Masch presents plan to close budget gap

by Paul Socolar on Oct 14 2009 Posted in Eye on the budget

In a presentation to the SRC today, Chief Business Officer Michael Masch has laid out a comprehensive plan for rebalancing the District's budget, which was thrown off by the final state budget. The District is now estimating that it will receive nearly $180 million less than the increase it had expected from the state this school year.

The District's revenue gap is compounded by a $17 million increase over budget in medical insurance expenses. Coupled with the revenue gap, this presented the District with a total gap-closing project of $196.5 million.

About a quarter of that gap, $48 million, is addressed by improved revenue projections and unanticipated carryovers of funds, including a $25 million increase in the projected surplus from 2008-09, Masch said.

In addition, Masch presented a long list of 20 planned cuts and savings to complete the closing of the $196.5 million gap. Big items were:

• $36.3 million in reductions to the Imagine 2014 plan, with the cuts primarily focused on the area of business systems upgrades - new computer systems and software that needs upgrading.

• $20.5 million savings on the temporary borrowing costs the District experienced this summer

• $16.8 million savings projected from a planned re-negotiating of medical insurance rates to bring them back within the range of what the District had budgeted.

• $11.4 million reductions in "non-instructional budgets" and a "less than 1 percent" cut to school budgets - no details provided yet.

• $4.6 million from a 3 percent cut in administrative support, as reported by the Notebook last week.

Commissioners spent about 30 minutes questioning Masch about the plan. Answering a question from new Commissioner Joseph Dworetzky, Masch estimated that only about 3 percent of the cuts would directly impact the delivery of services to children.

Masch said a completely revised budget would be presented to the SRC in November, reflecting these changes. He emphasized that most of the Imagine 2014 initiatives are intact, including class size reduction in early grades, vastly improved counselor-to-student ratios, 43 new ESL teachers, new high school rosters, new reading specialists, and more.

Masch said that by promptly revising the budget, the District was "acting proactively to insure that a problem does not occur." Unlike the 2006 budget crisis, he said, the District is "not dealing with an unanticipated problem after it has already occurred."