I. If We Want to Spend More on Some New Things, It Would Help if We Could Find Ways of Spending Less on Some Old Things.
We’re heading into budget season for the Madison School District and the difficult choices that budgeting presents. The 2012-13 school year will be the second and final year of the collective bargaining agreement (CBA) that the school district entered into with our teachers last year, prior to the provisions of Act 10 going into effect. The terms of the CBA and the consequent financial sacrifices our teachers are enduring make our budgeting task easier this year. Teachers’ wages are frozen again and we will cease offering the more expensive WPS health insurance option, a change that should save the school district about $5 million.
Superintendent Dan Nerad has prepared a preliminary budget for the Board to consider. Helped by the savings from the terms of the CBA, the superintendent’s proposed budget doesn’t appear to eliminate any existing programs or increase class sizes. The proposed budget results in about a 4% increase in the property tax levy, which is generally in line with the level of increases we’ve approved over the last several years.
We have additional considerations this year, however. The first is the superintendent’s achievement gap plan. The plan as first proposed lays out a menu of options for new and expanded school programs that would benefit all our students but that are primarily intended to enhance the learning of our underachieving students of color. The full range of options presented carries a first-year price tag of more than $12 million. With the benefit of lots of community feedback, the administration is now revising the plan. The school board will receive what I expect will be a prioritized and somewhat slimmed-down plan in a couple of weeks. The revised plan will likely be less expensive than the original, but we’ll still be looking at proposals whose costs will be measured in the millions.
In addition, the Board recently received recommendations from our Facilitiy Reinvestment Committee. The committee advises that we should double the amount we’re spending on the maintenance and upkeep of our buildings and facilities. No one seems to dispute the committee’s logic. But if the Board followed the recommendation, we’d be adding about $4.2 million more to our budget.
Hence the dilemma. If we pursued a status-quo, steady-as-she-goes budget this year, our job would be relatively easy. But if we make a serious commitment to the achievement gap plan or some form of it, and we increase our maintenance spending in the way that pretty much everyone thinks we should, we’d be looking at a level of budget increase that is greater than most of us are comfortable with.
A natural reaction to this situation is renewed enthusiasm for looking for budget savings elsewhere. If we can shave some millions off our roughly $375 million budget, investing more in the achievement gap plan and in maintenance and upkeep becomes more palatable. At our recent School Board budget discussions, there’s been support expressed for asking the administration to come up with a list of proposed least-harmful cuts to our existing programs for the Board’s consideration.
II. How to Spend Less: The Three Approaches to Cutting School District Budgets
I don’t envy anyone the task of trying to find savings. Cutting our budget is hard. There are only about three available strategies.
A. Approach Number One: Pay People Less
The first possible approach is to reduce the salary and benefits we provide our teachers and staff. That’s basically what we did with our last two-year CBA. We froze teachers’ wages both years, required increased contributions to retirement plans last year, and are eliminating the most expensive health insurance option this year. I’ve written before that in the longer run this approach is probably a false economy. If we want to be able to hire and retain good teachers, we have to pay them what they’re worth. I don’t think there’s much enthusiasm on the Board for whacking away even further at salary and benefits for next year
B. Approach Number Two: Offer Less.
The second cost-cutting strategy is to eliminate programs or initiatives that the school district is currently providing but that are deemed non-essential for one reason or another. In Madison, proposing to cut fourth-grade strings is the classic example. Other possible targets of the type that have found themselves on the budget chopping-block in past years include after-school programs, various alternatives programs, enrichment programs like AVID or whatever TAG programming isn’t compelled by the state, the planetarium at Memorial, and the stress challenge program.
Who’s in favor of jettisoning these programs? Don’t all speak up at once. In the absence of a genuine budget crisis, there’s precious little community support for cutting the kind of supplemental programming that enrich students’ experiences and can give our schools some distinctive appeal that help to attract and retain students and families. It would be particularly challenging and potentially divisive to eliminate popular existing programs in order to free up some money to pay for new and perhaps unproven programs as part of the achievement gap plan.
