Bridge to Success: Building a Budget for the 2024-2025 School Year

Bridge to Success: Building a Budget for the 2024-25 School Year
Posted on 04/12/2024
teacher high-fiving student in class

teacher high-fiving student in class

As we near the end of the school year and students and staff are getting ready for testing, graduations, vacations, and summer learning, we are also preparing for the upcoming school year and have developed a budget to ensure the continued success of MNPS.

The following is intended to walk you through some of the key information related to the budget process, what to expect this year, and how district leaders and the Board of Education are working to ensure we are meeting the needs of the students and staff throughout the district.

Funding Sources

While some programs and initiatives are funded through state and federal grants, such as Title I, the most significant portion of our funding for education comes through our operating budget, which consists of state and local funds that are allocated to the district.

In Nashville, most of our funding comes through local property taxes and sales taxes through the Metro Government. In fact, nearly 77% of our operating budget is funded through local sources of revenue generated by Nashville taxpayers.

The operating budget relies on revenue projections and forecasts for what the city’s financial experts believe will be generated over the course of the fiscal year (July 1 to June 30), and then allocating resources to meet the organization’s needs.

We don’t know yet how much funding MNPS will receive through this process, which won’t be announced until the mayor’s budget is released around May 1. However, we have put together an initial budget proposal to suggest how much is required to maintain our progress as a district based on a careful assessment of current obligations and needs.

How Schools are Funded

MNPS is a student-based budgeting (SBB) district, which means that while we have certain district-provided services (such as transportation, network infrastructure, custodial, and human resources), most of our funds are directly provided to school principals to develop their budgets based on a formula that is meant to ensure students with the highest needs have the resources necessary to succeed. This provides for a baseline level of support and expectations across all our schools but also gives school leaders autonomy to make investments in the people and programs best suited to meet the needs of their unique learning communities. Principals have been developing their budgets based on projected enrollment next year so they can determine staffing levels and programs to meet the needs of their school communities.

Board Budget Priorities

The Board of Education adopts a district-wide operating budget that includes the funding for the SBB as well as district-provided services. We start first with a set of priorities focused on giving district leadership a guide for how to develop a budget proposal for the Board to consider.

The Board of Education has adopted three budget priorities this year:

  • Continuity of Strategic Investments (ESSER)
  • Continuity of Operations
  • Cost-of-Living Adjustment

We’ll walk through what that means for the budget this year.

Continuity of Strategic Investments

Since 2020, MNPS and school districts across the country have received significant new federal investments in education through the ESSER program aimed at COVID relief and recovery. This amounted to $425 million spread out over four years. These funds have helped provide our schools everything from HVAC improvements, masks, and PPE to mitigate the spread of COVID, to curriculum materials and laptops, professional development, social-emotional learning support, and more.

ESSER funding runs dry at the end of June, which means that many investments would go away, something many across the country have called an ESSER cliff. In previous years, MNPS has already done some preparation around the end of funding, getting investments from the city for advocacy centers and free meals for all students which had previously been funded through ESSER, but there are many programs and initiatives that need additional funds to continue.

Thankfully, with the support of the Mayor and Board, we have built an ESSER bridge that will ensure critical investments are continued through the upcoming school year without requiring significant cuts or rollbacks. $77 million is being proposed for this ESSER bridge utilizing a one-time set of reserve funds (or Fund Balance) that has been accrued over the last few years as a result of fiscally prudent policies in place to protect against future economic downturns or unexpected emergencies.

Working with the Board of Education and our partners in Metro, the district is proposing to allocate those funds in a few key areas funded by ESSER that will maintain progress:

  • Student-Based Budget Spiral - $28.4M
  • Scholars Portfolio - $22.6M
  • High-quality Math Textbooks and Instructional Materials - $14.7M
  • Mental Health Supports - $5.8M
  • Professional Development - $2M
  • College & Career Readiness - $1.7M
  • Community Achieves Expansion - $1.8M

The goal of the ESSER bridge is to provide for a similar level of programming that we have come to expect over the last few years, with the hopes of receiving additional recurring funding in the following fiscal year that will lock these in for years to come.

Continuity of Operations

The Continuity of Operations budget is focused on recurring investments that will allow the district to absorb cost increases for staffing and services that naturally increase every year, which are projected to be a 5.2% inflationary increase for FY24-25.

The bulk of this relates to employee compensation and benefits, with $10.3 million for step increases for employees and $16.5 million to cover increased costs in medical insurance benefits for certificated staff. Dr. Battle and the Board have committed to including step increases in our continuity of operations budget each year – something that hasn’t always happened in the past.

The Continuity of Operations budget also includes about $13.6 million to cover anticipated cost increases and move some grant-funded programs and positions to the operating budget to continue to maintain our level of service to students, in addition to a $22.5 million request this year for the upcoming 2025-26 science textbook adoption that will ensure we maintain the same level of expectations for full curriculum materials and support that we have had with the English Language Arts and Math adoptions in the past few years.

Overall, MNPS is projecting a need for $63 million in increased funding to maintain this continuity of operations going into the next school year.

Cost-of-Living Adjustment (COLA)

Employees at MNPS typically receive pay improvements in a few ways:

  • Certificated staff will move to a different pay schedule if they obtain additional educational degrees
  • Employees may apply for and take jobs at a higher grade of pay (e.g., moving from teacher to administrator, or taking a management role)
  • Step increases, or moving up on the pay schedule
  • Cost-of-living adjustment that is focused on giving all employees a certain percentage increase in pay.

In addition, MNPS and city leaders have created increases above this standard pay improvement path through key investments, including a $50 million certificated teacher compensation plan in FY21-22 that revised our previous pay schedules to promote a better career trajectory for teachers who remain with the district over several years. This was followed by a support employee pay plan that raised the minimum wage to $18 an hour, addressed compression issues, and ensured a 4% COLA for all employees in addition to Paid Family Leave. Last year, the city funded a certificated admin pay plan to ensure we are competitive with other districts for talented leaders in our schools.

While step increases are included in the continuity budget, the COLA represents a new request to increase pay across the board for all employees, with a goal of matching or exceeding the COLA that is proposed for Metro Government employees. We don’t yet know what the COLA recommendation from the city will be for this upcoming year, but we can project that each 1% COLA increase is an additional $7 million in new funding that is required.

What Happens Next?

The Board of Education approved this budget proposal at their meeting on April 9 to send to Metro Government.

By May 1, Mayor Freddie O’Connell will present his proposed budget to the Metro Council, which will indicate the level of increase in funds and a suggested COLA for employees in Metro and MNPS. This will be followed by Metro Council meetings and budget hearings to consider any changes to the Mayor’s proposal before finalizing the budget, which will determine the MNPS funding allocations for FY24-25 that will allow the Board to adopt a budget for the next school year.

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