The Owl: Getting Ready for Even Deeper Cutbacks

ISSUE 47 | MAY 13, 2002

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DEEPER CUTBACKS WILL REQUIRE CLEAR EXPLANATIONS AND HARD FACTS

The boom-to-bust cycle of California's economy is wreaking havoc with school budgets. Tomorrow the Governor will announce his "May Revise," and most of us are bracing for more bad news.

But this old yet hopeful Owl thinks bad news is a good moment to educate your public about school finance. It is from this "educable moment" that more creative solutions may become possible.

Here are some suggestions for explaining the mess we're in. With luck, you may find that your public is willing to sit down with you and invent new solutions, as Irvine Unified's did. These citizens collected $900,000 — a voluntary tax — to preserve smaller classes in grades one through three. Read more about this marvel of generosity in the land of the tax revolt.

THE BIG PICTURE OF SCHOOL FINANCE NEEDS EXPLAINING

Few parents are aware that schools' operating budgets are tethered to state general revenues and property taxes. It is hardly logical, and equally far from obvious. Kids' educational needs don't fluctuate according to economic cycles. Only our capacity to pay changes. When citizens grasp this, they are far more willing to do what Irvine citizens did, or to impose parcel taxes or other forms of creative funding.

Equally baffling is the notion that school buildings must be funded by bond measures. We are in the odd historical moment when operating funds are likely to shrink, just as school construction and renovation funds are about to expand. The complete separation of these two funds in fact, the legal requirement that they never be commingled imposes a terrible inflexibility. The cost of inflexibility is explored and explained in this probing column by the wise Peter Schrag of the Sacramento Bee.

Recommendation: Two questions are worth airing with your public.

1. If school districts can borrow to build, why can't they borrow to operate (especially with interest rates at historic lows)?

2. Why must school buildings be owned outright by districts? And if they could be leased, why shouldn't the cost of leasing be carried by debt?

THE SMALL PICTURE OF PROP 98 FUNDING FORMULAS DOES NOT NEED EXPLAINING

The state's funding obligations under Prop 98 are clear only in one dimension: they impose a floor funding level for schools, measured as a percent of general revenues. Beyond that, the funding formulas are comprehensible mainly to economists.

Recommendation: Steer clear of the intricacies of Prop. 98 when explaining to your public the impact of cuts. These details are largely of interest only to you, your board, and your business officer.

SHOW WHAT YOU'RE DOING TO BE RESOURCEFUL

Being frugal in austere times should mean more than just penny-pinching. Let your public know how you're managing all resources: class time, teacher assignments, building capacities, and contributions from volunteer and business partners.

What under utilized resources can be put to work? Unused field time can be rented to adult soccer clubs. If your schools are in areas where parking is at a premium on weekends, why not rent out your playground space? Schools have meeting spaces that might be of value to other organizations.

Recommendation: Measure what counts, and account for what you measure. Show your public the metrics that matter. If your schools are crowded, how crowded are they? If you have administrators or teachers who volunteer time, measure and report it.

FIND OUT WHAT YOUR PUBLIC WANTS TO KNOW, AND THEN TELL THEM THE TRUTH

If cutbacks are on your board's agenda, your public will have a slew of questions. They usually begin with a concern about how the cuts will affect their children's schools. So you need to start where your public's questions begin: with a baseline accounting of each school's actual expenses?

Do you have actual school-level expenses to report? Real site-specific costs are what the public wants, not district averages. Those teachers' actual salaries (and benefits and pension fund contributions) ? those buildings' actual maintenance expenses ? that school's actual share of central services like transportation. The SACS accounting codes allow you to do this site-level roll-up. See the gory details.

Recommendation: Once you have this baseline, you can share with your public what you share with your board. Hopefully this will include an item by item detail of possible cuts: people and dollar costs.

THE PUBLIC POLICY DEBATE AHEAD: "ADEQUACY" FUNDING

The Owl feels the wind blowing in a new direction: adequacy funding. This legal principle would make it the state's problem ultimately to provide adequate resources and funding for all students, no matter what the economic news of the day.

Here in California, the Williams lawsuit makes the case for the state being the ultimate entity responsible for providing students with the resources required for an "adequate" education: books, facilities, teachers. The case will be heard in September, and is now a class action lawsuit. Read more.

The New Hampshire Supreme Court recently ruled that its legislature is responsible for providing adequate funding for all students. The case is triggering a redesign of the entire state funding system, and resulted in a new statewide property tax to pay for it. Read more, in Education Week's May 1 story on the court decision.

This austerity era may not be a short one. Might as well batten down the hatches, trim the sails, and make sure you're communicating with your crew loudly and clearly. I wish you good fortune as you navigate these tricky waters in the months ahead.

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