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BOE ‘first draft’ budget calls for $168 million

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Norwalk Superintendent Manny Rivera talks about his first draft 2014/2015 operating budget Tuesday at a Board of Education Finance Committee meeting.

NORWALK, Conn. – A rough draft of next year’s Norwalk Board of Education budget calls for a 3.6 percent increase over this year’s budget, even though the teachers are getting a 4 percent raise.

Superintendent Manny Rivera revealed the $168.1 million first draft operating budget at Tuesday’s BOE Finance Committee meeting. A more polished draft will be presented to the entire board at next week’s meeting, he said.

His budget, put together with parent and staff input, includes making the recommendations of the Capitol Region Education Council (CREC) report for Norwalk’s Special Education program a priority. Also given importance are a redesign of school libraries, the transition to Common Core State Standards, keeping classroom sizes small for younger students and strengthening central services.

The budget includes multi-year projections through 2016-2017. It’s projected that there will be a $176 million budget request in 2015/2016 and a $182.1 million budget request in 2016-2017.

The 2014-15 budget assumes that the BOE will get its 3.6 percent increase from the city, state funding through the Educational Cost Sharing formula will remain at about 7 percent of the total budget, grant funding will remain consistent at approximately $21 million and Alliance funding will carry over. It includes surplus Medicaid revenue.

Health insurance premiums are expected to go up 4 percent.

The 2013-2014 budget is for $162,271,864. This early draft of the 2014/2015 budget is for $168,118,385. That includes $400,000 to maintain low class sizes for kindergarten through fifth grade and an additional $100,000 for middle school intramural sports. A Human Resources department redesign, reorganization, staff recruitment/diversity hiring and systems improvement is budgeted at $285,000. Special Education would get $245,000 to implement CREC recommendations.

A one-time fund to create a facility utilization plan is budgeted for $100,000.

Comments

44 responses to “BOE ‘first draft’ budget calls for $168 million”

  1. More of the same

    Put another way, at $162 million this year….we are going up to $182 million in just 3 more years.
    .
    Is there one public sector employee left who understands real world economics?
    .
    No one wants to see this fail, but was it in the job description to rake out another $20 million from taxpayers as quickly as possible?

  2. Piberman

    Clearly Norwalk’s public school teachers, 5th highest paid in CT according yo the recent Arbitration Report, need more “respect”. Let’s encourage the BOE to again seek recourse to arbitration when the current contract expires to constrain teacher salaries so far removed from our City’s ability to pay. Norwalk’s future is surely becoming another Bridgeport if municipal salaries can’t be constrained. Stagnant property values 3 years running speak loudly to the consequences of funding the 5th highest teacher salaries for a City ranking only 19th in income. It’s long past time for City officials to “respect” City taxpayers.

  3. marjoriem

    Bankruptcy! Too steep. Way too steep!

  4. paradigm corrective needed

    @MoreOfTheSame – “real world economics”? teachers understand that they are paid less than what the market rate should be for the required qualifications and responsibility associated with the job. The only other profession that comes close on those fronts is pediatric medicine… what’s a doctor’s visit costing these days?

    Most teachers do understand that “real world economics” don’t apply when talking about city budgets and for exactly that reason, teachers lobby against, but ultimately continue to accept, salaries that are far too LOW.

    The accusatory tone you brandish (not just yours, it’s common) exemplifies the chicken-and-egg problem facing public education throughout the United States: Can’t raise standards for teacher performance (in a meaningful way) without being willing to pay teachers more; can’t pay them more if taxpayers see educational outcomes as lackluster and teachers as greedy.

    “real world economics” prove out time and time again that if you want to attract top talent, you’re going to pay accordingly. Maybe if the general public had better economics teachers…….

  5. marjoriem, please … “Bankruptcy”? We’re requesting 3.6% increase this year, vs. 3.4% last year, even while absorbing the teachers wage increase. This year City tax revenues (particularly from conveyance taxes) are way up, and the revaluation is shifting some of the tax burden off homeowners. How is a 2/10 of 1% larger increase this year going to lead to “bankruptcy”? Chill out.
    Piberman, the contract reopener negotiations for the teachers contract for year three (addressing the longevity provisions) begins in June of next year.

