The City Budget and School Funding

I always relish the opportunity to work with and in support of the Roanoke City Public School System. Over the last month, I was able to participate in a work group with school board member Jason Bingham and our respective Financial officers to help figure out the budget gap for the schools and an amount that the city can and should transfer to the schools to help with this gap.

There were and continue to be many moving parts to evaluate in this process, including: interpretations of the state aid package and the federal stimulus package for schools. Changing revenue projections for the city also had to be added to the mix (fortunately these were better numbers). Since the schools cannot raise revenues directly on their own, there is an understandable desire to be fiscally conservative in their interpretation of these numbers and projections. Finally,  when you put financial experts in a room many interpretations of even the same numbers can result. It all led to a complicated process but a win-win scenario fortunately resulted. And keep in mind that the majority of the school funding gap is due to loss of state aid and revenue. Sooner or later the state is going to have to reconcile increasing school and transportation funding needs with decreasing revenue availability. But for this post- lets stick to what the city can do.

Last Saturday, City Council agreed to give just over $1.5 million to the schools and will consider another $500,000 if certain revenue projections and an estimate of the student census in our schools do not deliver more revenue to the schools. By certain calculations, along with cuts made as of last week by the schools, it at the very least made the amount the city gives the schools on level with last year and came close to closing the school budget gap completely. As we learned last night, the school’s projections and final interpretations still left a gap and they announced how they will close that gap. While hard on many who work in and use the school system, given where we were just a few months ago with a possible $15 million gap we have overcome a lot.

City Council like our School Board has shown a lot of commitment and thoughtful deliberation to try meet the challenge of balancing our budgets in this harsh environment. City Council has many additional obligations to fund along with the school system. Tough decisions have been made and currently we have a balanced budget. Another round of tough decisions is probably needed. Throughout this process, all on council have shown their commitment to the school system and I am sure this will continue if needs change.

There are some who think we should do more despite the balancing of the schools’ budget and our commitment to keeping them level year after year on the city side; and their are some that think we are cutting too much on the city side and that the pain is not equally shared. Some believe instead of cuts in the city budget, we should raise taxes. Others vehemently oppose this. Some believe we should take what we need out of our building raining day fund- a smart fund that helps with fiscal ratings of our city and to be used for major unforeseen emergencies. Is this one of those crisis moments? If so- how much and for what should be taken? This is where the balance and the reasoning that I think we have shown lies. I would not support using raining day funds or capital funds or raising taxes for a general operating budget at this moment in time- we have a balanced budget but I would absolutely consider any of this if the financial environment worsens much further and our revenue projections end up being way off.

What are your thoughts?

-Dave