Feb. 24, 2015 / School Board considering the possibility of requesting a tax increase to improve school funding

At the School Board's Feb. 24 budget workshop, the School Board received a recommendation from Superintendent Dr. Aaron Spence intended to augment the $689.6 million operating budget proposal for FY-2015-16 by $20.3 million. Under the city-schools revenue sharing agreement, the school system must submit a request for a tax increase if funding is needed above the amount generated by revenue sharing. In his written recommendation, Dr. Spence noted it would take an increase of 4 cents on the real estate tax rate to provide the $20.3 million needed to address additional priority needs.

Those additional needs were identified as: 1) providing a 5 percent salary increase for employees (at cost of $14.3 million); 2) reducing reliance on year-end reversion funds (cost: $4 million); and 3) adjustments to the Unified Scale (cost: $2 million). Chief Financial Officer Farrell Hanzaker noted that with the adoption of a state budget, it was possible additional state funding would become available and if that proved the case his recommendation would be to earmark some of this money toward further Unified Scale adjustments. He said he would share updated information with the School Board at its next budget workshop on Mar. 3. The School Board is scheduled to adopt an operating budget proposal on that date and submit it to City Council for consideration. City Council will adopt a municipal budget, which includes an operating budget for schools, by mid-May.

Feb. 19, 2015 / Virginia Beach School Board continues to deliberate on next year's budget, commits to examining tax increase scenarios to address unmet needs

The School Board held a special budget workshop Tuesday, Feb. 19 to continue its deliberations on the development of an operating budget for the 2015-16 school year. Superintendent Aaron Spence, Chief Financial Officer and other members of senior staff provided information the Board had requested in an earlier meeting. Among the information that the School Board reviewed were:

At the conclusion of the deliberations the School Board reached consensus that it must submit a balanced budget to City Council as represented in the SEON. However, the School Board also agreed that it would also submit a request for additional revenue to City Council that would allow for a 5 percent salary increase for employees, funds to help address the need to improve the unified pay scale and funds that would be used to reduce reliance on year-end reversion monies. In its Feb. 24 meeting the School Board will identify the level of funding that would be needed to accomplish these goals and determine the tax increase scenario to be proposed to City Council that would raise the necessary revenue.

Feb. 10, 2015 / School Board begins deliberations on how to close a $15.1 million shortfall, implement reasonable salary increases for employees

On Tuesday, Feb. 10, the School Board held a budget workshop to begin deliberations on a proposed operating budget for the FY-2015-16 year. The starting point for these discussions was the Superintendent’s Estimate of Needs, which was formally presented to the Board on Feb. 3.

The superintendent’s budget proposal, which stands at $689.6 million, addresses a $15.1 million shortfall. The major strategy recommended to help close that gap is raising class size by one student. The proposal also contains only enough funding to give employees a 1.34 percent salary increase to offset a required contribution into the Virginia Retirement System (VRS). However, the superintendent, Dr. Aaron Spence, recommended in his proposal that school system leadership work with city leadership to accomplish a 5 percent raise (including the VRS offset).

Spence and Chief Financial Officer Farrell Hanzaker noted that raising class size was chosen as a strategy to address the shortfall for several reasons: 1) It represented the least disruptive way to do so; 2) it was the single strategy that produced the largest savings; and 3) it reduces reliance on year-end savings thus addressing the structural flaw of ongoing dependence on these funds. They shared other strategies that had been considered, but ultimately were not recommended because of their potential widespread impact on stakeholders. These included eliminating the second planning period for middle school core teachers, transportation for academies and gifted programs, all local funded summer programs not required by the state, instructional coaches, AVID, middle and high school activity bus runs, and implementing one day furloughs for all employees. Other budget reduction strategies considered were reducing the work calendar of school improvement specialists, data support specialists and data techs from 12 months to 11 months; reducing the number of security assistant positions; changing the employment contracts of academy coordinators and some assistant principals from 12 months to 11 months and extending non-transportation zones. If all of these strategies were to be implemented the savings would amount to $18.7 million. In contrast, the one recommended strategy of raising class size by one student would save more than $12 million.

The School Board made several requests for additional information from Spence and Hanzaker. To name a few, these included:

This information will be reviewed at the Board’s Tuesday, Feb. 17, 3:30 p.m. budget workshop.

Feb. 3, 2015 / Superintendent presents $689.6 million operating budget proposal to School Board

Superintendent Dr. Aaron C. Spence presented a $689.6 million operating budget to the School Board Tuesday, Feb. 3. The entire text of his presentation is posted here. However, following is a brief overview of the features of the proposed schools expenditure plan for the 2015-16 fiscal year.

  1. The proposal is $13.7 million lower than the current budget;
  2. In addition, it addresses a total $15.1 million shortfall for next year, largely the result of rising expenses, reduced funding and less reversion monies. Reversion dollars are monies that remain unspent at the end of a fiscal year that then can be applied to the next year's budget, upon City Council re-appropriation.
  3. The only way to address a shortfall of this magnitude and not trample on employee compensation and benefits is to raise class sizes by 1 student. This strategy, combined with a lower estimate for student enrollment, will save the division almost $12.1 million;
  4. The proposal only has enough funding to provide a 1.34 percent salary increase for employees, which is an effort to hold them "harmless" for a required contribution to the Virginia Retirement System. However, the superintendent noted in his presentation a goal of improving that recommendation. He indicated a need to work toward raising employee salaries by 5 percent (inclusive of the 1.34 percent adjustment) and pointed to the need for school system and city leadership to work together to meet this challenge
  5. In the last six years employees' salary increases have averaged 1.58 percent. However, even that percentage is deceiving because much of it has been dedicated to offsetting the new obligation of having employees pay 5 percent of their base salaries into VRS;
  6. The need to improve the Capital Improvement Program (CIP) budget was also cited. That budget which pays for renovating, building and repairing school facilities is underfunded. Schools are now on a 150-year replacement cycle;
  7. Other needs include adequate funding to improve equity in access to rigorous courses and technology and addressing achievement gaps more effectively;
  8. Lackluster state funding is a primary reason for underfunding. The Commonwealth of Virginia paid less for public education in 2014 than it did in 2009, by approximately $400 million;
  9. Six years ago, in 2008-09, the state was providing Virginia Beach $3,088 per pupil in basic aid. In 2014-15, that total was $2,568. That's a loss of $520 per pupil during a time when costs and inflation have certainly not been declining, but rising. The localities are having to pick up a greater share of the responsibility for funding schools.

In the coming weeks the School Board will deliberate on this proposal, making any adjustments deemed necessary. The Board is scheduled to adopt a 2015-16 fiscal year budget on March 3. That proposal will then be forwarded on to City Council for consideration. City Council will adopt a municipal budget, which will include a school system expenditure plan, by mid-May.