School budgets 101
It might come as a surprise that local school districts are already working on next year's school budget, which won't be voted on or approved until May.
In fact, according to Richard Snodgrass, business manager for York City School District, planning for the upcoming budget never really stops. As the school year progresses, he is careful to keep track of what's working with the current budget as well as any weaknesses or issues that he can try to mend in the upcoming budget.
School budgets can be complicated, but nearly everyone is affected by them through school taxes, often seen in property taxes. Many aspects go into making a school budget, and Snodgrass explained the district actually controls very little of it. Many costs are fixed ahead of time.
Planning a budget: Snodgrass says he begins preparing for a school budget by looking at what drives the district's payments, the largest of which are salaries. Salaries are typically controlled by a collective bargaining agreement, or a teachers contract. The contracts are negotiated every few years and include terms related to salary information, raises and health care benefits.
If the school is not negotiating a contract, Snodgrass and other district business managers will know what they need to pay teachers, so they then figure out how much staffing they need to pay for, which is largely driven by class sizes. It takes a lot of educated guessing to figure out how many students will be in the district from year to year, but schools estimate based on the previous year's numbers.
"Typically we take a look at the first grade and assume all of those first-graders are going to become second-graders," Snodgrass explained. However, it doesn't always work like that: New students move into the district, other students move out, and predicting the kindergarten class size can be difficult because students can enroll even after the new year has started.
Snodgrass then looks at insurance, Social Security, worker's compensation, pension and health insurance, based on his estimates of how many teachers the district will have, how many are currently on worker's compensation and how many will be retiring.
Every school has debt that needs to be repaid, typically from building renovations or other work that has been done. Much like re-mortgaging a house, sometimes a district can re-work its debt so that it pays less interest. Aside from that, these costs are set once the district enters into a contract to get the work completed.
Finally, Snodgrass will look into utility costs. He said there isn't much in the short term that a school can do to cut these costs, but in the long term, they can look at energy-saving projects. Weather typically drives utility costs, making that aspect out of a district's control.
Revenue: Once there is an idea of what the expenditures should be, business managers will try to estimate the revenue resources. The revenue source that impacts a number of community members is the local school taxes, the largest of which is real-estate tax.
Snodgrass said the district really does not enjoy raising taxes, though some people might believe they do. York City School District has not raised taxes for people living in the district in four years, but it's still a sore subject because the district does have the highest tax rate in the county.
"We don't enjoy taxing people," Snodgrass said. "We do care. It's a balancing routine. We want to be fair to the kids, to the taxpayers and the employees."
In addition to the school taxes, the district gets revenue from the state. The state budget is made up of a number of elements, including a basic instructional subsidy for teaching students, subsidies for special education and reimbursement for retirement and Social Security contributions by the district. Schools typically vote on and approve their school budget before knowing what they will get from the state, so they calculate based on what the district had received the year before.
"Not knowing what the state is going to give us in funding is a much bigger problem here than in other districts," Snodgrass said. "The cost of doing business in an urban environment is higher because of the types of problems you deal with."
According to Snodgrass, urban education is usually more expensive than education in suburban or rural districts. Things break more frequently; they need more supports, such as hall monitors, attendance officers and school police; and they have a more diverse population and needs.
Finally, school districts get money from the federal government. Title 1 funding is a program that gives schools money for remediation, which Snodgrass explained is typically used for reading and sometimes math support for students. Title 2 funding from the federal government provides funding for professional development for teachers, which allows them to stay up to date on the best teaching practices. Title 3 funding helps pay for English language-learner programs and is figured out based on how many English language learners there are in each district.
Charter schools: Charter school budgets operate differently than public school budgets.
Monik Johnson, business manager for York Academy Regional Charter School, said a large revenue source is their tuition rates, which are calculated by a formula at the state level. Individual students do not pay tuition to attend a charter school, but school districts where the child is from do.
Snodgrass said that a huge cost for the York City School District is charter schools. The rates that the district pays for students to attend charter schools can change year to year, and the tuition rate is different from school district to school district, according to Johnson.
Charter schools cannot collect taxes, but other than that Johnson said charter school budgets and public school budgets operate fairly similarly. One major difference is debt bonds, which public schools tend to have for work done on their school buildings. Charter schools often lease the buildings in which they operate.
Johnson said charter schools operate as nonprofit organizations, which means they can take donations and put it toward budgetary expenses.
For Johnson, the charter school's main challenge when it comes to the budget is the uncertainty of what they'll receive in tuition from the school districts sending students to the charter.
"We don’t have control over what we’re getting," Johnson said.