New Orleans public schools officials have warned that the district may face multiple years of deficits due to COVID-19. But despite fears for the future, school officials say there will be no significant cuts to next year’s general fund budget in an effort to provide schools some stability.
They’re also proposing that if schools incur negative deferred revenue — or end up owing the school district money — they can postpone paying it back.
The measure was developed by a working group composed of school finance leaders and the nonprofit New Schools for New Orleans in an effort to “mitigate the negative impact of COVID-19 on school finances,” according to NOLA Public School Chief Financial Officer Diane Allison.
Patrick Dobard, CEO of New Schools for New Orleans, said he felt the proposal was strong.
“Without any mitigations, schools will have to make cuts to staffing and services that benefit our students, and we can’t allow that to happen,” Dobard said. “This proposal will help soften that blow and make certain that schools are able to provide what students need during these very challenging times.”
Both items were presented at a virtual Orleans Parish School Board committee meeting Tuesday. The committee approved the negative deferred revenue measure, which will advance to a full board vote on Thursday. The proposed general budget will be voted on in July.
Louisiana public schools operate on a mixture of state and local funds, with local dollars coming from property tax revenue and a portion of sales tax. In New Orleans, sales tax is largely dependent on the tourism and food service industries, both of which have been severely reduced due to the coronavirus pandemic.
Officials anticipate that schools will end up owing the district money for the 2019-20 school year since money was allocated based on last year’s pre-COVID-19 financial projections. The proposed measure allows school boards to keep excess money as a “loan,” rather than pay it back immediately. They can keep the loan until a future year when payments outpace projections.
Schools won’t know how much they owe the district until the fiscal year comes to a close. However, the district has estimated that "negative" deferred revenues will be between $1.3 million and $6.4 million.
The general fund budget is available online and in person at NOLA Public Schools’ central office for public comment. The proposed budget makes no cuts to positions or salaries and includes a 1.5 percent cost of living salary increase.
The school board will also hold a public hearing on July 30, immediately before members vote on whether to adopt the budget.
Board members expressed concern that the district’s financial situation could be further weakened if annual grants aren’t collected as planned. In particular, they’re concerned about grants from the New Orleans City Council - Harrah’s New Orleans Casino Community Support Grant Program which has made changes due to COVID-19.
The district relies on those grants to fund the Travis Hill School, which serves incarcerated students, as well as for the district’s therapeutic day program.
Board member Ben Kleban said the loss of these funds is especially concerning given the district’s already limited resources. According to Kleban, the general fund has decreased by about $10 million since he became a board member in 2017.
“I think there is sometimes a perception out there that somehow the school system is flush with cash or reserves. That is just simply not the case.” Kelban said. “We continue to see some real sustainability questions that future boards are going to have to deal with along with the superintendent.”
The district is also wrestling with whether and how to reopen schools in August.
Last month, the district created a Reopening Task Force that is currently developing a Roadmap to Reopening, which is scheduled to be released the first week in July.
Unlike Gov. John Bel Edwards’ statewide reopening task force, the district’s reopening task force is not open to the public. In addition to concerns about transparency, the task force has been criticized for its lack of diversity.
Of the task force’s 34 members, four are elementary school teachers and three are parents.
Lauren Jewett, a special education teacher at KIPP Morial Primary, said there are many voices missing from the task force, including high school teachers, middle school teachers, students, custodians, cafeteria workers, bus drivers, teachers’ aides and nurses.
“And yet these will be the people most responsible for implementing the things that are needed for reopening schools,” Jewett said.
Jessica Wheeler, a Spanish teacher at New Orleans Math and Science Charter High School, agreed with Jewett.
“I would like to ask for consideration of the fact that the reopening task force has decided to not make their meetings public,” Wheeler said, “which is another way of shutting parents, teachers and students out of the process as it carries out.”
When it comes to the reopening process, district officials have their own concerns as well. While they’re actively working on the roadmap, NOLA Public Schools Chief of Staff Dina Hasiotis said they’re still waiting on state and local guidance.
New Orleans is scheduled to enter Phase 2 of reopening this Saturday. It’s unclear whether the city will enter Phase 3 before the start of the school year.
If the city is still in Phase 2, schools will have to limit the number of individuals in a classroom to 25 — including teachers — and adhere to other social distancing measures. This would likely mean asking some students and faculty to stay home or to find a way to rotate groups in and out of the building.
It’s also likely that not all students and faculty will be able to resume in-person learning, necessitating that the district continue to offer remote learning options as well.
While Louisiana’s Department of Education has released guidance for summer activities, Hasiotis says they’re still waiting for them to release fall guidelines.
