I wrote this as a follow up to the parents that have e-mailed, called, and met with me over the past few months regarding the school budget.  Below please find a bullet point summary of what we know at this point and how the budget process works from here.

Some of this information will not be new to many of you, as much of it is what has been presented publicly over the past couple of months.  However, I wanted to write a summary that made no assumptions about what parents know or do not know as many of you do not have the time or resources to follow the budget process on a daily basis.

Again, what is presented is what we know based on what has been presented to the council and to you by BPS.  I cannot vouch for the numbers.  The Council will get its chance to ask detailed questions about the numbers presented once the City budget is submitted to us.

Finally, I will continue to give you updates as we learn anything new.  If you have friends who want to receive regular budget updates, please have them email me at john@connollyforboston.com.

Budget Process¹

• The City of Boston operates on a July 1 – June 30 fiscal year.
• Fiscal Year 2010 (“FY10”) begins July 1, 2009 and ends on June 30, 2010.
• The annual City of Boston budget (“City Budget”) includes the Boston Public Schools budget (“BPS Budget”).
• The BPS Budget has its own approval process before becoming part of the City Budget.
• The Superintendent of Boston Public Schools (“BPS”) submits a proposed BPS Budget to the School Committee before the first Wednesday in February.
• The School Committee may adopt, reject, reduce, or increase any item in the proposed BPS Budget.
• The School Committee must vote on the proposed BPS Budget by the fourth Wednesday in March (March 25, 2009).
• If the School Committee does not vote, the proposed BPS budget is automatically approved.
• If the School Committee approves the proposed BPS budget, the Superintendent then submits the approved BPS Budget to the Mayor.
• The approved BPS budget then becomes part of the whole City Budget prepared by the Mayor.
• The Mayor submits the City Budget to the City Council no later than the second Wednesday in April (April 8, 2009).
• The City Council holds public budget hearings from April through June to review the proposed City Budget.  Typically, there are a series of hearings with the Superintendent and other representatives from BPS.
• The City Council has the authority to approve or disapprove the City Budget as a whole. The City Council may reduce or reject an appropriation in the City Budget, but it may not create or increase funding in the City Budget.
• The City Council must adopt or reject the City Budget as a whole or reduce appropriations no later than the second Wednesday in June (June 10, 2009).
• If the City Council takes no action, the City Budget is automatically approved.
• Typically, the City Council rejects the budget before the second Wednesday in June and the Mayor resubmits a revised budget, often addressing concerns raised by the City Council during the budget hearings.
• The City Council must adopt or reject the revised City Budget as a whole before the last Wednesday in June (June 24, 2009)(the last City Council meeting before the start of the new fiscal year).
• If the City Council rejects the City Budget, city officials are allowed to continue to operate; however, no city department may spend more in one month than the monthly average of the past three months.

FY09 City Budget Review/BPS FY09 Budget Review²

• The fiscal year 2009 (“FY09”) City Budget submitted by the Mayor and approved by the City Council totaled $2,302,606,680 (approx. $2.4 billion).
• The FY09 BPS Budget totaled $833,105,384.
• BPS also counts on External Funds to operate during a fiscal year.  External Funds are from non-city revenue sources including formula grants from state and federal govt. and competitive grants from private/non-profit sources.
• FY09 External Funds for BPS totaled $120,817,352.
• The total projected cost to run BPS for FY09 is $952,853,581.

FY09 BPS Budget                                   $833,105,384
+ FY09 BPS External Funds              + $120,817,352
FY09 BPS Total Funds                           $953,958,965

• External funds are not counted in the proposed BPS School Budget submitted to the School Committee.
• Title I funds are considered External Funds and are not included in the BPS Budget submitted to the School Committee.
• Chapter 70 funds, or State Aid to Education, are counted as part of the BPS Budget.

FY10 City Budget Summary and the FY10 City Budget Gap

• Through revenue calculations, the City has projected a $140 million budget gap for the FY10 City Budget as a whole.
• The Mayor will submit the proposed FY10 City Budget to the City Council on April 8.
• Until April 8, we will not be able to know cuts applied to each city department and how a reduction to BPS compares with other city departments.
• The proposed BPS Budget, currently before the School Committee, is for $786,883,901.  This figure does not include External Funds for FY10.
• The proposed BPS Budget calls for a 5.5% decrease from the FY09 BPS Budget.
• The decrease from FY09 (approx. $833 million) less the FY10 proposal (approx. $786 million) totals approximately $46 million.
• The $46 million represents 33% of the City’s projected $140 million gap.

BPS’ Level Service Budget Gap

• If the BPS Budget Gap makes up 33% or $46 million of the $140 million City Budget Gap, what is the $107 million school budget gap?
• The $107 million budget gap is derived from a “Level Service Budget” perspective.
• A Level Service Budget allows BPS or any city department to account for the cost of providing the same services as the prior year.
• Because of cost increases such as wages, benefits, and transportation, there is an increase in the actual cost to maintain a Level Service Budget from one year to the next.
• BPS estimates its increased costs from FY09 to FY10 to be $61.4 million.
• The increased cost plus the proposed BPS Budget decrease of 5.5% or $46 million equals approximately a $107 million gap (the Level Service Budget Gap).