  6. LWitherspoon

    What does Dr. Rivera’s budget assume happens with the salary re-opener that the Board of Ed won in arbitration with the Norwalk Teachers Union?

  7. Taxpayer Fatigue

    Wow! A 0.2% reduction on a 3.8% budget increase! Once again, the “tax and spend” Republican led BOE and City Council are going to stick it to the taxpayers of Norwalk with another big increase. My taxes more than doubled under 8 years of the Moccia Administration and a largely Republican-led Council.

    So much for fiscal conservatism in the Republican Party of Norwalk! What a joke.

  8. anonymous

    How much of the $20million increase 2014-2017 is for anticipated staff raises in salary?

    How much of the $20million increase 2014-2017 is for increases in staff benefits?

  9. LWitherspoon – For planning purposes, Rivera’s budget assumes the same increase for the teachers in year 3 as in year 2. That is a worst case scenario, appropriate for planning purposes, but we are confident we can do better than that in arbitration. Keep in mind that the purpose of the reopener is not just addressing the grand total in salary, but the entire salary STRUCTURE (which the arbitrators said was unmatched in ‘generosity’ in the State).
    anonymous – Roughly 85% of our budget is wages and salaries, so a comparable percentage of the anticipated budget increases would be attributable to those categories. I don’t have the breakdown between salaries and benefits with me in my office, but the numbers are in the budget spreadsheets. I do note that recent contract negotiations have successfully slowed the growth in benefits costs from 10% per year over the last several years to 4% per year (it would be even lower except for Obamacare-caused cost increases).
    Taxpayer Fatigue – Before I became Chair the Board had been requesting budget increases as high as 8% per year. We have halved that, and hope to continue bringing it down. Sorry we haven’t been able to eliminate increases altogether; perhaps if you could (i) stop national inflation, (ii) eliminate the collective bargaining statutes, and (iii) get the State to fund us fairly under the ECS system (we get 7% of our budget from the State, while comparable size-and-wealth Danbury gets 23%) we could get it down to zero. Let me know how you make out on that.

  10. More of the same

    @paradigm corrective needed. You would have failed Econ 101 by a mile.
    .
    Public school teachers are grossly overpaid compared to what the market will pay.
    .
    Private school teachers earn far less and produce a superior product.
    .
    Public sector education is ANYTHING but competitive. I hold teachers in the highest esteem, but no one forced them to take what you consider to be low paying jobs. Even though that low pay happens to be well more than the average private sector worker with the same level of education and experience. Oh, and did I forget to mention 12 weeks of vacation?

  11. More of the same

    @ML. Keep up the great work. 3.6% is a great starting point from where we’ve been. Thanks for explaining the conservative forecast as well.

  12. Taxpayer Fatigue

    Maybe you should check the inflation rates for the past 8 years…The rest of us are doing more with less, the BOE needs to do the same but the reality is you are unwilling to make the necessary reductions. To pay for contractual raises, eliminate an equal number of jobs – they’ll eventually get it.

    Maybe if Chiarmonte hadn’t completely failed in his efforts to improve our ECS by insulting everyone in Hartford, we wouldn’t have the problem we have now. Since we now have a Democratic Mayor, Governor and legislature, why doesn’t the BOE push for a renewed effort to improve ECS funding?
    Let me know how you make out. BTW – under Obamacare, I’m getting better coverage and saving $120 per month. Most businesses I know are pushing back and getting only modest increases in their rates compared to previous years.

    Republicans always have an excuse and blame other people, but at the end of the day, they are always the most fiscally irresponsible. Bush, Reagan, Nixon created huge deficits and the dems are the ones who fixed them.

  13. Bill

    Make the teachers do more with less, it is happening in the private sector and it has led to record productivity growth, no reason teachers can’t do the same, if they can’t, fire them and hire someone who will.

  14. Casey Smith

    Regarding the ECS funding formula, I don’t think that anyone really understands it, but I can tell you that many of the major cities feel that they aren’t getting their “fair share”.

