To the Editor:
The voters of Hamilton and Wenham elect the nine members of the HWRSD School Committee to undertake a critical annual task: develop a budget for the next fiscal year that balances the quality and cost of our public education. For the School Committee’s budget to be adopted, it must be supported by a majority of voters at both Town Meetings.
This year, the School Committee’s budget essentially provides level services for level funding from the towns -- that is, with no increase to the towns. This unusual situation exists because the district is benefiting from federal stimulus money and unspent funds from prior years. We should be happy that this was possible this year—it is a situation that is unlikely to repeat itself.
With the schools not asking for any increase from the towns, this should have been an easy year for the school budget. It hasn’t been, because the towns - after asking the district for and receiving a budget with 0 percent increase to the towns - are now demanding a budget that decreases the town contributions by a total of $500,000. This decrease is not financially prudent, is out of line with past practice, and puts the quality of our public schools at risk.
What will happen if the School Committee’s budget does not pass at Town Meeting? The School Committee will most likely return to voters with a reduced budget that either cuts services or uses funds from the District’s Excess and Deficiency (E&D) account to fund the revenue shortfall.
Towns and Regional School Districts maintain E&D accounts reflecting cash remaining after the conclusion of a fiscal year. Typically, some of these funds are planned to be spent in the next year and some are retained for unplanned needs. In fact, one of the Operational Audit recommendations was to establish a policy on a minimum E&D level, which the District’s financial auditors recommend be set at 3 percent of the total budget. The law requires that the account not exceed 5 percent. The district needs a cushion for unanticipated needs in FY 2012 and for anticipated costs in FY 2013 when we won’t have the one time funds we have in FY 2012.
If the school district uses an additional $500,000 from E&D for planned spending in FY 2012, the E&D level will drop to around 2.4 percent (or lower if Chapter 70 funding from the state is less than anticipated). This E&D level is substantially lower than it has been recent years (E&D at year end 2009 was 4.8 percent and at year end 2010 was 3.8 percent).
Our Finance Committees say the School Committee shouldn’t worry about financial shortfalls; the towns will provide the money if the schools need it. Unfortunately, the Finance Committees don’t have the authority to make these promises - it is up to the voters to determine how much to fund the schools in any given year. The School Committee cannot increase its budget without going back to voters at Town Meeting.
If its initial budget fails, the School Committee’s other option is to cut services for this upcoming school year. As teachers, parents and students know, the district has already experienced significant service cuts over the last decade. It is difficult to imagine what services might be cut at this point. However, the School Committee may determine that this is necessary in order to have a sufficient E&D to address maintenance issues (including those related to safety) and to ensure that mid-year cuts are not required to address emergencies.
Why are the towns intent on taking $500,000 out of the school budget during a perilous year? At various points, various town officials have articulated one of three different justifications:
1. The district is expected to underspend its FY 2011 budget by approximately $800,000 to $1 million, approximately $500,000 more than usual. Underspending happens regularly. The town of Hamilton, for example, under-spent in FY 2011 by $130,000 in total (without including any impact from the school budget) due to over-budgeting in general government and the debt categories in the total amount of $270,000, which was offset by over-spending in other categories. The School Committee, in recognition of the District’s FY 2011 underspending, plans to use $980,000 of funds remaining from FY 2011 to pay FY 2012 special education tuition, capital improvements and other one-time expenses. It is not clear why this isn’t enough to satisfy town officials.
2. The HWRSD’s FY 2012 salaries, health insurance and other costs are budgeted to increase approximately 4.4 percent over forecast spending in FY 2011. The towns are experiencing the same cost increases - Wenham’s town salaries are increasing 4.45 percent in 2012. In Hamilton, police salaries are up over 10 percent, driving a 6.2 percent increase in the police and fire total expenses. The town of Hamilton, the town of Wenham and the Regional School District all have union contracts and negotiations that drive increased salaries in recognition of experience and skills. And all three are subject to cost increases relating to medical coverage and energy usage.
3. The FY 2012 HWRSD budget doesn’t build in any cost-reduction opportunities identified in the operational audit. Of the 125 recommendations in the report, the School Committee has identified 106 as either existing initiatives, accepted for future action, or under consideration. Some of these recommendations are cost neutral or require significant expense to implement (such as immediately renovating the auditorium or establishing a 2 percent of replacement cost facilities maintenance fund), so the net financial benefit of implementing operational audit recommendations is a work in process.
None of the above support underfunding our public schools. Please don’t open the door to service cuts when we have lost so much already. Please give the School Committee your support at Town Meeting. The budget they propose is modest, asks only for level funding from the towns and is fiscally responsible.