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Budget Update/Alert:

Planning for and Defending against Targeted Reduction to LEA "Administrative Costs"

February 26, 2010 - By Adonai Mack and Brett McFadden

The following update contains two sets of information related to the governor’s proposed targeted cut to K-adult administrative functions in FY 2010-11.  The first focuses on how to plan for such a reduction. The second provides useful information to dispel the myth that California LEAs spend too much on central office administration compared to other functions.

Planning for possible revenue limit reductions

Last week, School Services of California (SSC) released a report detailing the proposed SACS function codes that are focused on the administrative cuts. ACSA’s own investigation to determine the definition of “central district administration” has produced similar SACS codes as those described by School Services.  However, we note that, at this time, the governor’s administration has not officially released language proposing how such a reduction would occur.

This proposal remains just that – a proposal.  It will require legislative review and buy-in by both houses of the Legislature pursuant to the annual budget development process.  It is likely that this specific proposal will be altered, but it will require strong advocacy from ACSA’s regional membership to ensure that it is not included in the final 2010-11 State Budget.

Data used to make a potential determination of the $1.2 billion targeted reduction to LEA administrative costs would likely be from 2007-08.  This represents approximately 12 percent of the costs spent on administrative activities statewide in 2007-08, not the estimated 10 percent described in the governor’s budget proposal. The SACS function codes that could be utilized in the governor’s proposal include:

2100 – 2150 – Instructional Supervision and Administration

  • This includes resources dedicated to Instructional Supervision, Instructional Research, Curriculum Development, In-house Instructional Staff Development, and Instructional Administration of Special Projects.
  • Click here for a detailed definition of these SACS codes.

7100- 7700: General Administration

  • This includes resources dedicated to Board and Superintendent, External Financial Audit - Single Audit, External Financial Audit-Other, Other General Administration, Indirect Cost Transfers and Centralized Data Processing.
  • Click here for a detailed definition of Board and Superintendent items (7100-7180).
  • Click here for a detailed definition of Other General Administration (7200-7600).

8100 – 8400: Maintenance and Operations

  • This includes resources dedicated to plant maintenance and operation and security.
  • Click here for a detailed definition of Maintenance and Operations.

As LEAs develop their Second Interim Fiscal reports, potential March 15th certificated layoff notices, and June budgets, we recommend focusing analysis on the overall reduction of $1.5 billion in 2010-11 Proposition 98 funding.  This would include the revenue limit (RL) reduction associated with the negative 2010-11 COLA and the proposed RL reduction associated with the governor’s administrative cut proposal.  This has been detailed in our budget materials as well as SSC’s updated fiscal dartboard.

ACSA remains in concurrence with other statewide K-Adult management entities that these two estimates should be utilized as part of an LEA’s second interim and June budget planning.  But we continue to fear that the overall fiscal situation facing LEAs could further deteriorate come May Revision.  We mention this to highlight that the construction of the governor’s proposed budget included a variety of potentially flawed assumptions that could impact the final revenue limit hit LEAs have to take in 2010-11.

Unfortunately, we can’t tell you how bad that could be, nor give you a solid dollar amount to factor into your multi-year projections.  The fiscal and political situation remains extremely fluid with a number of unpredictable variables at play. 

Local and regional advocacy against this proposal

The governor’s proposal is nonsensical.  Not only would it severely reduce already decimated vital leadership functions within district offices, but it would also negatively impact the day-to-day operations necessary to maintain high quality instructional programs.  This proposal attacks the core principles for which ACSA was formed and fails to recognize the importance of strong leadership in providing a quality educational environment for all students.

ACSA has noted that this is merely the governor’s proposal and the budget process is lengthy with dramatic changes likely as we move from January to the May Revision to the final enacted budget.  However, we believe that the targeted cut to administration can only be defeated with an effective campaign that points out the discrepancy in the numbers and focuses on the critical importance quality leadership plays when it comes to ongoing student achievement.

Below are links to materials that ACSA has developed to assist education leaders in dispelling the myths associated with LEA administrative costs and the role education leadership plays in student achievement.  We urge education leaders to utilize these materials when communicating to their LEA staff, boards, communities, and local and state political representatives.

We hope you find these materials useful.  You are also welcome to contact ACSA Governmental Relations for additional assistance with this effort.

Click here to review: Talking Points to the Governors Proposed Cut to School Administration

Click here to review: The Facts About School Administrator Ratios

Click here to review: K-14 Education Spending and the Budget Shortfall

Editor’s Note: Adonai Mack is a Legislative Advocate with ACSA in the areas of the state budget, special education, transportation, pupil services and preschool. Brett McFadden oversees ACSA’s Management Services Program, providing consultation and professional development services in the areas of school finance, collective bargaining and Response to Intervention.

Source:  Association of California School Administrators