Why the schools need more teachers And how we can afford them

Wed, 2008-02-20

The Acton and Acton-Boxborough school systems are doing a good job of educating our kids. Test scores are very high. We have many high-achievers in academics, sports, and community involvement. We are obviously doing many things right.

We are also doing some things badly. And some things, we know, need improvement.

This article will deal with how to spend our Chapter 70 state aid, which has increased rapidly over the last two years and is scheduled to increase for the next three. What should we do with this money, which will amount to millions of dollars? Should we hire more teachers, put it in the bank, or use it to reduce other town municipal costs (like hire more police officers)?

BUDGET BACKGROUND
From a budgetary point of view, the schools take up a sizeable chunk of our municipal budget. But I would guess that most taxpayers are relatively happy with that investment for two reasons. First, many residents move to Acton because of the schools, and second, having good schools probably helps prop up property values relative to other communities. Still, the schools take up a large percentage of our town budget and Acton doesn’t have some of the income streams that other many other towns seem to have that can help subsidize the schools.

The number one source of outside income for most towns is state aid. Historically, Acton has received a very small percentage of its school budget supported by the state. In some cities, the state covers well over 50% of the school’s budget. In Acton, it is close to 20%. That means taxpayers have to make up the difference.

Other income streams can include property taxes from a large business community. As we all know, we don’t have a huge commercial base in Acton. And relative to residential property, commercial property taxes have decreased and are now around 13% of the taxes that are collected.

Some of this is by choice, of course. When the “Home Depot” proposal was floated a couple of years ago, there was a strong local reaction and it was defeated. That would have contributed over $1m per year to our tax base. So choices that we make as citizens and voters definitely have an impact on the taxes we pay in the future.

STATE INCREASES CHAPTER 70 AID
Two years ago, we had the very good fortune of being the recipient of a large increase in state aid for the schools. The state changed the funding formula by recognizing that some communities had large enrollment increases that weren’t reflected by state aid increases, and they decided that wasn’t fair. So a new Chapter 70 formula was introduced, and (while no firm promises were made) it was envisioned that it would be phased in over five years. We are now in year two (and next year would be year three).

Any funding changes produces winner and losers, and Acton was a big winner. In fact, its aid increase was the highest in the state, and this resulted in over $1m in additional Chapter 70 education aid per year.

That is great news, but this isn’t “free money.” It is money that the state is giving us because (according to their new funding formula) we have increased costs because of our high enrollment and student population growth. And we know this is true because we have seen our student population grow very quickly. And our school budget has grow relative to our town budget (but always having a balanced budget, of course.) About 70% of our municipal budget goes to our schools, which is one of the highest percentages in the state. (In the last two years, there has been a very slow shift back to the “town” side of the budget…less than a 1% change.)

When times are bad, it is fairly easy to produce budgets. Just say “no” to everything. When times are good, there can be many more difficult decisions to be made. And we have one such decision now: what do we do with this additional state aid? Do we conserve it for future needs, do we use it to bolster the “town side” of the budget (i.e., police, fire, highway) which for years has been neglected relative to the schools, or do we use it to hire more teachers or other staff at the schools?

There is no right or wrong answer here, but I can tell you what has happened so far in Acton’s budget process and what we may see at Town Meeting this year.

On the town-school split issue, the Acton Leadership Group appears to be leaving the split “as is” for the present. The Selectmen want to move the split to the town side going forward, the schools want to leave it where it is, and the Finance Committee is divided. If I had to guess, I’d think the Finance Committee will eventually support a shift in the split to the town side. Whether that split starts next year, or in a following year, is anyone’s guess.

One reason that there is less pressure to change the split is the town also has control over a windfall of funds, which is the enormous balance left in the “NESWC” account. We have about $5 million which is, essentially, additional free cash (we have another $2m in free cash). The Finance Committee is on record in not wanting to use these funds to support operations, and is trying to save as much as possible and bond major capital items so we have some “emergency” funds available. The Selectmen are trying to spend most of it on capital or reserve it for future “town” uses, and have offered to fund the school’s boilers and univent upgrades for about $1.2m in exchange for a change in the split next year. The schools were willing to go along with this, but the negotiations became too complicated and they have since decided to stick with the original plan, which is to bond the improvements over time.

OK, so what do we do with this extra Chapter 70 aid? The most fiscally prudent action would be not to spend it. Keep stockpiling cash because we may be in for an economic downturn and by reducing spending now, we reduce the need for an operating override in the near future.

