Local school district forced to slash more from budget

Another $400,000 on the block this year

“Trickle down” just doesn’t capture the effects the Gunnison RE1J School District is feeling from a billion dollar budget crunch at the state level. It’s more a flood of misfortune.

Just as they have for the last couple of years, state budget problems are again cutting into the amount Gunnison Watershed schools have to spend on facilities, teachers and the education of students. Already in the last two years the local district has seen about $1.2 million disappear from its state allocation.
The district’s administration was hoping that the cuts made last year to discretionary spending, some support for sports programs and delayed teacher hiring would get them through the current year, “but [budget deficit] figures now are a little higher than we thought they would be back then. Now we’re looking for cuts to make up the rest,” superintendent Jon Nelson says.
In the next six months, school administrators will need to find another $880,000 to cut from its 2011-12 budget. And Nelson says the worst of the cuts have yet to come. Along with the current budget troubles, federal stimulus money that’s padding the state budget is set to run out next year and “that’s the cliff we keep hearing about in 2012-13,” Nelson told the school board at a work session on Monday, February 28.
On top of the cuts, the state is considering a move that would charge interest on the traditionally interest-free loan program the district borrows from to cover operational costs until property taxes come in the spring.
Depending on the interest rate the state charges, it could cost between $40,000 and $100,000 to get the $3 million loan through part of the year. Nelson said the district was also looking at the rates being charged by lenders and possibly a ballot question to raise the money from taxpayers.
The looming round of cuts was announced by Gov. John Hickenlooper as part of a plan to reduce education funding $332 million over last year, adding to cuts the governor’s predecessor had set in motion in an effort to close the state’s current billion dollar budget gap.
The biggest cuts he announced were to K-12 education. “They had to go where the money is,” Nelson says.
And the cuts the district is anticipating now are only based on current discussions in Denver, which are bound to change over the next year. The legislature will consider the changes and vote by the end of March and several amendments proposing to fix the budget problems being considered for the November ballot.
Based on a Colorado Department of Education formula, with a five-year average of 1,725 students, the district should have received $12.6 million from the state to fund next year’s budget. After the “rescissions”—when the state takes back money it had intended to give to schools—the budget will be closer to $10.8 million.
It’s a financial hit districts across Colorado are facing and the district’s administrators and school board are tuning in to what other districts are doing to make ends meet. And it’s hard for Nelson not to notice, with some frustration, that Colorado is spending almost $1,400 less on education per student than the average that other states are spending.
In the last three years, Gunnison RE1J school district students have gotten progressively less funding for their respective educations. This year, the district will take in about $6,300 per student, compared to the $7,350 per student the district got in 2009.
At the local level, you don’t have to look much further than the school’s funding source—mainly property taxes—to see why the budget is so tight. Of the district’s $10 million budget, $8.2 million will come from property tax, and property taxes ebb and flow alongside property values.
But with property values ebbing in most parts of the county and a steady school district mil levy, Nelson says the state will have to step in to backfill the school’s budget with “equalization funds” to the tune of $3 million. That’s just enough to bring the per-student funding up to about the $6,300 level.
When asked if the district is confident the state will have money to backfill the district’s budget next year, district business manager Jan Brummond said, “Until the long bill actually goes and passes [the legislature], none of these numbers are going to be definite. They’re still preliminary and there’s still the possibility that there will be more cuts.”
The district will also see about $546,000 from specific ownership tax on cars bought in the county. But that doesn’t make the district’s Administrative Council’s job any easier.
But they’ve been working diligently and already more than half of that $880,000 gap has been made up through money from a couple of federal programs that the state is holding instead of passing it on to the district, and a $9,800 payment the district still has to make to the state. What’s left is a question about how to make up the remaining $400,000 shortfall.
In the last round of cuts, the district worked hard to make sure the impact to students and education was minimized by trimming a little fat from every part of the budget, from unnecessary classroom expenditures to leaving open positions left vacant through attrition and a number of other cuts.
With those options off the table, “no rock will be left unturned” in the search for places to trim the district’s $10.8 million budget, Nelson says. The AdCo is meeting weekly to discuss places the budget can be cut further. The first draft of the district’s budget will likely be ready in early May, or as soon as administrators know how much the schools will have available next year.
“There’s not much point in crafting a budget when we don’t know what the revenues will be,” Nelson says.