EDU FAQ #004.1: What’s all this talk about closing the budget gaps? Operating Budget Edition

First, let’s discuss this question in terms of the Mayor’s Budget. Then, we’ll move onto Facilities. Buckle up, education fans! You’ll totally be able to wrap your head around this by the end.

April 13, 2016; 2:50 PM • by Teresa Cole

Photo by Daniel Novta

Mayor’s Budget

The City budget works a little differently than the RPS budget. For starters, the RPS budget is done yearly and submitted to City Council. The City budget is prepared biennially in odd years, and revised in even years based on new information, such as increased revenue from taxes. In this, the second year of the two-year budget cycle, Mayor Jones’s job is to propose amendments to the budget based on this new information. In terms of schools, Jones has decided that despite increases in revenue for the City and increased expenditures in RPS’s budget, school funding will not increase. In his letter to City Council, Jones stated “In FY17 the City is proposing to maintain the $11.2 million increase in local funding provided to RPS, totaling $145,999,657 (exclusive of State Shared Sales Tax) to meet existing operating budget revenue needs.” No matter how I did the math, I couldn’t find where that $11.2 million materialized from. Maybe someone can figure it out and get back to me.

But in reality, this is flat funding, as none of that increased revenue was allocated to schools. If you go back to EDU FAQ #003, you’ll remember that this flat funding has led to an $18 million funding gap for RPS.

The City Council will soon release its proposed budget amendments, and after the almost three hours of public comment at their meeting on April 11th, I suspect those will be substantial (God help them if they aren’t). Councilwoman Reva Trammel closed out that meeting by calling for an outright rejection of Mayor’s Jones’s budget, so it’ll be interesting to see where they propose those cuts come from to fund RPS.

When City Council considers amendments, the Mayor will likely step in to remind them about the RPS budget line item being the largest. This is true, but it’s also misleading. When you break down the education budget into the seven VDOE categories and then look at the whole budget by function, public safety spending is considerably higher than education funding.¹ Looking at it this way gives you a great snapshot of where the Mayor and City Council’s overall priorities lie.

Yet, it’s not really correct to look at this and think that education is even the Mayor’s second-highest priority. Like every onion, this one has many layers.

Budgets, Budgets Everywhere

There’s a lot of confusion about where funds can be cut and reallocated to schools. Starting at the top, you have to know that there are four big budgets:

• The City of Richmond Biennial Fiscal Plan
• The City of Richmond Capital Improvement Plan
• Richmond Public School’s School Board Approved Budget
• Richmond Public School’s Capital Improvement Plan

Operating Budget

Approximately 53% of RPS School Board Approved Budget comes from the City of Richmond Biennial Fiscal Plan. In our last EDU FAQ, we discussed only the RPS General Fund, the largest portion of the RPS budget. Any money that would be reallocated to help close the $18 million gap would have to come from the General Fund portion of the Biennial Fiscal Plan.²

In other words, any money that could be given to schools would mean cuts to one of the other areas from the Mayor’s budget (shown in the graph below), keeping in mind that the money for RPS is nestled in that “Non-Departmental & Other Services” category:

That isn’t to say there isn’t money that could be reallocated. For starters, the City of Richmond saw an overall revenue increase of $8.1 million dollars, none of which has been proposed to go to schools. According to Westbay’s report, “Real estate taxes have been revised upward by nearly $3M, other taxes by $1.5M, and other source changes for an overall revenue increase of $8.1 million.” This was unexpected “bonus” over and above the projected revenues and flows into the General Fund to pay for expenditures in FY17.

Where did all that money go? According to a report from Ralph Westbay,³ the Assistant Superintendent of Financial Services for RPS, the additional revenue was allocated to several places. In reality, it is more complicated than just divvying up the cash. Some departments saw increases:

• Public Safety: $8.1 million
• Department of Public Utilities: $2.7 million for leaf collection and snow removal⁴
• General Government: $800, 000
• Human Services: approx. $2 million
• Total Increases = $13.6 million

Other departments saw decreases, which offset the above increases:

• Debt Service: $2 million
• Non-departmental: $3.5 million
• Total Decreases = $5.5 million

Subtract the decreases from the increases and that’s how how that magical $8.1 million revenue increase was spent. Notice, none of it went to education. Zero. Zilch. Zip.

