Frederica Freyberg:
What was your reaction when you learned about the 15.2 percent reduction?

Daniel Nerad:
Well, it was a surprise, understanding that our prior information would have led us to believe that the effect was going to be no greater than 10 percent. And so we weren't anticipating that as the preliminary aid estimate for this new school year that, you know, that we're heading into, but from a budget point of view, started nine days ago, on July 1. And so that was a real disconnect for us, and we're still in the process of sorting through, you know, were there some things that we misunderstood and needed to understand better, or were there some things that were communicated incorrectly to us, or was the decision implemented in a way that changed it? And I think all those scenarios are possible. And what I mean by that is, you know, the DPI has the responsibility to create the preliminary aid estimate, and using all the things that go into the school finance formula. And that's what it's now showing is a 15 percent loss.  

Frederica Freyberg:
What does that mean in dollars?

Daniel Nerad:
Well, the difference between what we understood to be a 10 percent, no greater than a 10 percent loss in state aid and the 15 percent is a difference between a loss of state aid of $6 million and a loss of state aid of $9 million. Now, that also is separate from the whole conversation about the loss and increase of the revenue cap, if that makes sense, that goes to an additional deficit that we'll need to make up.

Frederica Freyberg:
And how many dollars is that additional deficit?

Daniel Nerad:
Yeah. And to explain what that is, we were anticipated to have an increase in the revenue cap of $275, and the increase is $200.

Frederica Freyberg:
And that's per pupil.

Daniel Nerad:
Per pupil, correct. And that is a $2.8 million difference. That amount cannot be made up through property tax. And so we are in the process of gathering options to make that gap up. But then in addition, we face now that $9 million loss in state aid.

Frederica Freyberg:
What might this mean to Madison schools?

Daniel Nerad:
Well, you know, first of all, we're nine days into the new budget year. We're 31 days from children crossing our doorstep. It's hard to believe a new school year coming. And now we have final numbers that we have to work with. And the reality of it is for us, as well as other school districts, I guess I hope that in large part this isn't just about the Madison school district. You know, most of our decisions are made for the following year in February, when we decide how many teachers do we need, we staff our schools, we make judgments about programs, we offer people contracts, they sign contracts. And so a lot of decisions have been made. And I also want to make sure I say that we understand that this is a very difficult economy. There's nothing easy about this. And we understood that there would be an effect on public schools in a way that perhaps for the first time or in a long time, that there would be a negative effect. We understood that. But at the same time we have an obligation to ensure that the effect is an equitable one, and we're still working to sort that out, to determine if in fact that difference on the state aid side, between the 10 percent and 15 percent, is Madison being dealt with — now I'm back to being the Madison superintendent — are we being dealt with in a fair and equitable manner.

Frederica Freyberg:
Aside from it being equitable, what might it mean in Madison for classrooms and kids?

Daniel Nerad:
Well, part of it in my conveying the, you know, decisions are made in February/March is that there are some things that cannot be retraced at this point in time. Number one, we need a certain number of teachers. We made a judgment about that. We can't even go back to retrace that judgment because of the fact that teachers have been given contracts and there's layoff language in the contract that we've passed those dates. And so part of the struggle that we'll face here is that we have a more limited number of options that we can choose from, you know, and right now we're still sorting through what those options are. We are going to do a presentation to the board of education Monday coming about the current state of the budget as it affects Madison Metropolitan School District and we are going to lay out some options for the board to consider that between now and August decisions will have to be made on.

Frederica Freyberg:
Give us some sense of what those options might look like.

Daniel Nerad:
Well, first of all, on that $2.8 million difference in the revenue cap amount, we are going to have to identify a source of money. We looked at the possibility of using some of the stimulus money. The longer we look at that, the more problematic that use is, for very technical reasons related to some of the state and mainly federal regulations relative to its use. We haven't eliminated that as a possible option in this scenario. And so we're looking at that. We're looking at, are there funds going to be available at the end of the school year that weren't spent that we could use to apply to that deficit? We're looking at non-classroom expenditures. Are there some things that can be delayed. And we have a very, just an example. We have, as most districts have, a very aging vehicle fleet to take care of our buildings, and so we just made a judgment just this week to delay the purchase of one of those. And those are the decisions that you have to make with limited options. But at the same time things that are not connected to the classroom in my mind may be more painful long-term, but they're less painful right now because we don't have to affect classrooms and numbers of teachers. We're attempting to avoid things like reductions in materials for kids, curriculum materials. We're trying to stay away from those areas. And so the other conversation that we've just begun is on the state aid — loss of state aid side — and there obviously is an ability to make up that through the property tax, but is that the only option we can come up with. And what I can assure our public here is that we're looking at as many other options as we can. In the end, it likely would be a combination of some things that get us some dollar amount that can offset that.

Frederica Freyberg:
All right. Daniel Nerad, thanks very much.

Daniel Nerad:
You're welcome.