To me, this argument is logical for the NESWC monies which are not replenished. But the Chapter 70 monies should be viewed as our new “base” of funding which (even if times get tough) will stay level or rise by 1-2%. Remember, we are expecting a 15% rise each year based on implementing the 5-year phase-in of the new formula. I think we can expect a 5% increase each year, which can sustain new hiring.

So certainly, we don’t want to commit to hiring new staff if the funding does not come through. But we can pass budgets with new staff and instruct our administrators not to hire anyone until the state budget is signed, sealed, and delivered. We’ve done that in the past. So hiring new staff is not a big “gamble” that we will be stuck with if state aid decreases. The worst-case scenario is we reduce staff the following year if necessary. (I don’t use the term “layoff” because we have so many staff changes year to year that it would be fairly easy to just not replace a few positions.)

So there is really little danger in putting new staff in the budget if state aid is significantly less than what is expected. We will simply not spend the additional money until it is guaranteed, or in the worst case, we can hold a special Town Meeting and come back and make cuts.

But on the school side, we already have room in the budget for many staff additions even if state aid only goes up 5%. The reason for this is that we simply have not spent all of the Chapter 70 aid we’ve been given in the last two years. The schools have budgeted prudently and (maybe by moving some money around) they could accomplish probably 50% of their hiring goals without any big increases in Chapter 70 aid next year.

We also have excellent news from our health insurance trust. It looks like health insurance rates will be holding steady next year with a very low (in the range of 1%) increase next year. All told, our short-term outlook is pretty rosy.

WHY WE NEED TO HIRE MORE TEACHERS
Now let’s assume that the state sticks by its commitment to implement the new formula and our Ch 70 state aid rises by 10-15% next year. What should we do with these extra funds?

I advocate hiring more teachers. Right away.

The reason is simple. Besides high test scores, Acton leads in one other category: highest class sizes. And no, these two numbers are not correlated!

In the state, Acton Public schools have the highest class sizes (#1) at 18.1 students per teacher and Acton Boxborough is close behind at #5 at 17.1 students per teacher. This is deplorable. (State DOE website: . There are two or three charter schools which I didn’t include in the ranking). This is out of 340 school districts across the state!

Why must our children be in such large classes? The reason, again, is that we have had huge increases in student populations and we haven’t had the money to keep pace with hiring new teachers. So what has happened is that class sizes have grown.

The purpose of this article is to give a financial perspective to hiring more teachers and not to make the case for why extra teachers are needed. I will let the schools deal with that issue. But they have made it clear, both in their words and in their written policies, that class sizes are too high and they need to be brought down.

My point is this: we can afford to hire 5-10 teachers in the elementary and Junior High schools to help deal with this problem. (We hired 5-10 teachers in the High School last year, partly because of additional aid, and partly because of the “990” requirement imposed by the state).

We need these extra teachers because class sizes are unreasonably high in many grades and the state has given us millions of dollars in extra Chapter 70 aid (that we absolutely would not have gotten had the funding formula not changed to our benefit) and that additional Chapter 70 aid should be spent where it was meant to go: helping with the costs of increased enrollment.

Is there some light at the end of the tunnel? Yes, there is. The elementary school population is scheduled to start decreasing, starting next year in the kindergarten sections. This means we will be deciding whether to reduce class sizes even further or shift teachers around and reduce sections (thereby reducing costs). That is a discussion for another day. But the Junior and Senior High Schools have not hit their enrollment peaks yet. They are coming in the next 3-5 years. And when their student populations also start to decline, there will be the opportunity to save money there as well.

So, from a finance point of view, I think we can afford to invest in additional teachers because of our additional (expected) Chapter 70 state aid, which is sustainable, recurring revenue. And our representatives on this issue, the school committee, feels that class size needs to be reduced. I hope they are successful. And when the school population moderates, we can see further class size reductions, or reduce staff, as our future school committee leaders suggest.

I just think it is short-sighted to not give students the opportunity to learn in a reasonably sized classroom environment if the state has given us unexpected state aid to deal with a problem that they see on a “global” scale, which is that some school districts have seen huge student population growths and have not been given enough state aid to respond. Acton is one such district. Acton has been “shortchanged” for years and now that the state is rectifying this, let’s put the money where it is needed.

GOOD NEWS: In researching this article, I went to the DOE website and saw the recent 2007 SAT test scores. Looks like Acton-Boxborough was #1 in the state! Other than a couple of charter schools, we seemed to have the highest test scores at 606 (reading), 609 (writing) and 640 (math). Here is the link:

Allen Nitschelm is a member of the Acton Finance Committee.

Clint Seward replies