The Budget Crisis: City and the Schools will work Together

While this is absolutely about a crisis and the decisions at hand will impact our community for a long long time- the one piece of good news I believe is how City Council and the School Board have committed to working together on minimizing the impact of this financial crisis on our great city. Perhaps the other piece of good news or even better news is how reasonable and understanding our citizens have been in this process. We are all rolling up our sleaves and participating in the process of making painful decisions in a reasonable and rational manner. We may want one negative option over another negative option- but we all seem willing to accept some negative options and make the best of them.

It hasn’t always been this way. Having served on the School Board and now Council, every year there are big budget decisions especially in the schools that impact the delivery of education to our children. Often these are vehemently opposed, often with good reason but with no options or middle ground offered. Perhaps it is how the economy is effecting us all, or the new political landscape nationally or pehaps the deligent work and presentations of the School Board. But a more reasoned approach seems to be happening with Council and the School Board and our Citizens.

While I have been one of the most vocal supporters of the School system for years- including trying to fund the gap in the PH construction budget and increasing the funding formula years ago- I do have some worry that not all the complicated facts of this budget crisis are being fully grasped and even worse that some politicizing of the facts and numbers may further complicate one’s grasp of the situation. A recent post by a respected blogger (www.starcityharbinger.com) is one example: is City Council going to give $7million or $3 million or what to help the schools? And if it is the lower number, have we shorted the schools yet another $4 million? Unfortunately these are wild numbers with no depth behind them, only a potential target. I worry throwing numbers around before we know how to get there again just complicates our grasp of the situation. The Harbinger also indicates a concern that this council does not fully understand the role of our schools the economic vitality and viability of our city: This City Council does indeed get it and it is priority one as it should be.

What is known is that due to decreased revenue projections, the City will short the school system about $1.6 million, the State about $6 million, sales tax decline about $2 million- though these numbers change daily and some recent news today that the State side may actually improve by a good margin. The Schools indicate heading into this budget they are short approximately $16 million. The City is short in our budget about $9 million. The $16 million on the school side includes the $11 million short from the City and State, and also unfunded mandates such as health care increases, debt service increases of $2.8 million (these uncontrollable cost escalation are normally dealt with every budget year whether there is a recession or not) and then there are provisions for possible further economic deterioration of $2 million.

So large numbers! The School Board is way ahead of City Council in terms of dealing with these numbers. City Council needs to reconcile our $9 million deficit with our budget and then go beyond that to give extra money to the school. Perhaps we need to find not just $9 million but another $7 million out of our budget. My fear is that saying $7 million is a target then we only give say $2 million - many will say that Council is shorting the School system $4 million. The vote this week in my mind was somewhat silly in that in reality it did not mean anything but did give a direction to administration of the need for significant cuts. Even Mayor Bowers was laughing when he raised his hand in support of finding $7 million, knowing it would be next to impossible but would certainly look good politically. For the record, I was the only one mentioning tax increases last week and have asked for a report of trends for tax increases. I am ok with prudent use of rainy day funds but understand that these are primarily for one time emergencies and not recurring costs as we are seeing in the School and City’s deficits. I wll do all I can to first make up for any revenue short fall the City has with the Schools- currently $1.6 million- the County did this and was roundly given credit for doing it. Next, I will work with council to go above this number as far as possible and still keep our city running, vital and progressive- albeit at a slower pace. If we get to $3 million, $7 million or more- great. But if we don’t lets understand that Council is doing everything it can to make the Schools better than whole from our side and under no circumstance at any of these numbers are we not supporting the Schools or symbolically reducing our support. All these numbers are reaches beyond what our revenue is shorting them and we have much work to get there- but the first thing we can do is make them whole.

There is also a blurring of funding available from bonds for capital projects and our operating budget. We can not use the capital money, eg move money that may be used for the market building renovation, for covering deficits in our operating budget. We could defer debt and not have as many capital projects but ultimately would make a small difference in what we are facing. In fact some capital project funding is essential to helping cities navigate their way through recessions and this, again, should not be confused with using this money in ways opposed to helping the school deficit.

Finally, I must say that many forget that the biggest short fall for the Schools is at the hands of the State. The State at some point is going to have to figure out how to get more revenue for the schools, the roads and many other vital services. Everyone is scared to raise taxes but at some point this needs to be considered at a State level- even a temporary gas tax increase would go a long, long way to solving this budget crisis in a more ongoing manner- something the one time Federal Stimulus Package won’t do but hopefully will help this year.

What are your thoughts?