Tuesday, November 27, 2007

9.5 Mills It Is

The following is a statement I read to the Board of Education at their regular meeting on November 26, 2007:

As was stated a during your Nov 14th meeting, going to the voters with a 9.5 mill levy will require the district to reduce spending by about $3.3 million per year over the next three years – if there is no plan to restore the 10% operating reserve which is your current policy.

To restore the 10% operating reserve by the end of 2011, approximately $9 million per year would need to be removed from the budget – an amount which would certainly cause uncomfortable if not downright painful reductions of programs and services.

However, if that $9 million/yr were to be removed from the budget, which is $54 million over six years, it would still mean that the levy amount in 2011 would need to be about 11.5 mills, if all of Mr. Wilson's forecast assumptions bear out.

You have three big financial knobs you can turn:

  • The 2008 Levy amount
  • The amount of annual spending cutbacks to be implemented
  • The 2011 levy amount

These are intimately related, and should never be considered independently.

My request to you is that you communicate all three of these numbers when you announce the March levy amount, with a statement that sounds like:

"The School Board announces that, in conjunction with $9 million per year of spending reductions, the community will be asked to approve a 9.5 mill operating levy in 2008, and forecasts the need for another 11.5 mill operating levy in 2011."

It is critical to solidify community trust during this campaign, and that starts with open and frequent communications.

Thanks to Board member Lisa Whiting for acknowledging that there is some merit in this viewpoint.

Earlier in the meeting, Gwen McCartt, chair of the Treasurer's Finance Committee presented the recommendation of their committee, which was to put a 9.5 mill levy on the ballot. They explained that they believe more is needed, but that they do not believe a larger levy could be passed.

The Board voted unanimously to put a 9.5mill levy on the ballot in March. Doug Maggied indicated that it's possible that the Board will seek the next levy in two years rather than three. That would be a good thing as the millage required for the second levy could be much less – on the order of 8.5 mills by my calculations.

Now the hard work begins – selling the levy to the community. It would have been easier (but not easy) had the school leadership been building community trust over the past couple of years as I have long recommended. Now all that messaging will have to be done over the roar of the holidays and the Presidential Primary.

And because this Presidential Primary can be expected to draw out extraordinary numbers of voters, the Board cannot count on winning the election with the support of around 11% of the voters (more than half the 20% that typically shows up for Spring elections). If the levy doesn't pass in March, the Board will have little choice but to go back to the voters in November 2008. More importantly, they will have to start the 2008-2009 school year without a clear picture of funding. With cash reserves depleted, severe cutbacks will be necessary to survive should the November 2008 levy request also fail.

The shame is that none of this drama was necessary.


  1. Can someone PLEASE explain why it costs so much money to run a school system that isn't that good at educating our childen? I've read that 90% of our taxes goes to salaries of teachers and administrators, but the teachers union always says their members aren't paid enough. Explanation anyone?

  2. Yes, it is true that 90% of all school funding goes to pay the teachers, staff and administrators of the school district. That number should not alarm us, as a school system is like any other services organization - the major cost is people. We do need to understand why over the past 10 years the employee headcount grew at nearly twice the rate as student population however.

    While I don't necessarily think our teachers are overpaid - after all, we entrust them with our educating our kids - I am disappointed that they seem to want to hide the details of their contract. You are encouraged to read this article I wrote that explains how their salary grids work.

    Today I asked Asst Superintendent Tim Hamilton for a copy of the OAPSE contract which was just signed. OAPSE is the union which represents the employees who are not part of the faculty, such as bus drivers and maintenance personnel. The official press release from the district says these folks will get 3% cost of living increases. I'd like to read the contract to see if they also get 'step increases' like the teachers. And it's not because I think step increases are necessarily bad, but because it would be another case of telling half-truths.

    Secrecy breeds distrust. The school board spends a lot of time in executive session, which makes me believe they're discussing matters which should be discussed in public. Things such as the details of a questionable deal they did with Homewood Homes to run water service to Bradley High School.

    To key to getting this levy passed is trust, and that starts with open and frequent communications.

  3. For what it's worth...not particularly edifying, but...a parody here. (I speak as a former and possibly current rube.)

  4. The dollar amount they are asking for is unbelievable. I simply can't understand why I need to invest another $291 per $100,000 every FOUR years to keep our school systems in the black. If voters pass this, they'll be back for even more in the blink of an eye.

    This is rampant, irresponsible spending. I understand student population is up and state funding is down. That still doesn't explain their explosion in costs. If this were a business, it would go bankrupt.

    Hilliard Schools needs to lose this levy and the next three attempts at passing it. That will force them to pair down the staffing and expenses. Further, they need to negotiate a cost freeze in the next teacher union contract. THEN you can come to me and ask for more money.

