Proposed State Budget Impact on RUSD is Worse than Previously Expected

Racine Unified School District officials said Friday that Gov. Scott Walker’s proposed state education cuts could deliver a $25 million deficit to the district’s 2011-12 budget.

“Because of the amounts and types of state aid we receive, the impact is among the worst in the state,” said David Hazen, RUSD’s chief financial officer.

According to the district’s calculations, RUSD stands to see cuts of $698 per pupil in state general education aid and other programs as outlined in the governor’s 2011-13 budget. This includes a $550 per pupil cut, or 5.5 percent, in general aid to all Wisconsin public schools plus cuts in programs that RUSD participates in aimed at at-risk students and to aid bilingual education.

RUSD has about 21,000 students and nearly 3,000 employees.

Hazen said Friday that RUSD would also be impacted by the loss of state-related aid to students attending 21st Century Preparatory School, a pre-kindergarten through 8th grade school chartered by the University of Wisconsin-Parkside. Other things in the budget potentially affecting RUSD are lifting the current 480-student enrollment cap on 21st Century Prep and lifting a statewide cap on virtual schools.

Prior to the governor’s budget, which was unveiled Tuesday, Hazen had told the RUSD School Board that it could expect a deficit of about $5 million to $8.4 million for 2011-12. Those projections were based on a projected state aid cut of $500 per pupil.

“We knew we’d have less money. Now, we know it will be a lot less money,” Hazen said.

On Tuesday, RUSD opened contract negotiations with six bargaining units representing its unionized employees to replace the present contracts that expire June 30. District officials proposed a two-year wage freeze, employee contributions of 5.8 percent of salaries toward the state pension fund and increases in health insurance contributions.

Hazen said those changes would save about $15 million annually, leaving RUSD with a $10 million budget gap.

Because 80 percent of the district’s budget is personnel costs, cutting the workforce by 130 positions is a possibility, Hazen said. At a $70,000 average salary/benefit package, the cuts would trim a little more than $9 million from the budget. The district may also consider larger class sizes and reducing or eliminating “programs that support student learning,” according to a district statement.

Gov. Walker’s new budget, designed to deal with a $3.6 billion state deficit, cuts aid to school districts, local governments and technical colleges. Property taxes are frozen to prevent local governments from making up the lost aid through property taxes.

To help the local governments make up for the reduced state revenue—without raising taxes--the governor has proposed that nearly all public sector employees contribute 5.8 percent of salaries toward the state pension program and that most collective bargaining activities be eliminated. That would allow school districts and municipalities to require unionized employees to contribute at least 12.6 percent toward health insurance premiums.

The latter provisions are the most controversial elements of a budget repair bill that is tied in up in the Legislature.

In any event, RUSD must have its preliminary 2011-12 budget ready by mid-June. “We really don’t have a whole lot of time,” said Hazen.