The Budget Commission of the Atlanta Public Schools will convene this morning at 9:00 a.m. and will review the FY16 Preliminary Budget proposal that will be presented by Superintendent Carstarphen. Initial indications are that General Fund revenues will be $668.8 million or $11.2 million higher than the previous years $657.6 million in budgeted revenues and $14.8 million higher than the currently forecasted $654.0 million in actual revenues for FY15.
The $668.8 million in projected General Fund revenues for FY16 are at record levels and exceed the $657.5 million peak in General Fund revenues in 2009. However, Special Revenues – that include Federal and other grants – will be lower than in previous years and total revenues (excluding SPLOST revenues that are used for capital projects) will be approximately $20 million lower than the total peak of $743.2 million reached in 2009 prior to the recession.
All indications are that the proposed expenditures will be equal to the projected revenues for FY16 and no General Fund reserves will be used in the budget proposal. If this holds, this will be the first budget in many years that will be balanced without the use of reserves. Superintendent Carstarphen has a track record of presenting balanced budgets and her first budget submission will be consistent with her record in previous districts.
Even with near record level revenues, there are State mandates and other requirements that are consuming all the incremental resources. These mandatory increases in spending include:
- The Special Education program will see a $4.8 million increase to bring the program into compliance with Federal and State regulations.
- The required contribution to the Teachers Retirement System (TRS) will increase from 12.18% to 13.15% of eligible employee’s salaries (almost all full-time APS employees are participants) and will increase employee benefit costs by at least $3.4 million.
- The Elementary PE program will be brought into compliance with State regulations and will see a $0.8 million increase.
- Projected enrollment is increasing in the district by 923 students with the charter school enrollment increasing by 1,220 and the traditional schools enrollment dropping by 297 students. As a result of the shift towards charters schools – by statute, the charter schools share of the resources will increase by $21.2 million to $92.2 million. It is estimated that the charter school enrollment will be approximately 16.1% of the district.
- The City Pension Liability payment will increase by $1.4 million to $50.4 million.
In total, the above increases in expenditures amount to $31.0 million, which leaves $416.9 million for all other expenditures in FY16 as compared to $438.4 million for all the other programs in FY15. As a result of the lower level of resources available to fund the rest of the district priorities, Carstarphen is undertaking a program of “right-sizing” the districts cost structure to conform with the changing enrollment patterns as more students are choosing to attend charter schools.
The “right-sizing” expenditure initiative likely will result in expenditure cuts to the Central Office School Administration and to the General Administration. The budget proposal is expected to include a total of approximately $7.7 million reductions in these two functions.
Additionally, there are a number of other initiatives that the Board and the Administration would like to pursue, but due to resource limitations, the following initiative are not included in the initial budget proposal:
- It is estimated that it will cost approximately $13.0 million to address the “pay parity” issue that will bring APS employees affected by the pay freeze instituted in 2010 to the same salary level of employees hired subsequently.
- $5.0 million in additional resources for the 10 clusters in APS – these resources would be provided to school leaders who would then have the flexibility to use the funds to address specific issues they are encountering in their schools.
- The Student Support Team (SST) and RTI programs that was implemented at a cost of $4.1 million is not funded in the FY16 draft budget. Carstarphen has noted that the results for these program are mixed.
- The Board has indicated a desire to expand the Pre-K program by eliminating the current waiting list and improving employee quality and retention by increasing compensation. The cost of the expansion and compensation increases is approximately $2.6 million.
- There is a proposal to improve the service levels provided by custodians with a cost of approximately $2.5 million.
- A new program for 3 year olds with a cost of approximately $3.9 million is also under consideration.
All of these could be topics of conversation in the Budget Commission meeting this morning. However, my sense is that the two most likely issues that will be debated are the $5.0 million incremental resources for the clusters (a parent “hot button” issue) and the $13.0 million needed to reach “pay parity”.
I think it is also important to note that, unlike in prior administrations, Carstarphen is deeply involved in the numbers and appears to be running a tight ship in the budget development process. As an example, the budget requests made by the division chiefs amounted to $725 million or $36 million more than the available resources. Carstarphen pushed back hard on these requests and to her credit is presenting a balanced budget.
As the Board considers its next steps, it has three alternatives for funding the incremental priorities noted above – cut costs in other areas, use the $12 million of available General Fund reserves or raise taxes.
It should be an interesting meeting. See you there.