ROANOKE, Va. – Roanoke City Council’s decision to change the school funding formula from 40 percent to 34 percent of tax revenue has left Roanoke City Public Schools facing a $16.5 million deficit.
Roanoke city council has been receiving a lot of criticism for that change.
10 News sat down with Roanoke City Mayor Joe Cobb to get some answers.
What was the reasoning for adjusting the school funding formula?
Cobb replied, “The formula was designed to be reviewed on a regular basis. It’s worked relatively well over the course of time but in the last several years, one of the reasons we’ve reviewed it is because as we’ve looked at our revenue projections and noticed those slowing down, while the costs for the city are going up. We’ve had to evaluate across the board our investments, where we need to make adjustments or reductions across the board. So in our review of the funding formula policy, we met with the schools and shared with them from what our perspectives, is realistic, and that led to level funding last year at 106.9 million and this year level funding plus a growth of 34 percent and that depends on the revenue growth.”
“The forty percent based on our realities as a city is not sustainable, that’s not to say that we won’t get back to that but right now it’s not sustainable.”
“We currently are facing over 18 million dollars in deficit so those are based on the revenue we can count on and making adjustments to costs across the board, department by department, looking at still prioritizing compensation as much as we can to get employees above a living wage. All of that is part of our analysis, but we still have to reduce or eliminate 18 million dollars. The schools are looking at a 16.5 million dollar deficit. Many people are calling on us to fully fund the schools, if we do that to cover that 16.5 million dollar deficit, we have to find that 16.5 million on our side and what that means is were looking at a 35 million dollar deficit.”
“The challenging part is none of us are happy to be in this position. We’re all faced with very difficult decisions on things that impact peoples lives whether its the PLATO program or activity buses or reducing solid waste pickup.”
“We’re paying very close attention and the schools have done a great job of stating their reality and giving us impacts and I’m grateful for that and we have to place that in the larger whole of the city which is what I and council are responsible for. The schools still receive the highest percentage of funding of anybody in the city and that to me conveys a continued priority of investment. The struggle is that we’re not able to do it at the level we’ve been doing it and again I think that is not long term, I think it’s short term but we have to balance that with what our revenue projections are and at the same time how we’re seeking to reduce costs or look at how to sustain programs with different types of funding.”
How did we get into the situation where both the city and the school are seeing such a deficit?
Cobb replied, “Again I think some of it goes back to revenue projection and costs.”
“One of the things we realized is that we have not set aside money as the city to pay off debt service from 2015/2016, so now that we know that, were having to set aside some of the capitol projects in order for us to pay down that debt to sustain our credit rating and then be able to add some of those capitol projects back in.”
“Both the school and the city have multiple revenue sources, our primary revenue source is local taxes, we do get some federal funding, we do get some state funding, usually in the form of grants.”
“The president’s budget is looking to eliminate all CDBG funds so if those go away then we have to find other sources for those. There may be other grants out there, there’s not a lot of give in our general budget.”
“Were trying to pay very close attention to what’s happening on the federal level and the uncertainty of funding on the federal level escalates the fear and concern that everybody has.”
Will changes be made to the formula again?
“I think what people need to understand is that this is a policy, it’s not law so it’s always under review. The fact that we didn’t review it for 8-10 years was because everything was going forward positively financially. Revenues were looking great, costs were well within what we can manage, on the school side and on the city side. I would say even five years ago, we were starting to notice this trajectory where revenue was going to come in under expenses and we’re at that inflection point. The thing we didn’t anticipate at that time is what we’re seeing on the federal level.”
“I’m hopeful that we’ll see a pathway through this very difficult time right now to restoring and grow that percentage of growth to then pass onto the schools, that’s my hope and I think that’s our collective hope too.”
Where is that $16.5 million going?
Cobb replied, “Again it can go towards capitol, we have a lot of deferred maintenance items.”
“It can go towards essential services that people in the city count on or expansion of those, we talked earlier about libraries and parks and rec.”
“Those are all part of the consideration, we’re working on a priority list for those things, but again it’s important that we stay in conversations with the schools about items they’re looking at.”
People feel like this decision strained the relationship between the two bodies. How do you hope city council can move forward and rebuild that relationship with the school board?”
Cobb replied, “What I know about relationships is even when they’re strained you have to keep showing up, for each other and with each other.”
“I just met this morning with the Chair, Franny Apel, she’s my school board buddy, and we talked about the rawness of our feelings and our frustrations and how to mend some of those things and how to talk with each other about reasonable and sustainable practices that we can put in place to not only restore those relationships, but celebrate the partnership we have.”
“So much of what the schools are able to do is because of the long term investment by the city and were continuing to invest in them. It’s not in the level that either of us would like right now but its at a level that’s realistic for us and thats left us struggling to figure out how to move forward.”
The school board is finalizing its budget and is scheduled to make a final decision on March 10.
10 News will keep you updated as both the city and school board’s budget finalizes.