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The city is moving forward with Mayor Bloomberg’s plan to avoid educator layoffs by freezing their salaries by writing it into school budgets for next year.

Neither the teachers union nor the principals union has agreed to Bloomberg’s plan, but budgets that principals are receiving today assume that the plan will become a reality. In an email to principals this morning, Klein said Bloomberg’s plan would save the city $400 million and eliminate the need for teacher layoffs. But the city would still lose about 2,000 teachers through attrition, and schools will still see their budgets cut by about 4 percent, he wrote.

Klein will answer principals’ questions about the budgets during a webcast tomorrow morning.

One question might be how exactly the city calculated its savings. In January, when the city cut the raises it had planned for teachers and principals unions in half, Klein said the city would save $148 million. It’s unclear how cutting the other half of the raises could yield the city $400 million.

Klein’s email, which is posted below, also includes an update about the hiring freeze. Principals can now look outside the school system to fill special education, bilingual special education, and speech positions. And the email also explains in more detail how the city is shifting various pots of money around to make sure that all schools receive the basic funding they need to open in September.

Dear Colleagues,

Today, you will receive your budget for the 2010-11 school year in Galaxy. Even though Albany has yet to pass its own budget, we can wait no longer to release school budgets. We know you need as much time as possible to decide how best to spend the dollars available to your school. You will be able to access your budgets beginning this afternoon.

In this e-mail, I will explain what you should expect-and invite you to participate in an interactive Webcast at 8 a.m. tomorrow, Thursday, June 3, during which I will provide you with additional details about our situation and answer many of your questions.

OUR OVERALL BUDGET SITUATION

This isn’t the first year we’ve faced budget hardships. Our schools have already endured several rounds of budget cuts-and, as much as I wish I didn’t have to, I’m going to have to ask you to cut back even further for next year. I know another cut will undoubtedly be tough, but I am confident that you will once again make the least-harmful choices for your schools as you reduce your spending.

Many of you have asked me why schools must cut back this year-especially because our overall budget has grown slightly. Here’s why: despite an increase in the overall education budget and significant cuts to central budgets, we do not have enough money to cover increasing costs for which we are obligated to pay. At the same time, we must prepare for a $500 million cut in state aid based on the Governor’s budget proposal, resulting in an overall funding shortfall of $750 million. We will, however, be able to absorb this cut without having to lay off a single teacher.

Facing such a sizeable hole, we had been planning for the real possibility of being forced to lay off thousands of teachers. As you know, state law forces us to lay off teachers in reverse order of their seniority, and we have no choice but to lay off the most recently-hired teachers, regardless of their effectiveness. We have been working around the clock to find a solution that would not force us to fire some of our most passionate and talented teachers.

Mayor Bloomberg has decided that he could not in good conscience continue proposing raises for educators if it meant laying off thousands of their colleagues. So, earlier today, the Mayor announced that he informed the United Federation of Teachers and the Council of School Supervisors and Administrators that there will be no raises for the next two years in order to save 4,400 teaching jobs. (The Department’s central staff will not receive any similar increases.) The City had budgeted for a two percent raise for UFT and CSA members for this year, with an additional two percent next year. By forgoing the raises, the City will save an additional $400 million for the 2010-2011 school year. These dollars will eliminate the need to lay off teachers for the coming year and minimize school budget cuts.

I know that we are asking you to make a difficult sacrifice at a time when many of your families are struggling to make ends meet. But at a time when the City-indeed, the entire country-is being forced to make do with less, this plan allows us to retain the most important ingredient in our schools: the hardworking educators who each day are making a real difference in the lives of our students.

While this move goes a long way in protecting our schools from the worst effects of next year’s budget gap, it doesn’t solve all of our budget problems. We still face a large deficit from the state, leaving us with no choice but to find significant savings in our schools. As a result, school budgets will be reduced by an average of 4 percent for fiscal year 2011. In addition, we still expect to lose 2,000 teachers next year through attrition. Having fewer teachers isn’t good for our kids, but our schools simply won’t be able to afford to fill every vacancy.

