PGCPS: FY 2012 Superintendent's Proposed Budget

Letter from the Superintendent of Prince George's County Public Schools Ms. Verjeana M. Jacobs, Esq. Chair, Board of Education

Dear Ms. Jacobs:

Pursuant to the Education Article of the Annotated Code of Maryland, the Superintendent’s FY 2012 Proposed Annual Operating Budget for Prince George’s County Public Schools is herewith submitted. The proposed budget totals $1,688,112,606 covering the fiscal year July 1, 2011, through June 30, 2012. This amount is an increase of $54,586,065 or 3.3% over the FY 2011 operating budget originally approved. This proposed budget maintains core services essential to the Board of Education’s Theory of Action and the school system’s priorities. Revenues supporting school system operations in FY 2012 are expected to be severely limited, but without a substantial increase in revenues, the Board will need to consider increasing class sizes, continuing staff furloughs, and other actions to close the gap. The loss of federal stimulus funds in FY 2012 and potential actions taken by the state of Maryland to address its projected structural deficit, combined with minimum amounts required from the County are the primary basis for the limited revenues. The decline in growth for FY 2012 joined with the possibility of further decline in revenue has required that proposed expenditures reflect strategic reductions that will ensure services essential to preserving our core business. The chart below demonstrates the magnitude of the changes over the last several years compared with FY 2012.

The revenue view reflects the impact of the major challenges that the State and County are facing in the next year. This situation is largely marked by a loss in revenues associated with the housing market, including rising foreclosures and the continued decline in housing sales. These real property tax revenue losses, combined with a recession in the national economy along with anticipated lower student enrollment, translate into limited available revenue to support the FY 2012 Proposed Operating Budget. In spite of this, this proposed budget requests additional support from the State and the County in order to avoid continued furloughing of employees and the potential elimination of successful programs.

Due to the ending of State Fiscal Stabilization Funds and Targeted Stimulus funds in FY 2012, federal revenue sources are expected to decrease by $71.4 million from the FY 2011 Approved budget. These funds were used to pay system wide utilities and school supplies, and supported Title I and Special Education programs. When the additional federal Education Jobs funding is factored in FY 2011, the federal funding cliff is projected to be $103.1 million. State funds are projected to increase by $49.2 million primarily due to the assumption that the Governor would have to include, and the General Assembly would have to approve, funding for the Geographic Cost of Education Index (GCEI) component in the FY 2012 State budget and a projected increase in Compensatory Education funding due to a projected increase in the FARMS population. The County contribution is projected to decrease by $2.7 million due to a drop in student enrollment but still meets state Maintenance of Effort (MOE) funding levels. Revenues from Prior Year Fund Balance are reduced 100.0%, which represents $6.0 million less than the FY 2011 approved budget and Board Sources are projected to decrease by $4.2 million primarily because of reduced tuition rates.

Additionally, changes to the State and County funding amounts may occur as updated State-wide wealth, enrollment and other information is received during the budget development process. Moreover, a key area that the State may consider in reducing the structural deficit that it faces is the potential redirection of the State Retirement funding from the State to the Board of Education, and this will necessitate further adjustments to the FY 2012 proposed budget. Similarly, changes in requested and/or approved County funding levels will require revisions to amounts shown in the proposed budget.

As a result of the limited revenue growth, compounded by the loss of federal revenue resources the FY 2012 Proposed Annual Operating Budget requests $64.7 million in additional state aid and $25 million in additional funding from the County in order to address its revenue gap. The proposed budget continues prior year reductions such as not funding COLA, no step increases, stipends and differentials and maintaining position reclassifications but funds the restoration of teacher and staff salaries from the furlough reduction in FY 2011. The proposed budget focuses spending on the maintenance of core services directly related to improvement in teaching and learning within classroom instruction in support of high student achievement. Priorities under high student achievement include the Advanced Placement Program, IB, AVID, Special Education Reform, Secondary School Reform, Middle College, Charter Schools, Pre-k, and HSA Reform. The continued funding of these priorities is critical to meet the goals of the Master Plan and support our vision for all students to graduate college-ready.

The process for developing and adopting a budget includes public input. Public forums were held in October to receive community input on budget priorities to ensure all available resources are effectively and efficiently used. This Proposed budget has considered the community’s input in preserving programs and services supporting classroom instruction, within projected available revenues, consistent with the Master Plan.

The Board of Education will hold three budget public hearings between January and February, as well as public work sessions on the budget in January and February, as it considers, adopts and submits its budget request to the County Executive by March 1, 2011.

Despite the severely limited resources available this year, the FY 2012 Proposed Annual Operating Budget maintains our best efforts to achieve school system goals and fulfill our mission to ensure our students, teachers and support staff have tools and resources needed to help children learn and achieve. Funding provided in prior years, combined with efforts to distribute resources equitably with a focus on effective programs and services that produce meaningful results enabled the school system to attain record levels of achievement on State tests. Unprecedented student participation and remarkable levels of success in all subgroups occurred both this year and in the past year.

While the economic outlook remains bleak, full funding of the FY 2012 Proposed Annual Operating Budget will maintain the core instructional programs and services needed to support teaching and learning and support the critical strides made in achievement by the students of Prince George’s County Public Schools.