Friday, January 25, 2002
FinCom to school committee: please ask for less
The Carlisle Finance Committee (FinCom) is faced with a potential million-dollar gap between requests and the spending targets they set in their "guideline budget" for town departments. At their January 16 hearing they asked the Carlisle School Committee (CSC) to reduce their proposed budget to help close the gap. The total increase the school had asked for ($759,000, or 10.8% over this year's budget), is more than $406,000 over the FinCom guideline for the K-8 school.
Each fall the FinCom calculates guidelines for budget increases by each town department. The goal is to estimate a budget which balances expected revenues with expenses and thus requires no Proposition 2-1/2 overrides. The guidelines are limited by what members predict about revenues. In October, anticipating a slowdown in building and other economic activity, the committee made conservative revenue assumptions for next year, allowing a rise of 5% for the elementary and regional high schools, and 2.5% for all other town departments.
School budget increases
Contributing to upward pressure on the school budget request for next year are familiar factors: an enrollment increase of 4% (38 students) over the past year; sharp rises in costs for teachers in "regular" education (9.2%) and special education (13.6%), including raises, step increases and educational incentives for existing teachers and three new full-time positions; and a 7.5% increase in costs to maintain and operate the buildings. (For a summary of major components of the large request see the table)
Other expenses that also drive next year's requested increase are tuition for new placements outside the school system for special education students ($131,000), and for early retirement incentives. Neither cost is discretionary. The early retirement program will "bump up" salary costs for the next two to three years. The teachers' contract requires the school to pay those who choose the program an extra incentive in the two years before retirement (20% of salary in the first, 15% in the second year).
Though the net cost to CPS over the entire five years will be only $38,000, Riley said, next year's extra expenses will total over $131,000 in extra pay. Any savings would be realized in the fourth and fifth years, as more highly-paid retiring teachers are replaced by teachers with less experience, theoretically at lower pay levels.
FinCom chair Tony Allison referred to the early retirement cost as "an act of God," rather than an ongoing operating cost, and has suggested that the expense be paid separately from the school budget. At the hearing he asked the town treasurer to explore paying the costs from a different budget line, or a trust fund, rather than the school budget. He noted that eliminating these early retirement costs from the school's budget would reduce next year's requested increase from the proposed 10.77% to 8.9%, since the $131,000 contributes almost 2% of the increase. (For more on early retirement see story .)
Is the slope sustainable?
Carlisle Public School business manager Eileen Riley included with the budget submission a table and graph showing school costs per student, both actual and adjusted for inflation using the Consumer Price Index, for each fiscal year since FY90. Selectman Tim Hult, who served as a member of the school committee during the early '90s, pointed out that the line for inflation-adjusted per-student costs had risen much more steeply in the past six years than in the first six of the period.
In fact, if next year's request for an adjusted increase of $323 per pupil, or 7.2%, were granted, the total increase in adjusted per-pupil costs over five years would be 24.3%, compared with a reduction of 15.5% over the first four years of that period and an increase of 16.3% for the next five fiscal years, 1994 to 1998.
This rising slope reflects the cost of "quality" at the school of teachers, salaries and program maintenance and improvements, Hult said. But, he asked, "is this sustainable given the income of the town?
"It's the school we asked for and the school we got...but we have to determine if we want to keep the slope of that line ... given the revenue available to [the town]," he continued. Hult repeated a caution to the school committee from earlier meetings: "What you want to avoid is that radical adjustment," referring to the sharp reduction from FY90 to FY93 following an override failure.
Teachers' salaries the key
"The only thing that will make a difference is the teachers' contract," said FinCom member Lisa Jensen-Fellows, who has recently projected possible future tax patterns based on historical trends. Superintendent Davida Fox-Melanson replied, "The teachers' contract is the result of the town's expectations ... reflecting your values and your philosophy," reminding the committee of the town's committment to maintaining "rurality" and excellent schools.
Later in the meeting, Hult and Jensen-Fellows debated whether it is teacher salaries or "the number of human beings working at the school" that are most responsible for the school's budget problems. A class size of 20-25 is a "fallacy," in Jensen-Fellows, words, because there are at least two people in most classrooms. FinCom member Larry Barton later pointed out that if class size were allowed to grow, the school would also not run out of classroom space as quickly.
According to the school's budget submission, there will be "no additional available classrooms" next year, so if the incoming kindergarten requires more than four sections or student enrollment changes in sharp or unanticipated directions, the school might have to rent a portable or "modular" classroom, at a cost of $41,000 plus installation and connection charges.
How big an override?
