D.C. schools may face another budget shortfall

By Bill Turque
Washington Post Staff Writer
Wednesday, September 29, 2010; 7:19 PM

The D.C. public school system, which laid off more than 200 teachers last October to close what Chancellor Michelle A. Rhee said was a budget gap, is facing potential new financial problems in the fiscal year that begins Friday because of a projected $30 million in overspending on special education.

Rhee said in a statement Wednesday that the estimate, part of an analysis by D.C. Chief Financial Officer Natwar M. Gandhi that places the citywide budget gap at $175 million for fiscal 2011, is "premature."

But she also said she was prepared "to take any actions necessary to offset any potential pressures to balance the FY '11 budget, as we have in past years."

The 2009 layoffs produced serious political problems for Mayor Adrian M. Fenty, who was defeated in his bid for reelection this month in the Democratic primary by D.C. Council Chairman Vincent C. Gray. The reductions sparked student and union protests and deepened a perception among African Americans, who comprise the bulk of the city's teaching corps, that Fenty was indifferent to their interests.

Union leaders also asserted that Rhee, who executed the layoffs after hiring a record number of new educators the previous summer, contrived a budget crisis to remove teachers she considered undesirable, a charge she denies. A Washington Teachers' Union lawsuit challenging the financial basis for the job reductions is pending.

Personnel costs are by far the school system's biggest expense. Using the budgeted average of $85,000 in salary and benefits per teacher, closing a $25 million gap would require a reduction of about 300 jobs.

Despite last year's layoffs, the Fenty administration has carefully shielded its education budgets from the ax that has fallen on city agencies as the District's economy has deteriorated. Buoyed in part by federal stimulus dollars, the school system's operating budget rose more than 16 percent from fiscal 2007 to 2010 ($669 million to $779.6 million) before dipping by about 3 percent in the budget that will take effect Friday ($757.5 million).

But the city's continued financial problems, driven by declining tax revenue, could place the education budget at greater risk, despite its status as a top priority of the mayor and council. Fenty is expected to propose cuts this fall before leaving office in January.

"Somebody has got to be at risk," said council member Jack Evans (D-Ward 2), chairman of the Finance and Revenue Committee. "One hundred seventy-five million is too much money to cover through gimmicks. Frankly, schools and human services have all the money. If you're not going to cut from there, there's really no other place to go."

The special education spending in question does not involve the nearly $300 million a year spent on private school tuition, transportation and attorney's fees for about 2,500 special needs students who cannot be served by District schools. Gandhi's focus is instead on the $54.2 million allocated to local schools for teachers' aides and support services provided by psychologists, physical therapists, audiologists and other specialists. A "spending pressure analysis" conducted by Gandhi's office estimates that the programs will cost $85.9 million in fiscal 2011, an excess of $31.7 million.

Evans said that according to Gandhi's staff, the overspending has been persistent.

"They do this overspending every year but have been able to cover it with other parts of the education budget," Evans said. "That just isn't going to work."

Rhee disagreed and said the problem has been a lack of resources. "The Office of Special Education has always been challenged by under-budgeting as opposed to overspending," she said.

Gray's staff is scheduled to meet with school officials Thursday. Spokeswoman Doxie McCoy said the chairman "wants to understand specifically why there is overspending."

Rhee and Gandhi have a history of difficulty agreeing on how much money the school system has and where it has been spent. Approval of the new teacher contract hung in the balance for several weeks in the spring because Gandhi refused to certify the pact as one the city could afford.

Council member Kwame R. Brown (D-At Large), the likely next council chairman, expressed dismay at the latest sign that Gandhi and Rhee are not on the same page.

"I'm alarmed that the CFO and DCPS have been unable to get spending under control because it hurts reform efforts," Brown said. "I want to know how we can get DCPS and CFO to work more collaboratively."

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