This spring, Oakland Superintendent Tony Smith heralded the elimination of a $40 million structural deficit that he had inherited when he came to OUSD in 2009. Soon thereafter, his financial services team discovered a multimillion-dollar shortfall, which was followed by major reductions in the proposed special education budget for 2012-13 and other adjustments.
Then, last Friday, the administration made the deficit-eradication claim once again. A public statement about the Lakeview Elementary School sit-in, which is now in its second week, said that the closure of Lakeview and other elementary schools had allowed the district to “eliminate a $40 million structural deficit…”
If you look at Slide #23 in the budget presentation (second-to-last link), and your eyes automatically run to the highlighted green line, that sure looks to be the case: You see a $665,071 surplus. But scan a bit further down and you’ll find a different number — a structural deficit of $10.28 million.
The non-highlighted bottom line takes into account the use of adult education funds and other special-purpose grants that the district has leaned on to backfill its k-12 spending cuts. That’s how OUSD used to calculate its structural deficit: a breakdown of its true ongoing costs and revenues. (Those funds are sometimes referred to as “Tier 3.” In 2009, the state Legislature allowed districts to use them for other programs — at least, temporarily.)
Using that second number, the district’s structural deficit is now about $1.8 million smaller than it was projected to be a year ago (see Slide 31), before the school closures, using a similar calculation: $12.09 million.
Either way, the district’s bottom line is improving. And it’s worth noting that central office does plan to give schools 5 percent more in per-student funding for next year. Still, if OUSD wants to use a deficit calculation method that makes its budget look more balanced than the old one did (and if it appears that school districts will forever have adult education money and other funding sources to spend however it wishes), then it should probably scrap the $40 million figure along with the old formula. Otherwise — as far as I can tell — it’s not a true comparison.
Other points I’m trying to pin down:
SCHOOL CLOSURE SAVINGS: Some news reporters received an email from OUSD’s communications department last week, telling us that Superintendent Tony Smith objected to our use of the $2 million ongoing savings estimate that he had used to make the case for school closures. We were told that the $2 million estimate merely reflected “an estimate for savings on facilities costs, which are just one part of the overall picture” — and that, as the presentation clearly showed (Slide #20 of Wednesday’s draft), “close to $6 million in savings will be realized from the closure of five Oakland elementary schools.”
Curious about this $6 million number, I went to Slide #20. That line, as labeled ["eliminate budgets for the closed schools (5 elementary)"], appears to represent the sum of the five elementary schools’ general-purpose budgets. If that is the case — I’ve asked the district spokesman to clarify; he’s checking on it — then that $5.76 million figure wouldn’t represent a net savings, as some of the costs will follow the students to their new schools.
LAZEAR’S CHARTER CONVERSION: I also can’t find in the budget a mention of Lazear Elementary School’s charter conversion, which the county board of education approved this month on appeal. I keep asking about it, as it was projected to be a major financial hit to OUSD. Lazear is one of the five elementary schools the district voted in October to close, but it will remain open next year after all, as a charter school.
As I reported two months ago after the Lazear hearing:
According to a fiscal analysis by district staff, approving the charter would cost OUSD $1.4 million, as the savings from the closure had already been factored into the 2012-13 budget. Superintendent Tony Smith said the conversion would wipe out the additional 5 percent per-student funding allocation that he said would be given to remaining OUSD schools as a result of those savings.
The budget presentation includes the conversions — and subsequent enrollment losses — of ASCEND and Learning Without Limits, but it doesn’t seem to reflect the Lazear development. Does anyone else see it?
I should note that these are simply questions that came up as I was analyzing the budget; perfectly reasonable clarifications and answers may follow, which I will duly report.
2012-13 Oakland school district budget