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Last week, I wrote that I am going through the end-of-year reports from various APS citizen advisory committees, beginning with the Budget Advisory Council. I'm sharing what I'm learning from these reports with you, along with some of my own questions and ideas. You can read the first part of my budget takeaways here. This week's budget email focuses on ways that we can improve community engagement during the budget process, plus one idea that might generate additional revenue for our schools. 1. We aren't getting the full benefit of the Budget Advisory Council's expertise. The Budget Advisory Council reports to the School Board and is charged with maintaining fiscal integrity, public confidence, and wise stewardship of taxpayer resources as outlined in school district policy. Although it reports to the School Board and not the Superintendent, the BAC could very likely play a more significant role during APS's budget development--and wants to. In its June 2020 end-of-year report, the BAC wrote: "Currently, the annual Superintendent’s Proposed Budget is prepared by, APS staff under strict secrecy and released to the School Board and the Arlington public on a planned date in late February. There is no statute, policy, or implementation procedure that dictates such secrecy." Because the BAC sees the budget at the same time it's presented to the School Board, it is "perennially concerned about its effectiveness as an advisor on budget issues and its value to the School Board." Additionally, The BAC notes in its 2021 end-of-year report that in the most recent budget cycle it had only about ten minutes to discuss its work with the School Board in an April budget work session—which doesn’t do justice to the extensive analysis it had prepared for the Board’s review and doesn’t incentivize talented and engaged citizens to donate their time to serve on the BAC. The BAC also wants to have more meaningful input into the Budget Direction that the School Board sets for APS staff each October. To that end, this year the BAC included its suggestions for the FY23 Budget Direction in its EOY report so that School Board members would have plenty of time to digest the recommendations and ask questions. 2. We can involve the community earlier and more meaningfully. Last November, the BAC offered to facilitate a meeting with representatives from many different citizen advisory committees to share ideas about developing the APS budget and finding cost savings. In its EOY report it notes, “Although there seemed to be some hesitancy about the cross-committee meeting and BAC playing a role in convening such a group, we would encourage the Board to repeat the idea gathering process next year and to formally end it with such a gathering, hosted by the BAC, for the benefit of all groups, so that all of the committees’ ideas can be shared and discussed openly.” The report continues: “While we believe larger changes will be needed, we urge the Superintendent not to spring these changes on the community for the first time in late February, but rather to tell the community that certain things are being considered, so that the community has time to weigh in and participate in the conversation, before large decisions are proposed and made.” To that end, we could adjust the budget development calendar so that the community has more time to study it and provide feedback. The calendar for FY23 budget development was approved by the School Board at its July 1 meeting, but let’s start talking about the next cycle. As I wrote back in March, many other local school systems provide more time for citizens to weigh in on the budget. A few examples:  3. We can change how the budget is presented so it’s more user-friendly and useful to the School Board and the community. Right now, there’s simply no good way for the public to read and understand the APS budget as it’s currently presented. People with the time and financial literacy skills needed to digest all the information are at a distinct advantage in advocating for programs and line items they care about--and that’s a real equity issue. Additionally, and as the BAC noted in its 2020 report, there's real inconsistency in how individual expenditures and proposed cuts are presented in the budget book. We should explore:
4. We should talk about setting up an education foundation. In its EOY report, the BAC suggests that we could increase financial support for APS by forging a strong partnership with Amazon and courting other corporate philanthropy. We should talk about whether this is something we want to pursue and study the examples of other communities across the country (and in Northern VA) who have done so by setting up education foundations. Education foundations are separate non-profit organizations that raise money for their local public school districts. There are more than 6,500 district education foundations serving 14,500 school districts across the US (National School Foundation Association). These organizations raise money from businesses, other foundations, and individuals and can help support more equitable spending and fundraising across an entire school division, when compared to fundraising that's done only at the individual school level by PTAs and other groups. In the DC metro area, Arlington and Alexandria are the only localities that don't have education foundations. Some examples to consider:
If you believe that Arlington could benefit from ideas like these or if you have ideas of your own to share, I invite you to get in touch with me, share and discuss this article with others, and become involved in the APS budget process. Early in my School Board campaign I received some great advice: a recommendation to read closely the end-of-year reports of the various APS citizen advisory committees. Community volunteers contribute considerable expertise and literally thousands of hours of work each year to collaborate with APS leaders and the School Board, and their informed perspectives are worth studying. As I continue to listen and learn over the summer I’m going through these end-of-year reports, starting with the recently published work of the Budget Advisory Council. I’ll be using these campaign emails to share highlights with you, along with my own questions and ideas. Why start with the budget, and why talk about it now? Earlier in the campaign I flagged the concern that APS is projecting a shortfall of more than $100 million by 2025. I think this merits a sustained and collaborative effort to ensure that our school system is on stable financial footing. Below are some of my reactions to the Budget Advisory