Superintendent's View: Schools must maintain adequate reserves, even during hard times

by Chris Belcher

March 5,2010

Chris Belcher is superintendent of Columbia Public Schools. cbelcher@columbia.k12.mo.us

Whether in the U.S. Congress, the Missouri General Assembly or Columbia Public Schools, several conflicting interests complicate the efficient use of public funds.

In all cases, money is collected through some previously agreed upon formula and then dispersed by a group of elected officials. The dispersal of the money often becomes mired in political and philosophical debate. Specific groups form lobbies — official and unofficial — to advocate for funding their programs or interests.

The revenues are connected to the general health of the economy, which by its nature is unpredictable, and the needs of a public organization will always exceed its revenue. For example, in Missouri our teacher compensation ranks in the bottom 5 percent of all states; at-risk students need intervention; medical conditions of students have increased fivefold over 10 years; and parents would like additional programs in various domains. So, when surpluses exist, the money tends to be expended to try to alleviate the various inequities and public demand for compensation and programs.

At the same time, public bodies must struggle with the need for long-term budget planning. It takes a strong board to build surpluses during good economic times. It also requires a five-year budget plan. Public boards can build end-of-year balances with some success if they have a defined budget goal that involves planned deficit spending for a future need. Districts that lack long-term leadership or have excessive turnover of elected officials often struggle to develop such long-term planning. Failure to have such planning results in an endless cycle of program/personnel increases followed by program/personnel reductions.

CPS is planning for the future. Our five-year budget plan requires a planned increase of balances. Our board supports a balance of 16 percent to maintain cash flow and deal with unexpected expenses or reductions in revenue. However, the board also realizes that planning and growing the balance must occur prior to opening a new high school in 2013 and a new elementary school in 2013 or 2014.

Current calculations project that increasing the balances to about 20 percent would allow for a planned deficit spending for years 2013 and 2014 to accommodate the increased personnel and maintenance costs of the new facilities. Of course, this is predicated on very conservative assumptions about assessed valuation and state funding.

Democracy is the best model of government available, and school boards represent the best of local governance and accountability. Similar to other public boards, the school board faces an array of viewpoints and opinions on programs and services. Effective elected leaders listen, discuss and ultimately must make decisions that benefit the long-term health of the system.

While the current economy continues to challenge schools to make difficult choices between immediate and long-term needs, it is incumbent upon elected leaders to ensure the financial viability of the system by maintaining an adequate reserve.