Massive cuts in state funding have local school officials worried

Southwest Virginia school superintendents – like their counterparts across the state – are scrambling to find ways to slash millions from next year’s budgets as they anticipate massive cuts in state funding.

While it might be weeks before they learn the specifics about those reductions, the Virginia Association of School Superintendents is surveying the state’s 133 school divisions to get an handle on where they’re headed. And early returns show that about 89 percent are considering increasing pupil-to-teacher ratios, 91 percent are considering eliminating teaching jobs and about half are looking to cut programs such as summer school, assistance for at-risk students and services for 4-year-olds.

In the Mountain Empire, the impending cuts follow a year during which many systems laid off employees, left positions unfilled, froze wages or invoked other cost-saving measures because local revenues were down.

Recent state cost-cutting efforts have largely left K-12 education alone, but this time it could represent a reduction of roughly 9 percent of each division’s state money over the next two years.

State lawmakers have until March to reconcile a $4 billion budget deficit that threatens funding for education, health care, public safety and other services.

“Every other department in the state has been reduced,” state Delegate Terry Kilgore, R-Gate City, said Friday in a phone interview. “We’ve all got to tighten our belt.”

Local impact

If the General Assembly adopts the budget proposal of former Gov. Tim Kaine, Washington County school officials expect to lose about $4 million of $42 million in state contributions. That represents about 5 percent of the division’s total $80 million budget, Superintendent Alan Lee said.

“Four million dollars is a fairly significant cut. And we think that is probably a best-case scenario,” Lee said, adding that any change by the General Assembly or new Gov. Bob McDonnell could alter that number significantly.

At a budget committee meeting Thursday, county school leaders said the combination of state cuts and a local shortage of funding could have a double impact.

Despite that, Lee said, eliminating programs lies at the bottom of his list.

“We have a lot of programs for children they might not get other places. And I believe that sort of diversity hooks kids to stay in school, who might not otherwise stay in school,” Lee said.

He cited the county’s career and technical education programs, dual enrollment classes offering college credit to high school students, art, music and other programs not required by the state.

“I fear the reductions will cause us to take those things away from our kids. And – in losing the programs – we lose kids,” Lee said. “As we look at trying to respond to a $4 million reduction, my inclination is to avoid losing programs and perhaps move to cut everything that doesn’t impact kids. After we get into that, perhaps increasing student-teacher ratios and keeping the programs.”

Lee said he would be “very disappointed” to lose music and art programs in each of the county’s elementary schools.

“Many people would say those are the first to go, because they aren’t funded by the state. The state doesn’t require those,” Lee said. “But I’m not going to cut art and music before I cut other things, because that’s one of those areas where we hook kids into finding something they believe in themselves about.”

The county has more than 1,000 employees and about 7,500 students attending classes at 17 locations.

Wise County Superintendent Jeff Perry said nearly everything is “on the table” as school officials talk with parents, teachers and administrators.

“Right now, we’re meeting with all of our stakeholders to solicit input on what are the most important elements of our school district and what we can give up,” Perry said. “We’re looking at about $4.5 million [cut], so we’re talking about some pretty substantial changes.”

State funding makes up about 52 percent, or $40 million, of Wise County’s $78 million fiscal 2009-10 spending plan.

Wise officials are intent on protecting student safety, the integrity of classroom instruction and preserving as many jobs as possible, Perry said.

Wise County schools employ about 1,300 people who operate a system of 17 school sites for about 6,500 students.

“We’ve offered a fairly liberal early retirement package in hopes that individuals will take that opportunity, so we’ll keep the displacement of staff at a minimum,” Perry said.

One option is to consolidate students from the county’s six aging high schools into fewer facilities next year. School leaders have invested considerable time and energy over several years in a highly controversial, costly consolidation plan that involves building new facilities, but Perry said merely consolidating classes seems an unlikely short-term solution.

“Even though it is on the table for discussion, we’re trying to stay away from that,” Perry said.

In Bristol, Va., preserving classroom quality tops the list, Assistant Superintendent Michael Amstein said.

“I think anyone would tell you our primary purpose is to protect instruction and keep the quality of instruction as high as possible. When you start taking small pieces out of that program, the result is going to be larger class sizes and raising student-teacher ratios. I think we’ve cut as much as we possibly can trying to protect instruction, but I don’t know how far we can go now,” Amstein said.

The expected cuts come on the heels of a budget cycle in which city school leaders had to make up a $1.5 million shortfall by a combination of cost-cutting measures, including layoffs, leaving some positions unfilled, wage freezes and furlough days.

In Bristol, the state provided about $12.5 million of the division’s $25.8 million fiscal 2009-10 spending plan. Based on the current guess, that could mean a $1.2 million cut over the next two years, but officials said they remain unsure of specifics.

More than 80 percent of the city division’s budget is consumed by salaries and benefits for its 300 employees. The system has about 2,250 students and operates six facilities.

Funding

State funding doesn’t arrive in a single monthly check, but is assigned to pay for specific programs or salaries – most that leave school officials little or no discretion in how dollars are spent.

“We get a number of state grants,” Amstein said. “We have an algebra readiness grant to help students at the middle-school level to prepare to take algebra. We have Project Graduation, which is funded through the state, that provides remedial activities for students who haven’t passed end-of-course tests.”

If state officials delete program funding, school divisions will have no option but to eliminate related programs, city schools Finance Director Tammy Jones said.

“It’s a blurry picture right now,” Amstein said. “I think it’s pretty obvious everyone is going to get cut, but just where those cuts are going to come from and how deep they’re going to be – nobody really knows.”

