School districts across the country are making tough decisions to cut costs in the face of shrinking budgets. Officials for some school systems, such as those in Kansas City and Detroit, have planned school closings to curtail spending.
While the situation for the Springfield R-XII School District isn’t quite as dire, the financial picture is far from rosy as administrators anticipate flat revenues and a $2.5 million increase in expenses for the 2010–11 school year.
It hasn’t been determined yet which departments will face cuts to cover expected cost increases in critical needs such as utilities, fuel prices and retirement benefits, but Chief Financial Officer Steve Chodes is presenting two operating budget options to school board members at an April 6 budget workshop.
One will have no spending increases beyond those critical needs, while the other would account for those and also include $2 million for salary increases and benefits.
The district’s 2010–11 budget must be finalized by June 30, Chodes said, and it will be built around $192.5 million in projected revenues from local property taxes, sales taxes and the state funding formula.
Fiscal expectations The district is expecting any increases in local property tax revenues to offset an expected drop in sales tax funds, but Chodes also expects state revenues to remain flat. Superintendent Norm Ridder said budget discussions are somewhat limited until the district knows what it will receive from the state.
The state budget deadline for fiscal 2011 is May 7, and lawmakers are scrambling to make hundreds of millions of dollars in cuts from Missouri’s $24 billion operating budget recommendation made in January by Gov. Jay Nixon.
In Nixon’s budget, the school funding formula – called the foundation formula – would receive $3.02 billion, which would include an $18 million increase. If approved, that increase would mean an additional $1.8 million in state funding for Springfield Public Schools, Chodes said.
That increase, however, doesn’t seem likely.
On March 25, the state House of Representatives passed its version of the budget, which is $200 million less than Nixon’s recommendation.
The House budget eliminates the $18 million increase for schools and keeps the foundation formula at 2010 levels. The Senate has not yet passed its version of the state budget.
Budget scenarios Both scenarios Chodes will present to the school board April 6 reflect his expectations of flat state funding. In the first, the only spending increase is the $2.5 million for critical needs.
“Critical needs are … something for which we know we’re going to have to incur the cost, regardless of whether it’s in the budget or not,” he said.
In the second scenario, funding for a $2 million increase in salaries and benefits would come primarily from attrition, Chodes said, but in either case, the district has to find a way to pay for those critical needs increases, resulting in the need for cuts.
District spokesman Ryan Van Bibber said the goal is to keep cuts as far from the classroom as possible.
That challenge, however, is compounded by the fact that the district already made $6.1 million in budget cuts to stay within its 2009–10 operating funds budget of $192.9 million.
“This is where it’s starting to get pretty difficult, so we’re really looking at salaries,” Ridder said. “Size of classroom is what it comes down to right now.”
He stressed that it’s too soon to tell what cost reductions may lie ahead.
To prepare for cuts, Chodes said, district department heads were asked to find 5 percent for potential elimination from their individual budgets, though he declined to detail which cuts would be recommended to the school board.
And while not all departments will receive the same amount of cuts percentagewise, Chodes said all departments would be affected to some degree.
“When we do make cuts, we … want them to have the least impact on students,” said school board President Gerry Lee.
Limited revenue sources Unlike a private business, the school district is limited in terms of developing new revenue streams.
“There are some very finite ways to generate revenues for schools,” Lee said. “Certainly there are grants and things, but in the scheme of things, those are very small compared to local and state funding.”
As unpleasant as the idea of turning to the public is, Lee said a tax levy increase can’t be ruled out without board discussion. But Ridder doesn’t think the timing is right.
“I don’t think we can turn to (local) taxpayers,” Ridder said. “I don’t think that’s too wise at this stage of the game because they’re hurting as well.”
The district’s operating budget does not include bond funding, such as the $50 million approved in November by voters for district construction projects, Van Bibber said.
Tough discussions won’t end after the 2010–11 budget is set.
District officials are bracing for even tighter state purse strings in 2011–12, because for the last two years, the state has been able to use federal stimulus funds to bolster general revenues.
“If state revenues don’t come back, and the stimulus money goes away, school funding is going to be a statewide issue,” Lee said.
For now, though, it’s first things first for district leaders, namely working out the 2010–11 budget by June 30.
“Come July 1, we’ll immediately start thinking about the following year,” Chodes said.[[In-content Ad]]
