Education

Funding

CUTS

Impact on

Delaware Public

Schools

FY 2018

Housekeeping

There are 4 Primary School Taxes in Delaware

for each Traditional School District

Tax Who Can Change?

OperatingResidents only via

Referendum

Match School Board; Annually

Tuition School Board; Annually

Debt

ServiceSchool Board; Annually

Abbreviations Used in Presentation:

• ESF: Education Sustainment Funds

• GA: General Assembly

• BOE: Board(s) of Education

• RIF: Reduction in Force (aka, lay-offs)

History of Ed. Funding Cuts

General Assembly dropped the

can and kicked it down the road for

at least the last decade

Result: $395 million budget

shortfall leading into FY2018

$37 million to be gutted from public

education, comprising ~10% of

shortfall in 2 Categories:

1. Education Sustainment: $22

million cut

2. Charter & District Operations:

$15 million cut

2007

2017

HATCHET JOBWhat are the cuts impacting?

EDUCATION SUSTAINMENTDISTRICT & CHARTER

OPERATIONS

-$22 million -$15 million

People “NOT People”

• Teachers

• Paras

• Secretaries

• Custodians

• Principals, etc.

• Energy

• Transportation

• Utilities (Water, Internet)

• Classroom Supplies

• Textbooks, etc.

3 Doors DownWhat is Governor Carney proposing Districts do about this?

1

For every position they eliminate, we’ll

shift the State’s portion of that position’s

funding over to the District Operations

fund to help offset that ($15 million) cut.Also State of Delaware

Due to reductions in Education

Sustainment funding ($22 million), if

Districts must lay off staff, that decision

should be up to Districts alone.State of Delaware

The Position Buy-Back

Door Number 1

Gov. Carney’s “Position Buy-BaCk”

1

+ $45,000

-$14,955,000in “Not People”

TEACHER

$45k - State

$15k - Local Unrestricted

$60k - Total

FIRED

TEACHER

$45k - State

$15k - Local Unrestricted

$15k - Total

Lather

RIF

Repeat

-$22,000,000in People

-$15,000,000in “Not People”

FUNDING CUTS

About that $15k in Local Unrestricted funds left

from the Position “Buy-Back”

Gov. Carney’s*

Education Sustainment

“Match Tax”*That the General Assembly Actually Has Write Into the Budget and Authorize First

Door Number 2

2

Match Tax exists today. It does not require referendum to raise today.

Fictional Example of Match Category

The General Assembly authorized Districts to “Match” funds provided for Reading Resource

Teacher Units with a 60/40 state/local split.

The GA values this unit at $65,000 and authorizes Districts to increase their Match Tax rate

to generate the 40% local share of the unit value, the State contributes the remaining 60%

share.

Gov. Carney’s* ESF “Match Tax”*That the General Assembly Actually Has To Authorize First

School Boards annually adjust Match Tax rates to raise revenue to spend on categories of

services “approved” by the General Assembly for matching. Gov. Carney has proposed a new

category eligible for “Match”: Education Sustainment to replace Districts’ portion of the $22

million cut; however the GA must create this new category before Boards can actually use it.

The GA will not take action on this until the State Budget is passed: June 30.

Gov. Carney’s* ESF “Match Tax”*That the General Assembly Actually Has To Authorize First

2

TEACHER

$45k - State

$15k - Local Unrestricted

$60k - Total

$15k - Total

TEACHER

$45k - State

$15k - Local Unrestricted

$45k - Local Match

$60k - Total

“New” Teaching Unit funded

from 100% Local Funds

Shift of State $ to Local $

2

Sustainability Concerns with this approach:

Approved Match Tax categories are not permanentThe General Assembly can sunset Match category approval with each new budget.

Historically, the General Assembly has sunset State Match funds but not Boards’ authority to

collect their local match share. When this happens, additional local funds are needed to

replace the removed State “Match” for any positions or programs that were funded through

the 60/40 State & Local Match.

