2014-2015 budget talk

Proposals and process

April 29: Status updates presented to the school board

May 1: Response to parents' concerns about Special Education spending

May 8: Response to employees' concerns about x-day reductions

May 19: Regular board meeting broadcast, via Channel 13

May 19: Proposed tentative budget

May 28: Special board meeting broadcast, via Channel 13

May 28: Journal entry timeline, facts and supporting documentation, presented by Finance Director Rodney Jackson in response to allegations of impropriety

May 28: Budget discussion points and spending adjustments -- The school board voted 4-1 to approve the tentative budget with these changes. A final working budget is due by Sept. 30.

2014-2015 tentative budget


Public input sessions

overview

FCPS financial update (PowerPoint presentation) & video

General Fund at a glance

March 6 feedback | written comments

March 11 feedback | written comments

Summary of listening efforts, themes, next steps

Background as the 2014-2015 budget process is underway

2013-2014 working budget

Salaries in FCPS

Positions at "It's About Kids" Support Services

Superintendent's contract with FCPS

Tom Shelton's travel reimbursements: 2013-2014 | 2012-2013 |2011-2012

District financial statements and auditors' reports

Emails from Superintendent Tom Shelton
Frequently Asked Questions (FAQ)

Why do we have to cut the budget?

It is no secret that our state and nation have struggled financially since the recession of 2008.  Fayette County Public Schools was spared in large part during those lean times by relying on a strong local tax base and a healthy fund balance. As state and federal grants dwindled, district leaders were able to sustain innovative programs rather than discontinuing them by drawing down the general fund reserves. While other school districts had widespread layoffs, we were able to give employee raises to attract strong candidates to work with our students. In 2010, our school board did not take the allowable 4 percent increase in revenue from local property taxes and the compounding impact of that decision has equated to the loss of roughly $21 million. This year, our spending exceeds our revenues, so we have no choice but to decrease our spending for the coming fiscal year and beyond.

What if we don’t make any cuts?

If we continue to draw down the reserves in the district fund balance again this year to cover the cost of recurring expenses, then the following year we will not have enough in the reserves to cover one month’s payroll and we could be placed on the state watch list for school districts in financial trouble.  If we do not make these reductions now, we will deplete our fund balance and become a deficit district.

It seems like all this talk about budget cuts came out of nowhere.

Since 2007, school districts around the state have had to cut their budgets drastically.  Fayette County was spared from those difficult decisions while others around us were laying employees off because we had a reserve to cover the state and federal cuts.  Think of it like two neighbors who both lose their jobs.  If one neighbor has three months’ salary in savings and one neighbor has three years’ salary in savings, then the one with more in savings can go longer before they have to make cutbacks.  It took seven years to get to this point.  We have weathered it for a long time.  We saw we had to make a change in our budgeting and spending processes in 2012, and that is why we applied for the Gates Foundation Spending Money Smartly grant to help guide as we scrutinize spending and ensure that we are using best practices to weigh these critical decisions.  We realized we could not get to equity if we first did not live within our means.  Then we could focus on efficiency and effectiveness, ultimately moving us to equity in resource allocation.

How did not taking the 4 percent property tax revenue increase contribute to this?

Taking the 4 percent revenue increase in 2010 would have generated about $7.3 million per year.  That compounds every year, so it is more than $20 million of lost revenue this year.

Why did you continue to give employee raises?

Our board of education is committed to recruiting and retaining the best possible employees. Although Fayette County was historically known for having the highest teacher salaries in the state, by 2000, the average teacher salary in Fayette County had fallen to 21st in the state. A concerted effort was made by district leaders to once again be able to recruit and retain teachers with better compensation packages, and this year our average teacher salaries are third highest in Kentucky.  In 2000, a beginning teacher in Fayette County Public Schools earned $25,680.  This year starting teacher pay is $41,209, which represents a 60.5 percent change and is the second highest in Kentucky.

Isn’t $20 million a lot of money to cut?

Yes, $20 million is a lot of money. But it is also important to think of that figure in perspective.  Fayette County Public Schools has an overall general fund budget of about $440 million.  In years past, we were able to maintain a healthy fund balance.  When you consider this loss of revenue of not taking the 4 percent increase, plus the state and federal grant reductions, and then couple the additional expenditure increases we have experienced, we swing from a positive “net income” or annual increase in fund balance of 2 to 3 percent to a "net loss" or annual decrease in fund balance of 5 percent or $20 million.

Won’t the governor’s budget proposal fix this?

We are very supportive of the governor’s budget and hopeful that the General Assembly will dedicate an increased portion of the state’s budget to K12 education, especially in the area of reinstating support for programs like professional development, textbooks, safe schools, preschool and extended school services.  But, because FCPS receives the majority of our revenue from local property taxes, an increase in state funding alone will not yield enough additional money to make the reductions unnecessary, especially if the General Assembly were to mandate that the increase in state funding had to be used on employee salary increases.