    OF COURSE, that's not what they'll do. They will cut programs before personnel. Football will go pay-to-play. Girls sports will be cut. Art and music? Forget it, gone. That's the scare tactics they use to get they're way. In fact, they're already using it: "Kids will be hurt," said Dick Hammond.

    Shame on you, Dick.

    You work for me, the voter and parent and taxpayer, not for the teachers and admins.

    The staff should feel the hurt before the kids. And with Hilliard's fat employment roster and high pay, the kids won't notice a difference.

    As a parent of two school children, here's the impression that I have: Hilliard Schools is a business interested in employing, not teaching.

  5. Your last sentence echoes what I've come to believe as well.

    The tough part for many folks to understand is that teachers as individuals are one thing, and the institutions are something else. The institutions I'm speaking of are the management of the district as well as the employee unions - HEA for the teachers and OAPSE for the rest.

    I bet few parents will stand face to face with their kids' teachers and tell the teacher they're getting paid too much. When 20-something whizkids can become zillionaires for creating video games, it's hard to say that $60K and benefits is too much to pay a teacher to whom you give responsibility for preparing your kids for their future. Besides, most parents actually like their own kids' teachers.

    But the institutions have become something not so beneficial, and I think I know why:

    Public school districts are essentially a monopoly. They are a granted an exclusive service territory, and within that territory are the only agency authorized to collect tax money to operate their business. You can use other service providers, such as private schools, but you end up paying private school tuition AND your taxes for the public school. This is not a choice available to most.

    Because school districts have this exclusive deal, they are insulated from competitive pressure. When that happens, the institutional focus turns to figuring out how to get more from (and do less for) the captive customer base. If the customers suggest that compensation be tied to results, the public is told that it's unfair.

    We've have been programmed to think that our current approach to organizing public schools is the only possible answer. I challenge that.

    I wrote a piece called Food Stamps that suggests another approach. Give it a read if you have a chance.


  6. Yes, no doubt the system has systemic issues. And I think you're right about the results of a monopoly. But... education's monopoly is a national phenomena. On that even playing field, many other districts are managed so much better than ours.

    The problem for me isn't the public employee, or even the organization(s) that works on their behalf, or employs them. I don't think we need to change the system to fix Hilliard's woes.

    My problem is the backwards method for funding our schools and the excessive employment (aka spending) within the system.

    Hilliard has got to do some basic things before I'll vote for more money:

    1) Assess a Impact Fee for any and all new development. Immediately. Do not pass Go, do not collect $200.

    2) Business Development. Present an aggressive and intelligent plan to attract businesses that will offset the costs to residents. And... "business development" does not mean housing.

    3) Stop playing the blame game and get the school ratings up. That's costing us state dollars, and now we're left to pay for the school's sins. You have enough employees, where's the results?

    4) Get out of bed with developers. You're my school system, not theirs. Renegotiate contracts with Homewood.

    5) Reduce payroll. Either through pay freezes or employee cuts. Until you cut spending, I won't give you more to spend with.

    6) Don't touch the programs that benefit children. If the board dares to threaten educational or extracurricular programs BEFORE cleaning up their own house, it will strengthen my resolve to fight.

    BTW - with regard to number 6, I also expect them to leave Bradley empty when the levy fails. They will weep, "If only you would pass the levy, we could open the school." They won't mention the levy is THREE times the cost of staffing the school.

    Hilliard: Bring us a 3.5 mill for Bradley and we'll pass it, no questions asked.

    If I see 1-6 happen, I will actually help campaign on behalf of a new levy.

  7. #1: Here's a pretty interesting article about impact fees in Ohio. I think you'll find that high-growth districts are all facing the same challenge as Hilliard, including the belief on the part of the levy-weary public that their district is wasteful and overspending.

    I'm not so sure that's the case. Yes, I believe that any organization with a $200 million budget has waste. One friend of mine said there's always 5% that can be cut from a big organization. A little crisis can drive a lot of that out of the system. But it's hard to tell fat from muscle from the outside. And one person's waste is another's requirement. Unfortunately, public schools aren't run on an a la carte basis. It's more like a buffet where you pay for everything and consume what you want.

    #2: Amen

    #3: The school ratings are good - very good in fact. The "Continuous Improvement" rating comes from the fact that there are some minority groups who did not test to the same high level as the rest of the kids, and by state law a district which has underperforming minority groups cannot be rated any higher than "Continuous Improvement" (see earlier article)

    The reality is that the resources necessary to help these kids do better on the standardized tests are expensive.

    #4: Absolutely the root of all our problems.

    #5: At least drop the annual increases back to 4% or so from the 8% they get now. But take care of the teachers in the first five years - when they're most likely to become disheartened and leave the profession.

    #6: I agree that cutbacks have to start in administrative roles, but that won't be enough if the levy doesn't pass.

    It will be an interesting couple of months. Thanks for the dialog.