Another approach might be eliminating programs or initiatives that are more closely aligned to student learning. Possibilities here could include reducing our school staff who are not classroom teachers, like Reading Interventionists, Instructional Resource Teachers, and Positive Behavior Coaches. We could also eliminate special interventions for struggling readers. The reading recovery program is the best-known example. While reading recovery is backed by research that supports its effectiveness, it’s an expensive program and, at least as of a couple of years ago, we hadn’t seen in Madison the level of successful outcomes in terms of students’ reading progress that had typically been achieved elsewhere with the program.
My view is that we should have in place an established schedule for evaluating the effectiveness of our intervention programs, like Reading Recovery, and we should be willing to make difficult decisions based on what the evaluations tell us. But that evaluation and review process should be separate from our budgeting process. We shouldn’t look at cutting programs like Reading Recovery strictly as a cost-saving measure. I doubt that we’re willing to eliminate all intensive interventions for struggling readers – I don’t even know if we could do so legally – and it’s far from obvious that substituting one intensive reading intervention program for another would end up saving us all that much money.
I approach questions about our school staffing models similarly. Do Instructional Resource Teachers, or IRTs, contribute to enhanced learning in the schools they serve to an extent that justifies their expense? Do school-based Positive Behavior Coaches earn their keep by providing expert assistance on the behavior and discipline needs of the school in a way that allows the school principal to focus more on instructional leadership?
These types of questions could certainly prompt a serious discussion about what’s the best way to staff our schools. But it’s not a discussion we’re likely to have – or are capable of having – over the next month or so. Again, we should try to avoid rushed judgments on our school staffing philosophies within the context of a search for budget savings.
In addition, the achievement gap plan calls for more in-school staff supplementing the work of our classroom teachers, not fewer. So again, it would seem kind of perverse to try to eliminate the existing embodiments of this kind of approach in order to free up funds to pay for different manifestations of the same overall philosophy.
C. Approach Number Three: Be Bold! Be Creative! Be Like Oconomowoc and Do More with Less!
The third cost-cutting strategy is to find less-expensive ways of providing the same programs and services. Consolidating schools falls into this category. So does increasing class size or the case load for special education teachers and assistants. An increased reliance on technology in the classroom would also fit the description, if it somehow reduced the need for teachers.
Some school district observers like to call on the district to be bold and make what they consider fundamental changes in the way our students are educated. Though I often have difficulty understanding what they mean, my sense is that the kinds of changes they may be contemplating would fall into this category. For example, I imagine they may have in mind the kind of change that’s in the works for Oconomowoc High School.
The Oconomowoc school district recently announced that it will implement a big staffing change for its high school. The school operates on the four-block system. The school day is comprised of four ninety-minute classes or “blocks.” This is the same system as is in place at Madison’s LaFollette High School. Like teachers at LaFollete, teachers at Oconomowoc have typically been assigned three classes a day, with the fourth “block” available for planning time, grading, and all the other non-classroom tasks a high school teacher is called upon to perform.
Next school year, things will be different at Oconomowoc. The district is laying off 15 of its 75 high school teachers and requiring those that still have jobs to teach all four blocks of the day instead of three. In return, they’ll be paid an additional stipend of $14,000.
Taking into account the stipend, the Oconomowoc school district expects that it will offer the highest beginning high school teacher salary in the state . Nevertheless, it is safe to say that teachers aren’t universally enthused about the changes. I’d think that parents would have some concerns as well. How will teachers be available to answer questions or provide extra help for struggling students? Will they still be able to help out coaching the wrestling team, or the drama club, or the math club or other extracurricular activities? When will they find the time to write college recommendation letters? Or grade papers? Or call parents if their students are at risk of flunking?
