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Gone With the Wind: Will the Sequester Blow Over as Fast as the “Snowquester”?
Last week, many in the Northeast found out they were overly prepared for the “snowquester” — the snowstorm that didn’t quite happen. The overblown “snowquester” (named after the recently passed “sequester”) left a lot of people in the Northeast feeling a little sheepish after the 6-18 inch predicted super-storm brought little more than a drizzle for many areas that had already called off school.
What about the “sequester” from which the snowquester took its name? Districts have been prepping for the worst, but the dreaded cuts slipped into place last Friday with surprisingly little noise. Will the sequester, like the snowstorm, fizzle out after a flurry of activity — or will the full impact of the cuts still threaten to cripple education?
The Debated Effect
U.S. Secretary of Education Arne Duncan has actively warned that the cuts will be disastrous, saying in February that districts were already issuing RIF notices in preparation for the $85 billion in cuts.
“The sequestration stuff is very, very worrying to me,” Duncan said. “There are literally teachers now who are getting pink slips, who are getting notices that they can’t come back this fall.”
That claim was somewhat weakened when it turned out the layoff notices Duncan referred to were actually transfer notices in one West Virginia school. Several other statements issued by Duncan were discredited, leading some to question whether or not the White House has blown the cuts out of proportion.
According to AASA Executive Director Daniel Domenech, “The cuts represent billions of lost dollars for the Department of Education and will affect millions of students, classrooms and teachers by increasing class sizes, reducing programs and eliminating educator jobs.”
Federal funding makes up about 8% of total education spending, and the cuts that went into effect on March 1 reduced federal aid to education by roughly 5%. Some of the organizations to be hit hardest include impact-aid districts with a large population of Native American students, schools near military bases and districts in poorer areas that depend heavily on federal aid.
Tough Budget Decisions
Ultimately, each district will determine how to implement the cuts. Most districts know this and have been actively preparing for budget cuts.
According to an AASA 2012 survey of more than 1,000 school administrators, more than half of respondents built cuts into their 2012-2013 budget to help offset sequestration. These cuts may help allay the initial impact of sequestration, but not the additional hit to the 2013-2014 budget when “forward-funded” programs get cut.
If sequestration went through, 69% of respondents said they were planning to offset the cuts by reducing professional development; 58% planned to reduce academic programs; 56% were looking at eliminating personnel and 54% faced increased class sizes.
In another AASA survey of 400 administrators last month (right before sequestration went into effect), 77% of respondents said they were facing the elimination of jobs due to the sequester, with an average of 3-5 positions eliminated per district.
Finding Ways to Save
Now, more than ever, districts must evaluate every measure for saving money. Here are a few creative ways districts are putting money back into the budget.
Some districts are reducing energy costs, which returns ongoing money to the district. For example, Bullitt County contracted with energy professional services company Harshaw Trane to improve district facilities. In combination with other energy-awareness efforts, the district saved 21% on electric and a total of nearly $500,000 in utility costs.
Another district, Mount Prospect School District 57, underwent an energy audit with the School Facilities Group that uncovered large areas of savings, including $50,000 a year saved by running heat and air conditioning less when no one is in the building. Mount Prospect also researched and actively pursued several state grants that are now funding additional energy improvements.
Many other districts are saving anywhere from thousands to millions by using an energy management system, installing new windows, switching to energy-efficient lighting, negotiating rates with utility vendors and re-accessing waste disposal processes.
“Going green” has been a significant push in many districts, not just for the environment, but also because it reduces administrative costs. By going paperless, many districts are cutting paperwork, printing and postage costs.
The School District of Pickens County saved more than 30,000 sheets of paper a year by using an online absence management system instead of absence forms and integrating it with their payroll system. Wylie ISD in Texas saved even more paper — 45,000 sheets a year — by trading in their 3-part absence approval process for paperless absence tracking and approval software.
Pottsgrove School District is going paperless by using a time and attendance system to eliminate paper timesheets. For large districts with biweekly pay periods, paper timesheet costs can be significant, in addition to the time wasted tracking them down.
No one wants to reduce employees. But many districts have discovered how to save money by reducing labor costs without eliminating personnel.
Excessive overtime is often an uncontrolled labor expense, especially since districts collecting time on paper generally have no way to track and prevent overtime. For non-certified employees like bus drivers, custodial staff and cafeteria workers, this overtime can add up quickly.
Era ISD in Texas implemented a time and attendance system to help control overtime costs.
“We were having some overtime issues before because we have a lot of employees that serve in multiple positions as at-will employees,” said superintendent Jeremy Thompson. “Now the system allows us to see data in real time on Wednesday or Thursday, and we can make those decisions during the week instead of finding out after the fact that they worked 42 or 43 hours last week and we owe the overtime. It’s not always possible to eliminate the overtime, but we at least can make that decision now ahead of time, instead of after the fact.”
Several studies also show that time and attendance systems reduce payroll errors by 1.2%. With labor accounting for 75-80% of a district’s budget, reducing errors by 1.2% can mean significant savings.
Employee absenteeism is another area getting increasing attention from districts and the media. A 2012 report from the Center for American Progress (CAP) showed that teachers on average are absent for 5.3% of the school year. The study also showed that in 2009-2010, nearly 40% of teachers missed more than 10 days of school, amounting to $4 billion a year in substitute teacher and administrative costs.
The CAP study recommended a combination of policy changes and management systems to efficiently address the absenteeism situation.
“Prominent policies include some number of days of paid leave for illness or personal reasons, and incentives discouraging frivolous use of paid leave,” the study says. “An electronic absence management system that records absences, assigns substitutes, and produces reports is a commonplace management tool.”
Specifically, absence management tools can help districts identify absence patterns and behavioral issues, such as excessive absences on Fridays and Mondays.
Hopefully the coming months will show some relief for cash-strapped districts, but in the meantime, districts must prepare for the worst and explore every avenue of cost savings.
What do you think about the cuts? How has your district prepared for the sequester? Share your thoughts here or contact us to talk further!