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2012-2013 Budget Planning

Open Letter From the Superintendent

Update: Friday, April 13, 2012

How do you create a budget when you don’t know how much money you have?  This is the situation that MCPS has faced as we struggle with budget preparations for next school year. We know that MCPS will face a budget shortfall for the 2012-2013 year. The range of that shortfall could be anywhere between $5 million and $7 million depending on actions taken by the state legislature and the board of supervisors.

In preparation for the school board’s upcoming budget discussions, I have worked with division staff to identify potential budget cuts.  These conversations were not easy ones to have and there are items for discussion on this list that will raise concerns throughout the county.  During the past five years the school division has lost more than $6 million of revenue. Previous budget cuts have reduced or eliminated the textbook budget, the budget for supplies and equipment, the field trip budget and more than 30 full-time positions.  We are now down to bare bones school operations. The things that remain in the school division budget are people, programs, benefits and buildings.  These are the most important components of our educational program, which is why the division has fought to preserve them. In order to meet any budget shortfall for the 2012-2013 budget year, we will need to reduce funding in one or more of these areas.  They are, simply, the only areas left to cut.

The list that I’ve created for the school board’s consideration includes a range of items, identified based on how feasible they would be to implement.  All of these cuts are painful. The items range from a 2-day furlough for school division administrators to serious reductions in personnel to the closure of one or more school buildings. The decisions to be made by the school board will not be easy ones.

Every penny is important.  Whether that penny comes from the state or from a local tax increase, every single penny makes a difference in the education of children throughout Montgomery County.  In the case of a potential tax increase, one penny equals $700,000 in money for the school division.  The 12 cent increase proposed by the County Administrator will provide MCPS with level funding for next school year, but does not encompass the $3 million increase in state-mandated expenses. However, a 12 cent tax increase would significantly bridge the gap for the school division’s operating budget. In addition, it would fund the debt service for capital projects underway in Auburn and Blacksburg.

Public schools throughout Virginia and the nation are facing difficult decisions, and Montgomery County is not exempt from these discussions. I thank you for your support of public education. For those interested in learning more about the budget process, I encourage you to visit www.mcps.org/cms/One.aspx?portalId=92248&pageId=132031. The school division strives to maintain a public and transparent budget process. The school board will discuss the 2012-2013 budget in depth during the next month.  The board of supervisors will also continue to meet over the next month to discuss the tax rate increase. I hope that the supervisors and the community will continue their support of public education in Montgomery County.

Sincerely,

Brenda B. Blackburn
Division Superintendent

2012-2013 Budget Planning Update

Update: Monday, March 19, 2012

How the County Administrator's Budget Will Affect MCPS

The budget proposed to the Board of Supervisors includes $3 million in additional funding for Montgomery County Public Schools operating budget. The additional funds compensate for the reduced revenue from the state, bringing the MCPS budget to the same operating level as last year. 

There would still be a budget shortfall with the County Administrator’s budget, but the 12 cent tax increase that he proposed would significantly bridge the gap for the school division’s operating budget and fund the debt service for capital projects underway in Auburn and Blacksburg. 

Additionally, the County Administrator has proposed allocating one-time funds to support small capital needs in the school division, including the roof replacement project, the purchase of school buses and technology improvements. This could reduce the budgetary needs of the school division by $750,000.

If this budget is approved by the Board of Supervisors, MCPS will still face difficulties balancing how to maintain a quality education in Montgomery County while dealing with increased expenses mandated by the Commonwealth of Virginia.  However, the cuts required based on the County Administrator’s  proposed budget will not be as detrimental to educational programs as the original budget presented by the Governor.

Citizens are encouraged to stay informed about the budget proposal and to participate in the upcoming meetings of the Board of Supervisors (March 19, March 29, April 16). The additional $3 million in support of education which will be generated by the tax increase will help ensure the quality of education, creating productive global citizens in Montgomery County.


Updated: Wednesday, February 8, 2012

School Board Adopts Budget Request

On February 7, 2012, the School Board adopted a budget request to submit to the Board of Supervisors.  The $96.8 million request includes the mandatory VRS contribution rate increase, funds to replace aging school buses, allocation for continuation of the roof repair project, and a step increase for MCPS employees that equates to approximately a 1.6% pay increase.

 The budget will be submitted to the Board of Supervisors for their review as they deliberate over the County budget.


Updated: Friday, January 27, 2012

The potential shortfall has decreased to $6.2 million.

