Tuesday, March 16, 2010

MG Budget Decisions Must Be Carefully Considered By Dean Bowles

From the Herald-Independent:

After the recent public hearings and board meetings I feel compelled to write this letter. Your budget decisions over the next weeks and months will not be easy but are vital to the quality of the Monona Grove Schools, schools that our children attended, and my wife and I have supported for 44 years.


Three-Year Budget Plan. The FY2011 budget decisions should be in the context of at least a 3-year budget plan since state school aids will be no better, and probably worse, in the next biennium, and revenue caps are likely to remain. In short, this year’s $1 million budget cuts, while difficult, will be easier than in any of the next three years.


Fund Balance. Make no decisions that put the MG schools in a long-term structural deficit. I have heard casual, uninformed talk that “MG has a “slush fund,” “rainy-day fund,” or “money hidden in the budget” that could be used to save programs. Not so. However, MG has a minimal “Fund Balance” of about $5 million that is vital to the financial health of the MG schools and should stay at 15%-25% of the budget which is also Board policy. The Fund Balance should not be considered a “cash” balance but an asset that pays for ongoing liabilities during the school year to avoid high interest, short-term borrowing and low financial ratings. Tinkering with the current Fund Balance will be costly in the long haul and only make future budget decisions even more difficult.


Procrastination and Delay. Procrastination and delay will only make the problem greater. Act and vote incrementally with the best available information after you have had informed recommendations. Make perhaps 120% of the cuts necessary to balance the budget. All this should be done with the expectation that the Board will act on and amend the preliminary budget when the whole package is assembled incrementally.


Dean Bowles is a former Mayor of Monona, a Deputy State Superintendent of Schools, and Professor of Educational Leadership & Policy Analysis.

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