April  28, 2007

Rejection of Brandywine tax
likely to result in drastic cuts

Failure to obtain voter approval to increase the Brandywine School District operations tax rate for the coming fiscal year probably will result in a package of budget cuts which will include an across-the-board layoff of 5% of teachers, administrators and support staff members; closing an elementary school; and cutting sports and other extracurricular programs by about a third. 

That, superintendent James Scanlon told an emergency workshop session of the school board, will be in addition to not being able to implement the district's new strategic plan, including full-day tuition-free kindergarten, and increasing the levels of building maintenance and technology use.

He said $4 million worth of local spending will have to be slashed. That is about 10.5% of the portion of the budget financed by local revenue.

Although the board has not formally approved going back to voters following their rejection of a total proposed increase of 38.2 per $100 of assessed value in the operations tax rate, discussion at the workshop on Apr. 27 left no doubt that will be done when the board reconvenes for an emergency business meeting on Apr. 30.

The workshop was attended by five of the seven board members. Absent were Mark Huxsoll and Sandra Skelly. The audience was noticeably larger than it is at most board sessions.

Scanlon said public-notice requirements and the Department of Elections process provide a 23-day 'window' between June 4 and 26, inclusive, during which a second referendum can be held. He recommended doing it "as soon as possible" in order to eliminate uncertainty about what will happen when the fiscal year turns on July 1.

State law allows school districts to hold no more than two referendums in any 12-month period. That means a third Brandywine try could not take place until late April of 2008.

The board must set the fiscal 2008 tax rate by July 12. The tax is due by Sept. 30.

The most dramatic immediate consequence of the 52%-to-47% rejection of the two-component tax proposal will be formally notifying employees who will 'riffed'. That is jargon for being included in the reduction in force. Under state law, those letters have to be sent by May 15.

Scanlon said law and the district's union contracts require that layoffs be based on seniority, which means the latest to be hired will be at the top of the lists.

Noting that Brandywine in recent years has made a concerted effort to hire the most promising of new teachers coming into the job market, board vice president Nancy Doorey said that "it will be a real shame to have those people grabbed by other districts" during the time between their being notified they will be let go and when the result of the second referendum will be known and, if favorable, they can be recalled. That, she said, underscores the importance of agreeing with Scanlon's recommendation that vote be taken as soon as possible.

Before it can be done, however, the board faces a monumental challenge to determine what it will ask voters to approve. There appeared to be agreement that the size of the proposed increase and the prospect of imposing all but a small portion of it immediately were the key reasons the proposal was defeated.

Doorey suggested that the board's having promised not to seek another tax hike for five years after the 2002 referendum resulted in Brandywine's present do-or-die financial situation. She said a four- or three-year gap might be more appropriate this time. Chief financial officer David Blowman said the longer the gap the higher the tax increase must be.

Doorey also said that some public misconceptions probably contributed to defeat of the tax proposal. Using 2004 data -- the most recent available -- from Standard & Poor's, a financial research firm, she said Brandywine's general administrative costs were $92 per student compared to an average $109 for all districts in the state and $94 for those in New Castle County. School administration was $599, which also was the county average, and compared to $575 for the state.

On the other hand, she said, Brandywine's payments to other school systems were $94 per student, sharply lower than $405 for the state and $441 for the county. That, she said, reflects the relative popularity of Brandywine schools vis--vis charter schools and schools in other districts accessible through the state's school-choice procedure.

She also said references to an end-of-fiscal-year carryover was misleading in that that is money needed primarily to meet the district's payroll during the summer months. Blowman said that is because components of school financing are not in synch. The fiscal year begins July 1, but taxes are not collected until September and county government, which does the collecting, does not begin to remit the proceeds to the district until late October. Also, he said, all but a handful of teachers now opt to be paid 26 times a year rather than just in the 10 months they work so summer payrolls are not much different from those in other months.

The carryover at the end of this fiscal year is estimated to be about $2 million -- which Blowman previously has said provides an extremely narrow margin with which to meet summer obligations.

Board member Joseph Brumskill said he regrets that school districts must seek voter approval before they can increase most of their tax rates. In proposing a 17% increase in its property tax rate, New Castle County government "didn't ask the people -- they told the people they are going to raise the tax," he said.

Board member Debra Heffernan said that when the new tax proposal is crafted "the strategic plan for the most part must be kept intact."

Noting that there were several elements in the defeated proposal and "good reason for [including] every item we put into the referendum plan," president Craig Gilbert said he and his board colleagues are going to have to make some tough choices to come up with a proposal that district residents will support the second time around.

"Remember, 4,800 [voters] said 'no.' If we don't listen, we won't be increasing programs; we'll be reducing programs and affecting people's lives. We're laying off teachers and affecting student learning," he said.

Scanlon said implementing full-day kindergarten already has fallen victim to defeat of the tax increase. Even if the second attempt is successful, he said, time constraints have pushed back the start of the program from this coming academic year to the 2008-09 year.

Blowman cautioned against too strong an affinity for preserving the various elements of the defeated tax proposal. "If you set the rate high enough, you can keep them all. We tried that and it didn't work," he said.

The district has undertaken a survey, requesting that the public respond anonymously to a set of questions posted on its website or available in printed form at the district office. Comments about the referendum and reason for negative votes received by telephone are also being tabulated.

In addition to what he described as a preliminary but  nearly final list of budget cuts that will be required if the second attempt to increase the tax rate fails, Scanlon said some immediate steps have already been taken. They include imposition of freezes on hiring, purchase of anything not considered essential, and all travel.

"The district as a whole has taken [those cuts] very cooperatively," he said.

To come up with his list of proposed longer-term cuts, Scanlon said he endeavored to "maintain as best we can the integrity of [instructional] programs."

In addition to layoffs, closing a school and reducing extracurricular activities, his list includes holding off on purchasing new textbooks, limiting the use of substitute teachers, restricting professional development, not accepting a new seventh-grade class into the International Baccalaureate Program, reducing the number of disruptive students who can be accommodated in the alternative-education program, significantly reducing purchases of supplies and equipment, 'outsourcing' some functions now performed in house, publishing fewer issues of the Brandywine Review, restricting payment of dues to professional organizations, and reducing the amount of data gathering.

"We're looking at everything and anything. ... One way or another, we have to get to $4 million [in cuts] next year," he said.

When Doorey asked, apparently rhetorically, if the list was intended as a list of options, Scanlon replied, "No. We would have to do all of these.'

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