It's easy to feel a bit sorry for Madison school officials as they grapple with ways to close a $12 million gap in state funding.
"It sounds like this came out of left field, so I don't think anyone can be faulted for not imagining that something like this could happen," says Chan Stroman, a Madison parent with one child attending elementary school and two at a virtual school.
But feelings may change in December, school watchers say, when tax bills land in mailboxes and everyone starts to feel the pain.
The district proposes hiking property taxes - $82.50 for owners of $250,000 homes. This and other solutions stress a school-community partnership, a balance between educational responsibility and fiscal fitness that has become the hallmark of superintendent Dan Nerad's administration.
Indeed, it's hard to talk about the current financial situation facing Madison's schools without hearing an opinion on how Nerad, who began his tenure in July 2008, is managing the situation.
"Prior to this, our reaction was generally to find places to cut," says school board member Beth Moss. For instance, the district increased the class sizes of elementary "specials" (art, music and gym) by 50%. The policy was a disaster and has since been rescinded.
"Now we're approaching it by finding ways to refinance [and] shift finances around so we don't have to cut programs and staff."
This was supposed to be a relatively smooth budget. A referendum last fall gave the board approval to permanently exceed revenue caps, to a total of $13 million, over the next three years. But the state funding cut has given the process a painful new twist.
Now the loss of state funding is requiring new approaches. But, Nerad says, "We have a plan that is consistent with our partnership approach."
Nerad came to Madison after working 32 years in Green Bay's schools, seven of them as superintendent. He was named state superintendent of the year in 2006.
Nerad soon won praise here for meeting, talking with and listening to a wide swath of people. Today, he's still talking, in a very public way, about this newest financial wrinkle. He's even made time to discuss the issue on local radio talk shows.
That approach has earned Nerad the confidence of budget watchers like Don Severson, who heads the group Active Citizens for Education. Severson also had a part in the community input process to hire Nerad and has been part of the district's ongoing Strategic Planning initiative.
"The problem in the past is that decisions were made on emotions and who squeaked the loudest," Severson says.Nerad, he says, has been a vast improvement: "From the business side of things, he is very transparent."
That said, Severson thinks the district and school board didn't do enough to anticipate the bad news from the state. It had an early May deadline with Madison Teachers Inc. to notify staff of possible layoffs. The deadline came and went with no action. Says Severson: "The partnership promise was mostly smoke and mirrors for the public. That part of the program only went so far."
Nerad says the district did the best it could with the information it had and could not have anticipated the drastic change in the state budget.
"The context changed during budget deliberations and as more information became known about the economy in terms of how much revenue the state was getting," explains Nerad. "Projections changed, and part of the problem is that our budget timeline does not match state budget timelines. The school district has to move forward with the estimated data it has at the time."
Erik Kass, the district's new assistant superintendent for business services, has called the current numbers "ugly," saying the $82 tax hike this year is projected to rise to $190 in the next budget year (2010-11). Severson agrees, saying the district needs to perform a cost-benefit analysis of programs and initiatives.
Nerad says he's working to meet financial targets while holding programs in place through an ongoing strategic plan. As he puts it, "Any time an organization goes through change you have new ideas and new ways of looking at things, and I'd say we're taking full advantage of that."
John Matthews, head of Madison Teachers Inc., which represents more than 4,000 educators and support staff, is waiting to see what happens next. MTI and the district are currently in negotiations for the 2009-2011 contract; the previous pact expired last May.
"[The district] is now projecting that they over-allocated the need of substitute teachers and the number of new teacher hires and that that will help on the financial front," says Matthews. "They can either fill the need for materials, repair, and have classrooms cleaned more frequently - something desperately needed given the expected flu bug - or apply it to the shortfall in revenue."
Moss says the district is now able to move money around and take advantage of refinancing options due to historic low interest rates. But while that will help for this budget year, it's "not going to last forever." And the district "can't continue to go to referendum."
Stroman thinks the district "may need to take a more strategic approach to future funding planning," as opposed to making periodic calls to fix the state school finance formula. She says it needs to acknowledge "the realities of a shrinking tax revenue pie."
Sounds like a job for Dan Nerad.