Budget Reductions AKA Scrub

On June 7, 2019 TSD released a list of “budget reductions” that have been made to the proposed budget.  The list, which can be found here was previously disclosed to the TSD Board at the May 23rd meeting.  This is the “scrub” that has been discussed at the TSD Board Meetings over the course of the last several months.  

I think this has been portrayed as “cuts,” which is a little misleading.  For the most part, the $4.9 million is comprised of funds budgeted, but not spent.  These are not really cuts in my view.  When I think of a cut, I think of a spending reduction.  For example, I spent $100 last year, but this year we are going to spend $90.  That is a $10 cut. 

The budget reductions represent money that TSD planned on spending, but did not.  For example, I plan on spending $100 this year.  However, I spent $90, so I only need to budget $90 next year.  That is a budget reduction. I am not spending any less money, I am just reducing how much I plan on spending to what I actually spent last year.  This process seems pretty logical.   

When I sat down with Jim Brittain, I posed the simple question . . . Will these budget reductions be felt in the classroom.? The short answer is “no.”  TSD did not spend it last year, and is not going to spend it next year.  Nobody should notice.  

 Jim started with TSD on July 1, 2018.  The 2018/19 budget was developed, for the most part, before he started.  The “scrub” was Jim going through and eliminating line items that were not used, and simplifying things so it is easier to understand. I think this exercise was much needed, and will be beneficial to the TSD financial analysis moving forward.  There is no need to continue to budget for expenses that are not going to be realized.  Jim’s first shot a drafting a budget in TSD will be this summer—when the 2019/20 budget will need to be approved by the Board.  

However, the fact that $4.9 million could be scrubbed from the budget does raise some questions. I have asserted over and over that the primary reason TSD and TEA were so diametrically opposed was that they were each using unrealistic, and unsubstantiated, enrollment projections.  In prior blogs which can be found here and here, I went over some of the erroneous assumptions by TEA.  TSD being able to scrub $4.9 million from its budget also evidences a lack of support for the projections used when budgeting during last summer’s negotiations.   

This scrub also poses an interesting math problem.  In 2018/19, TSD operated at a deficit and dipped into the general fund significantly(probably $4-5 million).  Prior to 2018/19, TSD operated at a surplus most years, and was able to put roughly $1 million per year into its general fund(savings account).  If TSD budgeted $4.9 million that went unspent, and only put away $1 million per year, then there was about $3.9 million in expenditures that actually occurred, but were not budgeted.   TSD must have overspent in other areas.  Otherwise it would have had $4.9 million to put into the general fund.  Maybe I am misunderstanding the situation, or do not have all the facts.  I am going to check with Jim Brittain and see what I can find out, and also encourage him to provide some clarification at the next Board meeting.  

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