Schools can do better with less money

Budget cuts and demands for improved student achievement test public-school administrators more than ever – but, undaunted, some scrappy innovators are passing that test with an 'A.'

When Alberto Carvalho took charge of Miami-Dade County Public Schools last September, his first goal was to scour the district's nearly $5.5 billion budget to find money for teacher raises, which had been on hold because of state funding cuts.

He brought together a budget review team – including some outside experts – for a series of weekend number-crunching meetings fueled with buy-your-own-pizza lunches. They were able to cobble together the needed $45 million – in part by cutting overtime and changing food service delivery.

The superintendent recalls feeling "euphoric." But he didn't stop there. Maybe there were more savings to be had if they dug even deeper, he reasoned, so the search continued, line by line.

The euphoria was short-lived: The leader of the 340,000-­student district, the nation's fourth largest, discovered he was on the precipice of a financial crisis that previous budget scenarios hadn't projected. Healthcare and other costs had been underestimated, revenues overestimated. It added up to $158 million of imminent deficits. And more state cuts were on the horizon. Raises would have to wait again.

Educators across the country find themselves staring over the edge of some steep financial cliffs these days. As never before, they're squeezed between the twin pressures of budget cuts and calls for improved student achievement. The demand is to do more with less, and it's a daunting one.

But even in the darkest shadows of the recession, there are many – scrimpers, innovators, or just plain optimists – who are finding ways to do exactly that.

Mr. Carvalho saw the Miami-Dade crisis as an opportunity for a "budget transformation ... that would increase efficiency and force us to invest more in our core function."

His approach, colleagues say, boils down to a keen sense of frugality and common sense.

The plan he and his team came up with last fall redeployed administrators to classrooms, whittled down central-office expenses dramatically, and protected teachers' jobs.

The result of the leaner and meaner approach: a healthier budget – with reserves to offset future revenue drops – and impressive academic gains.

"The traumatic impacts of budget reductions and the economy have pushed us to do more with less, but also to do better with less," Carvalho says.

The district starts its new year Aug. 24 with state grades dramatically improved for many of its schools – including one "F" school earning an "A."

This kind of self-examination and reinvention is what US Secretary of Education Arne Duncan is urging districts to do as they receive infusions of federal economic stimulus. The more they spend wisely and innovate, the more money he's likely to send their way. But traditional approaches – laying off teachers with least seniority, closing schools, and cutting back nonacademic classes – may prevail, observe scholars and advocates who follow education trends.

"There are [several] states, like California, where there's a supercrisis and a broad awareness that ... practices are going to have to be dramatically altered in order to cope," says Edward Kealy, executive director of the Committee for Education Funding, a coalition in Washington.

Still, while basic savings on everything from cafeteria food to transportation are widespread, many districts anticipating the federal stimulus aren't going beyond stopgap measures, perhaps in hope of maintaining the status quo until the good times roll again, Mr. Kealy observes.

"They're in a strange period of [wondering], 'How bad is it really, [and] is it going to turn around over the next year?' " he says.

In the meantime, school districts share a common quest to accomplish more with less. How successful will they be?

The Monitor took a closer look at Miami-Dade's transformation – and three examples of individual schools' approaches – to glean creative ways education leaders have been directing dollars in the hope of bringing out better results for kids.

While his colleagues cite Carvalho's methodical common sense, they also note that what he does is not common at all.

Out of seven superintendents that chief budget officer Judith Marte has worked for, Carvalho is the only one who has probed the budget line by line and vetoed hotel expenses for professional development or BlackBerrys for employees who didn't need them.

Chief financial officer Richard Hinds, who came out of retirement to work with the new superintendent, offers another anecdote: When Carvalho saw movers this summer clearing furniture out of a central-office space slated to become a new school, he canceled the $12,000 contract and rounded up school custodians, already on the payroll, to do the job.

Last fall, the budget team started at the top, eliminating about 350 positions in the central office (a 20 percent cut), including the seven with salaries over $200,000. More than half were reassigned to teaching jobs or other open positions.

By looking at average costs and best practices in other large districts, they found they could save millions on food and transportation and could cut dozens of assistant principal jobs. They froze hiring and all purchases of nonessential supplies. They trimmed overtime spending by more than $15 million.

Overall, the district cut 27 percent of central-office costs. Miami-Dade now spends less per pupil on those costs than any other school district in Florida, while before it ranked 27th, according to the district's analysis.

Input from principals and community groups was sought to help determine $55 million in cuts at the individual school level.

"It's like asking your kids to cut their allowance," Ms. Marte says, "but that's a good way to be innovative.... Let them decide what they can and can't live without."

A growing number of districts are placing such decisions in school leaders' hands.

"If [top administrators] say you have to fire all your librarians, but you happen to have this really great librarian who's doing more for reading instruction than anyone else ... it's not really useful," says Marguerite Roza, a senior scholar at the University of Washington's Center on Reinventing Public Education. The flexibility "allows the school to ... maybe even do things better."

