On the morning of this third day of the 2009 session of the Georgia General Assembly, the senators and representatives joined other state dignitaries in the House chamber to hear Governor Perdue address them and announce his legislative priorities for the coming session.  Of course, the looming budget cuts were what were on everyone's mind, and the Governor did his best to be upbeat about the future while revealing a gloomy present in that critical area.  $2.2 billion in cuts in the current budget, followed by a FY2010 budget that will only grow by $1 billion from that amount, simply cannot be sugarcoated.  The pain will be spread into many corners, but since the education budgets (K-12, Regents, Technical and Adult) comprise over half the state's expenditures, the budget ax will fall the heaviest in those areas.

In the world of education, the Governor's announced priorities included items intended to help local system manage the budget shortfall but also included a laundry list of initiatives being pushed by the Governor in the legislative realm.  He promised legislation in this session that would:

• Relax expenditure controls found in Title 20 (e.g., requirement to be "relaxed" that 90% of funds earned for direct instructional costs currently be spent in that area and at the school where earned; requirement to be "relaxed" that 100% of media funds be spent in that area and that 90% of those funds be spent at the school where earned; requirement "relaxed" that 100% of staff development funds be spent in that area; and, requirement "relaxed" that 100% of funds designated for additional days of instruction be spent at the system level.).
• Implement the recommendations of the Joint House and Senate Subcommittee on Teacher Training and Certification so as to pay math and science teachers more money in an attempt to recruit more teachers into these critical shortage areas.  In a nutshell, the key piece of the plan will be to pay beginning math and science teachers and those with fewer than five years of experience at the 5th-year level on the salary schedule and let them move up from there.
• Introduce and implement a merit pay program for teachers based on the existing Master Teacher program.
• Introduce and implement an incentive pay program for high school principals, one which would offer a $10K bonus to any principal who has been at his/her school at least two years and whose school has demonstrated improvement in graduation rates, SAT scores, and EOCT's, OR whose school is in the top 5% of the high schools in the state in the aforementioned areas.
• Seek changes in the law based on recommendations of the State Board-appointed Commission on School Board Excellence, said changes to cover qualifications to run for a local school board, a requirement for ethics and conflict of interest policies for local boards, limits on the size of a local board, limits on school board member compensation, etc., etc., etc.

Of course, the big "news of the day" revolved around the budgets for the remainder of this fiscal year and next, and there is very little good news in either of them.  GSSA will do a more thorough review of the two budget documents over the next few days as they begin their movement through the legislative process, but since it is known that readers of this site are anxious to know just how the anticipated cuts will affect them, please take note of the following list of highlights/lowlights:

