As School Districts finalize their budgets for the upcoming 2021-2022 School Year, one of the unknown factors districts will face is the impact of the COVID-19 pandemic on tax revenues. The knock-on effects of increased unemployment could result in school districts receiving lower tax revenues than originally anticipated. Additionally, a school district might find that more students are transitioning to cyber charter schools, resulting in a lower than expected student population receiving instruction at the district’s physical buildings. Accordingly, to counteract these issues, some options that a district might consider are furloughing its professional staff.
Professional Employee Furlough for Economic Reasons
Sections 1124 and 1125.1 of the Public School Code were recently amended to add “economic reasons” to the list of possible grounds for suspension (furlough) of professional employees. As in the past, a school district may also suspend professional employees due to a decrease in student enrollment or a curtailment of the educational program. The amendments to the School Code simply added a new cause for suspension of professional employees, namely economic reasons.
Resolution for Economic Furloughs
If the School District intends to furlough for economic reasons, it must act by a majority vote of the Board to approve a resolution for economic furloughs sixty days prior to final budget. The resolution must contain:
- The economic conditions of the school district making the proposed suspensions necessary and how the proposed suspensions will alleviate the economic conditions described including:
- The total cost savings expected to result from the proposed suspensions;
- A description of other cost-savings actions taken by the school board, if any;
- The projected expenditures of the of the school district the following fiscal year with and without the proposed suspensions; and
- The projected total revenues of the school district for the following fiscal year;
- The number and percentage of employees to be suspended who provide direct instruction to students;
- The number and percentage of employees to be suspended who are administrative staff;
- The number and percentage of employees to be suspended who do not provide direct instruction and are not administrative staff; and
- The impact of the proposed suspensions on academic programs to be offered both with and without the proposed suspensions and the actions, if any, that will be taken to minimize the impact on student achievement.
Consult with Legal Counsel
School Districts must be careful in using economic considerations as a basis for furloughs because, with some exceptions, districts must generally furlough an equal percentage of administrative staff when furloughing on economic grounds. A district does not have to furlough any administrative staff if the basis for the furlough is due to a decrease in enrollment or an alteration of the educational program. Accordingly, district superintendents should assess their districts’ needs and consult their legal counsel to determine the most effective rationale for furloughing professional staff. If a district does not want to expose its administrators to potential furloughs, the superintendent can work with legal counsel to justify a furlough based on educational rather than economic grounds. Alternatively, for districts seeking to reduce excessive professional staff, economic furloughs would serve as an effective tool for doing so.