Atlanta Public School Budget Commission increases projected revenues by $14 million to $682.8 million for FY16 – no tax increase at this time

February 26, 2015

The Atlanta Public School Budget Commission, chaired by Matt Westmoreland, convened yesterday to consider how to fund additional educational priorities that remained unfunded under the original revenue projection of $668.8 million. The Commission decided to include up to $14 million owed by the Beltline in its revenue projections for FY16 which raises the total revenue to $682.8 million.

The $14 million Beltline payment that has accumulated over the last two years remains unpaid and is the subject of a dispute between APS and the City of Atlanta. The Beltline currently does not have the funds to make the payment and the City of Atlanta – led by Mayor Reed who is the chief negotiator – is a party to the original contract and is liable for the amount due to APS. For more background on the dispute, see the AJC article here.

The Commission is taking the position that the amount is due to APS and that the revenue should be included in the FY16 budget. However, the Commission has also determined that in the event the payment is not received, the General Fund reserves of $14 million will be used to cover the additional expenditures added to the FY16 Preliminary Budget.

In addition, the Budget Commission determined that if the Beltline payment is received, the total expenditures will increase to $696.8 million and the $14 million in General Fund reserves will be used to balance the budget. The administration anticipates that the General Fund reserves at the end of FY15 will be $61-66 million and the use of the $14 million in reserves will bring the balance down to the minimum threshold set by APS policy of approximately $50 million in reserves.

However, even with the incremental funding source, additional priorities – including the pay parity issue (see here) – remain unfunded. The Board is considering adopting a plan to restructure the Pension Liability and, if a restructuring plan is adopted and subsequently approved in a voter referendum, the restructuring could increase available cash flows by approximately $20 million in the first year and $10 in the second year – and the amount would increase over time. In the event this occurs, then the funding structure for the FY16 budget will be revised.

The alternatives presented above have multiple dependencies on the different payment streams and the following flowchart attempts to lay out the complex decisions and incremental expenditure funding under each scenario (click to enlarge).

 

Revenue and expenditure flow chart

Based on the expenditure proposals under each scenario, it is clear that Board and the Administration are placing the funding of educational priorities first. Next in-line for funding are pay raises for teacher and other personnel, but they are dependent on receiving the Beltline monies and restructuring the pension liability. Also, based on the $7.7 million in cuts announced in administrative expenditures, Superintendent Carstarphen is taking steps to “right size” these functions and reallocate the cost to other educational funding priorities.

Additionally, the Board appeared unwilling to adjust the property tax millage rate and, at this time, tax rates will stay at the same level as this past year.

The Administration will incorporate the changes that have been agreed upon and present the revised FY16 Preliminary Budget at a public hearing that will be held on Monday, March 2 at 12 p.m. prior to the regular Board of Education meeting that will begin at 2 p.m.

The Budget Commission has made substantial progress and, due to the critical nature of the discussions, all nine Board members were in attendance for part or the entire Commission meeting.

My sense is that a conclusion will me reached in the very near future.

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Merry Christmas!

December 25, 2014

For unto us a child is born

May it be a joyous occasion for you and your loved ones.


Review of Atlanta Public School Superintendent Davis’ tenure – part II

July 4, 2014

Maureen Downey, who writes at the Get Schooled blog at the AJC, published the first part of the article yesterday and published the second part today.

The first part titled “Atlanta’s Erroll Davis: An able administrator, a novice educator. Did he change APS for the better?” is here and the second part titled “The legacy of Erroll Davis: A strong start but weak finish”  is here.

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Time to Take Our Medicine – We MUST Go Over the Fiscal Cliff!

November 13, 2012

One of the biggest problems I have with any discussion regarding the federal budget – revenues (primarily taxes) and expenditures – is the reliance on 10 year numbers. While the 10 year budget impact numbers are quite large and startling, they are irrelevant to gaining any understanding of the problem – or if in fact, the problem is being addressed. Why is this? There are two key factors which make any of the numbers outside of the current or next fiscal year completely irrelevant.