SCHOOL BUDGETS

As I described to you last week following my City Council testimony, we have made a funding shift that affected your school’s budget before the across-the-board budget cut was implemented. Fair Student Funding (FSF) budgets for a number of schools-particularly middle schools-were well below what was needed to cover basic operations, as a result of large cuts to FSF over the last two years. While funds from sources other than FSF have helped to support schools operations during these difficult budget times, we had to bring all schools’ unrestricted budgets to a basic operating level before implementing another cut to 2010-2011 budgets.

To do this, we shifted unrestricted, non-FSF dollars from schools where FSF allocations combined with other unrestricted funds are above a minimum operating threshold, and reallocated them to severely under-funded schools. This shift was done before implementing the budget reduction, meaning that about 400 schools experienced a slight increase in overall dollars prior to the cut while nearly 1,000 experienced a slight decrease. This decrease was no greater than three percent for any school before we implemented the overall budget reduction.

We must allocate our overall declining resources in a way that best supports all schools’ operations and ensure that all schools will be on firmer financial footing moving forward. Making this adjustment now is especially critical given the fact that we will lose $800 million in ARRA Stabilization funding for fiscal year 2012.

As I mentioned earlier, the average cut to schools will be 4 percent, after the budgets have been adjusted to reflect the shift in funds between schools. No school will see a cut to their total budget greater than 4.2 percent. However, 200 schools will see a smaller reduction because they simply do not have enough unrestricted dollars for us to cut and by law we cannot reduce their restricted funding streams.

When you examine your budget later today, you will see:

• Annual adjustments to Fair Student Funding, including adjustments for teacher salaries and projected register changes;
• A reduction to your Fair Student Funding allocation as part of your school’s overall budget cut (all schools’ FSF allocations were reduced by the same percentage);
• A reduction to your discretionary Contract for Excellence dollars as part of your school’s overall budget cut (all schools discretionary C4E dollars were reduced by the same percentage);
• A change in your Children First allocation as funds were shifted between schools to improve all schools’ operating capacity;
• An adjustment to the ARRA Stabilization Fund allocations, as these unrestricted dollars were first adjusted to improve all schools’ operating capacity and then reallocated to equalize the cuts to school budget as much as possible;
• Annual adjustments to other allocation categories, which you see every year, for changes in register numbers, student characteristics, and restrictions for reimbursable and grant funds; and
• Adjustments in the methodology to budget for projected register changes.

STAFFING

Like last year, hiring restrictions remain in place, so that nearly all vacant positions can only be filled by transfers or excessed staff. We will be monitoring part-time hiring and the use of substitutes as well. There are, however, immediate exceptions to the restrictions in the following areas: special education, bilingual special education, and speech. Also like last year, we will continuously review and adjust the restrictions to ensure we are best meeting the needs of your schools. We will provide you with additional details about staffing procedures for next year during tomorrow’s Webcast.

NEXT STEPS

Now that you have your budget, you should work with your CFN budget representatives to plan for the coming school year. Each school will face different choices. It is important that you work with your teachers and the other members of your school community to make the best decisions for your school and students.

We all have many questions and concerns. I invite you to participate in an interactive Webcast about our budget situation at 8 a.m. tomorrow. At that time, we will discuss how we can work together to manage challenging budget times. Please click on the following link to get the log-in information and to RSVP: http://www.learningtimes.net/chancellor.

CONCLUSION

The coming fiscal year is shaping up to be one of the most difficult our school system has ever had to endure. Until Albany passes a budget, you can be confident that we will keep fighting for more money for our schools. Our schoolchildren aren’t to blame for the financial mess we’re facing, and it’s unacceptable for them to bear the brunt of the State’s budget shortfall. This certainly won’t be easy or painless. I know I am asking a lot of you, but I don’t think there’s any group of people better equipped to make this work than New York City’s principals.

Asking you and your teachers to forgo raises is not an easy decision. Our principals and teachers certainly deserve raises. You’re living in these tough times too. But we can’t afford to take away 4,400 teachers from our students. Without them, we risk erasing the outstanding gains our students have made over the last eight years. Our teachers are simply too important to lose.

Thank you as always for your hard work.

Sincerely,
Joel I. Klein