State Aid Cut, Error Boosts E. Providence School Deficit (RI)
June 15, 2010
School officials say midyear state aid cuts may cause the district to have a $1-million deficit this fiscal year despite getting concessions from all its employees and making massive cuts to many planned expenses.
Yet district officials failed to track the tuition costs of 19 special-education students who were taught out of district last year. That mistake, which was discovered this year, cost the department $956,635, the city’s rec ently released audit states.
If it didn’t have the error, the deficit could be only $121,585.
Lonnie Barham, the district’s chief operating officer, chose to speak more about the state aid reduction rather than the special-education error when he presented the School Committee last week with a draft of a revised budget.
“We expected $1.3 million in cuts by the state,” Barham said. “We expected over a half million in pension [reform] savings. We also expected, based on some conversations with the City Council in the past, that the Union Primary School would be sold this year and that money would go towards our deficit reduction.”
Instead, the general aid from the state was reduced by nearly $2 million, the General Assembly didn’t approve any pension reform and the school will likely not be sold this year. Additional stimulus money left the department with a $1.55-million deficit in its anticipated revenue.
Knowing it was going to get some reduction in aid, school officials sought concessions from all its employees early. It settled new contracts with the unions representing custodians, maintenance workers, secretaries, teacher assistants and most recently, its 512 educators. The salary and benefit reductions are offset, however, by unemployment costs and it only saves the district $154,011.
“We sat and we cut and cut and cut and cut,” Barham said. “We cut about $2 million from our budget this year.”
Barham’s draft budget shows the district reduced $550,000 from transportation with an administrative settlement; $60,000 in utility costs because of a contracted lower price; and nearly 60 percent — $214,682 of a $364,682 budget — out of its technology department by offsetting most of those costs with grant money. It also cut $25,000 from athletics by using ticket sales from sporting events.
And while the department praised putting more money aside for textbooks and instructional supplies earlier this year, they cut that by more than 60 percent — from $776,962 down to $300,000. They also reduced non-instruction supplies from $325,000 to $60,000, an 82-percent reduction. Yet Barham said district officials were careful with how they cut these areas and chose to reduce central administration supplies more than those that would affect the students.
Finally, the department will only be able to reduce its cumulative deficit by $500,000 rather than the planned $1.15 million.
With increased costs in special education, nursing, testing services, insurance and maintenance, district officials found $477,800 in expenditure cuts to curb the revenue deficit. Barham said the revised budget is a draft because he and others are looking for additional cuts.
The city’s fiscal year ends Oct. 31.
“We’re still working this and some other municipalities and school districts are in worst shape because they have three weeks to balance a fiscal year 2010 budget,” he said. “We have three or four months, but bottom line, it’s not looking good.”