GSBA Finance Kit

1. GSBA Finance Kit A 30-45 minute presentation to assist in communicating the challenges facing districts in balancing their budgets. This presentation may be used with community and employee groups. The central message is that the world has changed, teaching and learning needs have changed. Public schools have been asked to do more than ever, but funding has not kept pace. With continued cuts in state funding and shrinking local property digests, districts have been forced to make deep cuts over the past several years. It’s time to have dialogue about what the community sees as priorities for balancing the budget. Instructions: Contact GSBA Communications Department at 770-962-2985 to request the PowerPoint. Download the PowerPoint presentation to your computer. There are numerous places within the presentation to customize the information for your district. Recommended handouts for your meetings include: a detailed list of all cuts made to staff, salaries and/or programs over the past several years; a pie chart that shows the distribution of revenue in the district (there is also a slide in the presentation that does this); an explanation of unfunded programs and services the district provides with local funds. Please feel free to customize the presentation as needed for your district. If you have any trouble with the PowerPoint, please contact the GSBA Communications Department at 770-962-2985.

2. Options for Communicating About the Budget Given that most people outside of administration and the board of education don’t understand how complex school finance is, it is important to inform employees, civic leaders and the community about the challenges faced in financing public education. It is not important to overwhelm them with numbers or legal citations, or try to make them experts in school finance. It is important that there is general understanding and that common ground is sought on those issues that affect the community. Possibilities: Create a local leadership coalition made up of school and community leaders that represent all stakeholder groups. You can use this presentation to help explain the local funding challenges. Meet (in person or via electronic means) with them throughout the budgeting process to keep them informed. Ask for their assistance in informing their stakeholder group. Present the information at staff meetings throughout the district and ask employees to send input on what their priorities are for balancing the budget. Present the information at civic group meetings such as the chamber, Rotary, etc. Hold community conversations for stakeholder groups. (GSBA can assist with this!) The goal is to gather input to assist the board in making decisions that reflect what the community feels is important. Ask your leadership coalition to assist with the planning: where and when to hold the meeting. Also ask their assistance in recruiting stakeholders to come to the meeting. Present the information in a large group setting and then break up participants into groups of about 10-15 people. Have neutral facilitators lead the discussion. Record thoughts on flip chart paper. Sample questions: 1) What are the strengths of the district that we are proud of and want to preserve?; 2) What are the challenges (in addition to financial)? 3) What are your priorities for balancing the district’s budget? Compile results and report at a regular board meeting.

3. Preparing Students for the Challenges of Tomorrow: We Can’t Do It Without You!

4. What We’ll Cover… • The world has changed and public schools are asked to do more and more. • Education plays a significant role in our economy. • ___________ County students are showing gains. • ___________ County’s revenue picture shows declining state funds. • We have significant funding challenges. • We are looking for solutions.

5. It’s a Different World for Kids • Email is too slow for them • They don’t fear Russia • Their blackboards are Smartboards • They’ve never seen a Sears catalog or a phone book • They know Clint Eastwood as a sensitive director…not Dirty Harry

6. We Are Asked to Do More • From 1910 to 1950 – schools added P.E. and football, Vocational Schools, mandated transportation, ½ day kindergarten, fine arts, school lunch programs, driver’s ed, sex ed • In the 60s and 70s – Advanced Placement, adult ed, career ed, federally mandated special ed, drug programs, Title IX programs, school breakfast programs

7. …and More • In the 80s– mandated child abuse monitoring, bi-lingual education, full day kindergarten, after school programs, expanded health and psychological services • In the 90s – America 2000 (Republicans), Goals 2000 (Democrats), technology use, expanded gifted ed, at-risk and drop out prevention • And in the 2000s – No Child Left Behind (Republicans), Race to the Top (Democrats), body mass monitoring, and much more…

8. Lately, we’ve been told… • New Common Core Curriculum (national curriculum) will be phased in over the next three years • National assessments will begin in 2014-15 • Career pathways will be required of all students for graduation • New teacher and leader evaluation (TKES/ LKES) instruments will require more time and personnel to implement

9. With Common Core Curriculum • We’ll need quality professional learning for staff so teachers areready to teach the Common Core Curriculum and have strategies to promote higher order thinking. • Teachers need new assessment tools for the Common Core to make sure kids are learning the new curriculum. • New intervention and support services for students will be needed.

