Knox County Schools' Budget Back Under the Scalpel

In a Knox County Schools budget of about $379 million, $2 million doesn't sound like much. But when the school board meets next week to consider a revised budget from Superintendent Jim McIntyre, a little bit of money could add up to a lot of pain.

After the Knox County Education Association voted April 19 to reject McIntyre's proposed salary freeze for next year, the superintendent and his staff have been sent back to the drawing board—or, maybe more aptly, the cutting board. The $2 million McIntyre had hoped to save through a one-year suspension of contractual step increases for teachers will have to come from somewhere else. Mostly, that probably means lay-offs.

"A substantial amount of it will be" position cuts, McIntyre said in an interview last Friday. "I think we have a responsibility to go back and look at the entire budget and say, Where else can we make reductions? Where else can we cut? Even if it's painful, even if it has some impact on what we do, where can we make reductions to try to minimize the impact on the classroom as best we can?"

McIntyre was sitting in a conference room adjacent to his office on the first floor of the Andrew Johnson Building, at the end of a long week. The KCEA vote that Monday had clearly disappointed and to some degree surprised him. Among other things, it was a strong rebuke to a superintendent just finishing up his second year. And while the proposal to freeze teacher pay was unusual, it was not unprecedented—McIntyre says it was done at least once before, during the budget crunches of the early 1990s. He says he was "at least cautiously optimistic" the teachers' organization would ratify it. If it had, the school board had planned a special meeting for last Thursday to pass the 2010-11 budget. Instead, the meeting was canceled and McIntyre and his staff were back to trying to make expenditures match revenues.

The total budget represents about a $3.5 million increase from 2009-10, a rise of just under 1 percent. But within that, the school system has to account for a $5.7 million increase in pension expenses (a not-so-surprising result of state pension fund shortfalls in the stock market), and now a $2 million increase in contractual salary increases.

If the KCEA had approved the freeze, McIntyre had estimated the school system would need to cut only nine classroom teachers, out of a workforce of about 4,100. That number is now certain to rise. An initial projection in March suggested reductions of 32 certified employees (teachers and administrators) and 26 support staff.

Bob Thomas, the assistant superintendent for administrative services and a Knox County Schools veteran, is no stranger to tight budget years. But, he says, "In my 20 years, this is probably the worst I've seen."

McIntyre adds, "The other part is, we had a tough budget year last year. So at the beginning of this budget we were lamenting, this is the second consecutive worst-budget-ever. That compounds the issue, because we made some difficult choices last year, but the choices today are even less attractive."

The one bright spot is the federal Race to the Top program. As one of two states selected for the first round of funding by the Obama administration, Tennessee is receiving about $500 million over the next four years. Knox County is due for about $13 million of that. But the money can't be used for regular educational expenses.

"We can use Race to the Top for lots of great things that are in our strategic plan, that we want to accomplish," McIntyre says. "This is a way to get them done, and we would've otherwise struggled to find the resources to do it."

Those things include a Leadership Academy at the University of Tennessee to help train new principals (partly funded through an anonymous gift); "strategic compensation" for high-performing schools and teachers; and an expansion of the Teacher Advancement Program, which among other things pays "mentor" teachers to work with less experienced or struggling colleagues.

But none of that helps fill the immediate hole. And it is still not certain that next year will be substantially better.

"It's not clear," McIntyre says. "We're hopeful that there are some signs that some of the revenue sources have bottomed out and perhaps they'll begin to come back in the next 12 to 18 months. But we don't know that for sure yet."