In Case You Missed It: How Newark schools closed a $65M deficit in 6 steps

NJ.com, 2/3/16

Seven months ago, Newark’s public schools were in a state of flux.…

The state announced it would finally return control of the district to local officials after more than 20 years, and sent in a new appointee – former education commissioner Christopher Cerf – to oversee the prolonged handoff.

One thing remained the same, however. The district’s finances were a mess. Cerf inherited a deficit of approximately $65 million, and immediately began strategizing on how to close the gap while minimizing impact on the city’s already disadvantaged schools.

At a meeting of the city’s School Advisory Board last month, Cerf announced that the once mammoth shortfall had been closed.

Here’s a closer look at how the district pulled it off.

Reduction in Employees Without Placement – $25.0M:
Under Anderson, the city’s pool of unassigned teachers, or “Employees Without Placement”, had ballooned to approximately 450. The group, whose combined salaries at the time totaled an estimated $35 million, had ended up without a classroom for various reasons. Some had tenure charges or poor performance to blame, others had refused extra hours and duties at so-called schools placed in the district’s “turnaround program”, and many simply found themselves the odd man out as schools were either closed or reconfigured.

By late August, the pool had been reduced by more than half, and as of last month, it stood at just 124 – saving the district approximately $25 million in the process.

Central office “cuts” (non-salary) – $23.1M:
Shortly after being named superintendent, Cerf made a public promise to focus staff cuts on the district’s notoriously bloated bureaucracy while sparing teachers and classroom support staff. By last month, he cited more than $23 million in “non-salary” cuts from the central office, such as the elimination of already vacant positions, and refunds in aid from charter schools who failed to reach enrollment projections.

Central office (salary) – $6.3M:
Cerf cited no additional layoffs since being named school chief, but said his administration was able to find significant savings by not filling vacant salaried position in the central office, and through retirements and other attrition.

Benefits Savings – $5M:
Reductions in staff come with an added bonus – the district is no longer on the hook for providing the employees with health benefits.

Mid-year Title Funds and one-time insurance payment – $3.5M:
The district said it made conservative estimates as to how much funding it would receive through federal Title I and Title II programs, which send money to low-income schools each year. The funds distributed after July 1 were higher than expected, leading to a welcome windfall. An insurance payment from a fire that destroyed Elliott Street School in 2006 also arrived, helping to further close the budget gap.

School level non-salary – $2.1M:
The smallest dent in the funding gap was made through cutting positions in district schools, though officials said all such reductions were realized through the elimination of already vacant positions and non-salaried workers.

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