Another round of cuts, with little left to trim

Minneapolis Public Schools face a $28 million budget shortfall

Facing its eighth consecutive budget shortfall, the Minneapolis school district has to find savings anywhere and everywhere it can — even the thermostat.

Maybe that’s why it was so chilly in the Assembly Room at district headquarters when the school board gathered Jan. 6 — to set the mood for the budget talks ahead. Board Member Lydia Lee wrapped her winter coat around her shoulders as she and her colleagues discussed options for dealing with an estimated $28 million budget shortfall next school year.

Minneapolis Public Schools (MPS) must cut about 5 percent from its general fund budget for the 2009–2010 school year, or the deficit could swell to $36 million by 2010-2011.

The plan under development in January included a mix of short-term actions to quickly cut costs and long-term strategies for a leaner, more efficient district.

"What we have been doing is cutting budgets year after year after year," Peggy Ingison, the district’s chief financial officer, said. "What we’re trying to do now is a project that is a lot more thoughtful."

That project could lead the district to shrink departments, close school buildings or cut underperforming educational programs. But all of that was unclear in January, even as the budget picture was slowly coming into focus.

In his Jan. 15 State of the State address, Gov. Tim Pawlenty proposed to shelter K–12 education funding from state budget cuts. Pawlenty also proposed a small increase for schools that show improvements in student performance and participate in the QComp merit-pay program for teachers.

Whether the state would be able to live up to that offer was one of the major questions hanging over the district in the early stages of budget planning. Per-pupil funding from the state makes up more than half of MPS revenue.

District officials and school board members agreed that much could change between January and June, when a final budget will be approved by the school board.

The district began looking in January for immediate cost-savings wherever they might be found, not just turning down the heat and shutting off lights, but also ordering generic office supplies and implementing new fuel-saving guidelines to cut transportation costs.

Superintendent Bill Green and his cabinet agreed to a 2 percent reduction in pay beginning

Feb. 1. That cabinet, made up of department heads, also began in January to review all spending requests above $5,000.

"We’re asking people to make a case — why is this important for student achievement? Are there some alternatives to using the money? — partly because we think, to the extent that we do some things to help save money this year, it going to kind of cushion the blow a little bit for next year," Ingison said.

The district also announced plans to negotiate with its vendors and seek out joint-purchasing opportunities.

While those measures could make this year’s budget trimming a little easier for the board, they don’t get at some of the fundamental issues that lead to shortfalls year after year.

District leaders say underfunded state and federal education mandates are a significant source of budget pressure. Minneapolis schools also have experienced years of declining enrollment while retaining the infrastructure of a much larger district.

"We’ve got this cost structure that still weights us down to some extent when you make comparisons to other districts," Ingison said.

The current deficit is not the largest shortfall ever faced by the district. But after seven years of budget cuts, it is getting harder and harder to find any fat to trim, Eli Kaplan, chairman of the Citizen Budget Advisory Committee, said.

"We’re down to the bones, and the bones are breaking," Kaplan said. "If we go through this shortfall and cut out a lot of things, we’re going to have a lot of broken bones and a lot of unhappy parents."

There are tradeoffs everywhere. Teacher lay-offs may lead to larger class sizes. Cutting transportation spending could increase segregation in the schools. School closings leave community members feeling angry and alienated.

School Board Chairman Tom Madden said he was considering cost-saving measures through the lens of student achievement.

"You try to protect the classroom," Madden said. "We try to look at everything else [for budget cuts] first."

At the same time, he added, the district had to get the most educational bang for its buck. In other words, programs that could not be shown to have a direct impact on improving student achievement might be on the chopping block.

The district already was moving in that direction, guided by its five-year strategic plan for boosting student achievement and closing the achievement gap.

Board Member Chris Stewart said as painful as the current budget situation was, it would force district leaders to act quickly and decisively to reshape the district.

"I don’t see this as ‘The sky is falling,’" Stewart said. "I do see this as a mandate to be very serious about changing the way we do things."

"I am confident in the fact that we already have started down the path of making these kinds of operational changes," he added.