It would certainly be presumptuous of me to assume that I know more than the elected members of the Oconomowoc school board about what’s best for Oconomowoc students. I imagine there are parts of the high school plan that I don’t know about that address the obvious concerns. But, even so, I have my reservations.
1. The thing about change is that it’s not always for the better.
First, whatever the theoretical merits of the Oconomowoc plan, it’s safe to say that no one knows how it’s actually going to work out. Ultimately, it’s a shot in the dark. I’m genuinely interested to see how it develops but I’m glad I’m not responsible for it, just as I’m glad that I don’t have a child at the school. I tend toward the cautious when it comes to big proposed changes. As a school board member, I’m no more interested in pioneering a bold and innovative way to save money by overhauling our teaching system than I am in a surgeon pioneering a bold and innovative way of removing my appendix.
There aren’t proven methods out there in the education world for school districts to adopt fundamental changes in how they educate their students that promise both enhanced student learning and cost savings. If there were, we’d all be following them. With the changes brought about by Act 10, Wisconsin school districts have more freedom to experiment with new educational models. Some districts, like Oconomowoc, appear more willing than others to exercise their new options. But any experiment could turn out to be a flop. It seems like a more prudent course to say to the more daring school districts, okay, you go first. Best of luck to you. Let us know how it turns out.
2. The extent of cost savings may not match the degree of innovation
Second, with its dramatic changes, the Oconomowoc plan is projected to save the school district about $500,000 a year. Here in Madison we’d sure like to figure out a way to save $4 or $5 million so we could more easily afford these other new expenditures but, my heavens, look what you have to go through to save half a million.
This underscores my initial point – there’s just no easy way to save millions of dollars from our school district budget, even when the budget is already in the hundreds of millions. We can’t, say, lay off the fourth grade, we don’t want to close any of our schools (which doesn’t save all that much anyway) and we don’t have a ready alternative to the highly labor-intensive process of attempting to inject learning into the young brains of our students, or, if you prefer, of facilitating our students’ learning.
If there were an appetite in Madison for the kind of dramatic changes that are on the agenda for Oconomowoc, the changes would not in any event be ones that we could patch together in the next six weeks as we figure out next year’s budget. Changes of that magnitude require study – the Oconomowoc changes are the result of a year-long planning process that, interestingly, didn’t appear to have teacher participation.
Bottom Line: We’re Likely to Keep Looking for Cuts the Old Fashioned Way
I recognize that there’s a certain cynicism involved in appearing to send the message that nope, we really can’t make any significant budget cuts at all. That’s not what I intend. We do have to be alert to all possible cost savings and be willing to make responsible cuts, even if they fall short of the magnitude we’d prefer. But attempting to save millions through bold, dramatic action doesn’t seem to be in the cards for us this year, and that’s probably a good thing.
Ed Hughes School Blog 
Ed, I don’t know that you can look at what Oconomowoc did and say, “Here in Madison we’d sure like to figure out a way to save $4 or $5 million so we could more easily afford these other new expenditures but, my heavens, look what you have to go through to save half a million.”
Sure, Oconomowoc “only” saved a half million dollars – which seems small. But with a budget of only $51 million (seven times smaller than Madison’s) that represents a 1% savings. A similar savings for Madison – saving 1% of it’s budget – would yield savings of $3.5 million. Bold actions can save millions of dollars, rather than just hundreds of thousands, when the district has a budget the size of Madison’s.
Now, you can still argue that bold action isn’t the way to go if you want, but I did want to point out that it’s an unfair comparison to imply that bold action here of the type they did in Oconomowoc would also only save our district a paltry half million dollars.
The one thing I didn’t see in your cost cutting options (which consisted of pay people less, offer less, and do more with less) is eliminating unnecessary or non-value added functions, positions, and services. You might say that falls under the “do more with less” category, but not in the same way you described that (cutting teachers and asking existing teachers to do more). I am talking about finding ways to reduce costs or headcount that won’t materially affect student learning – the ultimate and main goal of the school system.
