With federal funding drying up, MSCS is looking to save hundreds of jobs. Here's how

During the first weekend of November, Memphis-Shelby County School board members gathered at the Oasis Event Center for their annual retreat and spent hours discussing the future of the district with MSCS leaders.

For two days, board members spoke – at times intensely – about a variety of issues facing the school system. But it was the last topic that was among the most pressing: the potential fiscal cliff due to the looming end of federal relief funds.

MSCS is facing a budget gap of $150 million in FY 2025, and to help bridge it, the district is considering a significant realignment that could eliminate 675 positions. But before we dive into this, let's take a closer look at how the school system reached this point.

How we got here

During the COVID-19 pandemic, the federal government distributed billions of dollars to school districts around the country, through the Elementary and Secondary School Emergency Relief Fund (ESSER). MSCS received, in total, about $776 million over three phases, and it used the funds for a variety of purposes.

For example, the district spent about $176 million on building improvements and construction, adding to a Kingsbury school building, and repairing roofs and HVAC systems. It invested in technology and cybersecurity. And it poured funds into staffers and resources for students, which seem to have had an impact on students.

MSCS hired 750 special education assistants (SEAs) for K-2 classrooms to lower student-teacher ratios, and they’ve helped students improve academically, particularly when it comes to math. It expanded tutoring opportunities for students, and those who had scored in the bottom quartile on English Language Arts (ELA) tests saw significant growth. It opened reset rooms, where students experiencing emotional and behavioral difficulties could learn to more effectively manage relationships and make responsible decisions with reset room assistants. And it spent money on proximity learning, using virtual methods to fill teacher vacancies where necessary.

But the federal funding that’s been buoying these programs is nearing its end. And while some of the investments made were one-time costs – think HVAC and roof repairs – others are poised to continue costing MSCS money, if continued.

The 750 SEAs, for instance, come with an annual cost of $32.26 million, while the tutoring cost another $24.72 million each year.

And when you take away the ESSER funds and bring all of MSCS’ upcoming costs and revenue together, you get the possibility of a sizable deficit. As of now, the district would be poised to bring in about $1.237 billion in total revenue in FY 2025, and reach about $1.387 billion in expenditures – which would leave it with a budget gap that year of around $150 million.

So, board members and MSCS leaders must decide how to bridge that gap. Given that some of the ESSER-funded programs have been effective, should they go by the wayside? And how can the district effectively cover a $150 million shortfall in a way that doesn’t negatively impact students?

“We’re going to have to make some hard decisions,” interim superintendent Toni Williams told board members, during the retreat. “And I’m going to set the stage and say that we agree to do what’s best for our kids… so that may not mean prioritizing adults first.”

'A space to talk'

During the retreat, Williams emphasized that the district doesn’t have a “$150 million problem.”

“At this point in time, that's only if we kept things exactly the same and do nothing,” she said.

And Williams and co. seem intent on acting. Exactly what the district will do remains to be seen; no firm decisions were made at the retreat and Williams said the strategies presented were “only things we are pondering and thinking about.”

But what they’re thinking about could lead to a significant organizational realignment within MSCS.

MSCS presented a plan at the meeting that could reduce its number of positions by 675, according to documents presented at the retreat. These positions could be eliminated from an array of departments and include everything from top-level cabinet positions to health services and project management jobs and tutoring posts. It would also include a significant reduction of the ESSER-era SEA positions, with 136 of the jobs being cut. In total, the moves could save MSCS about $89.3 million.

During the retreat, however, Williams said that she didn’t want her staffers to fret over the ideas that were being discussed.

“I don’t want, tomorrow, for my employees to go into panic,” she said. “But we have to have a space to talk about these discussions.”

Will there be major layoffs?

After the retreat, she also emphasized to The Commercial Appeal that MSCS would not be kicking a mass quantity of workers to the curb.

“The plan right now is to go look at data and figure out how do we serve schools, a way that protects the student,” she said. “We need to do extreme research to ensure we understand how the models have been supporting the schools before one person gets laid off.”

And she framed it not as a mass layoff, but a realignment that could see staffers’ positions shift from centralized, administrative roles to positions within the schools themselves.

There might be employees, for example, that are supporting multiple schools. Is that the best use of those employees, Williams wonders? Or would it make more sense to have them focus on one school that has academic needs – especially if that school has vacancies.

“I’m not looking to send all these people home,” Williams said. “I’m looking to ensure that they are serving the schools directly. There’s no point in having a school that has… vacancies in it, when I have centralized support. That’s what we’re trying to do – send the centralized support directly into the school.”

This article originally appeared on Memphis Commercial Appeal: How do MSCS leaders plan to address the end of federal funding?