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Looking For School Money? - Wednesday, January 10, 2007
Aren’t all state governments in America facing similar economic constraints?

We hear political leaders around the nation bemoaning lack of dollars to provide the services that their people need.

Louisiana is no different. We hear the Republican caucus appeal the Governor’s call for “sin tax” increases on the basis that sales, income and oil/gas tax collections are up sufficiently to raise teacher pay.

As school board members, in Louisiana, look forward to legislative consideration of school finance, it is important to keep in mind that the major driving force behind efforts to find dollars for K-12 education is to catch up to Southern Regional Education Board member state averages.

How’re we doing in that chase?

The Georgia legislative session just adjourned. Its actions bear directly on our chase.
• Teacher and faculty salary increases averaged 2%.
• Adult and Technical education appropriation rose by 11.3%.
• PreK-12 funding increased 8.5%.
• Preschool budgets rose 7.1%

Another SREB state, Kentucky, added 5.3% to current (2004/05) elementary and secondary school budgets; and, throws in another 9.6% for the 2005/06 school year. Teachers will obtain a 3% raise in pay.

Virginia too took the initiative to raise K-12 funding by 7.3% while raising teacher pay an average of 3%.

While the appropriations process in Louisiana is only beginning, prospects that beginning teacher pay may increase by about 7% offer some promise. However, to accomplish that it has been proposed to sacrifice the remaining 50% of the inflation escalation part of the Minimum Foundation Formula. Let us remember that half of the 2.75% factor was taken a few years ago and dedicated to across the board teacher pay increases.

It is also well to remember that success in this initiative has still another cost: Where is the ancillary funding to pay for retirement and health benefit rises tied to salary?

Not only is the cushion against inflationary jolts, envisioned by developers of Louisiana’s MFP, being deflated, but, local schools will inevitably be expected to find the money for the increases in retirement and benefit costs. This is in spite of the Constitutional requirement that the Legislature of the State of Louisiana pay for retirement costs for teachers.

The Louisiana Board of Elementary Education was told, by DOE finance personnel, that local school boards would have to find $113 million in 2005-2006 to fund increased costs of retirement and health benefits. If school systems have to absorb all of this increase, BESE was told, 28 system will have zero fund balances by July 1, 2006.

The bottom line is that school districts have no control over spiraling health insurance premiums or the employer contribution rate established by the retirement system. The growth factor in the MFP does not come close to keeping pace with such increases.

The only additional funds coming from the state that could help offset those increases are contained in the annual growth contained in the MFP.

The Department told BESE that “without additional state assistance, 47 of the 68 school systems –69% -- will be in serious financial trouble by the end of this fiscal year.”

But that isn’t all by any means!

Fuel, insurance and utility cost rises, one can readily assume, will not retreat in the coming year. The 2.75% MFP dedicated to helping districts cope with such cost escalators may be locked into teacher salary increases.

Where might Legislators and the Governor expect local districts to come up with sufficient local funds to cover those costs?

With many local school boards rapidly running into decreasing financial reserves, and many communities resistant to local initiatives for increasing revenues, it might be interesting to study answers that Legislators would provide if these questions were asked.

Someone has to do the asking! Elsewhere on the LSBA are links to the Louisiana legislature and the Governor’s office. We heard from the Senate President and Speaker of the House that members of the Legislature respond to personal contact.



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