The FY25 School Budget Realities

At the April 9, 2024 School Committee meeting, the committee and the mayor began discussions about funding the proposed $51 million budget. Buckle up!

A quick note on the status of FY24

Good news! The district froze spending and secured a significant grant, resulting in the structural deficit for FY24 being slightly lower than the anticipated $2.6 million. The school committee requested of the mayor to make an appropriation request of $2.35 million to the city council, which she did.

The city council approved this appropriation, which officially closed the structural deficit of the current year to ensure that this year’s budget will be fully funded.

The Practicalities of Funding a School Budget

The superintendent and school committee have been working on the FY25 budget since the January 23, 2024 school committee meeting, with all departments presenting their needs-based budget before the committee, and the community providing comments on the proposal thus far. The FY25 budget is for $51 million, an increase of $51-$46.8 = $4.2 million over FY24.

Looking at the six budget items, the breakdown and comparison to FY24 is:

                                    FY24                                       FY25

Franklin ECC                $1.8 million                             $2.0 million

Elementary Schools       $16.1 million                           $17 million

MVMMS                      $7.8 million                             $9 million

MHS                            $10 million                              $10.8 million

Spec Educ                    $7.3 million                              $8.1 million

Admin and Other          $3.8 million                             $4.1 million

Total                            $46.8 million                           $51 million

As has been said in previous articles, the three sources of income for this budget include Chapter 70 state funding, Offsets, and money from the city of Melrose. Thus, the equation is:

Total budget = Chapter 70 + Offsets + City portion, such that:

$51 million = $12.1 million + $5.6 million + $33.1 million.

Tonight’s task of the school committee was to begin the process of determining what is required for the Melrose Public Schools to fully meet the needs of the Melrose students, what does that cost, and what can Melrose fund? This year the superintendent has presented a truly needs-based budget, and each of the departments have offered their needs and corresponding budget numbers to the school committee.

What are the goals of the superintendent and this budget?

First, let’s start with the superintendent’s stated priorities and goals for the Melrose Public Schools and specifically the next school year:

• Address middle school staffing to meet student enrollment needs.

• Implement language-based learning programs at the elementary level to develop a long-term resource that will, over time, allow Melrose to keep more students in-district and thus lower special education costs.

• Maintain class sizes as much as possible.

These goals will drive any resource and staffing decisions, no matter what the budget number is.

What can the city provide?

The mayor then offered three actions to address the question, “What would it mean for the city to prioritize the schools in the Melrose city budget?”

These are:

1. As much one-time city-side money is being allocated to school-related projects as possible.

$386,000 has been added to the special education stabilization fund, bringing the total up to $750,000, the highest it has ever been. $400,000 of free cash is being used to replace skylights and repair roofs and $250,000 to repair HVAC systems in schools. ARPA funds that were encumbered (received) but not spent and are being used to redo the middle school gym. This funding is being used to plug as many holes as possible, using existing one-time funds currently available to the city.

2. All city departments are being asked to make a 5-10% reduction in their budgets.

This is clearly the mayor living up to the belief that the schools will not be the only department to shoulder the city’s structural deficit. That is, the goal is to share the burden of the financial issue city-wide and not house the entire structural deficit in the school department. Realistically, for some small departments, this will mean significant cuts in staffing and services

3. The city portion for schools this year will be $41million, a 6.5% increase from FY24.

This $41 million number includes Chapter 70 funding, so subtracting that out we have $41 million - $12.1 million = $28.9 million coming from the city itself for the school district.

This is a significant increase over last year, and this is partly because the mayor has allocated 79% of the city’s “new growth revenue” (additional revenue the city has because of new houses, additions to people’s housing, new buildings) to teaching and learning.

While the figure is more than the city portion from last year, it is well below what is being asked for in the school’s budget, which is $33.1 million.

That is: $33.1 million - $28.9 million = $4.2 million shortfall in what the superintendent is asking for and the city is saying it can fund.

How to solve this problem?

The status of the budget is that 90% is comprised of fixed costs, meaning there is little to no room to reduce or modify the expenses through cost-cutting measures or belt-tightening. They are set (for example, a teacher salary is a set cost), and the only way to reduce it is to eliminate that staffing position.

What are non-salaried costs and why can’t they be eliminated or reduced? As has been said in multiple articles, the two main drivers of expenses have been:

• Out of district tuition costs (currently rising at a 14% rate)

• Transportation (currently at $2 million)

These are mandated costs the district must provide to our highest-need students, and they cannot, and will not, be eliminated.

Unfortunately, the federal and state governments are not providing much in additional funding to cities and towns to help with these mandated and very expensive costs. Melrose received a mere $150,000-$200,000 increase in chapter 70 funding, just a 1% increase, from FY24 numbers.

This leaves us with two options:

1. Cut $4.2 million from the proposed $51 million school budget.

Given that 90% of the budget is fixed and cannot be reduced or modified, this translates to a reduction of approximately 40 Full-Time Equivalent (FTE) staff positions.

Some questions that might come to mind:

• Is there a less drastic option?

• What about just not adding the additional staff proposed in the new budget?

• The city portion of the school budget is already increasing from last year, isn’t that enough to just keep things as they are?

While these questions, particularly the last one, are valid, the solutions are not as simple as “keeping things as they are.” Given the goals of superintendent and the astronomical rise in costs of some services, remaining at current funding (called level funding) would not result in maintaining the same amount of services (called level services). Even more concerning, the increase in funding already being provided would not be enough to maintain level services. That is, the $46.7 million amount (City contribution + Chapter 70 + Offsets = $28.9 million + $12.1 million + $5.7 million = $46.7 million) would result in staff cuts. Matt Hartman stated it as, “We would have ‘dollar for dollar less funding available in next year’s budget.’ That has never happened before.”

