Creative Funding for Schools

From Education Week.

Creative Solutions Eyed in Bids to Avoid Layoffs, Spare Crucial Programs
By Michele McNeil

At a time when states, collectively, face more than $30 billion in budget gaps, school districts are scrounging for money and for creative ideas they hope will allow them to hold on until the economy recovers.

In an effort to avoid, or mitigate, teacher layoffs and drastic cuts to politically sensitive programs, districts are aggressively raising money from private sources, upping their fees, and squeezing savings from existing budgets.

High schools in Daytona Beach later this year are going to charge $1 per ticket and $5 per car for parking at graduation. A donation of $3,000 from a dental office paid for this year’s science fair at Vista Magnet Middle School for Technology, Science & Math near San Diego. And the Clark County, Nev., school board, in Las Vegas, is debating whether to charge students an activity fee to take part in sports and other extracurricular activities.

In perhaps one of the more dire reports of a school in need, the Academy of the Americas school in the Detroit district has sent a letter asking for donations for school staples: light bulbs, pencils—and even toilet paper.

But some educators warn that there may be a limit to the utility of such methods that, while often more palatable to the public, may not generate as much money or do so as quickly as more-drastic measures.

“I know school districts are doing everything they can to raise funds,” said Daniel A. Domenech, the executive director of the Arlington, Va.-based American Association of School Administrators. “Revenue generation will help in some areas, but it’s not going to raise money to the level that we need, given that this is by far the worst economic situation that I can recall.”

As Mr. Domenech pointed out, these are “one-shot deals. ... The money isn’t going to be there next year.”

Forecast Darkens

Next school year, the fiscal situation could get worse. Already, 31 states face $30 billion in fiscal 2009 budget gaps and are cutting spending, including on K-12 education. Thirteen states have already made a total of $3.6 billion in midyear cuts to their fiscal 2009 budgets. ("Budget Pain Dampening K-12 Efforts," Jan. 7, 2009.)

In Florida, for example, education will be among the program areas most heavily hit by the $1.2 billion in budget cuts approved by state lawmakers on Wednesday to help plug the state’s projected $2.3 billion deficit. Although lawmakers backed off on the possibility of pay cuts for teachers and other employees, the cuts will reduce per-pupil spending statewide by an average of about 2 percent overall.

For districts facing significant cuts, every penny in savings is important.

The Sarasota County school system in Florida will likely have to slice $40 million—or nearly 10 percent—out of its $425 million general fund budget next school year.

With such a deep cut to the 42,000-student Sarasota County district, a mixture of staff cuts, budget savings, and revenue-raising measures will be needed, said Scott Lempe, the chief operating officer.

So far, the district is squeezing $3 million in savings, or 30 percent, from its energy budget by putting in automated thermostats and even taking the light bulbs out of the front of vending machines.

“We’re spending $10 million a year on energy; that’s too big a piece of the budget to not say there’s a better way,” Mr. Lempe said.

To help cut its custodial budget by nearly $3 million over the last three years, the district bought a special cleaning machine that allows custodians to spray down and clean an entire multi-stall school restroom in seven minutes.

Over the past year, the district has saved $1.5 million in construction fees by negotiating with city and county governments to waive fees for building permits, water hookups, and other add-ons. And, the district saved $250,000 on criminal-background checks on volunteers by purchasing a subscription to a national crime database and doing the checks in-house, rather than having the state run a background check on every volunteer, every year.

On the revenue side, the district raised its rates, by as much as triple, for private groups’ rental of facilities such as cafeterias and auditoriums. And in the 2007-08 school year, the Sarasota County Schools Education Foundation raised $1.2 million for the district to fund innovative classroom projects.

Such revenue-raising measures will be central to weathering the fiscal storm, said John Musso, the executive director of the Association of School Business Officials International, based in Reston, Va.

“We’re telling people they need to look at revenue generation in addition to spending cuts,” he said. That includes school fees, whether they be charges for parking, athletics, parking, or textbooks, Mr. Musso said.

“At this point, nothing is sacred,” he said.

His organization, ASBO, is working on a tool kit for school business officers, with ideas on how to bring in new revenue rather than make across-the-board cuts to programs. One emphasis will be on venture philanthropy, which supports targeted programs with a hands-on approach.
Calling on Parents

Sometimes, the situation calls for an emergency appeal.

When the 15,000-student Capistrano Unified School District in Southern California sent out 266 pink slips last spring to teachers, threatening to drive up class sizes, parents rallied. A fundraising drive by the Capistrano Unified School District Foundation, which asked parents to donate $400 per child to the cause, raised a whopping $1 million in two weeks—money explicitly used to keep teachers on staff for one more year.

“A lot of people were skeptical about whether parents and the community should really be offsetting the budget like this,” said Stacey Flynn, the foundation’s executive director. “But I felt like this was an emergency situation.”

She said the foundation tries not to rely too much on parents. It also holds community fundraisers such as golf tournaments or raffles to pay for such costs as music programs and teacher supplies.

Faced with a threat of teacher layoffs, however, the foundation felt compelled to appeal directly to parents to raise money aimed at keeping class sizes stable for their children. Ms. Flynn cautioned, though, that the foundation can’t sustain such fundraising momentum.

“I can run around and raise money like a madwoman,” she said, “but it’s just a Band-Aid.”