is $3.3 million in 2009-10 and an additional $1.6 million in 2010-11. And 2010-11 is probably on the low side unless the economy and budget forecast improves. Even with that, the district will continue to have a structural deficit of $1 million which will need to be addressed by 2011-12.
As Associate Superintendent Bruce Colby said:
"At some point we will run out of reserves and we will have to close the gap for the last million dollars."
The district examined the salary breakdown for 2009-10 by bargaining unit. Their proposed cuts are roughly proportional cuts across the three classifications ranging from 3.68% among classified (support staff), 3.88% among certificated (teachers) and 4.15% among unrepresented (management and administrators).
Under this scenario they are taking out three counselors, they think they can find 200,000 by shifting around unused parcel tax money, but $910,000 is coming from increasing the student to teacher ratio for grades 4-12 which are not governed by CSR requirements. That means losing teachings, perhaps as many as 14. Some of that could be obtained through attrition--retirements and transfers.
However, and here is where the real painful decisions come in. Those cuts still leave the district one million dollars short.
So the bottom column on the grid shows the possibilities for accomplishing that savings. One is what was talked about last week, would be federal stimulus package dollars. It is possible the district will get $2.7 million, but we would have to look more closely at the Senate's version. There is also a possibility that the Davis Schools Foundation will be able to raise some of that money, but these days are a bit tougher for raising money than a year ago.
On the other side of the ledger are flexibilities that could be granted by the legislature. The adult education program has a $200,000 that is categorical money, which means that the district could be allowed to use it for general fund if they get flexibility on that. There is an additional $1.1 million in categorical money that could be used if granted by the legislature. And then there is about $1 million in CSR that could be used if they raise the ratio of students to teachers from 20 to 22. However, as mentioned that is going to be a political fight and the DTA seems to believe that there are other ways to get that money.
Now here is finally where we get to the sexy headlines which are not so sexy. If all else fails, one possibility is that the teachers and in fact all employees take a 2.5% pay reduction. That would free up $1.26 million that would cover that million hole.
It is here that we see the offer from the top four administrators coming into play.
Superintendent James Hammond:
"If there were to be any type of salary reduction for employees, that we would double whatever that salary reduction would be. So if we are looking at a 2.5% reduction to every employee in the district, then we the four of us would incur a 5% reduction for the 09-10 school year in order to contribute to our ability to prevent layoffs."And let us not take away from this gesture. Because it is important to know that the administration is willing to share the pain, particularly after we have been so critical of Bruce Colby taking a pay increase of roughly 5% in these budget times. He is willing to give that back should it be needed.
As Board President told the Enterprise:
"They've being leaders."But clearly this is the worst case scenario and the last resort. However, it does appear that the administration got the message from the community that has complained about administrative raises during a year when the district was contemplating layoffs and teachers were not getting raises.
The bottom line here is that while that gesture is appreciated a lot has to go wrong for it to be implemented.
However, we are not done. The cuts in 2010-11 under current assumptions amount to $1.65 million. Remember however those are on top of the cuts that would be implemented for 09-10.
At this point we are really getting into pure personnel unless the district gets stimulus money, gifts, or categorical flexibility. Because the district is looking for a three-year balanced budget, they are looking at 8 teacher layoffs for $520,000 in savings, 12 secretarial layoffs for another half million, and the loss of nearly three site administrators for $295,000. The latter represents a 6.26% cut in funding for the unrepresented bargaining unit, compared to 4.59% for classified, and 1.59% for certificated.
Those cuts however still leave the district nearly $300,000 short of balance.
In short, the district is making a lot of tough decisions right now that they really might not have to make depending on how the budget pans out. Much of this is due to the board's apprehension to do a self-qualification and work toward a balance for 2010-11 with more realistic assumptions.
There are going to be teacher's noticed. That is now unavoidable. It will not be the 100 or so that were noticed last year. But as the DTA representatives said on Wednesday, that took a huge emotional and psychological toll.
As Superintendent Hammond put it:
"There could be overnoticing going on but we do not know what the rules of flexibility are going to be."As Board President Gina Daleiden put it:
"No one would do this unless we were at the very last resort."I understand some of the rationale for doing it this way, but I'm not fully convinced it is the last resort. Given the state budget picture, a self-qualification does not seem to put the district in the kind of risk they would have been in last year, they need to trust their Superintendent and Chief Budget Officer who just last week recommended the self-qualification route to avoid these kinds of drastic cuts that may not have to be implemented. I understand the frustration that Board Member Sheila Allen expressed at the state budget process, the school districts are one of many victims of that inaction. But I am not convinced this was the only way to do this based on the other alternatives out there.
---David M. Greenwald reporting
