And the Budget Woes Continue

Yesterday afternoon, the School Board met again in the journey to close the $50 million budget gap we have for the 2010-11 school/budget year.  As reported in the Press Enterprise, this was not an occasion for celebration by any means.  After lots of discussion, the Board determined in the Group #3 Recommendations from the administration to:

• Reduce 4.0 counseling positions
• Redesign High School Staffing for administration which includes:
• a reduction of work days for all High School Assistant Principals
• replacement of 1 Assistant Principal position at each campus with a classified position that would handle many of the former duties of the Assistant Principal
• Take additional "Tier III" reductions which involves state "categorical" money
• Staff Hyatt and Bryant Elementary Schools at levels commensurate with other schools which will cause more combination classrooms and a reduction in administrative and clerical services including the sharing of a principal.  Further discussion will take place as to what the future (2011-12 and beyond) should be to meet the needs of the schools and District.
• Reductions were taken in department budgets of district-wide operations

One recommendation that is still being considered and will come back to some future meeting is a 15% ($300,000) reduction in the athletic program budgets.

NO one is happy with any of these choices, but given the budget (based on State funding) and the circumstances of the day, there is little choice.  Based on the economy, we must do as is being done in private industry, we must redesign and reinvent ourselves.  The trick is how do we make it better with less investment.

Another Option?

In an effort to "leave no stone unturned," another option for the budget process is to continually look at the revenue enhancement side.  Beyond "cutting" budgets, how can we add more dollars to the budget?  One option is to take the possibility of a Parcel Tax Assessment to our community.

Parcel Tax Assessments are not based on property value, but is a flat rate (e.g., $25 per parcel).  Additionally, there are ways to exclude particular properties (e.g., senior citizen's homes) -- if desired.  This assessment is based on a community vote that would require a 2/3 pass rate.  Often the funds are targeted to a particular program that the community values. It is one way, a community can assist themselves, if that is a desire.  A number of progressive communities across California have done exactly that.  As an example, a $25 parcel tax assessment per year, could yield $1.6 million in additional revenue.  Obviously, that revenue can be raised or lowered based on the size of the parcel tax.

Board takes required action to balance the budget

Our Board of Education last night and continued to move forward with the horrific task of balancing this year's budget.  This requires actions NO one wants to do but they/we are obligated to accomplish.  These are unprecedented times based on the size and duration of these reductions.  The essential activity undertaken is to create the new future of RUSD.  The challenge is to become both more efficient (less money) and more effective (better results) at the same time.  While that seems impossible from this perspective, will be possible, if not required, in the future.

While that Board did approve the continuation of facility renovation, etc. -- which uses funds that can ONLY be spent on capital projects and not on operational costs -- they also began making those unpopular, unhealthy budget reductions that were recommended by the BAC, cabinet, and myself.  The reductions which amounted to $26.6 million included:

• A million dollars in management cuts
• Eliminating 6 management positions -- $632,391
• Reducing the management work year by 5 days (also commonly referred to as "furlough" days) -- $450,162
• Decentralization of the Central Registration Center back to individual school sites -- $237,294
• Elimination of Secondary Library Media Assistants in our middle and high schools -- $571,617
• Revising how we clean schools at night with what is hopefully a more efficient custodial cleaning model -- $527,650 (first year savings which could grow to $800,000+ in subsequent years)
• Further reductions in Tier III special programs that adds another $1,268,186 to almost $10 million in earlier cuts
• Utilizing $22,129,264 in funds that can be used only once ("one-time") and must be replaced again next year with additional cuts at that time
• Additionally, the Board considered and tabled (pending some clarification) $744,091 in elimination of transportation from home to school of secondary students.

In a related matter, the Board also authorized employee notification ("layoff) of employees that are impacted by the budget reductions.  Those notices included teachers, managers, and instructional specialists.  As I stated at the beginning NO one is interested in making these types of decisions and reductions as it effects us, our colleagues, friends, and neighbors -- BUT there is really no choice given the reductions handed to us by Sacramento.

More Budget Information

As questions continue to be asked about our budget situation (appropriately so), we have isolated an enhanced podcast with both PowerPoint slides and audio from Mike Fine's presentation on the budget to the Board on February 1st.  I realize that it is long (about 1 hour), but it will give you the best possible synopsis of information regarding the budget in RUSD.

Additionally, if you refer to page 2 of the Budget Advisory Committee (BAC) report provided on February 1st, you will see that there is a we have taken a reduction “of over $60 million in recent years.” The report goes one to say that the needed $50 million reduction represents 14% reduction in the operating budget.  IF (and we are NOT recommending this), there were a proportional reduction in all expenses -- it would equate to our teachers being reduced by 5+ weeks and a corresponding reduction of 4+ weeks for our students.  This is NOT what we are recommending, but hopefully it provides some perspective of the challenge before us.

Bad Can Be Worse

In the midst of all this District chaos and budget upset, there is another perspective. We have many in our community that have been severely impacted by the economic downturn. We need to help each other. Many families have lost employment or a major part of their income.

