New York State School Boards Association 2009 Annual Convention October 17, 2009

Transcription

1 Optimal School Budgeting During Tough Fiscal Times New York State School Boards Association 2009 Annual Convention October 7, 2009 Dr. Joseph L. Natale NYSSBA Director of AdvisorySolutions Efficiency & Effectiveness All schools are facing two difficult and conflicting challenges: Improve student performance Deal with increasingly fewer financial resources 2 3 Major Factors/ Interests in Communities. Safety 2. Quality schools 3. Taxes 3

2 The Challenge 4 The Requirements Federal Mandates No Child Left Behind IDEA Special Education 504 accommodations State Mandates Higher learning standards New graduation requirements Academic support for students 5 School Financial Management EXPENDITURES: SALARY & FRINGES 75% DEBT SERVICE 5% 80% OTHER INSURANCES UTILITIES EQUIPMENT SUPPLIES CONTRACTUAL FEDERAL FUND OFFSET UNANTICIPATED EXPENSES ANTICIPATE THEM 6

3 Areas of Expenditure New York State School Boards Association WASH ITEMS (E.G., SELF-SUPPORTING) (CONTINUING ED, TEXTBOOKS ) FIXED COSTS (E.G., DEBT SERVICE, UTILITIES), CONTRACTUAL BENEFITS, SALARY (FRINGES) VARIABLE COSTS (E.G., EQUIPMENT, SUPPLIES, STAFFING LEVEL) 7 Three-Part Budget Administrative....$6,443,206 (2%) Program.....$39,98,797 (7%) Capital......$9,36,394 (7%) TOTAL PROPOSED BUDGET...$55,003,397 8 Functional Breakdown (estimate) General support % Instruction 60% Pupil transportation 5% Community services % Undistributed 23% 00% 9

4 Proposed Budget Areas of Expenditure New York State School Boards Association 4.8% 0.28%.2% 59.36% 5.06% 9.28% Benefits & Transfers Community Service General Support Debt Service Transportation Instruction Object of Expense Breakdown (estimate) Salaries 55% Equipment 2% Supplies 3% Contractual* 40% 00% * (Utilities, repairs, insurance, tuition, texts, copying, BOCES, fringes, debt services) (BOCES 4%, Benefits 7%, Debt Services 6%) Proposed Budget Objects of Expenditure 9.0% 0.02% 9.42% 2.87% 68.68% Contractual Expenses Salaries, Benefits & Debt Services = 78.% BOCES Debt Service/Transfer Equipment & Supplies 2 Salaries & Benefits

5 Income: MAJOR REVENUE STREAM STATE AID 35% LOCAL NON TAX 3% (interest earnings, BOCES refund) FUND BALANCE 2% TAX LEVY 60% RECURRING VS. NON-RECURRING 3 Revenue Estimates 64% 2% 3% 3% Appropriated Fund Balance State Aid Gen Rev + Dbt Svc Income Property Tax 4 Fund Balance: APPROPRIATED UNAPPROPRIATED 4% cap RICHES ARE GOTTEN WITH PAIN KEPT WITH CARE AND LOST WITH GRIEF 5

6 Double Whammy Now Year Later $800,000 appropriated $00,000 deficit Tax Levy Increase $900,000 (Loss of $800,000 revenue + deficit amount $00,000) 6 What is a school district budget? A financial road map for your district s trip through the next school year. 7 Like all road maps & trips, your school budget trip will involve: Detours, bumps and unplanned stops Assumptions some right and some wrong 8

7 The School Budget A PHILOSOPHICAL AND POLITICAL DOCUMENT REPRESENTING THE EDUCATIONAL ASPIRATIONS OF A COMMUNITY GOVERNED BY COMPLEXITIES OF STATUTES. 9 Budget FINANCIAL PLAN SPECIFIED TIME PERIOD 7/ 6/30 ESTIMATE OF EXPENDITURE NEEDS (APPROPRIATIONS) (NEGOTIATIONS IMPACT) ESTIMATE OF INCOME (REVENUE) (STATE BUDGET DECISIONS) SPENDING PLAN = INCOME PLAN 20 Financial Forecast START DECEMBER 2009( 0- BUDGET) FINALIZE APRIL 200 VOTE MAY 8, 200 PROOF JULY/AUGUST 200( 09-0 BUDGET) JULY/AUGUST 20( 0- BUDGET) 2

