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A principal explains how his 5 percent cut became 8.5 percent

The 4.9 percent figure that Schools Chancellor Joel Klein has given for each school’s budget cut seriously underestimates the severity of the cuts, especially at schools where teachers want to stay, a principal told me yesterday.

When he first got his new budget from the Department of Education, the Brooklyn principal, who asked to remain anonymous, saw a cut of almost 5 percent, as Klein had warned. That amount was significant, but he could handle it. Things looked much worse when he saw that his expenses were also rising, by nearly the same amount that was being cut. In total, he said, his effective budget is set to drop by 8.5 percent, a size that means he will probably have to let go at least one teacher.

The second surprise came when he realized what was driving the rising costs: The arguably good news that staff members at his school, from teachers to school secretaries to administrators, are sticking around. That means they have more years of experience than they have in the past — and therefore must be paid more, thanks to the salary structure in schools gives teachers and other employees, including the principal himself, more money every year they stay in the system.

Klein explained the phenomenon at a recent City Council hearing on the Department of Education’s proposed budget.In the past few years, the city’s average teacher salary has been edging upward, a result of better teacher retention, Klein said. That wasn’t a problem in the past because the system’s budget was expanding faster than the salaries were increasing. But this year, Klein said, the department’s overall budget is staying flat, turning salary increases into what is effectively a system-wide budget cut.

The same phenomenon is happening at the school level. Holding onto teachers helps schools maintain stability, but it also means their budgets are locked into annual increases. The recession could inflate costs even more, since fewer teachers are expected to leave their jobs in the tough economy. That means teachers who in other years would have exited the system and been replaced by younger, lower-paid teachers are instead staying in the system and racking up salary increases.

The principal I spoke to said his 8.5 percent budget cut is going to force some tough choices. Even before he realized that was his number, he considered cutting down on payments for teachers who work extra hours, buying fewer supplies, and forgoing substitutes when teachers are absent. Now, he says he’ll talk to teachers at the school to brainstorm ideas about what to cut before the June 18 deadline to submit his budget. (What is your school cutting?)

Yet even as he struggles with the cuts, the principal said he is glad things aren’t worse, which they could have been. “Thank God — and Obama’s election — for ARRA,” the principal said, referring to the American Recovery and Reinvestment Act, the official name for the federal stimulus package. Without the hundreds of thousands of dollars that the stimulus put back into his school’s budget, the school would have been down more than 15 percent of its budget, he said.

“Could we function without it?” the principal asked. “Probably not.”

  • Smith

    Am I mistaken or is this a bit misleading? From what I understand, it is the new school funding formula, Fair Funding or whatever it’s called, that’s responsible for his problem. Under the old formula I don’t think he would have been penalized for retaining employees.

  • http://edintheapple peter

    Blaming the FSF methodology is wrong. The schools continue to receive the FSF Hold Harmless in addition to the FSF Legacy Teacher money. The same shortfalls would exist if the old allocation methodology was still being used.

  • Smith

    OK

  • Gideon

    Welcome to the real world. Using a lock-step salary schedule, this was bound to happen eventually. Budgets can’t increase forever. I’m glad to hear this principal is talking to his teachers about what cuts to make, and wonder what they will suggest. It would be great if you could follow up on that. And what if they collectively agreed to a salary freeze, which is a pretty reasonable thing to do during a fiscal crisis, especially if inflation is not a problem at the moment. Would or could the UFT allow individual schools to make that decision, if they felt it was in the best interest of their staff and students?

  • Athena

    Are the school and DOE administrators also volunteering to take salary cuts (in the best interest of our students and schools)? How about our politicians on the city, state and national levels , are they taking a salary cut (in the best interest of our cities, states, country???

  • Michael M.

    I do not pretend to understand the DOE budget.

    That being said, it seems that when teacher salaries go up (as well they should), but principals’ budgets do not get increased commensurately, that’s effectively a CUT to other parts of the principals’ budgets. To whit:
    1) On the effective May 2008 salary schedule, there is a range of roughly $50k over say a 50-year career. That would suggest an increase of $1k/yr on an average salary of $75k (roughtly). Call it a 1.3% per year increase.
    2) The increase to the entire table May 2008 over May 2007 is about 5%.
    3) Using a number I’m pulling out of thin air to make a later point, say teacher salaries make up 75% percent of a principal’s budget. If I were a principal, I’d want to see a 6.3% increase for that 75% of my budget, or 4.7% — just to BREAK EVEN.
    4) NOT getting that, I’d effectively have to CUT from the OTHER 25% of the budget (including enrichment, intervention, School Support Organizations, etc., etc.) some 19% just to, again, BREAK EVEN.
    ***And again, the above is BEFORE the cuts announced by the Chancellor, which follow a PRIOR round LAST year.***
    http(colon)//www(dot)uft(dot)org/member/contracts/moa/salary_schedules/

    As to Fair Student Funding, I believe that only impacts city-sourced funds. I believe it costs MORE than that per student after state and federal bucks. Point being, even after “FSF Hold Harmless” and “FSF Legacy Teacher,” I don’t know that the principals don’t take a hit if enrollment goes up.

  • aaron

    I believe it all comes down to Financial Planning (which most Principals are not very savvy in ). We need to analyze why so many schools have been able to roll money over from last years budget and are top rated. So obvioulsy they had more than enough money last year. so with the right planning the schools can get by with a cut in the budget. Most principals just dont understand the complicated DOE budget- which is very complicated.

  • Michael M.

    aaron,
    I’m confused.
    Are you suggesting these unsavvy principals were nevertheless savvy enough to game a rigged system?
    How do you know the ones who had rollover funds are the ones running “top rated” schools? Maybe the ones with rollover funds have low-rated schools.

    But I get your point — Klein should cut their funding even more. THAT will highlight the most resourceful ones. The rest should have gone to B-school — to improve their financial savvy. (/sarcasm)

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