Westbay made another nifty chart showing how the Mayor wants to allocate new revenue (in the graph below) to help us see where he continues to sustain interest and priority status.

Giving education some of that $8.1 million would be a start, but there would still be $10 million needed to fully fund Bedden’s proposal.

Which leads me back to the Mayor’s full budget. I spent hours trying to break down the entire 362-page budget (PDF) and comb through the over 13,000 line items in the budget spreadsheet. I had to determine what was mandated by federal, state, or locality requirements.

I’ve come to the conclusion that it’s all ridiculously complicated, and I’m not really sure they want any of us to really understand it. It is a good thing gray hair is back in fashion, because mine went grayer every second I spent looking. I walked away. I cried. But that budget spreadsheet tempted me, like the Sirens of Odysseus, and I finally broke down and ended up looking a little, just a little, into the possibilities of what could be cut.⁵ When you consider what schools have had to sacrifice while still being expected to perform, some interesting areas popped up and are worth looking into further.

TOTAL POTENTIAL CUTS ACCORDING TO ME — $18,850,500.35

• Conferences/Conventions — $209,861.00
• Clothing Allowance (Police) — $40,128.00
• Aircraft Use Fees (Police) — $129,000.00
• Employee Appreciation Events And Awards–$42,909.00
• Employee Parking Subsidy–$217,654.00
• Food and Drink Services–$97,753.00
• Grants To Civic Serv Cult–$8,559,474.00⁶
• Internal Printing & Duplicating–$160,114.00
• Lodging–$5,340.00
• Magazine/Newspaper Subscriptions (Not including Library)–$52,191.00
• Meals and Per Diems–$5,450.00
• Media Services (Just City Council)–$75,473.00
• Membership Dues–$295,679.00
• Mileage–$56,727.00
• Office Supplies and Stationery–$2,461,771.78
• Overtime Permanent–$6,244,711.00
• Pagers–$5,884.00
• Printing and Binding External–$190,380.57

These categories span the entire system, from public works to police to parks. What I’m finding is that many of the above items, when broken down by agency, are controlled by City Charter, Codes, Ordinances, and Resolutions.

In other words, the funds are mandated (or imposed) on the administration, but the Mayor and City Council have control over the amount of funds dedicated to the service. In other other words, they are all subject to some amount of reduction, and money could be reallocated to schools. I haven’t gone through all the line amounts associated with each of those categories. But, from what I can tell, none of the above are subject to fund restrictions.

All of this would make anyone wonder…If schools are an important focus, can’t everyone live a little leaner to benefit our kids? I didn’t see “Employee Appreciation Events and Awards” in the RPS Budget, did you? Teachers certainly had all of their professional development reimbursement funds cut years ago. It doesn’t seems fair that other departments are improving their educations at the expense of the City, while teachers are paying out of pocket, yet are mandated to attend professional learning activities in order to maintain licensure. And after the number of teachers who spoke at City Council lamenting the lack of office supplies (among many other things), couldn’t some of that $2.5 million in “Office Supplies and Stationery” be cut to help fund RPS?

Plus, you’re telling me we can’t digitize some of those stationery needs, as well as the internal and external printing? Last I checked, it’s 2016.

I’ve never met a teacher who gets overtime, but I know many who work well past their contract hours in service of our children. So, while sometimes it’s necessary to have an emergency taken care of that pushes a person into overtime, could we not look at cutting some of that $6.2 million in overtime pay to fund our schools? Maybe a fraction of that pay could go towards someone with time management skills who could better schedule City workers to avoid overtime needs. What do you think Mayor Jones? City Council? I’m asking for a friend…⁷

Sadly, that ship has sailed. Any proposed amendment had to be submitted by 5:00 PM on April 11th. Let’s hope that when the City Council recommendations come out, they’ve also seen places to cut in order to fund our public school system. Just a few days after that day’s meeting, several city council members have made it known that they submitted amendments that would help fund schools, all at varying levels.

Anyway, that’s the general fund stuff. Got a grip on it? Feeling good? Ready for more? Don’t worry, we’ve got the Facilities Budget coming tomorrow.

April 13, 2016 2:50 PM 4