The East Baton Rouge Parish school system is preparing for a likely seventh straight year of budget cuts, but there are conflicting signals about how severe they will prove to be.
The school system, the second largest in the state, started the 2015-16 fiscal year heading in the wrong direction. Its general operating budget, approved June 18, calls for spending $461 million while collecting only $431 million in revenue.
A healthy surplus carried over from the year before is keeping the school system out of the red. School officials recently learned the surplus — schools call it a “fund balance” — is bigger than originally thought, at least $9.1 million bigger. Even so, the surplus is likely to run out in 2016-17 unless revenue increases or spending decreases, or both.
East Baton Rouge Parish schools Superintendent Warren Drake, named to the post on June 1, has repeatedly highlighted the $30 million deficit — the difference between anticipated spending and revenue. He says the deficit is unsustainable and that everything is potentially on the table for cuts.
“We are looking at every program, at every budget down to the school level to make sure we can be more efficient,” Drake said in a recent interview with The Advocate.
Drake added that he is trying to limit the impact of any cuts in the classroom as much as possible.
Deliberations about budget-cutting will heat up in the coming weeks as the school system prepares its general fund budget for the 2016-17 fiscal year, which begins July 1.
The general fund accounts for 70 percent of the more than $600 million the school system spends each year. The fund is the system’s primary source of unrestricted money to pay for operating expenses, to finance new initiatives or to cover emergencies. Since 2010, the school system has cut the budget annually because of a mix of tight state funding, a variety of expenses and growing competition from charter schools.
Drake started his superintendency by eliminating many central office positions, saving $1 million a year from the parish school system’s payroll. The system also recently reconfigured its purchase of social studies textbooks, saving another $1 million.
Drake also has been spending money:
- More than $300,000 to add the Baton Rouge-based character education program Manners of the Heart to 15 elementary schools. Drake said he thinks all schools should offer character education, but he’s cautious about expanding the program, saying he wants to see how its first year goes.
- Buying only new buses with air conditioning, or about $7,500 more per bus. For 50 buses, the number the school system typically buys each year, it will cost up to an additional $375,000 a year. Drake, however, is hesitant about retrofitting the rest of the fleet with air conditioning, which would cost millions.
Drake also plans to spend millions renovating Istrouma High, which he anticipates will be returned to local control by the state when officials meet later in January. The overall price tag for repairs is $15 million, but Drake said he’s considering spending only $10.5 million at first — the money wouldn’t come from the general fund, rather mostly from money set aside each year for school renovations.
Repairs to the auditorium and athletic facilities at the north Baton Rouge high school, which has been shuttered for 19 months, will have to come later. Reopening the school, however, is likely to pull from the general fund to cover the added payroll for school administrators and perhaps extra staff.
Other expenses are beyond the school system’s control. For instance, in December, over Drake’s fierce protests, the state approved two new charter schools in Baton Rouge to open in fall 2016. Drake said those schools could cost the school system as much as $3 million in 2016-17 and more in the future if the enrollment of those schools grow, taking with them per pupil state funds that otherwise would go to the parish school system.
Budget-cutting is likely to dominate the conversation in the months to come.
Drake’s top lieutenant, Deputy Superintendent Michelle Clayton, is already working with Millie Williams, executive director of human resources, to revise the school staffing formula. Rather than basing staffing levels on how schools were staffed the year before, the current practice, Clayton and Williams are using a school’s pupil-teacher ratio. So schools with declines in enrollment, and consequently more adults relative to the number of children, are likely to receive less money to pay for faculty and staff, meaning they will have to eliminate positions.
Clayton said the expected savings range from $8 million to $12 million a year depending on the scenario used. She said the plan is to avoid layoffs and rely on attrition, meaning that as positions become vacant, they won’t be filled or staff in newly eliminated positions will be moved to other open positions in the system.
School principals, however, will have less flexibility in making cuts at the school level. Under Drake’s predecessor, Bernard Taylor, they had the freedom to eliminate certain nonteaching positions in developing their school staffing budget, but Drake sees some of those positions as crucial.
“I think that every school should have a secretary, counselor and a librarian,” Drake said.
Also, certain categories of teachers, including those who teach magnet, gifted and special-education children, are being protected.
Other school-level, nonteaching faculty and staff, however, will be targets for cuts. Clayton mentioned instructional specialists and parent liaisons as examples.
Before they firm up budget projections, school officials are waiting on more information, namely the latest enrollment counts from the Louisiana Department of Education. Schools count enrollment annually on Oct. 1 and Feb. 1 and submit those numbers to the state for verification, and state funding rises or falls depending on what the state decides. Those numbers, which historically have been released by now, are expected to come out soon.
Last year, the process worked in the parish school system’s favor. The state added more than 200 students to the rolls, meaning a $1.2 million midyear windfall in state funding for East Baton Rouge Parish.
This year, the reverse is likely. The school system’s Oct. 1 enrollment count, excluding prekindergarten, is down 620 students from Oct. 1, 2014. If that decline holds true, state funding could decline as much as $2.7 million. If the state decides the school system’s enrollment is higher, or if the Feb. 1 count is unusually strong, the decline in state funding will be less severe.
The school system, however, has a bigger financial cushion to sustain losses. Its annual audit, adopted Nov. 19, determined the school system ended the 2014-15 fiscal year with $50.6 million in its undesignated reserves, $9.1 million more than anticipated. If current spending and revenue hold steady, the school system would end the 2015-16 fiscal year with a $33.2 million surplus.
The experience of the past few years suggests that surplus could be even greater. Typically, sales and property taxes bring in more money than planned, and the school system doesn’t spend as much as it budgeted. For instance, in the 2014-15 fiscal year, the school system began the budget year predicting a $15.8 million surplus. The actual $50.6 million surplus is more than three times the level predicted. The reserves grew largely because of less-than-anticipated spending.