Oakland School Board Budget: Hide Money, Pump it to Contractors

Oakland Students Walk Out in Support of Teachers

by Jack Gerson

Retired  Oakland Teacher

Former member OEA Executive Board and Bargaining Team

 

Here are a few points on OUSD finances that I think need to be understood and publicized:

First, OUSD did not end the last school year (2017 – 18) in the red. They carried about $29 million in revenue over to this school year.

Second, OUSD is not in the red for this school year. In fact, by my calculations, as things stand today they can meet OEA’s demands for 2018 – 19 without running a deficit. Which gives them adequate time to moderately reduce outsourcing for 2019-20 and thus meet OEA’s demands for 2019-20 without running a deficit. And still more time to in the same way fund OEA’s demands for 2020-21 without going into deficit.

Third, But the less than transparent – OK, the opaque – OUSD board and administration are instead increasing their already huge budget for outsourcing. This reduces the amount available for increasing teacher salaries, reducing caseloads and class sizes, and providing more to classrooms and to classified staff.

To support the above points, consider:

As some of you already know, OUSD is manipulating the bottom line by grossly increasing the amount that it’s budgeting for Books and Supplies. 

• According to OUSD’s Unaudited Actuals, OUSD spent about $14 million on books and supplies in 2017-18. 

• OUSD’s initial budget for 2018-9 (6/27/18) allocated $19 million for B & S; 

• OUSD’s 1st interim revised budget (10/15/18) allocated a whopping $49 million for B & S

• OUSD’s 2nd interim revised budget (10/31/18) allocated $47 million for B & S;

• OUSD’s 3rd interim revised budget (1/31/19) allocated $44 million for B & S;

At the same time:

• OUSD’s initial budget for 2018-19 allocated $78 million for Contracts and Services

• OUSD’s 1st interim revised budget allocated $86 million for Contracts and Services

• OUSD’s 2nd interim revised budget allocated $90 million for Contracts and Services

• OUSD’s 3rd interim revised budget allocated $93 million for Contracts and Services

So now when OUSD presents its initial and revised budgets, we see something interesting. 

• OUSD’s initial (6/27/18) budget – as currently presented to us – estimates $566 million in revenues and projects not a deficit to the fund balance but a net increase of $22 million (my memory must be fading – didn’t OUSD’s budget when presented last June show a $30 million deficit?)

• OUSD’s 1st interim budget revision increased its estimate of revenues to $582 million – yet somehow changes its funds balance projection to a net decrease (deficit) of  $23 million

• OUSD’s 2nd interim budget revision estimates $586 million in revenue but a net decrease (deficit) of $23 million 

• OUSD’s 3rd interim budget revision estimates $586 million in revenue but a net decrease (deficit) of $21 million.

 

Let’s draw some conclusions:

• OUSD’s initial budget estimates for 2018-9 projected a $22 million increase (the opposite of deficit) in the fund balance.

• OUSD’s 1st interim revised budget estimates $16 million more in revenues than the initial budget, yet somehow projects a $23 million deficit. To do that, they have to be estimating increased spending of about $60 million – to account for the additional $16 million in revenue, the $22 million they’d estimated as a net increase, and the $23 million they’re now estimating as a net decrease (deficit)!

• Most of this $60 million increase in spending comes from three areas:

o Books and Supplies budget increased by $30 million (to $49 million)

o Contracts and Services budget increased by $8 million (to $86 million)

o Other Outgoing budget increased by $10 million (to $17 million)

• The 2nd and 3rd interim budget revisions differ from the 1st interim budget revision mainly by decreasing the Books and Supplies budget slightly each time, and correspondingly increasing the Contracts and Services budget. So now, as of the 3rd interim budget revision:

o Contracts and Services is a whopping (and outrageous) $93 million;

o Books and Supplies, at $44 million, is still $30 million more than was spent on that category in 2017-18.

Conclusion: 

• There’s still a $30 million excess in books and supplies over what was spent in 2017 – 18. That’s money that could be used to fund increased salaries, smaller class sizes, reduced case loads, etc. But as described above, that money is slowly being pumped over to private contractors, financing the increased projections for Contracts and Services. I think that, unless this is called out and fought, OUSD will continue to take money that they’ve sequestered in the Books and Supplies excess – money that could and should be used to increase teacher and classified salaries and reduce class and case loads – and shovel it out to private contractors. 

 

• Note that every year at about this time, a parade of contractors march into board meetings saying that they need an extension of their contracts -- meaning more bucks -- to finish the work that they originally contracted to do. And the board invariably says "OK",  thus increasing their outsourcing budget. Then they turn around and say that they’re going to run a deficit and can’t afford to budget for what public education and educators really need.

 

• SHINE A LIGHT ON THIS AND DEMAND IT STOP. And we can do that by demanding that Books and Supplies money be used to meet OEA's contract demands. (And note: there’s money elsewere in the budget that can be made available. I’d start by looking at “Other Outgoing”).