The Board of Education will hold its regular monthly meeting today at 2:00 p.m. and the Agenda with supporting documents can be found on BoardDocs here. There are three items that are critical to next years budget and are interrelated, but the interrelationship is not presented in the Agenda. The key items are as follows:
- Estimated revenue for FY16 – $657.6 million (with no use of General Fund reserves)
- Requested waiver from the 65% in school spending test (FY14 was at a shockingly low 56.4%)
- Renewal of the maximum class size waiver – +5 across the system except +3 at the high school level
Let’s take a look at each of the items above and see how they are interrelated with each other.
First, the revenue projection for FY16 is projected at $658 million (see presentation here). This estimate is $28.6 million higher than the current revenue estimate for FY15, but total available resources remain approximately the same when taking into account the use of the $25 million General Fund reserve in FY15. In total, over the last two years, revenues have increased by nearly $60 million or 10% (see 10 year revenue history here – p. 110 of PDF, or p. 80 of Report). In addition, the estimate exceeds the record level of revenue received in 2009. Clearly, the impact on revenues from the recession is over and the revenues have shown very solid increases for two years in a row. In addition, the new administration needs to be commended on what appears to be a plan to balance the budget without the use of General Fund reserves. This is a first in many years!
Second, even with strong revenue growth over the last two years, the district has made absolutely no movement in directing more resources to the classroom. The administration is proposing that the Board approve a waiver for the 65% test imposed by legislation (see presentation here). Based on the required formula in the statute, for the last two years APS has only allocated 56.4% of its expenditures to the classroom. To actually be in compliance, APS would have to shift an additional $60 million to classroom activities. While this may not be possible under current conditions, the $60 million shortfall is very close to the revenue gains over the last two years. Where did the money go? It is clear that the incremental fundng did not go into the classroom where it would do the most good in achieving the newly adopted mission of APS.
Third, the administration is requesting a renewal of the class size maximum waiver – again to a +5 for grades K-9 and +3 for high schools (see presentation here). This item was very controversial two years ago, but received scant attention during the last budget cycle. The administration consistently indicates that the system cannot afford to reduce class sizes and again presents the information in a manner that does not show an incremental approach to reducing class sizes. For example, the table in the presentation shows how much it would cost to reduce the class sizes for the system as a whole, but fails to show the cost of reducing class sizes by school levels (i.e. Kindergarten, grades 1-3, grades 4-5, grades 6-8 and high school).
In addition, the presentation shows the lowest and highest average class size for each grade level (p. 8 of presentation). If this chart is accurate, the differences in average class size between schools is very significant. As an example, for grades 1-3, the lowest school average class size 17.3 and the largest is 23.6 – or a difference of 6.3 students. The variance for grades 4-5 is even larger at 8.7 students. Parents should be rightfully asking – Why such a huge variance? And if the largest average class size in grade 1-3 is 2.4 students below the requested waiver of up to 26, why is the waiver above +3 even needed? The same question could be asked about every other level as well.
So let’s bring this all back together. Revenues for the last two years are at record or near record levels, but the administration has not allocated the increased resources to in-classroom activities as demonstrated by the failure to make any improvement in the 65% test or by reducing class sizes in any meaningful way.
As I have noted here many times, budgeting is all about priorities and – just as importantly – how the monies are actually spent is a clear indication of the priorities that APS has focused on. And the tale told by the items above present a clear and unambiguous picture of APS’ priorities – and it is not about improving the funding of student learning environments.
I think todays meeting is a true test of the new Board of Education that took office this past January. In accordance with their campaign promises, they should hold the administration to the balanced budget parameter (and no use of General Fund reserves). But there is so much more that was promised on the campaign trail that will not be accomplished if the waivers noted above are accepted. And at the top of the list was a transfer of funding from administrative functions to spending in the classroom. If the two waivers are approved as presented, that means that it is likely that the new Board will not have delivered on this promise two and a half years into its tenure (from Jan 1, 2014 to Jun 30, 2016).
If that happens, I say shame on them.
Both waivers should be declined until such time as the administration presents a credible three year plan to address the in-school funding issues and to eliminate the need for any waivers.