Keeping a lid on personnel costs
Districts devote nearly 80 percent of their budgets to personnel costs—leaving little wiggle room for administrators tasked with maintaining fiscal responsibility and boosting the quality of education in a time of nearly stagnant funding.
John Hutchison, chief financial and operations officer at Olathe Public Schools in Kansas, began budgetary planning for the 2017-18 school year without knowing how much aid to expect from the state. Since 2015, funding has been frozen at 2014-15 levels—and, as late as July 2017, state legislators were still debating the year’s education budget.
“Our district already ran lean” says Hutchinson. “When our funding started getting cut, we didn’t have a lot of low-hanging fruit to target.” And while no one wanted to lay off teachers or limit student opportunities, the district—which has about 30,000 students—had no choice but to cut personnel costs. “We started looking first on the edges” Hutchinson says. “Can you reduce custodians if you have teachers put the trash can by the door at the end of the day, so custodians can work more efficiently?”
The district also chose not to replace teachers who had retired, causing a slight uptick in class sizes, he adds.
A confluence of factors beyond administrators’ control have created some unique fiscal challenges. Districts’ hands are tied, for instance, by union contracts and government policies, says Paul Hill, founder of the Center on Reinventing Public Education at the University of Washington Bothell.
“There’s no real way to save a lot of money if you’ve got a teaching force that’s on a salary schedule and you’ve got state requirements about how schools are staffed and about class size” Hill says.
Despite the challenges, administrators nationwide are curbing personnel costs. The following are six strategies for balancing the budget without drastically affecting instruction:
Use technology to find efficiencies
Powerful software makes it easier than ever for district administrators to spot inefficiencies, such as duplication of responsibilities. “HR software is becoming more sophisticated” says Craig Schilling, an associate professor of leadership at Concordia University Chicago. “Many programs now incorporate what is referred to as ‘position control,’ so every position is accounted for and you know exactly where all the money is going.”
This type of software tracks salary budgeted for the position, rather than for the employee who holds it.
Some analytics software also allows districts to compare spending more accurately. Administrators—instead of calling colleagues in other buildings or districts to compare teacher salaries or custodial expenses—can “tie themselves together” via software, Schilling says. An administrator who notices the district has one aide per 10 students—while similar districts are staffed at a 13-to-1 ratio—can investigate further to see if that higher level of staffing is necessary.
Perform a personnel audit
Hiring a third party to conduct a personnel audit when you’re feeling a budget crunch may seem extravagant, but the investment can be worthwhile.
Outsider eyes can more objectively assess your staffing patterns and suggest potential changes.
Auditors examine job descriptions and salaries, and interview employees to get a sense of the on-the-ground reality. They then provide administration with a report that identifies potential cuts.
“The report may say, ‘You have duplication of work here. You could eliminate this job and consolidate these two,'” says Schilling, noting that personnel audits can also turn up some surprises. A large district he worked with learned it could actually save money by hiring someone to distribute mail, rather than asking existing personnel to step away from their tasks to do so.
Outsource non-core tasks
Core functions are those directly related to instruction; non-core functions include food service, transportation and cleaning. Outsourcing non-core functions can decrease personnel costs by eliminating staff salaries and benefits—but districts can’t completely wash their hands of the outsourced tasks.
The districts that outsource the most effectively retain someone on staff to monitor the performance of the company hired to take over non-core work. That person should frequently compare the services performed against the work agreement to make sure that the district is getting what it’s paying for.
Rethinking how students are grouped can save significant sums. A district that has two K5 elementary schools, for instance, may be able to save money by designating one school K2 and the other grades 3 through 5. “When you put all the kids at one grade level in the same building instead of having sections in each building for each grade level, you don’t need as many teachers” Schilling says.
Island Trees School District in New York saved nearly $500,000 per year after transitioning a pair of K4 elementary schools into a K1 building and a school for grades 2 through 4, says Charles Murphy, superintendent of the Long Island school system.
“The school district saved a lot of money in duplicate services and staffing” Murphy says. “We now have all of our elementary grade levels together, which makes it easier for planning and professional development endeavors.”
Because state aid is tied to the number of students served by a district, increasing enrollment can provide additional cash. Oregon’s rural Douglas County School District #15 consists of a single K12 charter school.
Superintendent Mark Angle has introduced “a really aggressive marketing campaign” to raise enrollment from 149 students to 202 students in two years.
The district uses targeted Facebook ads to reach residents in zip codes near the district’s boundaries, and added bus service to an additional community outside the district (a legal possibility, because the district has a charter school).
Angle also cultivates relationships with local journalists, newspapers, and TV and radio stations. “I frequently contact them with human interest stories about the school” Angle says.
In his pitches and ads, he emphasizes the distinctive qualities of his district, such as small class sizes, older students mentoring younger students, and an agriculture program that features an on-campus barn and greenhouse.
“Getting our name and story in front of these people worked so well that we currently have a waiting list at most grade levels” Angle says.
Of course, increasing enrollment to balance the budget requires a deft touch. “I’m constantly trying to keep our enrollment at just the highest number that our current staffing level supports” he says.
When student numbers increase above that threshold, Angle accommodates by adding temporary positions. If enrollment remains stable, the positions may become permanent the next year.
When class sizes increased, Angle was able to add an education assistant to help support good instruction. And he was able to add two part-time custodians and a part-time musician-in-residence.
Petition state for relief
Ultimately, district administrators can stretch their funding only so far.
Hill, at the Center on Reinventing Public Education, predicts that in coming years “more and more district leaders are going to have to work with their states to get a relaxation of the rules”—such as mandatory student-teacher ratios in K12 classrooms.
In turn, administrators would do well to establish working relationships with state legislators and press for any necessary changes.
“Educators need to dialogue with the state, and states need to be able to offer waivers in response