By Dr. Jim Scales, Superintendent, Hamilton County Schools & Tommy Kranz, Chief Financial Officer
The Hamilton County School System is an educational leader in the state of Tennessee and nationally acclaimed for its reform efforts. This success is largely due to our outstanding staff and the excellent work done in our classrooms every day.
In the last five years the district has undergone amazing academic reforms at all levels. Through partnerships with the community and local foundations, Hamilton County has emerged as an innovative and progressive school system, focused on academic achievement and individual student success. Strategic Plan 2011 seeks to take that achievement to the next level and create a 21st Century learning environment for all students, enabling our students to compete in the global marketplace.
However, even as our academic model is nationally recognized, our business and financial model remains stagnant. The district is facing a projected $20 million budget hurdle for next year (FY 2010), on top of $12 million in programmatic reductions last year. To reduce the growth of our expenditures now and in the future (and prevent annual budget cuts), we believe we need to change the model for how education is funded and how those dollars are spent in Hamilton County.
Over time this community has made a conscious effort to have small neighborhood schools. These schools, while educationally sound, are costing the district roughly $18 million a year beyond what we receive in state funding. We believe we can continue to offer high quality educational programs in larger school settings. Our local data indicate that our larger schools perform just as well as smaller schools on standardized tests. Three of our large Title I schools – East Brainerd Elementary, Hardy Elementary and Red Bank Elementary - continue to make great progress in academic achievement.
To help the district and the Board of Education grapple with the enormous challenge of balancing our budget and changing our financial model, we have engaged a Citizens’ Advisory Committee to learn in depth about our revenue and how we spend our money. The committee will continue to work with the district next year on long-term financial strategies.
With 90 percent of our dollars dedicated to staffing and buildings, we cannot balance the budget without looking at these areas.
In February, district administration presented discussion points for how to balance our FY 2010 budget to the committee and Board of Education. The initial draft plan was designed with the goals of Strategic Plan 2011 in mind.
This plan is a fluid discussion that will change up until the moment the board adopts a budget for FY 2010. In fact, contrary to what we said a few months ago, we are now projecting an increase in revenue of approximately $2.1 million next year. This helps, but still leaves us with a hurdle of about $18.1 million.
Our plan involves cutting Central Office by about $2 million, reducing our instructional staff by more than 100 positions, reducing projected increases to expenses for utilities, transportation, contracts and staffing at new schools and reducing our assistant principal ranks by 25 positions. The Board also recently voted to close 21st Century Academy and Howard Middle School at the end of this year.
This plan is a small step toward sustainability under our current funding structure, but still leaves us with an $814,000 shortfall. It also does not solve future budgetary concerns as we face a projected $15 million hurdle in FY 2011 and another $4 million in FY 2012. Nor does it identify resources for $14 million in annual deferred maintenance that is critical to maintain our aging buildings.
We believe that to truly address our challenges, a comprehensive approach is needed. We have recommended the Board engage in a community discussion about our financial model with a variety of groups including the Citizens’ Advisory Committee, County Commission, PTA, Chamber of Commerce, foundation partners, businesses and higher education representatives. These people would discuss finance issues with the goal of changing our model so we not only reduce expenditures but also identify resources to help our schools provide competitive 21st Century learning environments.
These are difficult financial times for our nation and for our schools. In addition, next year the state is raising standards to ensure that our curriculum is in line with national benchmarks. We must keep our eye on the end game and protect our students and their education. With limited resources, increased expectations, and the challenges of an urban school system, our efforts will be stretched thin in the coming years. Despite these challenges, we will persevere, we will survive and we will protect the quality of education in Hamilton County schools.
FY 2010 Budget Balancing Act
Beginning Hurdle $ 20,225,000
Increase in Revenue $ 2,060,034
Remaining Hurdle $ 18,164,966
Reductions in Projected Expenses
Reduce insurance increases $ 250,000
Reduce increases to transportation 400,000
Reduce contract increases 50,000
Reduce increases for utilities 350,000
Reduce increase in staffing for East Hamilton School 1,375,000
Reduce increase in staffing for Signal Mountain 605,000
Reduce instructional reserve 687,500
Delay retiree medical benefits book-entry 1,800,000
Eliminate purchase of new science textbooks 2,000,000
Total reductions in projected expenses $ 7,517,500
Proposed Reductions
Reduction in projected expenses $ 7,517,500
Reduction in assistant principals 945,000
Reduction in instructional positions 5,775,000
Reduction in Central Office staff 2,000,000
Close 21st Century Academy 786,096
Close Howard Middle School 327,790
Total proposed reductions $ 17,351,386
Summary
Deficit $ 18,164,966
Reductions $ 17,351,386
Shortfall $ 813,580