    Regarding Reagan’s “deficit”, the eight years that he was in office were the years that were prosperous for me. Bush 1 wasn’t as prosperous, and during the Clinton years, we were struggling. We’ve also financially struggled for the last five years, so I’m not buying the “Republicans left us with debt.” line.

  15. Taxpayer Fatigue – How exactly has Obama “fixed” deficits? They seem to be running at multiple times Bush’s, with no end in sight. I’m glad you’re saving money under Obamacare; this makes you one of the only people who is. But I digress …
    “You are unwilling to make the necessary reductions”. In 2012 we laid off 80 employees — the largest layoff in the City’s history. Hundreds marched on City Hall protesting the “necessary reductions”. Did you, Taxpayer, come to the public hearing to praise us for doing it? I must have missed that …
    We also took the teachers union all the way through an arbitration decision for the first time in 30 years, winning a wage freeze and the aforementioned right to reopen the wage structure in year 3 of the contract.
    At least Chiaramonte TRIED to do something about ECS (unlike any local Democrats have in the last 20 years). Perhaps Mayor Rilling will do better – I think he is a good man and will make the effort. The BoE IS planning to make a renewed push for more equitable treatment under ECS this year; it was specifically discussed at last night’s budget meeting, and one of our objectives for the year is development of a formal state legislative strategy, which hasn’t ever been by the BoE done before, as far as I can tell.
    The negative impact of Obamacare on our budget didn’t prevent us (as I noted before) from bringing the rate of increase in insurance costs down from 10% to 4% — it just prevented us from going even lower. We DID push back and made major progress. But obviously anything less than perfection won’t satisfy Taxpayer.
    Well, we live in the real world where you try to do the best you can when constrained by Federal and State unfunded mandates, union contracts, inflation, etc., and where change has to be incremental. Hopefully most people will recognize how much progress we’ve made against all those odds.

  16. paradigm corrective needed

    @More

    I’m afraid you missed my point. There is no “market” for educators because there is no market pricing. The wage cost is set by taxpayers tolerance for municipal salaries, not the real value of their work and responsibilities. (consult an Econ 101 textbook for the requirements of a free market… educator salaries do not, by any stretch, meet those criteria). Private school teachers are paid less because of the salary bias created by the public school averages.

    one of the factors absent from the equation is also ease of entry/exit from the market competition… tenure is an inhibitor here, and one that teachers would need to relinquish also to create an actual “market”

    and let’s not forget the traditional correlation between the teaching profession and gender… you don’t think the salary structure has been lagging behind for over a century because of the gender bias in society in general.

    For you to say public school teachers are “grossly” overpaid is really a shame… I think you were referring to other public employees who collect “overtime” for doing the kinds of after-hours work that teachers are expected to do as part of the package.

  17. anonymous

    Norwalk public school teachers average over $85,0000 a year, a 10 month year. not including benefits. Some checking might show those to be some of the highest average salaries in the country.

  18. LWitherspoon

    @Mike Lyons
    Thanks for the explanation regarding the forecast for year three.
    .
    I am in agreement with the many who feel that Norwalk is very lucky to have you as chair of the BoE.
    .
    @Taxpayer Fatigue
    Last year’s BoE and the previous City administration negotiated harder with the employee unions than any in recent memory. Have a look at what the teachers said about that and are still saying, if you don’t believe me. Also have a look at who they endorsed in the recent election. The suggestion that the BoE should simply lay off teachers until there’s a zero percent budget increase to send a message is absurd. In real life what would happen is the youngest teachers would lose their jobs, students would suffer when class sizes swelled to unmanageable numbers, and the tenured senior teachers would continue to receive big raises due to collective bargaining laws.
    .
    Once you get past all the challenges presented by collective bargaining, there is the question of what’s politically possible. The cuts Mike Lyons referenced were the result of then-Mayor Moccia and the BET drawing a line on spending on behalf of taxpayers. Those cuts led to such a big outcry and were so exploited by the Mayor’s political opponents that I am sure they contributed in some way to Mayor Moccia’s recent loss.

