School & District Management

Deep Budget Cuts Taking Toll On City Schools

By Karla Scoon Reid — July 14, 2004 6 min read

Many of the nation’s urban school districts—hit by dwindling state and local aid, shrinking enrollment, competition from charter schools, and higher costs— have made deep budget cuts.

The upcoming school year will find students in Baltimore with two additional children in their classrooms at almost every grade level. More students in Cleveland will be walking or catching a city bus to school. And Detroit and Minneapolis will have hundreds of teachers missing from their buildings.

Urban districts’ financial struggles are threatening to derail the academic progress that some city school systems are finally starting to make, said Michael D. Casserly, the executive director of the Council of the Great City Schools, a Washington-based group that represents the nation’s large urban districts.

“It’s the heartbreaking part of the story,” he said. “The academic gains [urban districts] have had are still fragile and still need to be sustained with a lot more momentum.”

Although declining enrollment exacerbated the fiscal woes of several city districts, Mr. Casserly said the key offender driving recent deep budget cuts continues to be ailing state and city economies. The national economy may be improving, he said, but the financial picture may not brighten for states and localities for a few more years, leaving districts limping along.

Anne W. Miller, the executive director of the Association of School Business Officials International in Reston, Va., agreed with that diagnosis, but pointed to small signs of optimism because fewer states approved their budgets late this year.

“It’s not really any worse than any other recent years,” Ms. Miller said of this year’s round of budget cuts. “The pain might be felt more.”

‘Last Pint of Blood’

Some school systems, most notably in Philadelphia, appear to have emerged from the financial crises that gripped their schools in recent years. But in Baltimore, Cleveland, Chicago, Detroit, and Los Angeles, the budget pain is intense.

Baltimore schools “were almost down to the last pint of blood” when the city came to their rescue with a $42 million loan this year, Edie House-Foster, a spokeswoman for the school district, said. (“City, Not State, to Lend Money to Baltimore Schools,” March 17, 2004.)

Now, the district faces a cumulative deficit of $58 million in its $964 million budget. With 936 employees laid off during this past school year, the 90,000-student district likely will send pink slips to 250 more.

Employees whose jobs were spared received no salary increases. Summer school offerings were scaled back, so students in grades K-8 who were held back at the end of the school year can’t advance a grade over the summer. (“Despite Tough Fiscal Year, Baltimore Students Post Gains on Md. Tests,” this issue.)

“There’s not a lot of frills of any kind,” Ms. House-Foster said.

In the fall, when the final bell rings signaling the end of the school day in Cleveland, most public school campuses will go dark. No parent-teacher conferences. No community meetings.

Facing a $100 million gap in a $600 million budget for fiscal 2005, Ohio’s largest district cut 1,000 jobs and could eliminate 500 more. Up to 1,100 teaching jobs could be lost. Summer school classes are being held solely for seniors who need them to graduate. Cleveland schools also won’t field baseball, softball, or soccer teams in the new school year.

Allan Seifullah, the district’s chief communication officer, contends that the 72,000-student district was not blindsided by the whopping deficit. Skyrocketing health-insurance costs, lower property-tax receipts, and declining enrollment explain the shortfall, he said.

In addition, he said, the Buckeye State “has lagged in the so-called economic recovery” occurring nationwide. The 63,000-student Columbus public school district, for example, is grappling with an $85 million hole in its $593 million budget.

Chicago’s schools are taking a $250 million hit. More than 1,000 school system employees—mostly clerical workers—lost their jobs in this spring’s round of cuts. Another 600 positions were eliminated.

Lower birthrates are taking a toll on enrollment and prompted the closing of 10 schools, said Pedro Martinez, the budget director for the Chicago district. In the past two years, elementary enrollment dipped by 8,000 pupils. Total enrollment is projected to drop from 430,000 students in 2003 to 422,000 this coming fall.

After slashing $100 million from its $4 billion operating budget, the district anticipates an additional $105 million in state revenue, leaving at least a $45 million gap still to be closed. The district is weighing more cuts and could increase property taxes as a last resort, Mr. Martinez said.

Dire in Detroit

The budget situation is especially dire in Detroit, where former employees last month protested at school bus terminals against the reductions and layoffs. Their protests kept some students from getting to their summer school classes.

The Motor City’s rapidly declining enrollment—roughly 5,800 fewer students are expected to report to class in the fall—has forced district officials to cut $170 million from the $1.5 billion budget for fiscal 2005. Enrollment is projected to dip to 144,500 students.

The Detroit schools consumed all of their reserves—$74 million—to plug a financial hole early in fiscal 2004, only to face another $78 million shortfall at midyear. About 2,100 jobs have been cut, including about 1,300 teaching positions. In all, the district could eliminate a total of 3,200 positions out of 26,000. And five more schools will be shuttered, bringing the total number of schools closed to 21 in three years.

District leaders are counting on concessions from teachers to balance the fiscal 2005 budget. Contract negotiations opened last month to revisit wages and benefits outlined in the three-year agreement with the Detroit Federation of Teachers. The teachers’ contract, which expires next year, includes a 4.1 percent pay hike for most teachers.

Janna K. Garrison, the president of the 12,500-member teachers’ union, said she hopes an effort to devise a retirement incentive will ward off pay cuts and return some laid-off teachers to the classroom. More than 2,500 teachers are eligible for retirement this year, she noted.

In the Los Angeles Unified School District, officials closed a $500 million gap in the $6.8 billion budget for fiscal 2005. The 746,000-student system has been piecing together budget reductions since March, including the elimination of 670 positions. The school board saved an additional $6 million last month by reducing the number of local administrative districts from 11 to eight. (“L.A. Board Votes to Trim Subdistrict Offices,” June 16, 2004.)

Los Angeles officials also are exploring efforts to raise revenues. This month, the district hopes to launch a public-awareness campaign to encourage students to come to school. Increasing average daily attendance across the district by two days a year, or 2 percent overall, would boost state aid by about $30 million, with roughly half of that amount given directly to the schools. Los Angeles’ average daily attendance is 93 percent.

One bright spot is Philadelphia. When the school district’s $1.9 billion operating budget was presented to the City Council in May, only $13.6 million in cuts had to be made to balance the books. It was a stark change of fortune for Philadelphia, which was facing a $216 million budget deficit in 2001—the year the state took over the district.

With charter school enrollment increasing by 10,000 students in four years, to 21,627 in 2004, staff positions had to be reduced in the regular system. Roughly 1,000 positions have been eliminated through attrition and layoffs.

Paul G. Vallas, the 190,000-student district’s chief executive officer, has redirected $100 million to the classroom.

“We’re not struggling to balance the budget here,” he said. “But I’m not saying we’ve got all the resources we need.”

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A version of this article appeared in the July 14, 2004 edition of Education Week as Deep Budget Cuts Taking Toll On City Schools

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