FY09 Growth and Funding

There was much consternation over the mid-December presentation by the County budget staff that the incoming Board of Supervisors was facing a $251M budget shortfall in the new year (Loudoun Connection, WTOP, Washington Post, Leesburg Today, Loudoun Times). With the school budget making up the vast majority of the budget, it is obviously incumbent upon the School Board to work together to spend carefully on our needs. But let's have a second look at the $251M budget shortfall, shall we?

If I read the story correctly,

• $18M is from fewer taxes collected in FY08 than expected
• $49M is from a lower than anticipated fund balance for FY08. Fund balance is leftover money at the end of the year, right? So basically, the current Board spent $49M of the new Board's money.
• $53M is due to lower property values, meaning that if you & I pay the same taxes we paid last year, this much goes away.

Now, although the superintendent's proposed budget has a $110.9M increase, much of that comes from State, Federal and other funds. A total of $80.1M would come from local funds. This is a 16% increase over the previous year. We all know that in addition to inflation, the growth of our student population pushes the budget ever higher. Next year we anticipate a 6% increase in the number of students.

Still, a reasonable person would ask "What is the cost of inflation and enrollment increases alone?" Supervisor Jim Burton put this very question on the table, and the LCPS budget staff provided a response.

FY08 Cost Per Pupil: $12,751
CPI (BLS Oct 2007): 3.00%
CPP increased based on CPI: $13,134
Projected enrollment increase: $3,270
FY09 increase due to CPI and Enrollment: $42,950,000

A reasonable person would then ask "Why does LCPS have an increase so much higher than the rate of inflation?" Here's why:

• This number assumes that our employees will make no more next year then they did last year... no increases for seniority and additional experience, even just the cost of inflation. I know that at my job I'm hoping for a raise this year, and a raise that outpaces inflation. So do our teachers, bus drivers, coaches and custodians.
• The price of everything doesn't increase equally. The CPI does not include the cost of fuel or health insurance which both increase dramatically more than 3% per year and make up a significant part of our non-salary budget.
• We will open three new schools in FY09. It costs more to open a new school than it does to operate an existing one. New textbooks and supplies, principals and maintenance folks operating for six months before the school opens, increased maintenance costs as the building grounds are settled in to service, the expense of inprocessing 3,270 new students... these all add up to much more than the cost of an existing school and a total of $3.2M for LCPS in FY09.
• Need for services grow at different rates. For instance, there is strong growth this year in the number of ESL students, who require more teachers per pupil and therefore disproportionately affect the budget. The cost for special education increases annually at a rate that outpaces the general population as well.
  
• Past needs were put off and need to be caught up. For instance, in the FY08 budget we cut the number of schools getting new computers by half. To make up for this, the FY09 budget has a 50% higher cost to purchase new computers in order to play catch up. Similarly, in order to come under the FY08 budget several new administrative positions were unfilled for the first half of the year. Therefore their salaries only counted for half of the FY08 budget but will count fully for FY09 budget.

If you want to see the specific numbers for the proposed budget, read the Executive Summary. They are your schools and your taxes, take some time to find out where that money goes. I especially recommend page 12, "Operating Budget Expenditure Increases."

In upcoming posts I'll look at the history of LCPS enrollment, staffing and budget increases in more detail.

If you're really ambitious, you can download the full proposed budget here.