From a student perspective (which represents families in our community), we have about 60% (3 out of every 5) of our students at or below the poverty line and therefore receiving federal “free or reduced” meals. We have 1,500 students that are homeless and are in fairly dire straits. Of greatest concern, we have students that we suspect ONLY get to eat when they are at school (breakfast & lunch programs). One of our local non-profit organizations come together weekly, to provide 500 of our neediest students with a backpack full of non-perishable food to assist them through the weekend. What happens to them on a 4-day "weekend" like this one? These are desperate times.

Our Mayor has appropriately talked somewhat regularly about the social capital in Riverside. I hope that part of our collective capital is going to assist those that struggle more than we do. Do you know of efforts in our community to assist others less fortunate than ourselves?

Our employees are working to do their part

We continue to look for any and all reductions that we can make to our budget to minimize the impacts. This is NOT really possible at this point as we are in our 8th year of budget reductions. Obviously, there is less and less to find and we are a long way beyond just “improving efficiency.” We were pleased this past week (finishing this week) to bring site level stakeholders together to assist us with specific recommendations about what they see as possible areas to recover some dollars. Additionally, they provided us with information about what should we continue to hold as a high priority.

One of the ideas that many have forwarded to us over time, is the notion of employees taking “furlough” days or something similar. This is an item that is generally negotiable with our employee associations – and requires their concurrence. At our next Board meeting, with the concurrence of our management / confidential employees, there is a proposal to take an on-going workyear reduction of 5 days. With 92% of our budget wrapped up in “people” costs, it is good to see our colleagues digging in to do their part and help us work towards a balanced budget.

Has It Always Been Like This?

I had the occasion to spend Friday morning at RCOE along with the other superintendents and CBOs in Riverside County listening to Ron Bennett, President & CEO, of School Services of California. Typically, Ron and SSC are regarded as the experts in education financing in California. Ron stated what has been pretty much the message from across the state – the Governor’s January budget, while not good – is probably as good as it gets. As Ron stated, “California would like to meet its obligations, but it can’t.”

Probably the most interesting and illustrative comment that Ron made was based on his long history with funding of public education in California. Ron recalled in the days of Governor George Deukmejian when we had a situation somewhat similar to this, educational spending was dreadful. We were spending at $3,500 per student and prisoners were costing the state twice that at $7,000. The most striking part of his statistics is that we are currently receiving $5,014 per student (statewide average) and the cost of incarceration is in excess of $52,000 per prisoner (over 10 times that of educational funding). Solving the problems in California may have something to do with priorities.

So What Really Happened?

So trying to understand what happened to our schools and funding is really difficult -- at least for me. It seemed that everything was going well -- when BAM!! -- the bottom falls out and we are making all kinds of cuts. When we have completed those cuts, we have to make MORE cuts -- when does it stop? Where did we ever come up with the "running on empty" concept?

Recently, Mike Fine tried to provide a bit of perspective on what has happened with state funding of education. While it does not help me "understand" -- it does give me some more perspective on how we in RUSD are caught up in this mess. Probably most illustrative is slide 12 on page 6, which shows the last several years and some future years. While we had a significant drop in funds as represented by the blue line -- we were protected temporarily by federal stimulus funds (gold line) and short-term options (red line) -- the has hidden the REAL impacts (for a short time).

Tuesday -- A Most Interesting Day

Tuesday morning I took a quick trip to Sacramento and met with the Governor's staff along with several other superintendents. NONE of us like the reductions we are taking in education and the ones that we are likely to take as the state continues to balance it's $20 Billion deficit beyond the Governor's January Budget proposal. Realizing that we are and will take reductions in educational funding -- we need to try and influence how we receive the "cuts" such that we can use them most effectively to meet the needs of our students and classrooms.

The Governor did stop by and one point and DID reiterate his commitment to protecting public education and students as well as possible with the least amount of reductions possible. Given the dire circumstances of the state budget and economy -- that is quite a statement -- which, given the circumstances, I am inclined to believe that is his intent.

Beyond all of that the discussion in and around the capitol, as we consider what our long-term issues are, continue to make the case that this situation is our "new normal" and it is unlikely that we will have a "rebound."

Difficult times with impacts to all

This is an unprecedented situation and horrific times when we have to go through the process of laying off 160 teachers last night in attempt to partially balance a $49 million deficit. This is before the "next hit" that comes with the May Revise and the Legislative wrangling. We sincerely hope that we will be able to "bring back" some or all of these teachers based on retirements, moving out of the area, and general attrition. Our teachers and our staff are what we are about -- we are in the PEOPLE business. We hope that "early notice" assists in some small manner.

We have lost $66.3 million to operate RUSD over the past 8 years. We are losing $48.9 million for this coming school year (2010-11) for a total of $115+ million. Our broad-based Budget Advisory Committee is doing heroic work to find the least oppressive solutions -- but with these losses -- program, students, and schools cannot help but be impacted.