8 SBMI vs. ST3 (ESTIMATED) (ACTUAL) TAX RATE: FUND BALANCE STATE AID ASSESSED VALUE EQUALIZATION RATE 22 PROGRAM BUDGET BUDGET A MASTER PLAN FOR A DISTRICT S EDUCATIONAL PROGRAM AND SERVICES. NUMERICAL TRANSLATION OF THE EDUCATIONAL PROGRAM. Spending Plan Revenue Plan Educational Plan 23 Educational needs vs. ability to support those needs Quality of service vs. economics of that service Provide for sound and reasonable educational support for the children who attend our schools 24

9 Other key assumptions Inflation, health insurance, retirement, energy, etc. State aid (some expense based assumptions) Property tax base changes Improvement plan costs (savings) Collective bargaining agreements Enrollments 25 What data is essential for budget planning? Academic Performance data Financial Performance data School facilities data Enrollment data 26 Building the Budget Total Budget + + Growth Program Decline Base Budget 27

10 PROGRAM BUDGET CYCLE SCHOOL YEAR Program Cycle Budget Cycle July 09 Sept. 09 Nov. 09 Feb. 0 April 0 May 0 June 0 Program Decisions Budget Decisions 28 Budget Development NEEDS: DISTRICT GOALS/ Strategic Plan SCHOOL REPORT CARD STUDENT NEEDS STAFF NEEDS FACILITY NEEDS 29 Budget Development TOOLS: BUDGET PARAMETERS/DIRECTION LEGAL REQUIREMENTS CAPS, EXCLUSIONS BOARD POLICY ADMINISTRATIVE REGULATIONS CENTRALIZED VS. DECENTRALIZED BUDGET DEVELOPMENT & ADMINISTRATION PROCESS BUDGET CALENDAR/GUIDELINES POLITICAL CLIMATE/INFLUENCE 30

11 Organizational Structure School District Organizational Structure COMMUNITY BOARD OF EDUCATION SUPERINTENDENT OF SCHOOLS ADMINISTRATORS INSTRUCTIONAL & NON-INSTRUCTIONAL STAFF 3 Budget Development Structure Budget Development Organizational Structure STAFF ADMINISTRATORS SUPERINTENDENT OF SCHOOLS BOARD OF EDUCATION COMMUNITY 32 Budget Cycle Budget Preparation / Drafts + Superintendent s Proposed Budget + Board of Education Budget + Community Budget + 33

12 Budget Revisions Increases & Decreases Not random Not personal Level of Reductions Level I Level II Level III Least harmful to students Most harmful to students Budget: Resourceful/ Creative Leadership Held down spending (average budget increase 2.3%) Held down tax levy (average increase.9%) Lowest state aid increase in 6 years 97% budget approval rate Cuts Program reductions Staff eliminations/ layoffs Diminishing reserve funds 35 Shrinking the Budget Base Budget Shrinking of Programs/needs/enrollment Shrinking of Resources/ Staff Total Budget 36

13 Example Staffing Needs Due to Shrinking Resources I. Quality of Education Increased class size 5.0FTE Elimination of 2 AP courses & HS electives -.5 FTE ($ ) & HS l ti.5 FTE ($ ) Elimination of instructional aides 4.0 FTE ($ ) Reduction of athletic teams Reduction of co-curricular curricular programs ($ ) ($ ) 37 Example (continued) II. Safety Elimination of resource officer Reduction of security aides - Reduction of bus stops - Lower cleaning standards -.0 FTE ($ ) 3.0 FTE ($ ) 4.5 FTE ($ ) 2.0 FTE ($ ) Budget Challenges Property tax cap Stagnating state support Final year of stimulus funding to replace state aid cuts (level funding) Escalating state budget deficits Escalating costs for providing special education services 39

