A Look at the School Budget Process

[Editor's note: The following article was contributed by the . The content in the article represents the sole view of the North Reading Public Schools.]

By Carl Nelson, Director of Finance and Operations

Most residents are aware of the fact that the school and town budgets are allocated at Town Meeting, which, this year, will begin June 6. Yet the budget development is a process that takes place throughout the entire year. With the budget season heating up it might be helpful to explain the process and the timelines that govern the steps leading up to the town meeting budget appropriation.

The first official step is for the School Committee to adopt its budget goals. These goals, which are adopted in September for the following school year, provide direction to the school administration on the shape and direction of the proposed budget.

At this point each school principal and/or director begins the process of formulating their individual expense budget proposal for review by the superintendent and director of finance and operations. The individual school councils and other forms of public input are invited at this stage. These proposals are scrutinized to ensure that they are consistent with the budget goals. These submissions are normally due in late November.

In early December the superintendent begins an examination of the staffing patterns of the school district. Are there enrollment shifts taking place? Should there be more or less personnel devoted to reading, special education and/or library services? These are just a few of the many focus areas that are studied as part of the annual budget formulation review.

In February the preliminary budget is issued. This budget is widely circulated and forms the basis for discussion as the budget season kicks into high gear.

Throughout the year, the Finance Planning team, comprised of the respective leadership teams of the Board Selectmen, School Committee, Finance Committee, and town and school administration meet regularly to monitor the budget process. One of the ongoing roles of this group is to forecast revenues. These estimated revenues, called available funds, become the basis for what budget figures the town can afford.

The challenge is for town and school leaders to craft budgets that fall within the parameters of what funds are forecast to be available. In these difficult economic times the town’s available funds are not increasing at the same rates as had been the norm prior to the 2008 economic downturn. This has meant that increasingly difficult service delivery decisions have had to be made, particularly over the last three fiscal years.

The next fiscal year (July 1, 2011 to June 30, 2012) will have two primary challenges. First, the school department will lose the bulk of its federal stimulus funds. These monies, provided during fiscal years 2010 and 2011, had been appropriated by Congress to assist schools through the fiscal crisis. Secondly, the inflationary cost of employee health insurance is rising at an unsustainable rate. The annual increases can eat up almost all of each year’s total revenue growth, thus leaving very little for the town’s other needs.

As the spring budget season progresses the School Committee will hold a series of budget workshops and a budget forum on April 11, 2011. The School Committee will adopt a final budget recommendation on April 25. It is this budget figure that will be forwarded to the Board of Selectmen and ultimately presented to Town Meeting in June.