School budget faces new funding cuts

As with all my posts... This important message on the school budget represents my views as an individual School Board member.

Last year, the “January surprise” of the budget process was an ever dropping tax rate target that had the Albemarle County School Board constantly cutting and adjusting the budget for 2007-08.  The School Board ultimately passed a balanced budget (it has to by law), but a number of major initiatives went underfunded or unfunded.

This year’s “January surprise” is the rapidly changing state and local revenue picture.  Once again, the funding request prepared by Superintendent Pam Moran for the School Board’s consideration is having fundamental financial assumptions shaken by matters outside the School Board’s control. 

Earlier this week, the School Board was facing a $832,637 funding gap for next year.  The School Board was told Tuesday to expect state revenues to drop by $250,000.  Not a huge amount.  I can deal with that in a $153 million budget.  We were also told that our competitive market for employee salaries was now forecasting smaller raises.  So compensation targets for classified employees were ratcheted back trimming that gap by $332,420.  Teacher salaries remained at the targeted 4% increase.  Still some more work to do, but certainly not impossible to balance the budget.

Yesterday however, I learned that local Albemarle County revenues for next year are now expected to drop by $2.16 million from the projection used by Dr. Moran in her December 2007 funding request to the School Board.

Let’s do the math.

In 2007-08, the schools were supposed to receive a transfer from local government of $98.4 million for operations (i.e. not debt service, capital, or self-sustaining).  That amount is 44.9% of the total County general fund expenditures of which 62% is funded by real estate property taxes.  (Note: This is from the perspective of the general fund for Albemarle and that there are other sources of local revenue) 

This year, we had been projecting since October a $100.67 million transfer from local government (assumes the real estate property tax rate would remain at $0.68).  That would have resulted in an additional $2.2 million from local government, or a 2.2% increase for the schools.  The lowest change in memory according to our staff.

Based on revised data from yesterday, that number is now projected to be $73,311 (0.074%) of TOTAL additional revenues from local government to the schools.  Yes, I have those commas and decimals in the right place.  Local government may look at reducing capital investments in community infrastructure to help plug the hole. 

But wait, there is more.  With real estate tax bills in the mail this week and dropping local property values, the County also has to face shortfalls in the CURRENT budget.  We had expected that and Dr. Moran had previously prepared the schools to accommodate a $2 million hit.  Yesterday local government informed the schools that the figure has reached the $3 million mark.  So the $98.4 million that we should have received from local government this school year is now $95.4 million.

Our community has some serious work to do.  My assessment of Dr. Moran’s funding request, as one School Board member, was that it ALREADY very lean and strategically focused.  Overall the projected growth of the budget was only 3.37%.  Yet, she figured out how to fund a $6.2 million initiative to ensure competitive compensation.  Given the budget was only growing by $5 million, she accomplished that by cutting positions and programs in other parts of the division.  An additional $73,311 from local government doesn’t go very far on a $6.2 million initiative. 

Further, in late 2007 the School Board hired the Commonwealth Educational Policy Institute (CEPI) at VCU to conduct a 5 month proactive study of the efficiency and effectiveness of our school operations.  Implementing the recommendations in this study will be an essential part of funding the future, but only so many adjustments can be made in the first year, and as I said previously, many cuts were already in the budget and other initiatives were already left unfunded or deferred to year two.

Unless the revenue picture changes for the better, the School Board will soon be in the process of planning reduction strategies with the Superintendent.  Those specifics will not be clear before the public hearing next week, but it is essential we hear from YOU regarding your priorities for our public schools.  What are you willing to do without?  What investments are you willing to make to accomplish the educational goals of this community?

The public hearing is being held at Monticello High School’s new auditorium this Tuesday, January 29, 2008 starting at 6:30 PM.  The sign-up sheet for speakers will be available starting at 4:30 PM.

Brian Wheeler

Comments

[Jim Jansen]

Hey! Interesting and informative post. Tough picture for the ACPS.

One question that comes to mind is the revenue sharing agreement between the County and the City. The whole agreement is confusing to me.

How can the County be in the budget crisis, but be transferring money to the City, which has a $6M budget surplus.

What's the history of the revenue sharing plan?

[bawheeler]

Revenue sharing funds are taken off the top and impact the entire Albemarle County budget. In this year's budget (FY 2008), it amounts to a $13.2 million transfer straight to the City of Charlottesville. These payments have been a growing part of Albemarle's budget since 1982, and which are now to solve a problem that no longer exists--annexation. A year after the revenue sharing agreement was passed, the General Assembly made City annexation of a surrounding county's land illegal. Even so, there was no escape clause in the agreement for Albemarle. Thus revenue sharing will continue until both parties consent to ending the arrangement.

That said, the Albemarle County School Board is supporting state budget amendments advanced by Delegates Bell and Toscano that would at least recognize the revenue sharing payments in the computation of Albemarle County's composite index (which is the state funding formula). If this was fully taken into account, Albemarle would receive an additional $2.8 million from the state next year. It has little chance of being approved by the rest of the General Assembly.

Other resources: Description of revenue sharing and a detailed list of the payments to Charlottesville during FY1983 - FY2008.

Brian Wheeler

[Heather]

How abput something simple like turning OFF the school buses at athletic events. On numerous occasions I have attended Alb. CTY. sporting events to see the school buses run the entire time of a sporting event. This is NOT necessary (for a warm bus, it is a disiel engine & its ok- wrong...) and a total waste of rsources. Consevation in all areas can go a long way in helping this year's budget & next years.

[Brian Wheeler]

Heather - Such a practice would be quite beneficial on several fronts. It is better for the environment, better for the health of people near the buses, and as you mentioned, lowers fuel costs. This issue has been raised by the School Board's Health Advisory Committee, but I do not believe any policies have been changed at this point. There are also a couple of bills about this issue making their way through the General Assembly. Here is a link to Delegate David Toscano's bill. It says, in part: "no operator of any diesel-powered school bus shall idle the engine of such bus on school premises while waiting for students to board or exit the vehicle at any school, nor shall such operator start the engine of any such school bus until ready to leave school premises..."

Speaking as one board member and not for the board, I think this would be a good law, but even if it doesn't pass, I hope Albemarle can implement its own policies in this area.

Brian Wheeler