Lebanon schools 2010 budget

Our July meeting was as close to "routine" as I've seen the board get. We paid the bills and approved the hiring of some teachers and other personnel. We also approved a resolution to advertise the budget for 2010, which is a legal requirement (the resolution, the advertisement, and the budget are all legal requirements). The board met in a long budget workshop last week and went over the nuts, bolts, and fine print of the various funds that make up the budget.

Here's something interesting about the LCSC 2010 budget that's being proposed: It's smaller than the 2009 advertised budget. That's right, smaller.

The way the budget process works we "advertise" a budget, which is what we're asking the state to approve. We advertise high, knowing that the folks in Indianapolis (specifically the Department of Local Government Finance, a place shrouded in mystery) will make some cuts. Eventually, they approve or "certify" the budget. It's like asking for a larger salary than you know you'll get, hoping that you'll eventually get what you needed or wanted in the first place.

Here are a few figures: In 2009 we advertised a budget of $39,817,791; the state certified our budget at $36,244,194. For 2010 we're advertising a budget of $37,343,552, anticipating that it will be certified at several million dollars less than that.

What has happened to your tax rate? Per $100 of assessed value, LCSC property owners paid $1.54 in 2008, and $1.19 in 2009. The rate we're advertising for 2010 is $1.2643, but it will probably be certified between $1.05 and $1.15

Why is our budget shrinking slightly? The state budget passed last month has the Lebanon schools slated to receive a .7% increase for this year, and a .7% decrease for next year--essentially "flat-lining" our budget. The largest factor in determining our state dollars is our enrollment, which is steady. But costs like utilities and insurance keep climbing, so we're economizing where we can while striving to insure quality programs and reasonable class sizes.

The budget process is painstaking, but I'm getting the hang of it. The corporation CFO and assistant superintendent Charles Tait is very good at his job, which includes preparing the budget and explaining it to the board. Unfortunately there is almost no public attendance or participation in the budget process, although it's all accomplished in public meetings, and in much more detail than I've offered here. If you have any interest in learning more, budget documents are available for review at the administration office, and the budget will be advertised in The Reporter. I also have a file folder with all sorts of figures in it, and I'm willing to share it, if you'd like to contact me to arrange a meeting.

"Reporter" columns

While I haven't been posting on this blog for the past year or so, I have written a couple columns about education issues for the Reporter. My most recent, about the variety of programs available at LHS, is available online here: http://www.reporter.net/archivesearch/local_story_157003816.html

An earlier column with some basics about the very complicated process of school budgeting was published in mid-March but did not appear online, so I have cut-and-pasted it below. Our budget woes are likely to be around for a while.

School Budgeting Basics, Recession Version (published March 2009)

At last month’s regular school board meeting, LCSC Superintendent Dr. Robert Taylor notified the board and the public about some reductions that will be necessary in the Lebanon schools, due to the overall economic climate. These reductions will include some programming adjustments and some personnel reductions. As a board member, I thought it might be helpful for the community to have a little more information about the situation we’re in, and how we plan to address it.

There are revenue factors contributing to this situation:

• A slightly declining enrollment (down about 90 students since September 2007) will result in less money coming from the state to our general fund, which is the source for teacher salaries and accounts for about $24 million of the LCSC’s $37 million budget. We get about $5000 per student from the state—a drop of 100 students means a drop of $500,000 in our revenue.
• The state plans to “flat line” the education budget for 2010. The state controls the entire general fund, as of this year. No local property taxes go to pay teachers’ salaries. Every general fund dollar comes from the state, much of it from sales tax and income tax. Declining tax revenues statewide and Governor Daniels’ resolve to “flatline” the education budget means we will have no more money for 2010 than for the current year 2009, and possibly less, depending how the state calculates the flatline.

Contributing expense factors include:

• Meeting the increment with fewer retirements. If you’re a teacher with 0 to 16 years of experience, you get about a 3% pay increase each year for your additional year of experience. Your increment is larger if you’ve taken continuing education. In order to pay for this increment, we have to see 7-8 teachers retire each year. For various reasons, fewer teachers are planning to retire this year, so their pay and benefits will continue at or near the top of the pay scale. We’re fortunate to have many of these experienced teachers, but it’s an economic reality that they cost more than newly-minted teachers.
• The master teacher contract for the last two years has included a 2.5% and a 3.5% base salary increase (in addition to the increment some teachers receive). Non-certified personnel like bus drivers and food service employees have received modest raises as well.
• Costs like utilities and transportation are likely to keep increasing.

