Last updated on 2011.01.21
Here's some quick local perspective on Governor Dennis Daugaard's proposed 10% cut in the state budget. Now note, as Governor Daugaard said during his budget address this afternoon, a 10% cut in state aid to K-12 education translates into just over a 5% cut in the total budget for schools, assuming their local and federal dollars remain the same.
Back in December, Madison Central superintendent Vince Schaefer estimated that former Governor Rounds's proposed 5% cut in state aid would have cost Madison $275,000. Governor Daugaard's proposal cuts 10% from state aid, $480 per student. Multiply that by Madison's 1150 kids, and Madison loses $552,000 in state aid.
Now suppose we eat that cut and don't raise local taxes---i.e., we don't triple our current opt-out. How do we cut $552,000 from our school budget?
- We could cut all extracurricular activities---basketball, gymnastics, debate, everything outside of the classroom---but that only makes up $357,000 of the shortfall. Nearly $200,000 to go.
- It's more likely we make up the difference by cutting staff. According to the LAIC, Madison Central employs 126 people. Cut every employee's salary by $4380, and we're covered. According to the 2010-2011 budget, the average teacher salary is around $42,800. $4380 off next year's paycheck is over a 10% pay cut.
- Instead of spreading the pain, we could just fire some people. If we start at the top (and this includes coach pay), we have to fire the seven highest-paid employees---Vince Schaefer ($96,770), Dan Walsh, Cotton Koch, Sharon Knowlton, Paula Kingery, Bud Postma, and Cindy Callies ($58,948)... and we'd still have to cut $25,000 more.
- Or let's fire from the bottom up: $552,000 covers the salaries of the eighteen lowest paid certified staff and coaches. Tina Denne, Joey Leisinger, Kristine Waba, Jennifer Fleming, Kelly Swenson, Nicole Gabriel, Nancy Falor, Renae Prostrollo, and several more... all gone.
Consider also the school's proposed new gym and high school renovation, a $16.98 million bond issue on which we vote February 1, at least six weeks before we will know the final disposition of our state aid. Amortize $16.98 million out over 25 years. Assume 5% interest (your mileage may vary). If I'm calculating correctly (Mrs. Callies, feel free to drop by and straighten me out), that translates into an annual debt load of $849,000.
The governor's proposed cut is 65% of the revenue we need to cover the first year's payments on the new gym and HS fix-up.
I am not prepared to ascribe to Governor Daugaard an intention to devastate K-12 education or local economies, any more than I think the doctor coming to amputate wants to kill the patient. I will accept for now the proposition that Daugaard is single-mindedly focused on eliminating the state budget deficit in one year.
But whatever the governor's motivations, these numbers show the practical impact of these deep cuts on local education. And we're not even considering impacts on DSU programs, on local kids paying tuition throughout the state university system, on Medicaid recipients and the doctors they serve, on our state parks, on laid-off public workers who pack up their families and look for work across the border....
Uff da. Put on your grown-up pants: this will be a serious budget debate.
Update 21:02 CST: Tea Area superintendent Jerry Schutz agrees: pass the Daugaard budget, and you'll see school staff cuts and opt-outs.
"that translates into an annual debt load of $849,000.'"
A way to make that understandable, it to convert it into the number of minimum wage or social security earners who would die required to lose that much income in a community.
Might be about like 60 funerals worth of lost money to the community.
grim, but effective
Cory,
I wonder if we will be paying for his 4-day, 8-city trip that was recently announced on Pure Pierre Politics? Yes, a big state-wide trip to make the budget cut proposals "more clear?"
I understand your view Cory, however, our state is facing uniquely tough fiscal times and when he proposes drastic cuts across the board, he should also seek pause in the decisions he makes about what his department will spend. I do not believe he needs to make this trip. That is why we have the media and South Dakota Public Broadcasting. If the budget was not in the dire straits it is today, then, the trip would be fine with me.
Cory, did you see tonight's letter to the editor? It's an interesting read but the main point that I walked away with was that if the high school goes under any renovation to fix the most pressing problems, the whole building must be brought up to ADA code.
I'm not hearing outrage at the Governor's budget, but a sense of gloomy acceptance instead.
Your numbers for the budget don't take into account the 20%-30% increase in health insurance premiums that we all will face in the next year.
What would Bill Janklow do to balance the budget if he were in office today?
Health premiums—ugh!
Guy: good point. Electronic interaction isn't quite as good as face-to-face... but then let's see if this trip is real crackerbarrel-style stumping or just private meetings with Chamber of Commerce hoi polloi. DD could make himself just as publicly accessible by blogging from the governor's office! :-)
Cory, excellent points! I'm sure there will be more issues to focus on than just this trip, especially during a time when everyone is asked to sacrifice for the common good.
According to our figures using amortization tables, the factor for 25 years at 5% is 70.96 per $1000. That equates to $1,204,900 annual debt load for the principle and interest. This number x 25 years equals about $30,125,000 total cost for the gym/renovation project.
And after listening to Gov Daugaard's proposed 10% cut to education, an opt out request will not be far behind. In fact, on the news tonight one school mentioned that would probably be necessary.
Thanks, Guy—I hope you'll keep helping me cover all those issues!
