Communications About ESF
Joyce Martelli, Chief Financial Officer and Scott Sittig, Project Manager, ESF
Comparing current year school budgets with estimated 2011-12 Equitable Student Funding (ESF) planning targets is like comparing apples to oranges. People are making this comparison but not including the information needed for an accurate comparison. This is leading to unnecessary confusion for parents, staff and the general public.
So why is this “apples to oranges” comparison causing concerns?
Let's start with what Equitable Student Funding is. ESF is a resource allocation method that distributes the district's available funding to our schools and departments. It strategically aligns dollars and positions to support our highest educational priorities as determined by those closest to our students. The allocation is based on student enrollment and the needs of those students.
In short, ESF distributes available funding in an equitable manner. This year there are fewer dollars available to distribute. The estimated $80 million budget gap is caused by a decrease in revenue and an increase in expenses, not by the use of a particular allocation method.
In addition to ESF, additional dollars and positions are distributed to schools from a central fund, referred to as “locked” dollars. Examples include the cost for certain special education classes, half the cost of kindergarten teachers, and special funds for programs such as IB and Career and Technical Education. Without these additional resources factored in, it is impossible to make any meaningful comparison between a school's current-year budget and its estimated budget for 2011-12.
Another issue that makes the comparison flawed is the method used to calculate salaries. ESF budgeting is based upon average salaries for employees in a given title while the current-year budget uses actual salaries. The use of average salaries supports an equitable distribution of staff based on student enrollment, rather than on the amount of money required to pay for a particular position. Principals and schools were asked to focus on the positions needed to support their strategic academic plans instead of looking for the lowest salaries. In other words, focus first on the work and then look at the costs of providing that support. Any analysis that excludes an average-to-actual salary comparison will produce inaccurate results.
Many have commented about “draconian” cuts. Yes, the cuts are severe, but it is simply inaccurate to publish numbers that compare figures that are not comparable or complete.
We are committed to a transparent process. Specifics about school budgets will be published as more complete information becomes available and a meaningful analysis can be provided. We will continue working closely on budget development with our principals, who this year have greater autonomy over how their budgets are spent.
John Scanlan, Deputy Superintendent for Administration
As has been reported repeatedly in recent days, the District is facing a significant budget shortfall for the 2012 fiscal year. It is estimated that between revenue decreases and projected expense increases, the shortfall will be around $80 million dollars. I'd like to explain how that number was calculated.
The district's final amended budget for fiscal year 2011 was $705 million. Using that as the baseline for projections for fiscal year 2012 , we then reviewed projected revenues. As of February 8, 2011 when the Governor's State budget was released, the following revenue reductions were anticipated for 2012:
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Reduction in State Aid: $4 million
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Decrease in Fund Balance Reserves: $24 million
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Net Decrease in Other Revenue: $1 million
TOTAL REVENUE REDUCTION: $29 million
The largest chunk of revenue reduction is the fund balance reserves. We have little cushion for emergencies because we used reserve funds last year to prevent layoffs and balance the budget.
The district is also facing obligations that will increase overall expenditures. These include:
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Projected contractual increase in Salaries: $11 million
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Projected increase in the cost of Employee Benefits: $26 million
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Increases in the cost of Fixed Obligations: $9 million
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Includes obligated costs for Charter Schools, Transportation, Special Education Tuition, Health and Non-Employee Insurance, among other things
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Increase in Facilities costs: $2 million
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Increase in other known expenses: $3 million
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Examples include BOCES and Agency Clerical
TOTAL EXPENSE INCREASE : $51 million
To summarize:
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$705 million minus $29 million (revenue reduction) = $676 million in projected Revenue
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$705 million plus $51 million (expense increase) = $756 million in projected Expenses
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$756 million minus $676 million = $80 MILLION DEFICIT
$80 million represents approximately 11% of the current amended budget.
