I am not sure how best to convey the facts about next year’s budget to large groups of people. I will try to use the blog for this purpose. If any part of this posting generates a question, please make sure that you contact us to get it answered. While readers may disagree with the proposal discussed, the intent of the post is to convey facts.
The FY2010 Budget is being constructed in two parts. Part 1 involves meeting a 3% guideline agreed to by the school committee, selectmen, and ways & means in the fall. The 3% guideline marked a significant decrease in itself when compared to the last three years – 4.9%, 6.25%, and 5.96% respectively. We achieved the 3% guideline through retirements without replacement (central office) and retirements with lower cost replacements (only the retirees of whom we are presently aware). We also level funded supplies and materials and reduced the professional development budget.
In addition, the 3% guideline assumes two historical practices. First, the two additional elementary teachers needed to maintain a district-wide elementary class size of 18 to 1 are not counted toward the 3% guideline. Second, the increase needed to fund a new 5-year bus contract is outside of the district’s control and therefore, outside of the 3% guideline. The transportation increase adds about $154,000 to the bottom line or about 0.5% by itself.
The guidance from the school committee was to meet guideline (3%) and maintain programs and services. We feel we accomplished this task with step 1 of the current budget process.
Step 2 in the budget process has been created as a result of the economic slowdown. There is a significant reduction in the amount of revenue the town is receiving from state and from local sources. This structural shortfall is estimated at $1.4 million at present. In working together, the school committee, selectmen, and ways & means asked staff to develop a balanced approach to solving the structural deficit. A balanced approach would include reducing expenses, rethinking some capital projects, and possibly using reserve funds to meet the structural shortfall ($1.4 million).
All union leadership was brought into the conversation at this point about six weeks ago. After much discussion, the reducing expenses component of the balanced solution came down to asking ALL employees (union and management – town and school) to forgo 1% of their negotiated raise for next year (about $520,000 town and school; about $310,000 all school employees). In other words, most school union members and non-union members would receive a 2% increase instead of a 3% increase. In regards to our largest group, with about 75% of our teachers on the salary scale and therefore receiving a step increase of between 3% and 4% for their additional year of experience, most Burlington teachers would receive between a 5% and 6% salary increase in FY2010 even with the 1% concession. Moreover, the 1% concession would essentially eliminate the need for program reductions and staff layoffs.
The solution to the structural deficit, however, is not as simple as finding 1% (or about $310,000) in school district operational savings. The principle associated with a balanced solution is eliminated without a salary concession on the part of union and non-union school personnel. The school district’s share of the structural deficit without foregoing 1% of next year’s raise would be anywhere from 50% to 60% of the structural shortfall or somewhere around $700,000.
What is more troubling is that the town is self-insured in regards to unemployment benefits. This arrangement has been cost effective without layoffs. With layoffs, however, our being self-insured means that we need to reduce almost two positions to save the salary dollars associated with one position.
After much consideration, the 1% reduction in next year’s raise was the most reasonable, most balanced, and best solution for kids due to the loss of revenue associated with the economic slowdown ($310,000 vs. roughly $700,000 reduction in the operating budget). As stated, the school committee has officially requested that each union consider reducing their scheduled raise for next year by 1%. The non-union employees in the district and the custodial union have already agreed to reduce their raises by 1% for next year. The school committee members believe forgoing 1% of a planned 3% raise will allow the school district to maintain programs and class-sizes while eliminating any possible reduction in force (unless the economy changes significantly).
These are the discussions we will be having over the next month. Compared to what I am hearing from most other school districts, our balanced approach is enviable. The school committee, selectmen, and ways & means also think the balanced approach is sustainable for more than one year if the economic down-turn continues into FY2011.