The net result is pretty straightforward: LCSC revenue and expenses don’t match up and we don’t have control over the revenue situation. We have to look at some reductions. Dr. Taylor said at February’s board meeting that the reductions will amount to about $325,000 for the remainder of 2009, and $700,000 for 2010, which is less than 2% of the total LCSC budget.

In context, this is not a dire situation, it’s part of a nationwide phenomenon, and things are much worse in other states. Connecticut is cutting its education budget by 10%; nationally 600,000 teachers are at risk of losing their jobs. Around central Indiana most districts are tightening their belts—Lawrence Township schools for instance, are looking at cutting 101 teachers.

The teachers who are most nervous right now are first- and second-year teachers who are not protected by tenure. You can argue about teacher tenure six ways to Sunday, but we can’t change teacher contract law on a dime, even if we wanted to, and in many businesses the most recent hires are the first ones cut when times get tough.

We’re not only looking at personnel reductions. Where we can make programs more efficient, we’re looking to do that as well.

Our class sizes are reasonable across the corporation. At the elementary schools there are some classes with fewer than 20 students, and more than 25 in an elementary classroom is very unusual.

We’re already managing our money well. As reported at last month’s board meeting, the state Office of Management and Budget shows that LCSC has increased its percentage of money spent on student instruction from 53% in 2007 to 57.2% in 2008. (Non-instructional expenses include things like maintenance, transportation, food service, athletic coaches, business support, interest, and debt.)

Our spending is effective. Our Fall 2008 ISTEP+ scores rank 60th in the state, out of 294 school corporations. In 2003 LCSC ranked 110^th in the state. Our four-year graduation rate has gone up in the last three years from 80 to 86%, well above the state average. (For a wealth of statistical information about public schools check the Indiana Dept. of Education Web site at http://www.doe.state.in.us/asap/data.html.) There’s always room for improvement, of course, but there are many positive trends as well.

The school budget process is incredibly complicated. While the LCSC has submitted a budget for 2009, the state has not adjusted or approved that budget. We are spending money right now based a proposed budget that has not yet been approved. The 2008 budget was not approved until September 2008, but our schools were open and we were paying the bills just the same. This process means we have to plan very carefully, because the state could, without much notice, cut our budget. Maintaining a cash balance in this environment is critical.

Many things can and will change. For instance the effect of the federal stimulus package—how much money comes to Lebanon, and how it can be spent—is still unclear. Some teachers may decide later in the year to retire or resign. In the best case scenario we can hire back all of the staff that will be part of the reductions. But we are required to notify employees of their status by May 1, so we’re preparing for that based on what we know, or can reasonably guess, right now. We’re confident that we will not be compromising the quality of education we offer this community.

The next regular meeting of the school board is 7 p.m. Tuesday, March 17, in room B-14 of Lebanon High School. As always, the public is welcome to attend these meetings or watch them on Channel 19. School board e-mail addresses are available through the corporation Web site at www.leb.k12.in.us.

One year in ...

I thought it was about time to start using this blog again. One year into my term I've learned so much, but I've also learned how much more there is to know.

When people ask me how my work on the board is going, I tell them that it's interesting and challenging, and that I'm confident we're making good decisions for the students and staff of LCSC. The past year included several issues that brought out strong feelings from the community. The dress code, a personnel decision about Coach Hammel, and the budget cut package, including eliminating the Academy, were all truly difficult episodes. Though we didn't always agree with each other, board members treated each other with genuine respect and worked toward consensus in a professional way.

One of my goals on the board is that school issues be well-publicized, but that the board itself not make headlines. Too often there are personality conflicts, or just questionable behavior by board members, so that what a community hears about is the board itself. This can never lead to strong educational decisions, and takes the focus off of student achievement. I'm grateful to be part of a board that truly works together--a big "thank you" to Alan Cragun, Tom Merritt, Michael Burtron, and Dave Herr.

I'll try to post here a couple times a week. I will use this blog to try to explain what's happening, and to reflect on education issues, local and larger.

Thank you for reading. My board e-mail address is thomasmm@leb.k12.in.us. Feel free to drop me a line with any thoughts about the board, Lebanon schools, or this blog. For now I'm not inviting comments, but if you think I really should, please let me know.