LCPS Superintendent Edgar Hatrick has proposed spending $764 million in fiscal year 2011 for school operations alone.  It is an increase of $32 million over the FY 2010 adopted operating budget and will require $25 million more in local funding.

A Budget Loudoun Taxpayers Cannot Afford

It is expected that a $1.41 tax rate will be needed to support that amount of spending.  The current rate is $1.245 and with residential property assessments falling 2.89% in 2010, $1.41 would represent a 10% tax hike for the average Loudoun homeowner!  That will be a tough sell to recession-weary residents who have watched their home values fall for 4 straight years now and who already have the highest property tax burden in Virginia, as well as the entire south region, according to Forbes magazine.      

Even with such a large tax increase, $37,515,762 of FY 11 revenue will come from one-time sources that will disappear next year.  The use of these one-time funds is serving to prop up spending beyond the county's means and just delays necessary spending cuts until FY 12.

    

More Full Time Positions

The budget includes hiring 140.7 full time employees.  One of the reasons the school budget has soared since FY00 is the increased staffing levels.  Back then, there were only 127.3 school employees per 1,000 students.  In FY11, the staffing ratio will be 139.5 employees per 1,000 students.  That may not appear to be a big increase, but if the FY11 staffing ratio was 127.3, LCPS would need 776 less employees.

This increase in staffing levels has happened during a time when most businesses are downsizing and lowering staffing levels.  Has the School Board ever explained why they need so many more employees or how it will improve the quality education?

Higher Benefits Costs

The VRS employer retirement contribution will rise from 9.89% of salary to 11.5%.  Employees are required to pay an additional 5%, but LCPS generously pays that for them.  In all, LCPS contributes a whopping 16.5% of employee salaries to the VRS retirement plan - considered to be among the most generous offered by states.

In comparison, defined benefit pension plans such as the VRS plan have all but disappeared in the private sector.  Many employers do offer a 401k plan, but not all of them offer a company contribution.  For those that do, the average cost is only 3% of payroll – 13.5% less than what LCPS pays.  With the FY 11 budget calling for $476M in salaries, it will cost taxpayers $54.7 million for the employer contribution and $23.8 million for the LCPS-paid employee contribution.

The budget appears not to include any reduction in health insurance costs, but it is a major expense that needs to be trimmed to keep the budget under control.

Will Education Quality Suffer With Any Budget Reductions?

Advocates for more school spending claim that any reductions to this budget proposal could adversely affect the quality of education.  It is important to remember that LCPS received very generous funding increases last decade during the housing bubble tax revenue bonanza.  In fact, spending on a per-pupil basis increased from $6,890 in FY00 to a proposed $11,683 in FY11.  Only $9,459 would be needed in FY11 to have kept pace with inflation over those years.  There is still plenty of wasteful and inappropriate spending that needs to be cut that would not affect the quality of the school system.   

In Prince William County, the Superintendent has proposed a $762 million operating budget, but they are expected to have 16,000 more students than Loudoun.

Note that the per-pupil spending numbers previously cited were calculated using a Washington Area Boards of Education formula and do not include all costs associated with public schools, but they are valid for historical comparison purposes.  For an analysis on what LCPS actually spends, see our  piece What Loudoun Really Spends on Public Schools on the subject.