14 More Challenges Pension cost increases Health insurance premium increases Energy cost increases Budget cap of lesser of 4% or 20% CPI (What if CPI = 0??) Unemployment benefit increases Budget Tools ) Health insurance consortiums 2) Regional energy purchasing cooperatives 3) Consolidation of school districts 4) Consolidation/ sharing of services & functions with other districts/ BOCES, e.g. payroll, purchasing, AP programs, back office operations...) 5) Coordination of transportation services with other districts, e.g. non-public schools, BOCES 4 More Budget Tools ) Inter-municipal/ governmental cooperative agreements 2) Increased state aid (2007 finance reforms, foundation aid, etc.) 3) Control pension costs for future school employees 4) Special education mandate relief 42

15 TAXPAYERS A unique role as provider of services through their tax support, as well as consumers of services that are provided Don t forget our DEMOCRATIC PRINCIPLE: Our government derives its powers from the consent of the governed. (Support by the Public is Critical) 43 The Dilemma Salaries & Benefits 75% Debt Payments 5% 80% Federal Mandates Special Education No Child Left Behind Act (NCLBA) State Mandates Higher learning standards Academic support for students 44 The Reality Health insurance increase 2% of budget increase Contract salary increase 2% of budget increase Retirement rate increase % of budget increase 5% Contingency Budget Cap 0- %? 45

16 Less Staff The Impact Less Program Academic Athletic Extra-curricular Larger Class Sizes 46 The Mess Growing Shrinking Increasing Fixed costs State aid revenue Gap for taxes Less for More 47 The Unknown Living on a Cliff State Aid State Aid Stimulus $$$ 200- Stimulus $$$ 20-2????????? 48

17 Strategies for Passing a School Budget New York State School Boards Association 49 Communicating in Tough Times More, not less Staff Part of the communications team accurate facts Listen, listen, listen Budget committees community stakeholders, employees Impact Short & long term implications Comparative year to year data Shift in tax burden due to decreased funding School based learning Student opportunities Data Economic indicators (COL, HIP, ERS, energy, etc.) Human dimension Students & families Employees 50 Nurture Support Year Round vs. Seeking Support Only at Budget Time Meet with Key Communicators Straightforward Newsletters Grandparents Day Meet with PTA, Booster Club, Senior Citizens Senior Citizens Concert & Lunch 5

18 C.A.V.E. People (Citizens Against Virtually Everything) Be patient Listen to them Provide facts Encourage them to make an informed choice 52 Budget Presentation Format Clearly describe the reasons for major budget initiatives Need Plan Cost 53 Thought Process Expense to Fund X So that Students t are able to do X-Y-Z 54

19 Answer the Question: What s in this budget for kids? New York State School Boards Association Emphasize: Why this budget is good for students? Answer the so that question Fiscal restraint: Items considered but not funded Cost savings strategies Grants received vs. tax increases 55 Budget documents Should avoid jargon, mathematical intricacies & complicated vocabulary Should discuss district academic & financial successes Should explain district improvement priorities, plans & evaluation methods Should meet all legal requirements Should clearly address community perceptions that are inaccurate or undermine community confidence 56 Make certain key groups are encouraged to vote School employees Parents Grandparents Registered high school students 57

20 Hold a major event on the night of the budget vote Music Events (schedule band concert or choral performance) Elementary Showcase (to cause parents to walk near voting booths) New York State School Boards Association Result Sharing students talents while encouraging voting on the budget 58 Remember: It s the KID BUSINESS It s about TEACHING & LEARNING Parents are sending their best kids to school now Not saving the best for later Every kid is important Every year is important Think of every child as being your child Do what is right for all your children/ students/ kids. Your business is important 59 Mind Our Business The Kid Business 60 2

21 When Starting the Budget Process, Ask: What is the most important learning need at this time? Where will we put our collective effort for improvement this year? New York State School Boards Association 6 2