Milwaukee Public Schools: Meeting the Challenge

dr_thornton_473By MPS Superintendent Dr. Gregory Thornton — When I became superintendent of Milwaukee Public Schools in July 2010, I knew the district – like many other urban school districts – faced deep financial challenges.

But I had confidence that the Board of School Directors, administration and staff understood the urgency and were committed to make tough decisions to secure the district’s financial future for the 79,000 students we serve.

An independent, third-party analysis of MPS finances released recently by the Public Policy Forum found the tough decisions made by the district over the past two years are showing signs of paying off.  MPS’ fiscal condition has improved significantly, with savings of nearly $400 million.  While much of the Public Policy Forum report focused on past years, the real story is the future of MPS and the continued efforts of the district to move forward to address additional fiscal challenges.

Four key factors are the root causes of MPS’ financial pressures:  rising healthcare costs; increased legacy costs for retiree benefits; declining enrollment, which results in less revenue; and the high level of dependency on state and federal funding, which can be very volatile and complicates MPS’ ability to be in control of its own financial future.

While Act 10, first introduced in February 2011, offers opportunities, the effort to be in better control of our finances began in September 2010 when union negotiations resulted in more than $150 million in healthcare savings over three years.

Since then, the district added an additional $228 million in savings.  We made further changes to the health plan and increased the minimum retirement age and years of service for employees to receive post-employment benefits.  We froze a supplemental pension plan for teachers and closed it for future hires. The benefit eligibility threshold for part-time employees was increased from 20 hours to 30 hours weekly.  Act 10 helped achieve savings with mandatory employee pension contributions.

These actions have a significant impact on our five-year budget forecast.  Instead of facing looming budget deficits, including a nearly $50 million deficit in fiscal year 2015, the district not only has a balanced budget, but anticipates having resources to make strategic investments to improve the standard of care for our students.  These savings also have a significant cumulative effect on reducing our Other Post Employment Benefits (OPEB) liability.  Our actions have cut the OPEB liability by $1.4 billion dollars and improved the sustainability of a quality benefit package for our employees.

MPS receives nearly 75 percent of our funding from state and federal revenue, a percent that is nearly twice as high as Milwaukee County or the City of Milwaukee.  As the Public Policy Forum report highlights repeatedly, the district is at a disadvantage because of the dependency it has on state and federal funding and, as the report states, the “volatile and uncontrollable fiscal environment in which the district must operate.”  The district is moving aggressively, but strategically, to explore ways to control our own fiscal future.

MPS will continue to work hard to address our fiscal challenges.  We are committed to improving educational opportunities for all children.  But the challenge is not ours alone.  How, as a community, do we make sure that all children have the resources needed to succeed? The last sentence of the Public Policy Forum report frames the challenge for all of us.

It states, “It is incumbent upon local and state leaders to reach agreement – once and for all – on the role MPS will play in the city’s education framework, and to define and secure the resources required to fulfill that role.”

These words represent both a challenge and opportunity; it is also a call to action for all of us who care about our children and community.

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Reader’s Note:   This Op-Ed piece initially appeared in the Milwaukee Journal Sentinel on Sunday, December 3.  The reprint here represents the acceptance of an ongoing invitation we’ve extended to the Milwaukee Public Schools and to Superintendent Thornton to consider our blog as a vehicle for extending the dissemination of key district messages.

BH

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