Fairfax County Public Schools will face a projected $147.9 million deficit in fiscal year 2014 — a gap that would require an 8.8 percent increase in the annual transfer it receives from the county.
That amount does not include $90.8 million in identified program needs, such as restoring class size reductions, extended teacher contracts and textbooks — in all, the system would need $238.7 million to meet projected costs.
The county's school board got an early look at the structural gap it faces over the next five years during a fiscal forecast presented during Monday's work session, created largely by the board's use of one-time money to meet ongoing needs, said FCPS Chief Financial Officer Susan Quinn, who gave the presentation, noting the numbers discussed were only projections and not final figures nor recommendations.
"It's clear we need to change the way we do business here ... and also the way we educate students," said board member Patty Reed (Providence) as members began to piece together a budget strategy they hope brings more efficiencies, savings and community buy-in than in years past.
To cover the $147.9 million deficit, aside from program needs, Fairfax County would have to increase its transfer to the school system by 8.8 percent — around the amount board members In fiscal year 2013, the Board of Supervisors ; school board members said Monday they did not think an increase twice that size was realistic.
"This isn't just our challenge, this is the whole school system and community's challenge," Reed said.
The system's revenues have failed to cover all of its expenditures over the past several years, Quinn said. That, combined with federal and state uncertainty in a number of areas — among them, how the state will adjust the state Local Composite Index (LCI), Virginia's school funding formula; when and if state per-pupil funding will rise to pre-recession levels; and the impact of federal sequestration — has created a structural deficit for the system.
Beyond those issues, the system is staring down a student enrollment that will increase by 2,250 next year — hitting a total of 193,000 students by 2017 — and must finish phasing in mandated shifts in Virginia Retirement System contributions, which will cost at least $10.8 million.
For all expected revenues, expenditures, compensation and program needs, click on the PDF of the report in the window to the right of this story.
Board member Janie Strauss (Dranesville) said officials were "in a deeper hole than we've been," worse than the last major recession the board faced in the early 1990s, from which it took seven or eight years to recover.
After that period, the system saw a period of financial growth while enjoying fairly flat student enrollment. But this time, Strauss said, student enrollment growth is at unprecedented highs, and there's no telling where the county economy is going to go.
"[I keep asking], how long does it take for the Fairfax local economy to go one way or another and nobody can answer that question, so it becomes just an incredible poker game as to what we can predict is going to happen for this 2014 budget," said Strauss, who noted many elements would remain unclear until after November's elections. "It's wise for us to presume flat funding from everyone because we don't know were it's going to go ... we have to be extremely careful when we plan this budget."
Superintendent Jack Dale said he has asked each of his departments to identify the consequences of a 5 percent non-school based reduction; he'll also be meeting with leaders at the elementary, middle and high school levels over the next two weeks to identify other efficiencies and savings.
The system is working with the state on an efficiency audit, which studies management of non-school based departmental efficiencies. Dale said those results will not be available until sometime next spring.
Other suggestions from board members included:
- Reopening the fiscal year 2013 budget to hone in on wants versus needs
- Studying the impact hiring and travel freezes would have on costs
- Revisiting the system's school staffing ratio
- Looking more closely at wants versus needs, specifically in the areas of consultants, travel and technology
"We have to incorporate into our vernacular the phrase 'savings,' and it doesn’t mean that we're cutting education, it doesn't mean we're doing things badly, it means that we're establishing priorities," Elizabeth Schultz (Springfield) said. "And I beseech my fellow board members to start adopting now the mindset that there's ways we can do things more efficiently, and it isn't to the detriment of our students or the detriment of our system but it's just that it can be done better because the forecast demands it. We don't have the luxury to say we're not going into the line items anymore."
Dan Storck (Mt. Vernon) said the board needed to better engage the community during the coming year's budget session: Pat Hynes (Hunter Mill) noted the parent community can sometimes come to Board of Supervisor budget hearings with a divided message about whether schools need funding, and where they need it.
"Changing the conversation ... that is our responsibility and nobody else's," Storck said. "We have to go out there and explain and educate."
Staff is preparing a program budget, which will be available to the board in mid-October. Board members also asked to develop better budget engagement and budget prioritization strategies.
The board will meet with the county board of supervisors in November.