Monona Mayor Kahl's Analysis of the MG School District Budget

Dear Editor:


Residents of the Monona Grove School District are hopefully by now beginning to fully understand the dire financial situation confronting our district. However, I think a quick recap is in order to ensure everyone fully comprehends the extent of the problem.

This is not a $1 million dollar budget hole that can be fixed this year with cuts including closing Maywood School. The district’s problems are much larger than that. Superintendent Gerlach has often referred to this as a $15 million dollar operating budget deficit and I know there are many questions of how he comes to that total. Quite simply, using a five year projection the total amounts to $15 million because the district needs to make $1 million in cuts each year in addition to the money cut in preceding years. The chart below shows how this amount is calculated.


Year 1 2010-2011 Needed Cut of $1 million

Year 2
2010-2011 Needed Cut of $1 million PLUS
2011-2012 Needed Cut of $1 million

Year 3
2010-2011 Needed Cut of $1 million PLUS
2011-2012 Needed Cut of $1 million PLUS
2012-2013 Needed Cut of $1 million

Year 4
2010-2011 Needed Cut of $1 million PLUS
2011-2012 Needed Cut of $1 million PLUS
2012-2013 Needed Cut of $1 million PLUS
2013-2014 Needed Cut of $1 million

Year 5
2010-2011 Needed Cut of $1 million PLUS
2011-2012 Needed Cut of $1 million PLUS
2012-2013 Needed Cut of $1 million PLUS
2013-2014 Needed Cut of $1 million PLUS
2014-2015 Needed Cut of $1 million

Total Deficit if No Cuts Made = $15 million


Frankly the number is higher if you project out longer and it could be alternatively described as $5 million in new cuts that are sustained. However, for discussion purposes we can agree to the district’s description of the situation and look at this over the next five years and agree the problem is $15 million.

The multi-faceted state funding mechanism for public schools is not going to change anytime soon so revenue from that source will flatten off at best and more likely decrease in coming years. That leaves us with the option of either raising property taxes or cutting operational costs. It is apparent to anyone with a calculator that the district will need to go to a referendum to raise more property taxes and do so soon as it is simply unfeasible to make the total amount of needed cuts. The “plan” of the district is prior to going to that referendum to have some “blood in the streets” in their own words by undergoing significant cuts to programming and closing Maywood School. After this blood letting, they will then come to the citizens of the district within the next year or so and ask for permission to exceed the property tax levy limits.

Monona pays 55% of the property taxes that fund our school district, the Village of Cottage Grove 27% and the townships account for the balance of 18%. My question to the school board and administration is why would Monona agree at that time in the near future to step up and cover 55% of that levy increase if you have already imposed immediate reactionary cuts disproportionally impacting Monona without formulating a long-range plan to address this entire $15 million dollar operating budget deficit? That plan could involve cuts, referendum or a combination of both but nonetheless it would be a plan with a timeline and a clear objective of eliminating our entire operating budget deficit. What is before us now is not a plan by any definition of the term and that is why I think so many in this district are struggling to grasp the severity of the situation because the focus has been on these short-term cuts without putting those cuts into proper long-term context.

Let me attempt to provide some context by discussing the $5 million in needed cuts to avoid the $15 million dollar deficit. Using the district’s own math, closing Maywood saves about $259,000 (this is a gross amount as we are not including remodeling costs at Winnequah) which leaves $4,741,000 in other cuts that need to be made. In other words, closing Maywood only addresses about 5% of the district’s operating budget shortfall over the next five years. Where will the rest of the needed 95% in savings come from assuming additional revenues are not achieved? Personnel costs account for about 80% of the district’s budget so it is obvious that this is where the majority of cuts will need to be imposed. As an example, let us assume to address our budgetary deficit we eliminate 25 teacher positions in the district. While this is a large number, that cut is roughly only $1.5 million dollars in salary and benefits and it only addresses 30% of our budget shortfall. I want to make clear that I am certainly not advocating for this cut, but simply pointing out that even draconian cuts to staff, which will in turn correlate to significant negative impacts on programs, still leaves us with a huge budget gap that we will need to close. Specifically, those personnel cuts combined with closing Maywood only gets us to about 35% of needed cuts, leaving approximately 65% or about $3,241,000 more in needed cuts over the next five years to balance the budget. It is evident the district cannot cut its way out of this entire problem.

So if the district can’t cut its way out of this situation and a referendum is a foregone conclusion, why are we not having that candid discussion about our long term plan right now? If the district wants to pass the inevitable forthcoming referendum, I would respectfully suggest the following be done immediately and prior to the implementation of any cuts:

1) The problem has repeatedly been described in terms of five years but the solution in terms of one year. Please present the residents of the district with a five year plan of what cuts will be made without a referendum. A clear picture needs to be provided so the facts can come out versus the misconception of many that the current cuts being proposed are the only cuts needed to solve our budgetary problems. We need to face the real possibility that a referendum does not pass and we need to see what our district looks like under that scenario.

2) Since it is obvious the district will eventually need to go to referendum, please tell us when that is happening and how much you plan on asking for from the taxpayers.

3) Move the administrative offices from Nichols to Maywood and leave early childhood through 1st grade there with Winnequah then housing 2nd through 6th graders. Alternatively, and preferably from a capital cost perspective, move administration to Winnequah and otherwise maintain current grade configurations. Either way, I would expect some of the district administrators and support staff to be able to help with administrative duties at Maywood or Winnequah similar to my expectation in these difficult times that all city staff including management wear multiple hats. I would also hope to see operating savings in closing Nichols similar or higher than that proposed by closing Maywood. Moving forward we then must act thoughtfully and expeditiously to make a final determination about the long term plans for Nichols. If the decision is to never again bus Cottage Grove students into Monona elementary schools then do we need this facility? If it appears that Nichols is not a long-term needed school facility, I would then ask the board to discuss and decide if it should be leased or sold? I understand that the Madison School District has expressed an interest in renting Nichols. I also have at least two developers potentially interested in redeveloping the site right now with different options for the district on how it would partner and benefit from said developments. However, until the district decides whether Nichols is needed as a district facility and understands the realistic value of this site, all these other options are in limbo.

4) Explain to us the space capacity issues in Cottage Grove schools and how the proposed transfer of Monona 6th graders to Glacial Drumlin would impact those issues and, just as importantly, how this move saves the district money over five years.

We find ourselves in a precarious position and many have taken a great deal of time to point fingers at anyone and everyone as if finding someone or some institution to blame will somehow alter the state of our reality. I am not here to point fingers as it is frankly time to move on and fix the problems confronting our district. We must now focus on what comes next and not what went wrong because the former we can do something about and the latter only works to divert our focus at this critical juncture. This is a district-wide problem that will not be solved by eliminating 4th grade strings or closing Maywood School. The situation confronting us is too complicated and important to not have a long-range solution prior to implementing immediate reactionary cuts. Without a plan that is shared now with everyone in the district, I trust the residents of the district are going to be reluctant to once again step up to support an increased property tax levy when asked to do so via a referendum that reality dictates is coming in the very near future.


Sincerely,


Robb Kahl
Mayor
City of Monona