  19. Taxpayer Fatigue

    When Bush left office in 2009, the deficit was 1,412 Billion. This year, 2013, the deficit under Obama has been cut to 680 Billion. See, they don’t talk about this on Fox News because it doesn’t work for Obama-bashing by the Republicans.

    Thanks for pushing back on benefits costs from a 10% increase to only a 4% increase. That sounds like less of an increase than in previous years but that doesn’t make good Obamacare-bashing either. Facts suck, don’t they?

    As I recall, it was Fred Bondi, back when he was a Democrat, who first stood up to the BOE and said “no more”. A year later, Moccia decided to follow suit.
    It was the years of salary increases for city hall staff and tax hikes every year while he was in office that led to Moccia’s loss. Heck, his parting gift to the city was to put the city’s lawyers into the unions. Boy, the republicans on the council couldn’t run away fast enough from that one last night!

  20. marjoriem

    Talk dollars, not percentages. $182,000,000 in three years? To me that’s bankruptcy, Mike Lyons.

  21. M Allen

    Just so we’re clear on real numbers about the Bush/Obama years
    2002 $157.8 Billion Deficit
    2003 $377.6 Billion Deficit
    2004 $413 Billion Deficit
    2005 $318 Billion Deficit
    2006 $248 Billion Deficit
    2007 $161 Billion Deficit
    2008 $459 Billion Deficit
    2009 $1413 Billion Deficit
    2010 $1294 Billion Deficit
    2011 $1299 Billion Deficit
    2012 $1100 Billion Deficit
    2013 $759 Billion Deficit
    .
    Now back to the story. BOE

  22. granny

    Would be great to see a detailed breakdown of the numbers of how the Affordable Care Act is raising costs. It’s very much appreciated that Mr. Lyons responds to give us clarifications and details. That said, there is something to be also said for excersising tact and extending civility as well as leading by example. We all have to work together towards building bridges, not burning them.

  23. anonymous

    @mike lyons, You reference that 85% of the Board of Ed budget is wages and salaries so 85% of the $20Million increase from 2014-2017 would go there too.

    85% of $20million is $17million.

    Does that mean that $17million of this increase goes straight to staff raises in salary and benefits? And $3million is left for everything else?

  24. marjoriem — The City’s budget overall goes up about 4.2% per year (in recent years). The overall budget is now $309 million and would be expected to increase to $350 million by 2017. The $20 million projected BoE increase would be about 6% of that number. This AAA-rated City, with a grand list of $12.9 BILLION, is not going into “bankruptcy” because of that small percentage. If that means “bankruptcy” to you, you need to look up the actual definition of “bankruptcy” in Websters …
    M Allen – thanks for posting the actual deficit numbers. ‘Taxpayer’ somehow omitted the four separate trillion-dollar plus Obama deficits in between 2009 and 2013 …
    granny — Rich Rudl (Finance Director) told us that the Obamacare-derived insurance cost increase above what would otherwise be expected is $250,000 in this year’s budget. That number will go up substantially when the “Cadillac benefits tax” hits the union benefit packages in future years.

  25. Anonymous, I have the budget projection with me (I’ve emailed a copy to Nancy so she can link it here). Of the projected $20 million increase through 2017, $13 million is for salaries/wages, $5 million is for benefits, the balance is for everything else. We’ve preliminarily identified $2.5 million in cost reductions over that time frame, so the ‘everything else’ actually adds up to about $4.5 million. Note that the projections for years 2 and 3 are ‘same services’ projections to give us a sense of what would happen if nothing else changes. The whole point of doing long-range budgeting is to give us the opportunity to make other things change — to identify areas we can reduce costs, or make program improvements without the need for more headcount (e.g., through better use of educational technology), etc. Years 2 and 3 are there as planning tools, not simply as a statement that ‘this is all the money we want.’ This is using budgeting as a strategic planning tool. The starting place is good data, which we finally have in this budget.

  26. marjoriem

    Mike Lyons, are you saying that the city, AAA rated, is rich enough to support large raises and a large budget?

