RACINE — Racine Unified faces several challenges as it looks toward the budget for next school year and beyond.
Although the budget won’t be finalized until October, the district is looking at an $800,000 reduction in federal funds, as well as a $700,000 reduction in its revenue limit. Unified expects to see an increase in state categorical aid, but an approximate $4.3 million in cost increases will lead to a predicted $1.9 million structural deficit.
“We do have a lot of work ahead of us to resolve the financial situation of the district,” said Marc Duff, Unified’s chief financial officer.
However, Duff said, the district has faced much larger structural deficits in the past.
“I think it’s a manageable one, but the work will have to continue for the next several years,” he said.
Items contributing to the deficit include new computers for some staff members, a yearly building maintenance increase of $300,000, as well as the expansions of the district’s Montessori and all-day 4K programs.
Another strain on the budget is a 2 percent compensation increase for staff, which alone will cost the district an estimated $2.9 million.
Declining enrollment also contributes to budget constraints. From the fall of the 2013-14 school year, to the fall of 2017, Unified saw a decrease of 2,173 students, according to the Wisconsin Department of Public Instruction. Unified started the 2013-14 school year with 20,301 students, but went into 2017-18 with only 18,128.
At Monday’s School Board meeting, Duff presented his annual budget forecast for the district. The numbers in the forecast are speculative, but he predicted increasing structural deficits for the next several years.
However, he said future enrollment numbers could fluctuate due to the impact of local economic developments.
“We’re facing a situation in the Racine area community of significant flux with Foxconn coming in,” Duff said.
Duff is projecting an enrollment decline for next year of 316 students. He attributed the ongoing decline to the economy, increased enrollment in voucher schools and a low birth rate, but he said the district would need to keep an eye on trends in the next several years in case of a possible rebound.
Due to the complicated nature of the state funding formula, Duff said, the district will actually lose state revenue if its enrollment decline moderates. Unified gets a $2 million-$3 million cushion in funding as its enrollment drops, but that cushion goes away when enrollment levels. This could lead to a situation wherein for a year, or a few years the district might have increased or steady enrollment, while receiving fewer state dollars than it would with decreased enrollment.
So even though stable enrollment would mean more reliable funding in the long term, it would pose challenges in the short term, Duff said.
“It’s a whole new day in our community and our planning process is changing,” he said.
The district will have to continue to identify operational efficiencies in order to make the budget work, Duff told the board.
“We’ll have to develop strategies as a team to address the structural deficit which would mean adjust staffing to meet enrollment, we’ll have to right-size schools,” Duff said.
As enrollment declines, the district doesn’t need as many classrooms. So, for example Unified will merge Bull Fine Arts with Gilmore Middle School next year to create Gilmore Fine Arts K-8.
“We have to be really thoughtful, too, about where the growth is in the community,” said Stacy Tapp, Unified’s chief of communication and community engagement.
Unified will face some tough decisions in the future, when deciding its funding priorities.
A number of Unified schools are in need of repairs, and others could use updated equipment and furniture. Staff could benefit from training in best practices, and some students need extra help from academic coaches to improve their achievement. But it’s difficult to fund those when the budget is tight.
“There’s a number of things that are harder to put in place when you’re always working to make reductions,” Duff said.
The district would like to provide busing for more students, some of whom live almost two miles from their school and have to walk, but that will cost the district $400,000 per year.
“Those are the types of things that are harder to fund when you’re looking to be more efficient,” Duff said.
“We’ll have to develop strategies as a team to address the structural deficit which would mean adjust staffing to meet enrollment, we’ll have to right-size schools.” Marc Duff, Racine Unified’s chief financial officer
RACINE — Marcelo Giugale, director of the World Bank’s Department of Financial Advisory and Banking, believes that the end of poverty is in sight. And he plans to share his message in Racine next weekend.
“Behind all the noise and madness that we hear in the newspapers, we’ve never been so close to ending poverty as we are today,” Giugale said.
Giugale is set to give a talk about poverty alleviation at 6 p.m. on Saturday at Sacred Heart Catholic Church, 2201 Northwestern Ave. The talk is free and open to anyone who is interested.
Sacred Heart’s pastor, Father Ricardo Martin, asked Giugale, his close friend, to speak at the church because Martin believes it’s important for his parishioners to be informed.
“He’s a fantastic speaker and he’s speaking about something that should concern all of us,” Martin said.
Giugale believes the end of poverty is near due to a mix of politics and technology including changes in the ways governments and economies behave, as well as the transformation of social policies.
When Giugale speaks of poverty, he’s talking about the hundreds of millions of people who live on $1.90 or less per day and the 3.5 billion people who live on less than $5 per day.
“There’s no reason for people to have to live with $5 a day or less,” he said.
Giugale believes that middle-class people in the United States, who are wealthy compared to those living in poverty in Bolivia or Nigeria, want to help once they learn about the conditions some of the people in those countries endure.
After their eyes are opened, Giugale said, they pay more attention to the actions of governments all over the world and how their policies affect those living in poverty.
For example, some governments, like the ones in Venezuela, Nigeria and Iran, subsidize gasoline for the rich while that money could be used to fund education or healthcare, benefiting the poor.
In Giugale’s eyes, the most important things people in Racine can do to help those living in extreme poverty is to care and to vote accordingly.
“For them to care when they read, to care when they listen to radio and television, to care when politicians make statements about what’s happening in those parts of the world,” Giugale said, “that’s a lot more important than giving money away or signing a check.”
Giugale grew up in a working class neighborhood in Buenos Aires, Argentina. At that time Argentina was ruled by a dictatorship.
“The economy was a mess,” Giugale said “We had something called hyperinflation.”
Prices doubled every quarter. He would watch his mother going from shop to shop trying to find the best prices, so he decided he needed to fix it.
“I was really naïve, of course,” Giugale said.
But this spurred him to study economics, later receiving a scholarship to obtain his doctorate at the London School of Economics. He was then recruited to the World Bank’s Young Professionals Program at age 27 and has been working for the bank for the past 30 years.
In his current position at the World Bank, Giugale works with a team of professionals who help emerging and developing countries manage their reserves, lighten their debts and hedge their risks. In the past, he led senior-level policy dialogue and over $30 billion in lending operations across the development spectrum in the Middle East, Eastern Europe, Central Asia, Latin America and Africa.
Martin hopes that this talk will welcome outsiders into the church.
“We want Sacred Heart to be a part of the community,” he said.
“There’s no reason for people to have to live with $5 a day or less.” Marcelo Giugale, director of the World Bank’s Department of Financial Advisory and Banking