We are hopeful that the State Legislature will restore some of the funding cuts proposed by the Governor. We have lobbied for relief from State mandates to allow greater flexibility in spending. We are leaving no stone unturned to find opportunities to trim projected cost increases so we can drive more resources to our schools, who are making difficult choices and investing strategically to support students.
John Scanlan, Deputy Superintendent of Administration
For the past two years we have studied the way we distribute and use funds in RCSD. By analyzing where and how we spend our resources we are able to gain a more detailed understanding on how to support the work of teachers and Principals in our schools. We have created a plan to increase equity for our students through a funding system called Equitable Student Funding (ESF). This method of distributing dollars to our schools is designed to accomplish three (3) goals for the district:
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ESF supports our objective by allowing those closest to our children to make the best informed decisions in distributing our resources and money aligned to the school’s academic plan.
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By distributing the funds based on characteristics and needs of our children we are, over time, building more equity into our system. Across the district we will provide the same level of resource to cover the needs of all of our children.
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The funding method is designed to support those priorities that improve the academic outcomes for all of our students. The resources are targeted to our core work of academic instruction and student learning.
While complex in implementation, ESF is really as simple as these key concepts. We will change and adapt our system to serve schools in the same way we differentiate student learning based on individual students’ needs. ESF is designed to provide teachers and schools the resources available as they work to “create masterpieces.”
We will be providing more information in the coming weeks and months around this and other work.
John Scanlan, Deputy Superintendent of Administration
Beth Mascitti-Miller, Deputy Superintendent of Teaching and Learning
Is this the right time for Equitable Student Funding?
As the time draws near to present the 2012 budget, many concerns have been expressed about whether now is, in a time of declining revenue, a good time to roll out equitable student funding in the district. Experiences from districts all over the country that have transitioned to ESF have produced mixed feedback on this question. Our perspective has been unequivocal. Now is the best time to roll it out.
First, the children of Rochester schools are our highest priority. ESF places the focus of our resources on each student and puts the onus on district leadership to structure academic programming to meet their needs. Second, the transition to devolving decisions to the school level is long overdue. Principals have asked for greater flexibility and autonomy in making the decisions that affect their students and ESF allows them more of both. Third, when resources are pinched, the need to think strategically becomes paramount. ESF demands that resources be allocated where they will result in maximum academic impact for their school. There is no better lens through which we can make limited resource allocation decisions than through those who are working directly with students in each building.
It is important to remember that ESF is not the cause of this year's budget shortfalls and is not the reason that many difficult staffing decisions will be made this year. The stagnant economy has resulted in major budget cuts at the state level and the federal resources have dried up. As a result, the district is facing a budget reduction of over $80 million dollars this year. Whether ESF is rolled out this year or not, the same difficult staffing decisions and strategic alignment of fewer resources is going to be a reality. ESF provides a thoughtful model to make these difficult decisions and maximize the impact that the limited resources will have for the children in our district. Our experience with ESF this year will also provide a good lens on the future to learn what principals and their staffs believe are the most important components to educating our children and reaching our overall strategic goals. The road ahead will be challenging, but ESF is part of our strategic commitment to making this district better for every student we serve.
From John Scanlan, RCSD Deputy Superintendent of Administration (3/3/11)
The district is working to create a balanced budget while facing a budget gap of approximately $80 million. This gap is the result of declining state and federal revenue and increasing costs including employee compensation and benefits.
The district has significantly less money to spend this year, which translates into fewer dollars available for schools to spend in their budgets. Across the district, there will be cuts in spending both operationally and through workforce reductions. The deficit may require the reduction of hundreds of positions across all departments and across all buildings including central office.
Schools right now are developing their budgets based on the funding they have been allocated. Through a system known as Equitable Student Funding, we have allocated funding equitably among all of our schools based on student population and student needs. Principals and their school budget teams are creating the most effective academic programs and staffing plans possible within the constraints of the approximately $80 million deficit. They are making difficult decisions while also investing their dollars where they will have the greatest impact on student achievement. These decisions are being made by those who know our students best—those in our schools.