Handling a Budget Crisis

Posted by Matt Berringer on June 30, 2011

By Dr. Ramiro Zuniga

It is no secret that school districts are being greatly affected by the current budget crisis. Many school districts have already made plans to eliminate positions across the board. Some districts are eliminating teachers, others are eliminating administrators. Still others are encouraging early retirement for their most seasoned professionals.

Unfortunately, there are no magic solutions to this type of situation. School districts will need to prepare for a bumpy ride.

Over the last few months, I’ve been pondering on how to possibly avoid, or at least minimize this type of situation. For the sake of brevity, I will summarize my thoughts on this matter. Know, up front, that these thoughts are oversimplified intentionally to make a point. Understand too, that the budget process of any school district is complex, to say the least.

I will compare a school district budget to that of a home budget, as I think there are several key points that can be drawn from this comparison. First of all, the basic formula of consistent savings coupled with measured spending should result in a healthy home budget. Right? Well, the same holds true for school budgets.

So here is a question. “Why do school budgets have to increase every year?” I would suggest that although there are external factors, school districts can minimize the need for an increase. Here is another question. “What does a household do when nobody gets a raise?” The wise thing to do is to reduce expenses to reduce the need for more money. The same applies to a school district.

“How does a household prepare for an emergency?” The smartest way to prepare for an emergency is to ensure that savings are built up. The same applies to a school district. School districts should work hard to build up their general fund balance.

“How does a household build up savings, even when there is no raise?” The only way is to comb through past purchases and purchasing patterns to see where the money is going. Each expenditure should be scrutinized to see if the purchase could have been bought elsewhere for a lower cost. Furthermore, expenditures can be categorized as a necessity or non-necessity. Decisions can be made to purchase at a lower cost and to purchase necessities. This also can apply to school district budgets.

Again, the points above are admittedly oversimplified. I would however, encourage both current and future administrators to view their budgets in a different way. I would ask administrators to seriously try to reduce spending versus maintaining current spending trends. I would further encourage this approach even when there is no budget crisis. You may not completely eliminate future budget crises but you would be better prepared. Imagine how well prepared a school district would be if every administrator followed this practice.

Know that I have always asked my students to “step up and make a positive difference,” especially, when they become administrators. This would be such a time.

Topics: budget, technology, general fund, education, K-12