Though crediting the superintendent with reducing a top-heavy administration, Karen Aronowitz, president of the United Teachers of Dade union, says she's frustrated by claims that the cuts have not harmed the classroom.

Arts and vocational classes, for example, don't keep up with demand from students, she says, and often lack supplies. And new teachers were hired as temps last year, delaying their ability to build seniority and become vested in the pension.

"Our teachers and educational support professionals are really holding up [more than their share of] the system," Ms. Aronowitz says. A new contract is under negotiation.

Overall, the budget team says, there's been a spirit of cooperation throughout the district. But they also fielded accusations that they didn't care about kids.

After decades of growth in the district, enrollments have been declining in recent years, but "it finally took a new superintendent and a crisis to say, 'you do need to shrink, and ... it's time to start putting your money where kids get the most bang for their buck,' " says assistant chief budget officer Ron Steiger.

A former business consultant, Mr. Steiger came to Miami-Dade in 2005 through the Broad Residency, which brings people with business experience into school district offices to help them run more efficiently.

Many districts have outdated systems and layers of personnel that are no longer providing value, say officials at the Eli and Edythe Broad Foundation in Los Angeles, which has placed 173 people in dozens of districts and attributes millions of dollars of savings to their initiatives.

Early on, Steiger's business-school friends who had gone on to work in private equity would ask, hypothetically, whether the district would make a good investment – was it using dollars wisely? At first, he couldn't give a ringing endorsement. Now, "we're becoming a good investment," he says, and as a leaner organization, it's easier to make that case to foundations and other would-be donors.

The $4.8 billion draft budget for 2009-10, approved last month by the school board, includes $56.5 million in the rainy-day reserve, an additional $50 million set aside to protect jobs in the event of future state cuts, and $10 million in case local property tax revenue declines further.

Unlike some neighboring districts, Miami-Dade has not laid off any teachers. And for this school year, it saved about 2,000 jobs, such as counselors and media specialists, with $125 million in federal stimulus funds distributed by the state. The district will also receive directly $180 million in stimulus to serve low-income and special-needs students over the next two years.

With that solid foundation, the superintendent is looking forward to implementing new initiatives, some of which could position the district well to compete for more stimulus dollars that the US Department of Education is leveraging to promote innovation. One is an expanded set of virtual learning opportunities called "Beyond the Bell," to supplement what's available during the regular school day.

Another – "Everybody Teaches" – expands what started last year by having more central-office staff spend time teaching. Carvalho hopes to break down the walls that often build up between school staff and higher-level administrators.

"Some of our struggling schools across America, they struggle because people stop believing.... We need adult witnesses to what happens in these schools," he says. He practices what he preaches: Not only does he go into the classroom to teach, but he regularly stops by school cafeterias to serve lunch.

Carvalho cut his teeth managing a tight budget when he immigrated to the United States from Portugal on his own at 17. After high school in his native country, he worked for a year to save up for his ticket to New York. In the US, he worked before and during college in jobs ranging from construction to hospitality. In the Miami-Dade schools he started as a science teacher and worked his way up.

Today, as absorbed as he can be in saving money, Carvalho says the drive for efficiency is all about doing better for the true bottom line: the students – like a third-grader at Liberty City Elementary School, in a predominantly poor, African-American neighborhood, who told Carvalho that he's never been to the beach less than 10 miles away.

Liberty City was an "F" school – based on state test scores and annual gains among low-scoring students.

When Tamme Williams, an experienced principal in the district, took over last fall, she scoured the data, met with teachers and students, and says she recalls thinking right away, "This school is not an 'F'.... These are bright kids."

The superintendent sent experts from the central office to develop teachers' skills and give students extra instruction at Liberty City and eight other "F" schools. He "volunteered" top managers from his own cabinet to work at Saturday sessions where kids could earn $10 for attending. The district sponsored parent academies, too, to explain the testing and give them tips on how to support their children's progress.

When Ms. Williams showed students how close they were to reaching the next level on tests, "some of their eyes just got so big because then they realized, 'I can do this,' " she says. Each time a group of students scored well on reading and math, she'd have a special lunch for them, using local donations for pizza or money from her own pocket for Happy Meals from McDonald's.

This summer, they had extra reason for singing their theme song – "The World's Greatest" by R. Kelly: They had earned an "A" from the state.

Another six of the nine "F" schools had improved by at least one letter grade. In total, 210 of the district's 364 schools scored an "A," 39 more than the year before.

Carvalho cautions that the district's success in doing more with less this past year doesn't justify further cuts in education funding, as some might suggest.

"There is a breaking point," he says. To him, that would be when he's done all he can and then finds he has to target areas essential to a comprehensive education, like the arts or physical education.

"Should economic conditions not improve, and should the nation as a whole not seek solutions beyond the sunsetting of the stimulus monies," he says, "we could very well reach that [breaking point]."

Related: For schools, use of stimulus money falls short of big hopes