Friday, March 25, 2011

A Bullet Dodged?

Today's Columbus Dispatch reported the long-awaited details of the the district-by-district funding proposed by the Kasich Administration. So how did we do?

It seems as expected. It could have been much worse.

As described in my earlier article, our major funding streams from the State of Ohio are State Foundation Aid, Reimbursement of Tangible Personal Property Tax Revenue, and - for FY11 and FY12 only - a total of $4.3 million of one-time Federal Stimulus money. Here's how it looks so far:

State Foundation Aid

For FY11 (the fiscal year we'll finish on June 30, 2011), our Foundation Aid - shown as "Unrestricted Grants-in-Aid" on the Five Year Forecast - will be $33.996 million. A table just published by the Ohio Department of Education shows the FY11 number to be $33.115 million. I'm not exactly sure of the reason for this $881,000 difference (and will ask our Treasurer for clarification), but for now will assume that the $33.115 is the number we should be working with for this analysis to keep things apples-to-apples.

So according to this newly published table, we should expect to receive $33.127 million in FY12, or essentially the same amount as for FY11. The method for calculating this interim funding mechanism - the Governor says he has bigger plans for the next budget - is explained here. If this interim plan holds up through the legislative process, it puts us right on projections. And for FY12 the State Foundation Aid is projected to increase by about $1.5 million to $34.626 million.

When our last Five Year Forecast was prepared in Oct 2010, Treasurer Brian Wilson estimated that we would see a 10% reduction in State Foundation Aid for FY12 - on the order of $3.4 million. I've been concerned all along that the cut would be deeper. However this funding proposal appears to keep us pretty much whole.

So far, the news is good.

Reimbursement of Tangible Personal Property Tax

As I reported earlier, it looks like the $12 million we had forecasted to receive in FY12 and FY13 is going to be reduced by $3 million each year. I think this one blind-sided all of us, although Mr. Wilson's radar had recently picked up that this might be a place were cuts would be applied.

He was right. So in aggregate, his forecast was pretty much right on in regard to the net impact across these two categories.

Federal Stimulus Money

I don't know how many times this needs to be said:  This was one-time money that gave our District the little extra cushion needed to show a tiny positive year-end cash balance for FY12, which in turn allowed the delaying of the next additional operating levy until this year. Of course, the calendar 2011 base pay freeze and step increase postponement accepted by the teachers, staff and administrators contributed as well.

This was a nice gift from the Federal Government (which of course was just piled onto the massive national debt), but it's over. The Five Year Forecast was built with that knowledge, and does not assume any additional Federal Stimulus dollars will be coming out way.

Bottom Line

The Revenue side of our Five Year Forecast looks like it lines up pretty well with the current funding information we're getting from the State. That's a relief.

But we can't rest easy.  All we've seen so far is the Governor's proposal - we still have the legislative process ahead of us, so it could be several weeks before we know the final numbers.

The last time around, Governor Strickland's first cut with his so-called Evidence Based Model didn't stand up very well. It led to the creation of the Education Challenge Factor as a mechanism that allowed funding to be tweaked district by district. The addition of the ECF significantly changed the number for many districts.

Will there be such a 'tweak' this time?  If so, will it be a big one or a little one?

Can't tell yet.

There are winners and losers in this scheme, as there is with any change in the school funding system. Cleveland Municipal Schools is a big winner, and will get $15.7 million more in FY12 than the $398 million they received in FY11, which is a 3.9% increase. But also in Cuyahoga County: Beachwood, Cuyahoga Heights, Independence, and Orange schools will see their State Aid reduced to zero.

Here in Franklin County, the big winner is Columbus City Schools, who will see $6.3 million (2.9%) added to their FY11 State Aid of $218 million. No districts in Franklin County get zeroed out, but Upper Arlington will lose more than half (54%) of the $3.3 million they were granted in FY11, and New Albany will lose 39% of their $2.4 million.

The explanatory document that accompanied this proposed funding table says that 421 districts will see an increase in funding for FY12 under this plan. That means 192 districts will stay the same or see cuts. Whether it gets tweaked will depend on the relative legislative power of the 421 districts (who tend to be urban and rural) versus the 192 (who tend to be suburbs).

I wouldn't be taking much of a risk by assuming that this table was constructed in such a way to ensure that a majority of the members of each House are in the 421...

Remember the Special Board of Education Meeting Monday March 28


  1. So, if I may summarize, Dale McVey's email to parents lambasting the budget cuts was, well, a bit premature?

  2. The fact still remains that Hilliard needs a levy, at the current rate of spending on Salaries and Benefits (90% of the budget). Those cuts proposed by Dale will be made should the levy fail. If the State Funding was lower, the then we would see further cuts. If you are really concerned Anon, please be at the School Board meeting Monday night.