Council’s end-of-year report, adding in my own study of the APS budget and investigation of how other local school districts develop their budgets. There's a lot to consider in the BAC's report, so I'm going to be emailing key takeaways in two parts--here's Part One. 1. We should talk about “zero-based” versus “baseline” budgeting. APS prepares its budgets through a method called “baseline budgeting” in which the prior year’s adopted budget is the starting point for building the next year’s budget. The previous budget gets reviewed and modified to reflect any necessary increases or decreases, and the resulting new budget line items are usually presented as a percent change up or down from the previous year. There are many advantages to baseline budgeting, not the least of which is the ability to easily track increases and decreases from previous years. However, it’s all too easy to carry forward items year to year without careful review and justification of expenses. For that reason, many school districts including those in Loudoun, Alexandria and Montgomery County use “zero-based” budgeting instead. LCPS describes its budget as “built based on actual needs without particular regard to previous funding.” ACPS notes that this requires staff to “scrutinize each line item and build their budgets from the ground up.” Given our projected shortfalls, building from the ground up—without assuming business as usual—sounds like it has merit. If APS can’t utilize zero-based budgeting, I believe it should consider more regular, formal evaluations of return on investment as other school districts are doing (what I described as “academic ROI” in my campaign platform.) 2. We should talk about “needs-based” versus “balanced” budgeting. One of the few differences of opinion I have with the BAC is its recommendation that the Superintendent present a balanced budget versus a needs-based budget, which has been the practice over the past few years. Without a doubt, it would be less painful for all involved if the Superintendent presented a budget that’s already balanced, but I think it’s the wrong move for two reasons. First, the Code of Virginia requires district leaders to develop needs-based budgets that reflect the total funding needed to operate schools. As ACPS notes, “It is then the responsibility of the School Board to balance the needs of the school division with the considerations of the economic and political environment.” The second reason to present a needs-based budget is that the community needs to understand the actual costs of operating its schools—and it deserves a voice as the School Board makes the hard choices that may be required to balance the budget. 3. We need to build in the full cost of staffing. Our budget reflects our values. If we believe that our staff is our greatest asset (and indeed, research confirms that there is no greater school-based influence on student achievement than access to a qualified, caring teacher), then our budget should reflect that by fully funding staff salaries. It’s wonderful that in its FY22 approved budget the School Board was able to fund a 2% increase for all staff and a STEP increase midway through the year. (If you don’t understand what a STEP is, see here.) Still, it troubles me that the School Board’s Budget Direction to APS leadership last fall included a waiver of its own policy that requires the Superintendent to include the STEP increase in each year’s proposed budget. (And this is not the first time this policy has been waived.) Why aren’t we building the full cost of staffing into our needs-based budget? Fully funding the STEP increase costs APS $10.6 million. Each 1% cost of living adjustment (COLA) costs $4.6 million. APS’s total approved FY22 budget is $700 million. I’m also curious why we aren’t able to fully fund the STEP increase when several other local school districts are doing so. Examples:  4. We need focused effort on, and transparent accounting of, enrollment projections. As the BAC noted in its report, enrollment projections are fundamental to building the budget. APS is continually working to improve the process by which it forecasts enrollment; it would be helpful, I think, for the School Board and the community to have a clear sense of whether those efforts are bearing fruit. When I looked at the Falls Church City Public Schools FY22 budget, I was struck by information that FCCPS included on the accuracy of its enrollment projections:  Given how important these projections are to our budgeting, I’d love to see similar reporting included in our APS budget. (I believe I’ve seen something like this from APS before, but it’snot in the current budget and I wasn’t able to find it on the APS website.) If our projections are not as accurate as we’d like and/or not improving over time, perhaps we could explore working with different outside consultants to generate the projections.
5. We need to look for cost savings in transportation, energy use, class scheduling, and more. Here I quote the BAC (and paraphrase what APS itself suggests in the FY22 budget): “With a projected deficit of over $100M by FY25, we need to start planning more than one budget year at a time, and we need to identify structural rather than one-time cuts that reappear in the following year’s budget. We should do serious studies on every one of the long-term budget savings ideas that show up in the Long-Term Savings Section of the FY22 Proposed Budget Executive Summary to determine whether there are real savings to be captured.” I wrote about Transportation in May and want to keep listening and learning to understand how we can become more cost-efficient and environmentally friendly. I’m also keenly interested in how APS energy savings might dovetail with Arlington County’s goal to become a carbon-neutral community by 2050. I also continue to believe that there are cost savings we can achieve by improving our class scheduling within existing class size limits. I wrote about this in March and in a January letter to APS, which also suggested that APS explore the idea of employing class size averages instead of a ceiling. (Some have used this to argue that I am in favor of increasing class size—which is not my position. I am trying to find creative solutions that don’t yield larger classes across the board.) Studies suggest that districts who increase their scheduling efficiency and/or adopt class size averages are saving tens of millions of dollars. In my next email, I’ll talk about a few steps we could explore to improve the budget process and format, plus one idea to increase revenue (no tax increases involved). |
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