The District schools' surprise surplus should not be a point of contention

A BUDGET SURPLUS is normally seen as good news, but D.C. Schools Chancellor Michelle A. Rhee's disclosure of an unexpected $34 million surplus in this year's school budget has created a furor. Politicians and union leaders suggest there was no need for her to lay off 266 teachers last fall. A lot of reckless charges are being bandied about, and before they gain traction -- along the way endangering a new teachers' contract of extraordinary importance to the city -- it's worth laying out a few facts.

-- Fact No. 1: Ms. Rhee does not control school finances. The office of chief financial officer, headed by Natwar M. Gandhi, keeps her books and runs her payroll; she relies on the office for critical fiscal information.

-- Fact No. 2: Last August, Noah Wepman, the chief financial officer assigned to schools, told Ms. Rhee the schools faced a shortfall of $21 million. Ms. Rhee had no choice but to respond in some way; in September she opted for the layoffs rather than the cuts to summer school that some D.C. Council members preferred but which she believed would be more harmful to students. She made no secret at the time that in laying off teachers, she would try to get rid of those who were not effective -- as we would hope she would.

The layoffs were challenged in court; their legality was upheld. No one questioned their financial foundation. Indeed, Mr. Wepman was fired because Mr. Gandhi believed he had not appropriately kept him abreast of the budget pressures facing the schools. Mr. Gandhi's deputy, Gordon McDonald, signed a sworn declaration attesting to the budget problems, and Mr. Gandhi himself gave testimony to the council on Oct. 29 discussing the shortfall.

-- Fact No. 3: In February and March, George Dines, who replaced Mr. Wepman as the chief financial officer's deputy for schools, provided Ms. Rhee with information that the system was spending less than forecast on teacher salaries this year, generating what appears to be a $34 million surplus. Whether this should have been obvious to the CFO before the September layoffs would be a useful question for the council to ask and for Mr. Gandhi to answer. It is clearly not a question that is properly posed to Ms. Rhee. Mr. Gandhi, a consummate budget professional, may clear up some of the confusion when he delivers his much-anticipated analysis of the proposed contract.

Of much greater significance to District students, however, is what the D.C. Council will do with this information -- and with the surplus. The money is not all that much in an annual school budget of nearly $800 million. It could be used to rehire the teachers who were laid off last year, as some council members are demanding. Or it could be used to help pay for the generous retroactive and prospective raises that the union won for all its teachers in recently completed negotiations.

Another way to ask the question: Does the council want to move forward, affirming a contract that will promote teacher quality and morale? Or would it like to obfuscate the facts surrounding this latest development and try to score political points?