    Again, when a budget increases by millions a year, that 4.2% isn’t a steady dollar amount. As you add in the millions over the years, the 4.2% increase is definitely not the same increase. In fact, it’s way above the current cost of living increase. Don’t serve us up average percentages. That’s not good math.

  27. More of the same

    @Taxpayer Fatigue. You are proud and admit to being on welfare and yet have this screen name? If you are being subsidized under Obamacare, I’ll posit that you pay no where near your fair share in taxes.

  28. marjoriem, you have been a consistent supporter of the teachers union and teachers pay. Then when they get the pay, you decry the tax increases required to pay for it. Make up your mind.

  29. Oldtimer

    It is troubling that Mike Lyons is counting on future arbitration awards in the BOEs favor. The BOE is required by law to first engage in good-faith bargaining. Arbitration was written in to the law as a last ditch alternative to public sector strikes in the event bargaining failed to reach agreement, when Ella Grasso was governor. It was deliberately written, at that time, so one side or the other clearly won, while the other side clearly lost. This was designed to create a disincentive to arbitration. By publicly telegraphing an intent to resort to arbitration at this time, Mike may well be putting the board in an indefensible position if one of the unions decides to file charges of refusal to engage in good-faith bargaining. The law requires agreement by both sides to certify impasse in good-faith negotiations before anybody gets access to arbitration.

  30. More of the same

    @Oldtimer. You have Mike confused for Bruce. We know damn well who’s on the side of the citizens and children and who is in it for themselves.

  31. Oldtimer, I am well aware of the requirements of the law. As we did last time, we will of course engage in good faith negotiations in an effort to reach a reasonable settlement before going to arbitration. The measure of that good faith is established by the proposals we make and the interactions during the negotiation process, not comments made on blogs. We successfully negotiated new agreements with the nurses, the custodians, and the technicians unions without the need for arbitration during the time-frame when it became necessary to arbitrate the contract with the teachers, and expect to shortly enter an agreement with the ESG union as well. I certainly hope we’ll be able to do so with the teachers this time around, too.

  32. marjoriem

    Mike Lyons, I was using your own facts against you. I am saying that you publicly stated that the city is in excellent financial health. QED, the city can afford the increases in budgets.

    BTW, I am not union.

    Another BTW, you didn’t address the “bad math.” If a budget is $1,000,000 dollars one year (just simplifying as an example) and there is a 5% raise for the first year, that is an increase of $50,000. The next year, 5% of 1,050,000 is an increase of $52,500, bringing the budget to 1,102,500. The third year, with this accumulation, a 5% raise becomes an additional $55,125. The budget now rings in at $1157625. A simple math problem, when multiplied by Norwalk’s actual budget of $168 million, means multiply $168,000,000 by your “average” percent increase (4.2%) for three years (keep adding in those increases for years two and three)and you will find that there is no logic in an “average” increase, especially when the cost of living increases don’t match up to your so-called averages. If I’ve made mathematical errors, feel free to correct me. I’m not a mathematician.

  33. LWitherspoon

    So we could hire 3 or 4 more entry-level teachers at the same budget level if it weren’t for the Obamacare tax of about $250,000 that the BoE – aka us taxpayers – is forced to pay.
    .
    I wonder what the numbers are for all City employees.
    .
    Covering uninsured people is good, if Obamacare does in fact ultimately manage to do that, but I think it’s important to be clear about what it’s costing and who is paying. I would wager that most Norwalk taxpayers are uninformed about the extra $250,000 that we’re paying so that uninsured people can have plans that require them to pay $500 per month in premiums plus $5,000 out of pocket in medical expenses before the plans pay for anything.

  34. LWitherspoon

    @marjorie
    Mike Lyons pointed out that in the past you have argued for higher teacher pay, but you now criticize the BoE for paying contractually-mandated teacher raises. You then proceeded to prove Mike Lyons right by doing both in the very same thread!
    .
    Further, the facts Mike Lyons alluded to do not establish that we can afford to spend more on schools. They simply support the argument that we won’t go bankrupt if we do. Obviously the standard for whether or not something is affordable is not whether or not it will or won’t bankrupt you.
    .
    Sounds to me like you just want to attack Mike Lyons and argue for higher teacher pay. I wonder why.