In my business over the course of the recession we have cut costs out of our operation by over 10%, quite frankly because we had no choice. It was either do that or go under. While in some cases, yes, we have asked some employees to take on more, what we also found were many cases where we were doing things that weren’t absolutely necessary to achieving our ultimate goals of meeting our customers’ needs. wer they nice things to do or have if budget concerns weren’t an issue? Absolutely. But critical to our organization’s overall mission and success? No. We no longer do those things, and yes, we have fewer employees and positions. Frequently these are the types of activities, services, and positions that no one questions until you are literally forced to question them, to question and justify each and every position and activity within the organization.
It seems that’s where MMSD is now, and that is what I would encourage members of the MMSD board to be doing.
As always, thanks for an informative blog post.
Torrey –
Thanks for your thoughts. I would have replied earlier (and posted your comment earlier, as I had mistakenly thought I had), but I was out of town for a while.
You’re right that I shouldn’t imply that the amount of savings a smaller school district could achieve through a particular change is the measure of how much Madison could save by adopting the same change. It’s the case, however, that if Madison wanted to make the same change as Oconomowoc, we could only do it at LaFollette, the only MMSD high school on the 4-block system. The standard teaching load at our other high schools is “twenty-five (25) hours of classroom instruction per week, five (5) classes per day, or four (4) classes plus a study hall, or any other combination of assigned regular teaching duties.” (Teachers’ work day is defined in the CBA as eight hours, not all of it, obviously, is spent in classroom instruction.) So the per-high school savings available from jacking up the teaching load would be less at the other schools. My principal point, though, is that it is tempting to think that it couldn’t be that hard to trim several million from our $375 million annual budget. But after years of budget cuts it turns out to be much more challenging than one might think.
I understand your second point to be that school districts could certainly reduce their spending if they put their minds to it, just as businesses are often required to do.
Sure, we could do it. If we were required to slash our budget by, say 5%, we would do it because we would have no choice. But the situation would be different than it would be for a private business. For example, analogizing to the Oconomowoc model, a business may decide to lay off a portion of its sales staff and increase by 30% the number of customers each sales employee is responsible for. The business would be able to monitor the results of the change and before too long could probably have an idea whether there’d be a drop-off in sales that might render the new strategy unprofitable. In this case, the advantage the business has is that there is a common standard of measurement: the dollars in reduced employee expenses can be compared to the dollars of any resultant decrease in sales. The market will let the firm know whether the strategy was a good one, just as the market will ultimately let the firm know whether it can remain in business.
It’s tougher to draw conclusions in the school context. It’s certainly possible to put a dollar figure on the amount of savings that Oconomowoc should realize by downsizing its high school teaching staff, but how do you measure whether the change is a good one for the school? While it’s not free from doubt – particularly since the school district could select the teachers who will be laid off – I’d still expect that there’ll be some drop-off in learning as a result of the change. In other words, I’d expect that a teacher’s effectiveness would decrease if she or he is required to teach four 90-minute classes a day rather than three. I’d expect, for example, that there’d be more movies shown in class, or the equivalent of empty-calorie classroom experiences, so the teachers could carve out some classroom time to attend to some of the other responsibilities of their jobs. How do you measure this? Even if you could measure it, how do you make the judgment that saving $X by reducing staff justifies sacrificing Y amount of overall student achievement? I don’t mean to suggest that you could never make such determinations, nor that you should never cut expenses even if students’ experiences are diminished in some way as a result. I’m just saying that it’s a tough calculation to make.
We could, of course, make cuts in such things as equipment budgets and travel expenses, as we have done in the past and are likely to do again, though those aren’t big budget items. Beyond that, you start getting in the area of expenses like professional development, which have an indirect impact on student learning, and the difficulties of measuring the adverse effects of the cuts start to re-emerge.