  3. This is likely as true of Ohio as of Wisconsin and is why I'm voting "nay" on any new levy:

  4. @Eire: Yes, Paul already has a telling graph for Hilliard on the site -

  5. A bullet dodged, really? The bullet is coming straight at us from the administration and the complicit board, who I see as just rubber stamping the already decided-upon listing of cuts. Will there really be a thoughtful discussion and list of alternatives to be considered? As a parent of two gifted children I find it disgusting that this district thinks gifted services is expendable. Required by the state, no. But essential to the academic growth of my kids, absolutely. It is the ONLY place that my children are sufficiently challenged, despite my ongoing pleas to the teachers to differentiate the curriculum -- they can't do it because they spend so much necessary time dealing with the under-performers. Cuts to the gifted program is taking away an ACADEMIC NECESSITY. To think it is an "Extra" that can be taken away without addressing how these children will be served is sad. It is one of the programs that make this district truly excellent.

    For those of you who feel it is a "statement" to vote no this time, if the board approves this list and the levy fails, this is on you too. The program will be destroyed and it will take YEARS to get it back. The teachers will be fired and will move on. If you must vote no, then DEMAND gifted programming be maintained to keep these families here and the district in tact. Come on, no sports fees to be "fair" but we have no problem deciding what's fair for gifted children?

    I challenge the board members to ask for alternatives from the administration. HAVE A REAL DISCUSSION -- DELAY THE VOTE IF NECESSARY. Parents should not be forced to BEG in public comment period prior the the board even beginning its discussion. So, we will BEG and the board will quietly proceed with it's "yes" vote anyway.

    Yes, you bet we'll be there. But please, board members, take on your duty to represent the needs gifted children seriously. They will be left behind and eventually the district will loose them to new gifted charters that will open, taking the student's money with them (and the best teachers). Bullet dodged? Really?

  6. It does seem ridiculous that sports should be put before gifted children. The mandate of the schools is to educate, not to provide coaches and venues for sports teams.

  7. To be accurate, the board is putting status quo salaries and a heavily subsidized health care plan above the gifted program, above sports and above everything else on the cut list. If not, salaries/benefits would be on the table tonight.

  8. Anon above, you are totally correct.

    The happy happy crap is over. There are severe financial issues in the community. The board majority in power for too long has caused this by abdicating their responsibility. Only when a
    spending adjustment is made ( Thanks Paul )will things get back on track. Paul has talked about kicking the can down the road for a long time

    Only if 2 new members of the board are elected in November that understand that the kids and the community come first, not the employees will be be on solid ground. None of these state funding cuts should be of any suprise as many of us started talking about this 10 YEARS AGO. It was coming and the board and admin. chose not to act.

    The 2008 contract stupidity should have been a wake up call. It is not about the kids, it is about compensation and benefit increases to the
    districts coddled groups.

    Tried to suggest reasonable growth over the last 10 years and they chose not to listen

    NOW !!!!!!!!! Reopen contract, cut 4 mill in
    compensation and benefits ONLY, it is 90 % of the budget. No one gets laid off, programs stay the same, and for all the "they will all le3ave" where are they going to go./ And if they do GOOD RIDDANCE

    I may be wrong, but tonight will be a wailing of the teachers, employees, and parents who
    have not been paying attention all this time to the financial goings on.

    Should be of interesting entertainment value.

    Time to say no and NO again. The commmunity cannot AFFORD 3 levies in 6 years upcoming
    and you will see more foreclosures. Soon taxes for the schools will be more than your house payment.

  9. I don't think current state funding cuts could have been foreseen 10 years ago. This state was in much better financial shape then than it is now. If you are that good of an economist, you can afford this levy and many more without doubt since you obviously can predict the future.

    However, I do agree that the district growth and increased reliance on property taxes to continue to fund school operations should have been better analyzed and acted upon. Actions should have been taken to start our district on a more responsible, sustainable fiscal path probably six years ago (two to three teacher contracts ago) at a minimum.

    I also agree that the current board and teacher union can not argue that they are worried about the kids and expect us to believe it. Unless I've missed something, no current discussions are taking place between the two to begin to work through what the salary levels will be come January 1.

    As for the previous comment on vouchers for gifted kids, there has been a proposal made to the Governor and statehouse by the OAGC to allow gifted children to access the newly expanded voucher program, should schools fail to provide adequate gifted programming (so far, this has not been rejected -- waiting to see what's in the bill language). This would NOT be only for those attending low performing schools. Would I fight hard for this alternative for my own kids, yes indeed, should Hilliard get rid of its programming. But, I'm still fighting for passage of the levy (active volunteer) because I think its poor public policy NOT to serve these students in our public school setting. FYI, I volunteered to campaign for the levy passage before the list of cuts came out -- let's get it passed and then let the union know that the public has very high expectations for this next contract negotiation.