10. And Yet… Public schools are facing major economical funding cuts from the state right down to the local level.

11. The Role of Education in our Economy 4.2% • Without an education, our children won’t be able to find and keep good jobs. 8.3% 9.1% GPEE, Economics In Education, 2013

12. The Role of Education in our Economy Our local economy cannot thrive if its citizens can only get the lowest paying jobs. $38,012 $33,072 GPEE, Economics In Education, 2013 $23,868

13. _________County Figures • Unemployment rate: ______% (2012) • _____% of adults have high school diplomas • ____% have college degrees or higher • Current graduation rate for ____: __% (approximately __% did not graduate)

14. Our Economy is Tied to Education Counties with a large percentage of their populations without at least a high school diploma will find it extremely difficult to attract businesses and sustain a healthy economy. Georgia Partnership for Excellence in Education, 2012

15. A Snapshot of Our District • _______ County Schools educates _____ students. • We spend an average of $______ per student, which is _________ than most districts our size. • There are ___ public schools in ______ County. (_____ elementary, _____ middle school and ___ high school) • All of our schools are accredited by the Southern Association of Colleges and Schools (SACS).

16. CRCT Scores for Grades 3-8 Customize for your district.

17. ________ Graduation Rate Trend Customize for your district.

18. Federal Funds = XX%State Funds = XX%Local Funds = XX%Enrollment = X,XXX *According to the Georgia Department of Education website. How Our Schools are Funded… 2013 Customize for your district.

19. Federal Funding • Federal funds can’t be used on expenditures funded by state or local funds in previous years. • Federal expenditures are funded on a reimbursable basis — you must spend it to get it. Customize for your district.

20. State Funding • State funds make up __% of _______ County Schools’ funding. • The state’s education funding formula is based on a 1985 law, the Quality Basic Education Act. (QBE) • A smaller portion of state revenue comes from state grants for specific purposes such as Career Tech, Ag programs and pre-school services. • 90% of the QBE funds are allocated based on student enrollment and 10% is based on the number and size of our schools. Customize for your district.

21. QBE • QBE was adopted in 1985 and is the basis for the “formula” used to allocate funds through a partnership between the state and local districts. • The law is intended to ensure each student in the state receives a quality basic education—not a “Cadillac,” but a “Chevy.” • The state pays districts an amount of money for each student based on a QBE “foundation formula.”

22. Austerity Cuts to _____ County Lost QBE funding • 2013 Cut by $_______ • 2012 Cut by $_______ • 2011 Cut by $_________ • 20010 Cut by $__________ • 2009 Cut by $__________ • 2008 Cut by $_________ • 2007 Cut by $__________ • 2006 Cut by $ • Since 2003 total cuts of $_________ Customize for your district.

23. What Underfunded Mandates Mean For ________ County Schools… Customize for your district. • Just a couple of examples: • ________ County paid 69% of the overall cost of transporting students last year and 100% of the cost of transporting students living within 1.5 miles of a school. • Local districts must provide educators with 12.5 sick days/year, but the state pays only $150 per employee/per year. After the $150, any cost for substitutes, etc. is paid by the local district. Subs are paid a minim of $65/day.

24. What QBE Does Not Provide Any Funds for…… • Social security costs (6.2% of taxable salary) and workers’ compensation • Athletics • Other extra-curricular activities (band, drama, student organizations, etc.) • Capital expenditures (new buildings, new technology, furniture) Customize for your district.

25. _________ is Not Alone Customize for your district. • Over the past 10 years in Georgia, school funding has been cut by $7 billion. • Districts are having to furlough staff and, in some cases, cut the number of school days in order to balance their budgets. • The economic climate is hurting the amount districts collect from SPLOST funds. • Revenue sources are severely limited.

26. Local Funding • Property taxes are the primary source (over 90%) of local revenue for local school systems. These funds are used for the operating budget. All property is taxed, even rental properties. • Property taxes are based on the county millage rate adopted the Board of Education annually. By state law, millage rates are capped at 20 mills, except in a few rare circumstances. Customize for your district.

27. _________ County School Tax Customize for your district. • _________ County’s millage rate has remained the same (_______) since 2009. • School property tax levy has decreased by $________ since 2007.

