The Anxiety of Balancing the Budget

Since we are spending so much time on it I thought it would be timely to share some thoughts about our process of aligning revenues and expenditures for next year's budget. It has been an anxiety producer in various parts of our school system and continues to be as we still find ourselves about $400,000 out of balance.

Every year we go through a similar process and always end up OK without really having to "cut" or go through what we are currently experiencing. We have meetings, create a level of concern for the board, and then find some way to increase revenue and remove requests, not cuts, to balance the projected budget. Because of a combination of factors this year is different. Slowing increases in enrollment and other factors have slowed down revenue increases at the same time that required expenditures for negotiated and state provided salary increases are increasing significantly. Trying to balance this and at the same time preserve a reasonable fund balance have proven very difficult for us.

We are engaging in true cuts having already made 15% cuts in building and some department NERC (non employee related cost) budgets. These are the budgets that are used for supplies and to cover costs for services and all other costs but salaries. This is only the beginning as we look at all programs where we have an imbalance between revenue and expenditures. Those currently being reviewed include the athletic/activity program, our intervention program, transportation, and substitutes for classified positions.

During this process I have again learned how very difficult it is to bring to the process a system perspective. Most people view this process through the eyes of equity and believe that fair means all experience similar cuts. If one budget is cut 15% so should all others. When viewing it from a system perspective I focus more on equitable, meaning that fairness is not necessarily equated with all being treated the same. For example, not all NERC budgets have the same flexibility as some are composed almost entirely of fixed costs such as insurance and utilities that make them more difficult to cut. Here a 5% cut may be felt more deeply than a 15% cut in a budget with more discretion.

Another issue that always surfaces in these discussions is the belief that the cuts should have as little impact as possible on students. Who can argue with this? The problem with this is that if we are truly focused on achievement and support for students and teachers and our budget is aligned with this support isn't any cut going to ultimately impact students? Yes, the public would expect cuts to be felt first in the Central Office, but the only reason we have one is to support those engaged more directly in the learning process. Change in one part of the system will be felt throughout the system. Balancing this issue is difficult without a system perspective because in it's absence it becomes easy to cut first in those places that most view as far removed from the classroom.

Perhaps the greatest anxiety is currently being felt at the board level as we ask them to make the difficult decisions of identifying where the cuts need to take place. We then make the cuts at the administrative level. So, they get to tell us where to cut, but they don't have the benefit of identifying what the actual cuts will be. Sort of like telling your spouse that we need to cut our food budget then letting him/her make the decisions and you find that they cut your favorite meal while there are other meals that cost more. This is a difficult position to be in when you care deeply about students, staff, and the support needs for both. We are asking for a great deal from them and we should be thankful for our board. Though this has and will continue to be difficult for them and for us, I am thankful for our board. Individually and collectively they are wonderful, caring people, who are learning through this experience.

I could go on with much more detail, but it would probably be overkill. The last thing I want to share is the need to have smart people engaged in this work. We have those throughout the system and in Lori and Bruce we have two of the best. They understand the funding system and use it to our advantage. They make the difficult and critical decisions knowing that someone will be upset. They balance competing needs with finite resources and they do all of this while maintaining a sense of humor. I am fortunate to have these system thinkers on my team.