Linda, I'm no banker. I just plugged $16.98M, 5%, and 25 years into the PMT function and assumed monthly payments. That may not be the right formula for this situation. Your calculation makes things look even grimmer.
Gov. Dennis 'deep cuts' Daugaard is making the tough choices right now. It would be wise to put that fancy new gym on hold.
At Monday's forum, the answer to my question on P& I based on a 4.9% rate was 1.112 million annual payment for 25 years. I believe the building itself was built for 1.35 million in 1965.
The frustrating outcome whether the bond issue carries or not is that we will as a district have inadequate funding to hire staff at good salaries. We can not just promote new brick and mortar without first addressing funding for educators and programs. Even brand new cars require "fuel" to operate.
If you were going to trim a "live" turkey so it would be lighter, but remain alive and viable, you certainly wouldn't take off all the skin and feathers because the turkey would not survive...too much trauma. That's what a 10% across the board slicing of the budget does. What we need right now is innovative leadership in Pierre. Not just from our Governor, but also every legislator. Someone who will listen and cut or reduce services provided by the State that are outdated or unneeded. Someone who is open to using a portion of reserves or raising taxes temporarily until the economy recharges. Trim the feathers, don't skin the entire bird. Governor Daugaard needs to take a surgical look at the budget rather than assuming every budget area has 10% of fat. Lopping 10% off and pushing the costs back on the taxpayers, hospitals, doctors and balancing the education budget on the backs of our children is not innovative leadership. Lay down the broad stroke brush and pick up that scalpel. Listen to your legislators this session. This has to be a team effort, not top-down management.
Thanks to open enrollment, a school district is just like a business: customers (families with students) can choose to use a different district to fullfill their educational needs. Every student that decides to leave a district takes the $4000+ with them to their new school. Open enrollment can be a great thing allowing troubled students a chance to do better in new surroundings...BUT...
As the current MHS building ages further, how many families will send their students to neighboring high schools because of the things the bond issue addresses: heating and ventilation, electrical infrastructure, mold and mildew, locker rooms showers, bathroom accessibility and science labs?
There are many things that are related to the condition of the high school that we don't think about that affect more than the amount due on a tax bill: the ability to attract new industry to Madison, new families, new small businesses as well as retaining those we already have.
One of the best successes for Madison has been the Community Center. Not many cities have anything close to the Community Center. Last night when I was there with my family, the parking lot was full of cars and the place was bustling with activity.
Go to the state education page on enrollment. Take the total enrollment numbers and multiply by $480 (I rounded it) and you will have $60+/- million, which is close to 50% of the $125+/- million that the govenor wants to save. Gee, let's sock it to education again!
I'd have to question the Community Center being a great success for the community, perhaps part of the community, but not for most of the community. With an annual family membership fee of $505 and a daily family rate of $18, this facility is not an open and 'community' place, rather a place for those who like to think it's community (and be able to afford its community). I'm not sure the amount of local and state taxes and resources used to construct the facility, but let's figure that as part of the overall picture.
Needless to say, I like my doors open like our libraries, guess I'll be doing my running in the cold.
Chris, the Community Center is a bargain when it comes to the benefits offered compared to prices in Sioux Falls. Running outside is not an option when it's as cold and icy as it is now. The CC has down way more for the state of my well being than my health insurance which is 20 times more expensive per year than our family membership at the CC.
The comparison to Sioux Falls is not really of importance, different dynamics and different opportunities. What is of more importance is how the average, and let's be honest, the less than average income family in Madison (which is the norm) can not easily afford the costs associated with this facility. Sure, it's health benefits are great, but when they're only made truly available to those who can afford them, that is a problem for our community. We should not be proud of a facility that serves those who can afford it's benefits, while neglecting those who can not.
Nothing in life is free. You must invest time, energy and commitment to things that you value in life.
Paul, the ~$60 mil cut to education (almost 50% of cuts) makes sense from a proportional standpoint, as education consists of almost 50% of general funding at the state level.
It holds true to the broad strokes mentality, but doesn't consider the value of the program. Daugaard seems focused on egalitarianism rather than making value-based judgements on impacts/outcomes... it's a strategy, though not one to which I subscribe.
Michael, I think somewhere between our low paying first, second and third jobs, if we've regained employment for that matter, thoughts of enjoying the good life at the Community Center probably seem a little lost and misplaced.
I would also say it would seem unfair to say we lack 'committment' or the zest to better ourselves, but maybe I'll give you the 'time' factor. Actually, I sure wish I had more 'time' to not go to the Community Center, and I remain 'committed' to that.
I go to the CC because I am CHEAP. I hate going to the doctor. I can't find a more economical place for the family to get out and get wet, shoot hoops, play raquetball or just run on the track. I save way more money than I spend.
Since the Community Center is so great, and since DD's cuts mean we can't afford a new gym, maybe the school can afford to drop all sports and P.E. and simply send the kids to the community center to exercise.
Dropping sports would be suicide for any school in the area, especially the small schools.
Cory, I don't do hyperbole.
I guess I consider cutting $552,000 from Madison Central to be budgetary hyperbole, but that doesn't stop the governor from proposing it. Of course, what I consider unnecessarily extreme, Senator Russell Olson considers "a good idea."