    Finally, I wish that advocating for gifted children's educational needs wasn't viewed as "wailing" by those who don't understand the their unique learning challenges and differences from other students. I recommend reading "A Nation Deceived." In fact, the entire board and administration should read it.

  10. In response, 9.5 years ago at Memorial Middle School a funding forum was held. At that time the information on the reduction and eventual
    elimination of business taxes that were a source of significant funding for schools.

    Forecasted levies over the next 6 years (3 of them) will be needed to fund the PASSED 5 year forecast. This is not sustainable.

    Gifted Education SHOULD BE HIGHER and it IS understood that it is important cog. Much more than just recently enacted Sports Mgt curriculum
    and other Craft areas. Having family members in the AP program and gifted program does not fall on deaf ears.

    The wailing will be we are hurting kids, when the simple solution is to reduce spending from
    90% of the budget. Not one layoff need occur
    if reductions in compensation and benefits similar to challenges in the private sector are

    Suggestions WERE made to reduce the increase in spending at levels where we were driving compensation at 7% plus premium benefits. As those suggestions went unheaded, the result is a spending deficit and a financial forecast that must produce MULTIPLE levys.

    If the levy does pass, The budget for compensation will go up as almonst 90% of our budget is in salary and benefits. That means
    out of the 14 million raised,12.6 million will go to significant increases, or roughtly 7,000 dollars per employees.

    Past passing of levies and then trying to hold the board and employee unions accountable has simply not worked.

  11. So two Board Members up for re-election (Maggied and Lundregan).

    I wonder if Doug will not run for re-election. He has presided over all this growth in spending over the last 20+ years, I can see how he would not want to go through the result of it over the next four years. Perhaps he will run just to make sure another Lambert does not get elected, then retire and the majority of the Board can assign someone like Botsko.

    I imagine Dave will run again. It has only been four years. I wonder if he has any more kids in school to give a diploma to.

    Any other challengers out there other than Justin? (No, not me).

  12. Is it reduced to "another Lambert" versus "another status quo"??? Voting no is an important part of the dialogue at the SB level. As I type that, I see the irony that I'll vote yes on the levy.

    So the administration chose to propose cutting gifted, 5th grade band/strings, MS sports, 14 teachers and media/technology. Then by a 4-1 vote, the SB approved it.

    I don't know know for a fact, but it seems like they intentionally picked emotional issues: gifted, sports, arts.

    I expect another list of emotional "curricula" to cut at the next levy campaign....whether this one passes or not. It might be argued that it's been successful in the past.

  13. As was noted at the meeting last night, the same $$$ can be saved by cutting pay across the board by 2.9%, saving all of the programs and jobs.

    To Anonymous who'll be campaigning FOR the levy -- maybe instead of giving these fools more of our money to squander, you should be demanding they stop threatening us with cuts.

    For what it's worth: the fact that parents WEREN'T there gnashing their teeth, and the fact that board members stated that they hadn't received push back from the public on the proposed cuts tells me one thing: the public is OK with the cuts and that the levy is doomed.

    But we all knew THAT back in January...

  14. To Anonymous who is pushing for the levy - no disrespect but you are playing directly into the boards hands by supporting the levy because one of the cuts affects something you feel strongly about. I was hell-bent on voting No for the last levy but my involvement here convinced me to avoid the scorched earth policy and vote for the levy, then fight for some type of change with a clear conscience that I was not simply a "No to all levies" person. I feel totally abused for that decision since the last HEA contract granted 70% of the members 7.2% raises for each of the next 3 years. I won't let that happen again - my vote remains No until the new contract is announced. I'm sorry if it results in the loss of programs to your kids, but that is on the board, not on me or folks like Rick.
    FYI - when we asked for transparency from the Board, it was NOT to request what would be cut should the levy fail. It was to be honest about where the majority of the money is going. And again, as a Board, you have failed miserably.

  15. I'll bite.....

    Where do you think "the majority of the money is going"? Salary, right?

  16. The stakes have been raised... I'll be posting on this soon.

  17. @ce Yes -- 88.2% of the budget is compensation and benefits.

    What folks need to understand though is that we're not against the folks that work in the district. But that 88.2% increases every year.

    Under current forecasts, it will be 90% by 2015.

  18. @Paul - SB5? Before you post on that, if that's what you're looking at, see if you can find out if SB5 appropriates any money in it anywhere...

  19. I'm not ready to comment about the Amended SB5 yet - the update I have will be about the PPT Reimbursement.

    If you want to real the fiscal analysis of SB5 as passed, it is available here