Why are you building new schools and doing so many renovations if you have to make budget cuts?

School districts are funded through a complex process through many different revenue streams. Most of those income sources come with restrictions on how they can be spent. We cannot take money earmarked for buildings and pay for salaries or other operating expenses; those funds are restricted solely for the construction and renovation of school facilities.  Such restrictions are beneficial to schools in Kentucky because school boards never have to choose between hiring staff or maintaining high quality facilities for students.

Won’t opening new schools cost more money?

There will be some operational costs associated with opening new schools.  But please remember that the largest expense of any school is the cost of the teachers.  If we do not open new schools, those students would still be in a different building and we would be paying for teachers there.  When the new schools open, the teachers will follow the students.  So the only added expense would be for the staff positions such as the principal, front office staff, librarian and custodians.

Why aren’t you cutting central office?

We will cut central office expenditures, including staffing and operations by at least 5 percent.  District leaders will be identifying central office reductions at the same time that schools will be making decisions about staffing.  The process is underway, but those reductions have not yet been finalized.  In accordance with state law, all personnel reductions will be finalized by early May and affected employees will be notified no later than May 15.

Why don’t you do away with the central office?

The Fayette County Public Schools is an organization with 5,800 employees that serves nearly 41,000 students. There has to be a central administration to take care of things that schools can’t do themselves, like maintenance and repair, payroll, accounts payable, human resources and districtwide programs including magnet schools and special education.  As the number of students enrolled in Fayette County Public Schools has grown by more than 8,000 in the past 10 years and nine new schools and programs have opened, the number of people working in the district’s main offices at 701 E. Main St. has grown by only 20 employees.

Can we have some examples of the state and federal grants FCPS has picked up the funding for?

  • In 2012, the federal grant that was covering the cost of world languages at the elementary schools ended. Continued funding of those teachers and programs this year cost $1.3 million.
  • In 2012, the federal “Smaller Learning Communities” grant supporting innovations at our high schools ended. Continued funding for positions at each high school cost roughly $600,000 a year. Additionally, we have continued to fund Opportunity Middle College, originally funded by this grant, at a cost of $450,000 a year plus transportation.
  • The state gives districts some funding for programs like gifted and talented programs, assistance for struggling students and preschool.  We are required to serve every child who qualifies for those services, but the state grant is not enough to cover the full cost.  We have been supplementing those programs by more than $1 million a year.

Why don’t you have someone from the outside audit your books and look for savings?

The finances of the Fayette County Public Schools are audited annually by a private, outside auditing firm. Audit reports going back to fiscal year 2007 are available on the district’s website at www.fcps.net/finance. Since 2004, the district has had a budget and finance committee made up of finance professionals (including certified public accountants), business leaders, community leaders and school principals to advise the district on spending and budgeting decisions as well as looking for cost savings.

Couldn’t you save money if you stopped educating all those illegal immigrants?

Absolutely not. The heart of our mission is that we value and respect every child who walks through our doors. Diversity is a valuable asset that strengthens and enriches our classrooms, schools, district and community. Every person is of equal worth, and individual differences are to be respected and celebrated. We are committed to helping all students achieve at high levels and graduate prepared to excel in a global society -- not to mention that the school district is required by the federal government to educate every child who comes to school and prohibited from asking about immigration status.

Why not stop all the freebies for the poor?

In Fayette County Public Schools, we believe that resources – human, financial and capital – should be allocated in an equitable way that reflects different student needs. There is a difference between equity and equal. Equal means everyone gets a new pair of shoes. Equity means everyone has a pair of shoes that fit. Funds that support children from low-income homes are generally made available through federal grant programs such as Title I and the Free and Reduced lunch program. Those dollars come to the district earmarked to help our poorest students and cannot be used for other purposes. A child’s socio-economic status should not be a predictor of their ability to achieve at high levels, and we are committed to aligning our resources to meet the needs of all students.

How will you ever close the achievement gap if you cut the number of employees in our schools?

One of the main reasons we sought the Spending Money Smartly Grant is because despite all the money we are pouring into our schools, we have not made an impact on the achievement gap in the past 10 years. The reality is that not only are we spending more money than we have, we are also paying for things that aren’t working.  We must first figure out a way to live within our means.  Then we need to overhaul the way we evaluate programs and make spending decisions to ensure that we invest in initiatives that yield the highest return on investment for our students.  And then, we need to redirect our spending so that we can continue to provide high-quality services for all kids while shoring up our efforts for students with the highest needs.  We cannot begin to talk about equity in funding until we first right-size the current spending.

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