It took Spokane school administrators one week to shift from saying they were glad to be able to give raises to classroom aides, whom they’d been paying Wal-Mart wages, to blaming employees for “budget cuts” that might drive up the price of school lunches and district child care.
It was an astonishing show of bad faith.
It was also an astonishing show of bad math.
The district faces no shortfall. No budget gap. No deficit. None. While Spokane Public Schools issued a news release blaming “budget cuts” on the union last week and succeeded in obtaining compliant news coverage of this assertion – nearly every news organization in town trumpeted the line that there is now a “gap” or “shortfall” because of the Spokane Education Association’s threatened strike – the truth is that the current problems facing the district grow out of its own choices, priorities and procedures as much as anything.
The new contracts change the budget. They don’t bust it.
To choose just the most obvious example: Spokane Public Schools has a savings account of $22.8 million. It could cover the entire salary increase from that rainy-day fund. Ah, but isn’t it a bad idea to cover ongoing expenses with money set aside for one-time emergencies? Absolutely. But the district could adjust the budget to cover the salary increases and use the reserve funds for some of the one-time expenses – such as curriculum and technology purchases – that it now says might be postponed or eliminated.
Instead, it’s done its best to cast shade on the employees it claims to value so highly.
The budget challenges arise from the settlement of the labor contracts between the district and the union, which threatened a strike that was averted by a mediated deal at the last minute. In addition to cost-of-living increases, the union was pushing for raises for some of the district’s worst-paid positions, such as classroom assistants and food service workers. The district said it budgeted for salary increases, but not as much as the unions wanted, and in the end officials agreed to spend $5.6 million more than they had budgeted.
This is a question of planning as much as dollars. The district had already passed a $369 million budget while negotiations were ongoing, though it knew there might have to be adjustments.
“We had a budget,” said Kevin Morrison, the district spokesman. “We presented a budget in August. Now we have to go back and take off items from that budget.”
Morrison said that the decision to make a public announcement about “money originally budgeted for other items is now going toward additional salary increases” – complete with the inclusion of potential hikes in school lunches and child care programs, high-profile items liable to catch the attention of parents – was something that administrators and board members felt “needed to be communicated to the public.”
Superintendent Shelley Redinger put it this way: “We love our employees. We want to pay them well, but again we have to make sure the lights are on.”
Linda McDermott, chief financial officer for the district, agreed this week that the announcement last week, and the news coverage of it, might have created the impression of a budget deficit. And that impression is false.
“We settled a contract within our authorized budget,” she said. “We don’t have a budget deficit per se.”
Officials are combing through the district’s $369 million budget, looking for ways to save money, she said. The district’s reserves have often been brought up by critics who say Spokane Public Schools is poor-mouthing, but McDermott says that a savings account is necessary for a number of reasons, including emergencies, unexpected delays in funding from other sources, and establishing a good credit rating for selling bonds.
The district has among the best bond ratings of any school district in the state, she said, but both Moody’s (which ranks the district as AA1) and Standard and Poor’s (which gives it AA) have encouraged the district to bolster its reserves.
The district’s $22.8 million in reserves includes $9.7 million that is legally restricted for various reasons – can’t be touched. The $13.1 million unrestricted reserve amounts to 3.7 percent of the budget, and the district has a goal of 5 percent, McDermott said.
“We do not believe our level of reserves is excessive for an organization our size,” she said.
McDermott emphasized that spending reserves on salaries is poor financial management.
“One of the last things we want to do is use reserves for salaries, because salaries are an ongoing expenditure,” she said.
But she also said that there are one-time expenses in the budget now that might be covered by reserve funds. In other words, the “cuts” – or some of them, at least – could be made up with reserves. In fact, one might say that’s exactly what reserves are there for.
There is no shortfall. None. The lights will stay on. And if the district decides to raise the prices of school lunch or put off buying new textbooks or stop paying students’ SAT fees, it should come up with a better excuse than blaming the employees it supposedly loves.
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