Bleak School Budget; Tough Decisions Ahead

A still-weak economy, reduced and erratic payments by the state, a decrease in property values and new construction, and rising expenses have all contributed to ’s dismal 2011-12 budget, officials said Monday.

Current projections call for an operating deficit of $5.8 million, with the bulk of the shortfall -- $5.48 million -- in the education fund. Operating costs, which are the combination of six funds used to pay daily expenses, show total revenues at about $243.8 million and total expenditures at about $249.6 million.

John Prince, assistant superintendent for business and operations, and Susan Krautstrunk, director of finance, presented the board its first review of the budget Monday, saying that challenges lie ahead.

Current staffing levels need to be reduced and base operating costs are not sustainable at the current levels, they said.

Health, dental and life insurance continue to rise, budget documents show. Health insurance plans went up about 10 percent (about $2.5 million in expenses), life insurance is up $66,000 and dental insurance increased $11,000.

Salaries are projected to go up by about 3 percent, or $4.4 million, but contract negotiations are still ongoing with the teacher and support staff unions.

Utilities are also expected to escalate by about $430,000 over last year.

While expenses continue to rise, many of the district’s revenue sources are decreasing.

During heavy growth periods, the district once saw more than $4 million a year generated by new construction. Just a few years later, the district is only anticipating about $504,000 in new property tax revenue.

The state, already $6 million behind in payments owed to the district, is decreasing the amount of money it reimburses the district.

The cost per year per student is about $6,100, but the state’s portion of the funding continues to decrease while the district’s share keeps going up, documents show. The district now pays about $245 more per student than it did in 2010.

The poverty rate continues to rise as well, with the district absorbing student fees that are waived to help low-income families.

Documents show that in 2005, 17 of 19 schools participated in the free and reduced lunch program, with most of those schools having less than 10 percent of students eligible to participate.

Now, all district’s schools have a free and reduced lunch program, with two schools having more than 31 percent of its students participating and nine schools having between 20 percent and 30 percent of its students eligible.

The district is mandated to waive fees for students who are certified as impoverished by the state. Last year, it waived about $481,000 – nearly four times more than it did in 2006.

Prince said the budget numbers can change throughout the next month, and the district plans to hold a Sept. 21 public hearing before approving the budget Sept. 26.

The school board has not publicly discussed or made any decisions on whether positions or programs will be cut to reduce the deficit.

Since March 2009, the district has cut 272 full-time equivalent certified, support and administrative positions to save about $29 million. The district cut 86 positions in 2009; 159 positions in 2010 and 27 positions earlier this year.

Other cost-savings measures have also been implemented, including freezing administrators’ salaries, reducing school and department budgets, and consolidating bus routes.