FY09 BPS Budget                                 $832 million
+ FY10 Increased Costs                     +$61 million
FY10 Level Service Budget                 $893 million

FY10 Level Service Budget                  $893 million
- FY10 Proposed BPS Budget          – $786 million
FY 10 Level Service Budget Gap        $107 million³

Teachers

• In December 2008, the Superintendent asked each headmaster and principal to submit individual school budgets with a five, ten, and fifteen percent cut from the budget the individual school received for FY09.
• In February 2009, the proposals from the headmasters and principals, which contained the elimination of many teaching positions, formed the basis of the first draft of the proposed BPS Budget.
• Some of the proposed reductions violate terms of collective bargaining agreements, accreditation requirements, and/or federal or state mandated graduation requirements.
• There are two distinct factors involving a teacher’s position at a school: “Excessed” and “Non-Renewal”.
• Excess of a teaching position means the position is being removed from the individual school’s budget.  A teacher whose position is excessed goes into a pool of teachers who may fill existing positions at any school based on qualification to teach a given subject area and seniority.
• Non-Renewal means that a teacher will not be brought back at a given school the next school year even though the teaching position may still exist.
• Non-Renewal can happen for a number of reasons including a provisional teacher or more junior teacher being Non-Renewed if a more senior teacher qualified in the same subject area has had their position at another school excessed.
• To date, no teachers or provisional teachers have received written notice that their positions have been excessed or that they have been non-renewed as a result of the budget crisis.
• Some teachers have received verbal notice that their position may be excessed or they may be non-renewed depending on the outcome of the budget crisis.
• The City’s Contract with the Boston Teachers Union (‘BTU”) requires written notice for the non-renewal of a teacher’s contract.  Such notice is to be delivered to permanent teachers on or before June 1. The BTU Contract requires written notice to be delivered to provisional teachers on or before June 15.
• The City’s Contract with the BTU requires written notice to the teacher for the elimination of a position.  The date for such notice has been extended three times, and it could be extended again.
• Presumably, the date has been extended and will be continue to be extended while the City and the BTU negotiate.

Federal Stimulus Money Overview

• BPS is going to receive at least $58 million in Federal stimulus funds over a two year period in the form of $34 million in Title I funds and $24 million in IDEA funds.
• Broadly defined, Title I funds are federal money used to supplement education in schools with significant populations of low-income students.
• Approximately $17 million in Title I funds of the $34 million will be received for FY10.
• Broadly defined, IDEA funds are for special education.
• We do not know the amount of the $24 million IDEA Funds that will be available for FY10.
• The allocation of Title I and IDEA funds to individual schools is determined by legally mandated formulas.
• BPS can reallocate for any purpose any general operating funds dedicated to Title I and IDEA requirements once the stimulus money comes in to cover those requirements.
• The Title I and IDEA stimulus money is a one time source of federal dollars.  The Superintendent wrote in a memo to the School Committee, “This one-time source of federal dollars will not solve our budget challenges, nor will it necessarily prevent layoffs.  It would be irresponsible to use money from the stimulus package to pay for positions that we may not be able to support in future budget years.”  In a letter to BPS employees, Superintendent Johnson wrote, “[W]e do anticipate spending some of the stimulus money to restore positions.  We want to invest in our valued staff; however, we must be careful, knowing that this is one-time revenue.  Using it solely for positions that we may have to eliminate the following year when those federal dollars are no longer available would not be prudent.”
• There are also stimulus funds available in the form of State Stabilization Funds.  However, it is unlikely that BPS will qualify for these funds.
• State Stabilization Funds do not have spending restrictions as the Title I and IDEA funds do.
• To receive State Stabilization Funds, state law requires a school district to be under “Foundation Budget” levels.
• Broadly defined, a Foundation Budget is the minimum amount required to operate a school system at state mandated levels.
• Boston’s BPS funding far exceeds the Foundation Budget requirement, so BPS will not likely be a priority district for state stabilization funds.

Partial List of Sources

• The Boston City Charter.
• Boston City Council Ways and Means Committee Briefing by the Mayor’s finance cabinet, “Wage Freeze Proposal” (January 26, 2009).
• Memo from Superintendent Johnson to Boston School Committee, “FY2010 Preliminary Budget Recommendation: $786,883,901” (February 4, 2009).
• Boston City Council Joint Education and Ways & Means Briefing by BPS, “FY10 Budget Hearing” (February 11, 2009).
• BPS FY2010 Budget Update, “Presentation to the Boston School Committee” (March 11, 2009).
• Boston City Council Special Committee on Federal Stimulus Oversight Hearing, “American Recovery and Reinvestment Act, Impact for the City of Boston” (March 12, 2009).

¹The Boston City Charter is the main legal authority on city budget process.  The Boston City Charter is not contained within one document. It is a collection of laws that has been amended several times. You can access the City Charter online at: http://www.cityofboston.gov/cityclerk/pdfs/cc_charter.pdf.

² The FY09 City Budget can be accessed online at: http://www.cityofboston.gov/TridionImages/02%20Summary%20Budget_tcm1-3153.pdf.

³ These numbers are approximations and use rounding. The total amount cited by BPS is $107.6 million.