  • MCPS received the health insurance renewal information for next year.  The cost was budgeted to go up 10%, but only increased 2.5%.  This reduced the deficit by $271,335.
  • The Governor’s proposed budget includes additional funds specifically earmarked for maintaining small elementary classroom sizes and for reading intervention. These designated funds would reduce the deficit by $192,576.

These items alleviate approximately $1 million of the burden for MCPS.  There is still a gap of $6.2 million between the projected revenue for the school division and our necessary expenditures.

The major reasons for the deficit – increase in VRS contribution rate, increase in the composite index for Montgomery County, and the loss of hold-harmless clause for the composite index – have not changed.


Posted: Monday, January 23, 2012

$7.1 Million Preliminary Budget Shortfall

The preliminary 2012-2013 operating budget for Montgomery County Public Schools has the school division operating at a 2007 funding level, with 2012 expenses. The preliminary budget includes a potential shortfall of $7.1 million.

As a part of the recent reductions, the school division has enacted the following cuts that are still in place in the current budget: - Reduction of 51 positions: 35 in previous years and 16 additional positions reduced in the superintendent’s proposed budget for 2012-2013 - Reduction of 50% of the textbook budget - Reductions ranging from 41% to 59% in the categories of supplies and equipment - Reduction of 35% in funding for field trips

The superintendent’s preliminary budget for 2012-2013 is a needs-based budget that signifies the bare minimum expenses the school division needs to maintain a quality education for K-12 students across Montgomery County.

Click on a question to be taken to the response.


Why $7.1 million?

The preliminary budget deficit reflects a decrease in revenue, an increase in expenses required by the state, and a small increase in expenditures for roofs, technology and buses. The state legislature is meeting now and the outcome of the legislative session may help decrease the shortfall.


Why is there a revenue shortfall?

MCPS will lose $5.2 million in revenue based on the Governor’s Proposed Budget. Although the Governor’s Proposed Budget increases funds to schools, two-thirds of the increases are earmarked for specific purposes.

  • 1.9 million - The division will receive $1.9 million LESS from the Commonwealth of Virginia. The state has determined that Montgomery County can pay more towards education. This determination is based on the local composite index, which increased as county real estate values increased. Historically, the state has had a safety net for divisions that had this great of a change in their composite index. However, the Governor proposes to remove that safety net this year.
  • $3.3 million - Governor McDonnell has proposed a significant increase to the employer contribution rate for all employees in the Virginia Retirement System. This will cost MCPS $2.7 million. - Governor McDonnell proposed an increase to the retiree health insurance credit that will cost MCPS more than $500,000. - Governor McDonnell’s proposed budget almost doubles the group life insurance rate and will cost the division almost $140,000.

MCPS will also lose $1.2 million of federal job stimulus funds. Sixteen positions were saved in 2009 using these funds and the current proposed budget for MCPS includes a reduction of 16 full time positions.


What are the Division's increased expenses?

Due to capital and technology needs in the district, MCPS has an expenditure increase of $902,358. - Almost $350,000 in increased textbook funds to match the state increase. MCPS must match the state increase to be eligible for the funds. - An additional $150,000 for utilities costs at the new and larger elementary school facilities (Eastern Montgomery Elementary and Price’s Fork Elementary). - $250,000 to repair building roofs across the division. - $150,000 to continue implementation of the 21st Century classroom technology initiative. - $350,000 for bus replacements.


What does $7.1 million look like in MCPS?

To show the magnitude of how $7.1 million may affect the MCPS budget, here are a few examples of what $7.1 million could buy in MCPS.

  • $7.1 million = 81 new school buses
  • $7.1 million = the entire supplies and equipment budget (paper towels, cleaning supplies, bus fuel, etc.)
  • $7.1 million = 123 full-time staff positions
  • $7.1 million = an additional $0.10 increase in the real estate tax

What would make a difference?

  • A gradual phase-in of the increased employer contribution rate for the Virginia Retirement System would help ease the VRS burden on the school division and could add up to $2.7 million to the MCPS budget.
  • Reinstating the hold harmless clause for divisions that experience a significant change to their composite index could add up to $1.9 million to the MCPS budget.
  • Additional flexible funding that is not restricted to a specific use.

How can you contact the decision makers if you are concerned about the status of education funding in Virginia?

  • - Contact your Virginia legislators and ask them to make funding for education a priority for the Commonwealth.
  • - Contact your representative on the Board of Supervisors and ask him or her to keep education as a priority in Montgomery County.