Lee said he has asked lawmakers to determine the percentage of funding to be cut and allow school divisions to make the difficult decisions.

“We’ve been saying from the get-go, if they tell us we need to reduce by a certain percentage and give us the freedom to decide where that comes from, that’s going to help us,” Lee said, adding that he’s received no assurances that will happen.

Kilgore, the state delegate, believes the General Assembly will follow that recommendation.

“We [General Assembly] want to determine what the cut will be and let the local school boards and superintendents determine where the needs are,” Kilgore said. “What’s good for Washington County might not work in Scott County or someplace else.”

The General Assembly also is expected to try and lessen the financial impact on state retirement payments, Kilgore said.

Composite index

The state Department of Education uses a statistical tool called the composite index to determine support levels. The composite index determines a school division’s ability to pay education costs under the commonwealth’s Standards of Quality, according to the department’s Web site.

The index is calculated using three indicators of an area’s ability to pay: the true value of real property, adjusted gross income of its residents and taxable retail sales. Each city and county index is adjusted to maintain an overall statewide local share of 45 percent and an overall state share of 55 percent, according to the state.

Bristol, for example, has a composite index of 0.3132, based on combined property values of $1.2 billion, $404 million in adjusted gross income and taxable sales of $361 million, compared to its student population of about 2,270 and population of about 17,300.

Washington County has a higher composite index – 0.5020 – and therefore an assumed greater ability to pay more – because its values in all three measured categories are higher than the city’s and its population is more than 53,000 with 6,500 students.

Gov. Kaine’s budget proposal, however, seeks to freeze the local composite index at previous levels.

That would mean less state funding for four Southwest Virginia counties – Lee, Scott, Washington and Wise. For example, Wise County already ranks near the bottom of the state’s composite index scale at 0.1885. The county’s individual adjusted gross income, average individual property value and taxable retail sales are all considerably lower than nearly every other locality, which means it is eligible for proportionally more state money than wealthier areas.

However, the formula is a two-edged sword.

“We have the second-lowest composite index in the state. We’re just ahead of Lee County,” said Perry, the Wise County superintendent. “So if we get cut a certain percentage, it hurts us more than any county other than Lee. It’s more severe for us because we have less ability to make those cuts up.”

Timing

In a normal year, local school officials receive clear indications about state funding during the winter.

“Typically, in the middle of February we receive some type of guidance from DOE [Department of Education] on the General Assembly’s budget,” said Jones, Bristol’s finance director.

Some school systems are required to submit proposed budgets to their respective city or county governments before that.

“We have specific deadlines that we’ve got to meet. Even if you said the middle of February to try to enact any cuts we would need to do – and make appropriate contingency plans to address those – it’s not going to be something we can do overnight. I think a lot of localities are going to be hard-pressed to meet budget deadlines this year,” Amstein, of Bristol, predicted.

City school officials are supposed to submit a proposed spending plan to the City Council in February.

Without clear direction, Lee and his staff in Washington County worked last week on a budget that is scheduled to be presented to a joint meeting of the county Board of Supervisors and School Board this week.

Perry said Wise County officials hope to have specific budget details to its Board of Supervisors by early March.

Meeting standards

The state superintendents association has asked lawmakers to delay state mandates such as new graduation requirements and the development of middle school career plans because each is expected to demand additional time, personnel and funding.

Kilgore predicted the General Assembly might agree to some concessions, given the economic climate.

“We are going to do that for them,” Kilgore said. “There are a lot of things in the works right now. It’s important not to make them come up with new expenditures.”

He added that lawmakers also will likely allow modest increases in class sizes to address the possibility of fewer teachers.

“The students in Bristol have performed very well. So when you talk about removing specific programs, raising student-teacher ratio, inevitably it has to affect the quality of instruction and student performance,” Amstein said. “The benchmarks for No Child Left Behind continue to increase each year until they reach 100 percent and we’ll be trying to do that with much less resources than we’ve had.”

In 2010-11, for example, the state and federal governments are scheduled to impose the following seven new requirements on school divisions:

* Implementing two levels of technical diplomas for ninth-grade students;

* Linking student performance with teacher and principal performance evaluations;

* Benchmarks for average yearly progress under the federal No Child Left Behind will increase to 89 percent in reading and 87 percent in math;

* The completion of a course in personal finance and economics by all ninth-grade students;

* Developing an academic and career plan for all seventh-graders before they move on to eighth grade;

* Increasing the number of classifications for student ethnicity from six to 32;

* Implementing new standards for social studies classes.

Mixed signals

While state leaders talk about reduced funding, Gov. McDonnell last week called for increasing the dollars that “go to instruction in the classroom” from 61 percent to 65 percent over the next four years and additional funding for charter schools.

That concept rankles Lee.

“The charter school model is a school that doesn’t have as much state regulation that allows the freedom to be creative and find ways to educate children that public schools don’t,” Lee said. “Since it’s the government that creates the regulations that are hamstringing us from being creative, it makes sense they would raise those regulations from public schools and allow us to be creative. It would save a lot of time and a lot of money.”

McDonnell also has called for teaching more science, technology, engineering, math and health care in public schools.

Last week, the General Assembly voted 97-0 to reject Kaine’s call for a tax increase, which means the state budget plan remains out of balance.

“It’s going to be a rough couple of years,” Kilgore said. “We don’t see the economy coming back for two or three years. It’s not going to turn around that fast and we’re having to make some tough choices.”

dmcgee@bristolnews.com | (276) 645-2532