The question is, Hult continued, "Can we manage education budgets at a lower slope ... where the quality is acceptable?" Carlisle's elementary school may be better than Concord's, but not so much better as to justify the tax rate, Allison commented. "At some point, people will say no because they don't have the discretionary income," Allison added. The way the school budgets are rising is "very scary," he commented to an audience member who pointed out that tax rates per thousand are as high as $20 in other towns (as compared to Carlisle's current rate of $15.78).
FinCom's concern, Jensen-Fellows explained to an audience member advocating "letting voters decide" rather than limiting what would be offered on a Proposition 2-1/2 override, is that an override that is "too large" will fail at the ballot box. The strategy should be to "allow people to choose quality" on an override "that's not overly complex and fair with regard to the budget," Hult said, "but what you really want to avoid is losing big."
Barton asked the school committee to explain what would be eliminated from the requested increase if the committee is not able to include the full $406,000 in the no-override budget or if an override for all or part "weren't palatable." If the override were to be in "tiers," what would each tier include, he asked.
If the FinCom was considering putting the full $400,000 on an override, "that's going to hurt," school committee member David Dockterman commented. The entire $400K is over the selectmen's request to the FinCom to keep the total tax-rate increase for the town to no more than 5%, FinCom member Dave Ives said. As a committee, we have to ask what would be lost from the school if the guideline budget is adopted, Barton added.
Closing the gap
Hult reviewed the FinCom's three choices for resolving the million-dollar
gap: (1) a transfer from free cash to boost nontax revenues; (2) reduce
budget requests; and (3) a proposition 2-1/2 override vote.
Eliminating the early retirement expense from consideration on an override would reduce the CPS contribution to the gap to about $275,000. Paul Morrison asked whether $100,000 in reductions, leaving $175,000 for a possible override would be sufficient. A suggestion by Allison emerged from the discussion that followed. If the school committee could identify reductions, FinCom would hope to help close the gap with a transfer from the town's "free cash" of several hundred thousand. This could lower the amount of an override substantially.
By telephone and email following the hearing, Allison clarified the
FinCom's current plan, which, he pointed out, of necessity is something
of a "moving target" at this point in the process. He anticipates
that free cash will be certified by the state at a level between $700,000-800,000,
and hopes to plan to transfer between $400,000 and $450,000 from that
balance. Such a transfer could minimize the amount of any ballot override,
Ives pointed out that if the million dollar gap were divided into three
equal parts, school and town budget increases would have to be reduced
by a total of $350,000, with just $350,000 transferred from free cash.
However, Allison believes the level of reserves in the town's stabilization
fund, anticipated at over $800,000 this year, warrants using more free
cash than when that was the town's only reserve for emergency spending.
How do SPED costs compare?
The meeting was also enlivened by a debate on special education costs,
which will rise 11.7% next year. Continuing a discussion from a December meeting, Dr. Linda Stapp, supervisor of special education and student services, pointed out that 11.6% of Carlisle students receive special education services, compared with 14% for nearby schools (members of the Concord Area Special Education collaborative), 13.3% for Concord, and 16% for the state as a whole.
Jensen-Fellows asked Stapp about the average amount spent for each special education student, so FinCom could compare Carlisle's spending on special education with other towns. There is no "average" student in special education, Stapp replied. Some require over $100,000 in services, while extra spending for others may be "just a ripple."
But "the average person" in town thinks special education costs "huge" amounts, and "some relatively straightforward figures" would help "people understand that we're providing a good service but not blowing the budget on it," Jensen-Fellows continued.
The nearly $131,000 rise in costs for outside placements next year accounts for a large part of the school's requested increase (about 2% of this year's total school budget), Allison observed. One student requiring outside placement can wreck your budget, he went on. (These costs can be as high as $100,000 per year for one student.) How much the school must spend in this area is "extremely dependent" on the needs of a few pupils, Stapp agreed.
How many classroom teachers?
Jensen-Fellows also asked how many of those employed by the school system work in the classroom. According to a table submitted with the budget request, of about 71 professional positions, 47 are for classroom teachers, and more than eight other positions teach in classrooms a reading specialist and foreign language, music, and art teachers. Among the 44 noncontractual positions, about 19 work in classrooms, including classroom and special education aides and teacher assistants.
Jensen-Fellows also questioned a 5.5% rise in custodial salaries, which are not governed by a union contract. The school tries "to maintain equity between teachers and noncontractual employees" in salary increases, Fox-Melanson said. However, Jensen-Fellows pointed out, this results in inequity with noncontractual employees in all other town departments, where guidelines this year have effectively limited increases to about 3%.
© 2002 The Carlisle Mosquito