City schools likely to face more than $60 million budget shortfall
By Jayed Rahman
Published: February 27, 2015
Education officials on Thursday evening revealed the city’s school district may face a budget deficit of more than $60 million.
Acting business administrator Daisy Ayala informed the school board of the budget shortfall during a special meeting at the district’s central office. She said although the district has been getting the same dollar amounts from the state and local property owners education costs continue to increase.
“It’s a flat budget, but unfortunately expenses are not flat,” said Ayala. “We have salary increases, health benefit increases, we have increases of service and product.”
Ayala said the district’s healthcare and benefits expense increased by 17-20-percent. She also said there was a salary increase of 4-5-percent following the settlement of the teachers’ contract.
School board president Jonathan Hodges pointed out an additional $4 million being siphoned from the district to city charter schools. “That was $32 million,” said Hodges of money leaving the district for charter schools, “now it’s $36 million.”
“If you got a household, you know that if your salary stays the same and everything else goes up, you’re going to have to go into your savings,” said Ayala.
The district has been balancing its budget through the use of carry over funds, according to officials. Money that’s left over during one fiscal year is moved into the next instead of saving it.
“The fund balance projected for next year is how much?” asked Christopher Irving, school board member. Ayala said the carry over for next year will be about $30 million. Irving said in that case the deficit is halved and the district must come up with $30 million.
Errol Kerr, school board member, suggested the district is skimping on students needs to create large carry over funds. “When you construct a budget you start at the point of need and move on from there,” said Kerr. “Look at our budget, look at our performance, could you honestly say that we have adequately, through our budget process, addressed all the issues, our needs that we need to address in the district? Now, if we cannot say that then we cannot start at a point of surplus.”
“There was no surplus. We created a surplus,” said Kerr. “If we’re not addressing the real needs of the district and we have money, we’re short changing our own process.”
State-appointed district superintendent Donnie Evans passed out a memorandum that highlights the manner in which the district will reduce its spending. Evans has re-instituted a hiring freeze for all non-essential positions on February 18th of this year. He also highlighted what’s called “cliff avoidance strategies” designed to create reductions of $62 million.
Evans plans to eliminate stipends, revise principal assignment structure to combine multiple schools under a single principal as well as revise principal staffing formula. The memo included seven items which will potentially be cut to create savings depending on how deep the cuts must be, said Evans.
Ayala also suggested savings that could result from lease purchasing large number of computers for the Partnership for Assessment of Readiness for College and Careers (PARCC) assessments.
“We’re going to need computers to continue providing the equipment that’s needed for the PARCC, so one of the things that’s being considered is a lease purchase,” said Ayala. “This way we don’t have to spend a couple of millions of dollars in one year, we could spread out in four or five years.”
A draft budget will be presented to the school board during its next workshop meeting, said Evans. He said a draft budget has not been completed due to the recent changes in the business office.
Officials pointed out that the deficit is based on funding requests from various departments.
Flavio Rivera, school board member, said the “the numbers are over stated.” He said the departments need to be told to have flat budgets of their own without increases.
“We got to emphasize the needs first,” Rivera said. “If a department asks for more you have to justify it.”
Last fiscal year, the district’s budget stood at $594.71 million. State department of education yesterday announced the district would receive $400 million in funding, the same amount it received last year. Other sources of district funding include federal grants and roughly $39 million from city property owners.