It is not known precisely how many staff members will need to be eliminated with a budget number of $46.7 million (as opposed to $51 million). That is, it will result in a reduction in staff that is less than 40 FTE but it is unsure how much less. Some examples of where this staff and services cuts might come from include: reductions in district-wide directors, reductions in coaches and interventionists, possibly no world language is grades 6-7, a continued requirement in the middle school for students to repeat some classes, and near-certain class size increases especially at the high school.

It is important to acknowledge, said the Superintendent, that changes made at one level will have ripple effect in later years and schools. So, while a single cut might seem obvious, it can have longer term, bigger effects than might be anticipated.

2. Increase the city revenue through a Prop 2/12 override.

As discussed in previous articles about Proposition 2 ½, an override is the mechanism by which a city or town can voluntarily increase its tax levy (the total taxes brought into the town through residential and commercial properties) if a ballot measure is voted on by the citizens of that city or town. I will write additional articles about what this is later but, for cities and towns with limited commercial income, and no federal or state revenue available to solve the funding gap, the Prop 2 ½ override is the only way to increase municipal revenue.

What are the specific steps that go into getting an override on the ballot? First, there needs to be a request from the mayor to the city council to put the override question on the ballot. Specific wording for this ballot measure, including how much revenue is being requested and what the revenue will be used for, will be included in this request.

Next, under state law, the city council must vote to put it on ballot. Then, the citizens of Melrose vote whether or not to approve the override measure.

Mayor Jen Grigoraitis has committed to making this override request, and has proposed a June ballot measure that, if passed, would begin additional funding for the city July 1.

In either case, a balanced budget for the schools must be voted on in the upcoming weeks. That is, a balanced budget must be created without knowing whether or not there will be funding to cover all staffing needs during the FY25 school year.

This will mean the superintendent and school committee will need to be working on the process of identifying the 40 full-time-equivalent (FTE) reductions in staff, coming from teachers, administrators, and paraprofessionals, that would be needed to meet the possible budget shortfall.

To being this difficult process, the superintendent has already talked to principals and asked for a 5-10% reduction in each school. To continue the focus of the superintendent’s goals for next year, reductions will occur most obviously with staff at the high school and elementary school in an attempt to keep middle school resources as much as possible.

It is essential to note that all seven school committee members spoke out in strong support of an override. “We need an override, it’s just a matter of when,” said Jen Razi Thomas. The school committee is also in agreement that no one is in favor of making these cuts. However, the job of school committee is to pass a balanced budget and this year it must be done before knowing whether an override will be approved.

The structure of Melrose, and many cities and towns like it, with a tax levy that is 90% residential and only 10% commercial, requires periodic overrides given the limitation of Prop 2 ½ and its inability to keep abreast of (even modest) inflation and rising costs. Jen McAndrew stated that, “Until we are doing that, we will never fully sustain the Melrose Public Schools.”

Next steps

There will be much more to come at the April 23 school committee meeting, with the possibility of an earlier meeting if needed. The superintendent will continue to document specifics about where the reductions will be, and let the community know who can expect to feel the impact of these cost cuts.

More specifically, Mr. Macero will address:

• What position are being proposed in the new budget, but will not be accommodated with the funding cuts. This is a “don’t add” but it is not a “remove” of staff, but a known need is not being met.

• What positions can be restructured by, for example, moving a staff member to another school or position.

• What specific positions are expected to be eliminated.

• What positions are being reduced by expected retirement of a current staff member (so removed and not replaced).

There is also the possibility of revisiting the proposed fees and tuitions that have already been determined to see if more revenue is possible here. This would, of course, mean an increase in the Offsets amount.

The superintendent and mayor agree it is important to document and release information about these important budget issues to the community as soon as possible.

Neighboring communities

As noted an earlier articles, other cities and towns are dealing with the same issues as Melrose. The last article discussed two towns, Stoneham, which is slated to reduce their school district by 30 staff members and will need to eliminate entire programs, and New Bedford, which has a $14 million budget deficit.

Other cities and towns that have notified their communities of impending cuts include:

• Dighton-Rehoboth is cutting 21 staff members

• Braintree is potentially closing one of their elementary schools

• Brookline will cut at least 12 teachers

• Groton and Dunstable voted down overrides and will now need to make cuts

• Andover is cutting at least 34 positions

• Westfield projects a $4 million shortfall

• Marblehead’s "level-funded" budget would require an additional $2.3 million in cuts

• Pittsfield could lose over 100 staff positions and close an elementary school

…to name a few.

Numerous cities and towns who are facing this issue have decided to include a Prop 2 ½ override question on their ballots. Some of these are: Westford, Belmont, Acton, Hanover, Townsend, Dartmouth, Hingham, Harvard, Arlington, and Dedham.

There is a School Community outreach meeting on April 11, 7-8:30, by zoom. If you would like to join, the Zoom link is: https://cityofmelrose-org.zoom.us/j/4480736855?pwd=M29tNDlqK0VHNGl6TThpaXZsYlZQUT09

The School Committee office hours are drop-in. Therefore, please feel free to join whenever is most convenient for you between 7:00pm-8:30pm on Thursday evening. If you have any questions, please do not hesitate to reach out to the committee.

We’re all in this together, Melrose.