28. SPLOST • Special Purpose Local Option Sales Tax (SPLOST) funds can be used for capital expenditures like buildings and technology, but NOT for salaries and other operating expenses. • SPLOST is approved by the county voters every five years. Projects are outlined ahead of time and cannot be changed after approval by voters.

29. How funds are used in ___________ County….. Customize for your district.

30. FY 12 Budget SummaryFunds 100-499 State, Local and Federal Regular Operating Accounts Customize for your district. Revenue State $17,035,838 Federal $ 3,059,212 Local $ 9,064,362 Total revenue $29,159,412 Expenditures Salary $19,477,041 Benefits $ 6,957,776 Other $ 4,202,609 Total Expense $30,637,426

31. Response to Financial Challenges Customize for your district. • 2009: • Raised millage 2.25 mills (12.62 to 14.87) • Cut $1,040,135 • 2010 • Rolled back millage to 14.668 • Continued cuts from 2008 • 2011 • Millage remains at 14.668 • Continued cuts from previous years • Cut additional $1,666,384

32. Response to Financial Challenges Customize for your district. • 2012 • Millage remains at 14.868 • Continued cuts from previous years • Cut additional $1,310,682 • 2013 • Millage remains at 14.868 • Continued cuts from previous years • Cut additional $1,274,275 • Cumulative savings since 2009: $8,601,294

33. General Fund Balance Customize for your district. • Beginning Balance, July 1, 2013, was $3,005,533 • Projected ending fund balance on June 30, 2014, is $1,809,300 • Projected ending fund balance on June 30, 2014, if no adjustments are made to revenues or expenditures will be $210,493 • Minimal fund balance to operate is about $1,314,600 (5% of revenues)

34. Our Local Challenges The “funding cliff” has arrived…. • Significant state cuts (austerity cuts) will remain in place. • Our tax digest has decreased and the result is reduced local revenues. • Our equalization grant has been cut by over $1 million. • Employee benefit costs are increasing significantly. Customize for your district.

35. Our Local Challenges • We have been cutting programs, positions and operations since Fy2008. • Staff pay has been cut every year since 2008 • Pioneer Regional Educational Services Agency’s salary study shows us significantly behind the pay scales of surrounding districts. • Lack of funds will prevent us from moving forward in student achievement, teacher/leader quality, and addressing the graduation rate. (75%) Customize for your district.

36. Strategies and Solutions • Revenue: The only way to increase local revenue is by raising the millage rate or charging of services that are legally allowable. (not many of these!) • Expenditures: We will have to cut further into our core business: teaching and learning. Customize for your district.

37. Strategies and SolutionsExpenditures Customize for your district. • Increase Class Sizes (Means Cutting Teachers) • Reduce or change student and staff support services such as nursing, professional learning, and assistance to students who struggle or who are high achievers • Eliminate programs: Electives, Athletics, for example • Reduce school days further • Reduce or change operational support provided such as transportation service, technology, facility care and maintenance.

38. Our Budget Process • We are seeking input from the community and our employees to begin the process. • The board and superintendent set the vision and use input from the community and employees to set priorities for the district’s educational program. • The Budget Committee develops a proposed budget and some specific recommendations and sends to the Board for review. Customize for your district.

39. The Budget Process Continues • Funds are allocated based on state and federal mandates, the state salary schedule and the district’s strategic plan. • The local property tax millage rate is established to generate revenue to fund what the state or federal funds do not provide. • The Board must operate under a balanced budget. Adjustments to the proposed budget have to be made if available revenues and an adequate remaining fund balance do not cover expenses. • The Board must approve a budget by July 1, the start of the fiscal year, or pass a temporary spending resolution. Customize for your district.

40. We Need Your Best Thinking Customize for your district. • We want to hear from you on what you believe should be the priorities for _________ County Schools. • These challenges are real. The Board of Education needs your input to help them make the tough decisions. • Our kids and our community deserve no less.

41. Our Process for Engagement • We will break in to small groups of about 8 to 10 people. • Each group will have a trained, neutral facilitator who is not an employee of the district. • Each group will consider four questions about the future of our school district. Customize for your district.

42. Our Process for Engagement • Each group will follow a set of ground rules, for example: • Every person gets a chance to talk • Every person is treated with respect • It’s okay to disagree, but do so with respect • Seek first to understand and then to be understood Customize for your district.

43. Thank you for your time! The Board values your input and will use it to assist them in making a decision that reflects the _________ County Community.