• The biggest "curve" thrown local school systems (among several of them) is in the area of austerity cuts.  Superintendents and local boards have known for some time to expect an austerity cut touted as "2% of QBE" in addition to the $92.9 million austerity cut that had remained in the FY09 Budget.  That would have meant an austerity cut of $92.9 million plus an anticipated, additional cut of $136 million for a total of $228.9 million in this fiscal year.  What absolutely no one anticipated, DOE included, was that the Governor would also recommend that the $50 million that the General Assembly had restored to the budget against the austerity cuts at the end of the 2008 session would also be cut!  Thus, the total austerity cut for this fiscal year will now be approximately $278.9 million (total reported in budget documents as $275 million after having been reduced by some funds targeted for that very purpose), or roughly three times the amount that appeared on each system's original allotment sheet for the 2008-09 school year.  [Note:  The amount for FY2010 will increase by another $11+ million for a total cut of $289+ million in that fiscal year, an amount that will be reported as "only" $275 million in austerity cuts, because the monies formerly used to fund RESA's and ETTC's will be "applied" against local system austerity cuts; see next item for details.]  Add to that the fact that enrollment growth for this year is a measly .23%, generating only $77 million in mid-term adjustment funds, and it is clear that new dollars are not pouring into public education.
• The RESA formula funds ($12 million) and most of the funds used to operate the ETTC's ($2.7 million) are recommended to be transferred to local systems where, apparently, those local systems will decide whether to support those entities with those dollars.  This will obviously require some statutory change, as current law requires systems to be members of their RESA's.  [Note:  $930,000 remained in the ETTC budget, but that money was shifted to DOE for the purpose of adding 1,500 slots in the virtual school.]
• The limited amount of "good news" comes in the areas of capital outlay and Local Five Mill Share.  In the Governor's original budget request for FY2010, capital outlay requests are recommended to be funded at the 100% level.  Local Five Mill Share, the amount that is actually deducted as required local effort from each system's QBE earnings, only rises by about $6.5 million statewide for FY2010.  [Note:  LFMS was set to rise by almost $175 million next year, but the requirement in law that LFMS be capped at no more than 20% of QBE earnings kicked in once again as a result of the draconian cuts that have been recommended, thus providing a limited amount of "good news" for local systems.  More on this later, though.....]
• The Governor recommends in his FY2010 Budget that equalization grants only be paid on (up to) twelve mills instead of the fifteen permitted in law.  All school systems who rank in the lowest 75% of school systems in property-wealth-per-child currently earn equalization grant funds based on all mills they levy up to the maximum of 20, a system designed to offer an incentive to lower-wealth systems to tax themselves.  This recommendation clearly is designed to reduce that maximum levy upon which equalization grant payments would be made to 17 mills.  This saves the state over $112 million.
• All funds for the teachers' gift cards ($11+ million) and the graduation coach salaries (approximately $49 million), totaling $60 million, are proposed to be shifted into the QBE program.  This, too, will require statutory changes, as neither of these seems to "fit" into any of the existing QBE programs.  [Note:  Adding $60 million to "QBE" by this method would make it possible to raise the state portion of QBE expenditures, thus raising the previously-mentioned cap on LFMS.]
• All $30 million that has been included in previous years' budgets to assist local school systems in paying for school nurses is recommended for elimination in the FY2010 Governor's Budget.  Several years ago, these funds were known as "dedicated" funds associated with the infamous "tobacco settlement" between tobacco companies and states.  Only a couple of years ago, this expenditure was shifted to 100% state funds, and education-watchers feared that this day would come, when the state would no longer support this popular, school-based program.  That day is here.
• The Governor is clearly in no position to recommend a raise for teachers, but he also recommends in his FY2010 Budget the total elimination of funds to pay the 10% salary supplement to teachers who have earned National Board Certification.  In addition, he recommends the elimination of the state's expenditure for the teacher liability insurance program (approximately $300,000).
• The changes to employers' contribution rates for the State Health Benefit Plan, including state employees, Regents' employees, and employees of local school systems will save the state hundreds of millions of dollars.  For the QBE formula alone, the savings is $250+ million.
• The Governor recommends adding $1.4 million to support the much-discussed dual enrollment program.  Superintendents know that to be a hollow victory, however, as they know that this money does not come close to replacing the formula-driven money previously earned by local systems who supported this successful program.
• Other cuts included 10% cuts to many state-level, state-managed programs, even including the same cut to the special education vouchers authorized by SB10.  Also cut were funds to the Georgia Virtual Academy (a state special charter school) for foreign language instruction and the funds targeted for implementation grants for future charter systems.
• The $428 million Homeowner's Tax Relief Grant is eliminated from the Governor's FY09 Amended Budget as well as from the FY2010 Budget, creating both a funding and a political problem for local governing agencies, including school boards.  There will undoubtedly be some attempts by legislators to put all or part of that money back in the budget (to avoid those dreaded "second tax bills" being sent out by local taxing authorities while pointing an accusing finger toward Atlanta), but finding that kind of money in these budgets will prove to be a daunting task.  And, education advocates will (rightly) fear that their remaining monies might provide the best target.

There are, of course, more "under the radar" cuts that affect DOE more so than local school systems, and the news for them is not any better than the news for those local systems.  No one, even the most optimistic among us, had expected much good news.  But, seeing the printed, black-and-white version of the cut-laden budgets is a lesson in just how serious the state's budget problems are.  These are, indeed, tough, tough times.