  1. Any law passed by Congress is subject to amendment or repeal.
  2. A future Congress is not bound by prior decisions and can make changes to the law prospectively.

Given this ability for Congress to change taxes and expenditure in the future, the only budget numbers that are relevant to the current decision are the ones that impact the current fiscal year (and maybe FY14 because we are well into FY13).

So what is the impact of the “Fiscal Cliff” on the FY13 Federal budget. According to the CBO report “Economic Effects of Reducing the Fiscal Restraint that is Scheduled to Occur in 2013” (May 2012), here are the numbers:

 

The outcome of the election is clear – voters agreed that we must raise taxes. Unfortunately, there is no agreement as to who will have their taxes raised. Lacking an agreement, it makes sense to go back to where we started with the Clinton Administration tax rates that everyone seems so enamored with. The Obama payroll tax cuts were supposed to be temporary – let them expire. And the rest of the tax increases in the chart above – they represent the will of the Congress (which in form and substance was essentially reelected) – let the voters will be done.

As to the reduction in expenditures due to “sequestration” and other items – the dire warnings of the “apocalypse crowd” are way off base. Let see if I have this straight. In FY2012, the total federal expenditures amounted to $3.6 trillion (with a T). The expenditure reductions amount to a 3% actual cut in spending. Oh the HORROR of such irresponsibility! Women, children and minorities hardest hit! As wrong as the “apocalypse crowd” is – so is the “redistribution crowd”.

Will all of this have an impact on economic growth? The CBO estimates that it will reduce GDP by $47 billion. I would suggest that this is a pittance in comparison to the impact of all the new regulations that are going into effect (see EPA, Interior Department, Obamacare, etc.). If we can accept the impact of massive regulation on the GDP, then we can easily digest another $47 billion.

As I noted above – let the “fiscal cliff” happen. If we don’t like the outcome, our incredibly responsible Congress and President will quickly change course to correct any problems. Their historical record on this is clear for all to see.


Vote for the Next Generation

November 6, 2012

This morning tears are rolling down my face – and I am not sure why. I suspect it is the final release of emotions that began welling up three years ago and then intensified in the last three months. Our day of decision has come and our future will be decided – as it should be – by millions of voters around the country.

What is so strange about this is that for my entire adult life I have been a “numbers guy” – focused on dispassionately assessing the result of prior decisions and moving quickly to minimize the negative and altering the course to leverage the positive. And I always ask what I consider to be the central question – what will the course corrections look like in three months, a year and five years? The answer to this question drives my decisions. And so it is with the election today – but the horizon is far longer than months or years – it is generational.

The decision voters make today will not only impact the next four years, but will determine the future we hand to our children and grandchildren. Will we give the next generation the opportunity to be masters of their own futures or will we cede the decisions to the government? Each vote today says who you trust to make the right decisions – is it your children or a faceless bureaucrat in Washington DC?

The outcome today will result in one of two very different nations that we will leave to our children. I trust Americans will look to the future and make their decision in our children’s favor.

Every vote today will be recorded in eternity – and the next generation will determine if we were thinking of them or only selfishly of ourselves.

And the outcome today will determine if my tears this morning are of joy or despair.

 

 


To North Atlanta Parents – Get Over It! The APS HR System Worked.

June 20, 2012

An article in the Reporter Newspapers by Dan Wisenhunt (with what I believe is a misleading headline) does a thorough job of analyzing the APS hiring process and provides an excellent Q&A with school officials regarding the steps they take prior to hiring a candidate. And the process worked! So why are North Atlanta parents still upset regarding the consideration of a candidate for principal with a prior negative history?

A number of vetting steps are in place that culls out candidates that are not qualified or have other problems. The candidate in question got past the first step, but was identified in subsequent steps as a problem and the individual was not offered a position. While I am sure the HR function at APS is embarrased, the individual was not hired due to a public vetting (a step in the process). Again, the system worked as it should.

Parents  – move on to something more important!


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