In this case, there is NO State Match to begin with. This is a FULL revenue shift

from the State to Property Tax payers in each District & we must rely on the GA

to continue authorizing ESF “Match” with each new Budget to utilize ESF Match Tax

Gov. Carney’s* ESF “Match Tax”*That the General Assembly Actually Has To Authorize First

We can’t believe the

State is pawning its

responsibility for

taxation off to Districts.

They’re politicizing

Boards of Education!

NO MATCH!

We really need that

teaching unit though.

Otherwise we’re denying

services to children.

Board of Education Also Board of Education

2

Sustainability Concerns cont'd:

Enacting this change effectively kills future chances of Districts passing

Operating Referendums

Gov. Carney’s* ESF “Match Tax”*That the General Assembly Actually Has To Authorize First

Ethical Concerns with this approach:

Board of Education members are not elected to manage taxation on

behalf of the State. They are elected to manage taxation on behalf of the

District they represent.

If the Governor and General Assembly truly desire a revenue shift from

the State to Property Tax payers, they must grant Boards of Education the

authority to adjust Operating Tax rates as they do Match Tax, Tuition Tax,

and Debt Service Tax rates: Annually based on need with constraints.

Do not piecemeal this shift with Match Tax changes.

Reading

Resource

Teacher

State Match Local Match

General Assembly De-Authorizes

Reading Resource State Match

Local Match

Uh,

guys?

Districts Have 2 Choices

Reading

Resource

Teacher

No Reading Resource

Teacher

ORReading

Resource

Teacher

Local Unrestricted Local Match

Reading Resource Teacher

Supported by 100% Local Funds

What Happens When a Match

Category is De-Authorized?

2

We have no guarantee that the General Assembly will even authorize Boards of

Education to raise Match Funds to cover the cuts to ESF.

Authorizing language (or lack of) would not be seen until GA issues approved

budget on June 30th.

Staff affected by potential cuts MUST be notified of their status by certified mail

by May 15th.

IF Boards are authorized, no guarantee that ESF Match will continue to be

authorized in subsequent years.

No guarantee that Boards will opt to use the new Match Tax authority at all.

Altering the Match Tax to cover for State funding cuts effectively destroys the

Operating Referendum for all Districts and places all Districts in very real

financial danger moving forward.

2

Shifting Local Unrestricted Funds to Cover the $22 million ESF Cut

IF chosen, services currently supported by Local Unrestricted funds would be greatly reduced or eliminated completely

Guidance CounselorsSchool PsychologistsTransportationEPER for Coaches & Academic ClubsAcademic DeansSports, and more

All Unrestricted Funds that are shifted WILL count toward Local Cost Per Student formula for Charter Payments

A Shifty Thing to Do

TEACHER

$45k - State

$15k - Local Unrestricted

$60k - Total

$15k - Total

TEACHER

$45k - State

$15k - Local Unrestricted

$45k - Local Unrestricted

$60k - Local Unrestricted Total

“New” Teaching Unit funded from 100% Local

UNRESTRICTED Funds

3

Services currently supported by Local Unrestricted

funds would be greatly reduced or eliminated completely

Guidance Counselors,

School Psychologists,

Transportation,

EPER for Coaches & Academic Clubs,

Academic Deans,

Sports, and more.

STILL a full shift of State $ to Local $

but this option has additional fiscal concerns

Districts would contend with in the future.

What We Know

Governor Carney & the State’s positions are clear on Education Funding:

Completely shift $22 million in funding from the State to Local Property

Taxes

Further reduce State Education spending by additional $15 million

Kill (but not eliminate the need for) Operating Referendums by proposing a

drastic change to the Match Tax and taxing authority of Boards of Education

Continue to abdicate the responsibility to provide quality education to the

children of Delaware by ignoring the fundamental structural failures of our

education funding system.

Speak to your State Legislators

the Budget is in their hands.

DEMAND Public Schools Be

Fully Funded!

Thank you for reading.

@ThoseInFavor

bluedelaware.com