  35. anonymous

    Does anyone know if any of the $250,000 insurance cost increase due to Obamacare mandates get picked up by school employees or does the whole $250,000 increase get picked up by the Norwalk taxpayer?

  36. The school system (i.e., taxpayers) have to pick up the full $250,000 cost.

  37. marjoriem

    I support higher teacher pay. I support honoring contracts. I believe I have been clear on that. That doesn’t mean I support some other expenditures. When I said the budget was way too steep, I never said to cut teachers’ salaries . I was saying that a AAA rated city can afford a larger budget.
    Again, in case you missed it, I am not affiliated with Bruce or his union.

  38. marjoriem

    An addendum to the above: the city seems to be able to afford larger tax burdens with its AAA ratings, however many individuals can not. The budget is too steep for these times. Norwalk continues to create and hire new, expensive people.

  39. ryan

    Ive just received my new property revaluation. My home has gone down in value a good deal. I wonder if my taxes will follow suit?

  40. ryan, the word is that the revaluation is shifting the OVERALL tax burden from residential to commercial properties. Whether a given individual’s taxes will drop, however, is going to be determined by relative changes in valuation and final tax rates that we won’t know for a while.

  41. Don’t Panic

    http://www.norwalkct.org/CivicAlerts/#550_SingleEntryView

    Estimated taxes calculator using the revaluation has been posted on the city Web site. I belive it users a same services model so it out not what you will pay bit what you would be paying today.

  42. Mike Lyons

    Marj – teachers are 900 of our 1,300 employees. Employee salaries and benefits are 85% of our budget. That means teachers are 69% if our employees, and thus (very roughly) 60% of our budget. Assuming you think only teachers should get good raises, how do we increase that 60% of our budget and not have a major overall impact? If you think other employees deserve raises, too, how do we increase 85% of our budget without increasing taxes? By cutting the remaining 15%? That 15% heats our buildings, buys books, supplies, new educational technologies, fixes roofs, etc. do you want us to cut out all of those? This is my problem. You want good raises for the employees, which is 85% of the budget, but don’t want us to increase the budget. What do you propose that we cut in order to give these raises without increasing the budget. Specifics, please!

  43. marjoriem

    Mike, specifically I don’t understand expensive new hires in the school system. This isn’t a time to expand administration. It is a time to determine the new K-5 Language Arts curriculum. Where are the priorities?

    I also think it is time to look at what secretaries now do. With the computer available, secretaries no longer are needed to type the longhand memos of their bosses. Perhaps they are no longer needed to answer phones. Cell phones are available to every central office person. There is a way to leave a message. If it is an emergency, there is a way to call through. We need to update our systems and our thinking. If secretaries are needed, at most they should work part time, or have one secretary to schedule appointments and meetings for administrators.

    I certainly don’t have all the answers, but I am trying to put out one suggestion in the hopes that others follow.

  44. Marj, I appreciate the suggestion, and I note that we are reducing 6 central office positions as part of Dr. Rivera’s initial reorganization, and his plans extend over several years. As for expanding administration, sometimes it IS the time to expand. Past boards cut central administration to the point that we had no Finance function — leading to a $4 million shortfall, chaotic budgets, and a major layoff. The work of our new CFO – and the significantly enhanced financial control systems we are implementing – is a major reason why we were able to add teachers last year and will add them again this year, WITHOUT busting the budget (remember when the Board used to ask for 8% increases, vs. the 3.4% and 3.6% the last two years)? For instance, on determining the K-5 curriculum, we have no in-house expertise on early childhood literacy (so Dr. Rivera has had to consult with several outside experts as he reviews K-5 options). Given the critical importance of IMPLEMENTATION of that curriculum, he is recommending administrative enhancements to provide the support necessary for our teachers to get early literacy improvements done. In comparison to other cities (e.g., Stamford), our central office staffing is actually quite lean, and it will remain so, but the lack of solid central office administration has directly contributed to financial problems, special education problems, and curriculum problems. Since we want those problems fixed, some (slight) expansion of administration makes sense.

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