Open Letter to the Board: Pinch your nose if you must – but pass the Atlanta Public School’s FY15 Budget

Editor's Note: The following was posted on Tuesday, April 22, 2014 by Robert F. Stockwell at his website Financial Deconstruction. It was also sent to members of the Atlanta Board of Education.

The Atlanta Public School Board of Education will meet today at 5 p.m. in a Special Legislative Session to consider the proposed FY15 Budget. The current proposal calls for $633 million in revenues and $658 million in spending and relies on the use of $25 million in General Fund reserves.

The Budget Commission has passed the budget and recommended that the full Board approve it, but the Commission voiced strong reservations regarding the spending plan and recommended that the Commission enter into discussions with the new superintendent to make changes that conform to the spending priorities that were much discussed during the recent election.

For all the reasons that I enumerate below, I am strongly in favor of passing the current budget and then working in partnership with the new superintendent to make the necessary changes. Hold your noses if you must (and I would), but pass it today and quickly move forward with the new superintendent to fix it.

Background

So what is happening here? The Board Commission does not like the budget, but recommends adoption? Why?

The answer is really quite simple - by passing the proposed budget now, the Board is essentially leap-frogging past the current administration that has clearly stated its opposition to the policy and spending priorities that were overwhelmingly approved by voters in November and December.

But you ask – if the Board was elected to implement fiscal reforms and other campaign promises they ran on, why don’t they just do so now?

And the answer again is - they could, but it would require a major fight with the outgoing administration that is finished on June 30th. Some are calling for the Board to engage in this fight, but to what purpose if the Board can engage in a meaningful and productive conversation on the issues with the new superintendent - who will then be tasked with implementing it. 

So what did the voters and candidates say this past election that is not incorporated into the current budget proposal? The key items are:

• A reduction in the cost of the central office administrative functions – both central office school administration and general administration.
• A reallocation of expenditures from the administrative functions to in-classroom spending.
• Develop a plan to reduce class sizes in the district and implement it over time.
• Stop the practice of relying on the budgeted use of General Fund reserves.
• Demand greater accountability for results from senior administrators.
• Grant greater authority, responsibility and accountability to the principals in the school-house. 

Let’s look at each item above and consider the current administration’s position on each one.

Reducing the size and cost of the central administration functions – Superintendent Davis has made his position quite clear on this issue. He believes that the central administrative functions are currently underfunded and he wants to increase them in size. And his view is manifestly displayed in the past and current budgets. In the last two years, the central office school administration has increased by 15 staff or 19.2% and the general administration has increased by 13 staff or 4.5%. Clearly, Davis has no interest in reducing the size or the cost of administrative functions. Getting him to change his mind now is futile. 

Reallocate expenditures from the administrative functions to in-classroom spending – as just noted above, Davis has no interest in doing so. And the data further supports this. The percentage of the total proposed budget for administrative functions is up to 13.6% as compared to 12.4% this current year. And where did this increase come from? Spending for teachers and other in-classroom activities has dropped from 59.1% in FY14 to 57.2% for the upcoming year. In other words, this is exactly the opposite of what voters and Board members wanted.

Stop the practice of relying on the budgeted use of General Fund reserves – this is at least the fourth year in a row that deficit spending is being proposed. To place this in better context, understand that the General Fund revenues are at record highs, but – once again - the administration is not capable of balancing the budget without the use of General Fund reserves. 

Davis argues that the administration will make an attempt to control spending and balance the budget during the year and to force the issue now will result in senior executives making “stupid decisions”. Got that? ‘If you force us to balance the budget, we will make stupid decisions.’ This statement alone encapsulates everything that is wrong about this administrations fiscal policy and, unfortunately, its level of competence.

Demand greater accountability for results from senior administrators – to have accountability, there must be clear and measurable objectives and clear budget priorities that address these objectives. However, when asked for the objective measures – as reflected in the Balanced Scorecard – that the administration will be accountable for in FY15, the answer is that it cannot be provided until all the FY14 data is in – sometime over the summer. 

In other words, it appears as if with 60 days to go in this school year, the administration is not capable of estimating the results for the current year and therefore cannot set objectives for next year. How much confidence does this inspire in the Senior Cabinet’s grasp of current conditions? Not much. How can the Board possibly hold the administration accountable for results if they are unwilling to let them know what the objectives are? The answer is simple – they can’t.

Grant greater authority, responsibility and accountability to the principals in the school-house – this past years saga with the principal at North Atlanta High School was dramatic and provided us with a great deal of insight into how this administration operates. There is no question that there is a central office ‘command and control’ culture. There were promises to fix this, but the efforts have been minimal and principals keep leaving in droves. 

When the administration was asked about extending budgetary authority to the principals – and having school budgets is a requirement for this – the administration stated that it did not have any plans to budget at the school level this year – and not even on a test basis.

So you want to fight this administration and ram through budget reallocations and cuts? Davis has given you his answer – if you force the issue, we will make “stupid decisions”.

Now let’s take a look at what we are likely to encounter in a discussion on the budget with the new superintendent. 

• Carstarphen has a demonstrated record of fiscal responsibility and taking actions that avoid impacting the spending in the classroom. When faced with a budget deficit issue in Austin, she first cut the cost of the administrative function by 30 people over two years - and these cuts were in the context of a much leaner administrative function than we have in Atlanta.
• She viewed deficit spending as a concern even in light of the fact that the General Fund was near 25% of annual spending (this compares to approximately 12.7% for Atlanta).
• In Austin, school budgets and accountability measures are the norm and not something to wish for, but never implement.
• Austin principals have told me that their relationship with Carstarphen is good and the central office understands that it is there to support principals and teachers. In the words of one Austin principal, "The central office is responsive and, as long as the schools are performing, the central administration works with a very light touch."
• While Carstarphen indicates that she believes the research on the class size issue is “a mixed bag”, she also clearly stated that,

In Austin we tried to push as much money into schools as possible… [establish] what is it that you are trying to support and then cut out anything else… 

But let’s also be clear that passing this budget is not without risk. It does take a leap of faith that the new superintendent will view many of the fiscal issues in a manner that is consistent with the current Board. However, it is also true that the current Board addressed many of these issues with Carstarphen during the interview process and they were satisfied that she is aligned with their policy directions.

And I would add that her past performance strongly validates this.

The Board is responsible for establishing overall policy and direction. They have tried to do so in a manner that is responsive to the voters. However, the current administration has ignored the mandates of this past election – and June 30th can’t come soon enough. 

As I noted earlier, pinch your nose if you must – but pass the Atlanta Public School’s FY15 Budget - and then get on with the process of establishing policy and direction for the new superintendent who recently said,

“I know that it is time to bring the pride back to this school system,” 

“I can implement anything. I feel like I’ve had to do that,” she said during her introduction at Hope-Hill. “Be careful what you ask for, because it will be done.”

Please urge the Board members to pass this budget today – we have entrusted them with the responsibility and authority to make the changes we voted for in this past election. 

Let’s give them a chance to deliver on their promises by working with the new superintendent.