School district working on proposed FY2022/23 budget

Relying on use of fund balances

[  By Kendra Walker  ]

During the May 23 Gunnison Watershed School District school board meeting, district business manager Tia Mills introduced the proposed budget for the fiscal year 2022/23 to the school board. There will be a public hearing at the June 13 board meeting, and the school board has until June 30 to adopt the budget. 

The proposed budget estimates a total of $36,240,798 in revenue to support $40,866,740 in expenses. “This means that the district is relying on the use of fund balance resources to help cover the cost of total expenses,” said Mills. “This is being done to bring fund balances in line with desired levels.” 

She continued, “We’ve been building the fund balance up to create financial stability. The influx of COVID stimulus funds has allowed us to use some of that money to base expenses, and the staffing shortage has created surplus which goes into the fund balance.”

The district’s budget consists of eight different funds that account for various revenue streams and expense budgets. Mills noted that the general fund budget reflects a use of almost $2M in fund balance. “That is significantly larger than anything you’ve ever seen. That is purposeful and intentional to bring our fund balance down in line to what we feel is appropriate.”

Mills stressed that the fund balance is one-time revenue, so it’s tricky when using funds for ongoing expenses such as teacher and staff compensation. 

“I do want to caution that we are relying on fund balance to support this ongoing cost,” she said, noting the 9% total compensation increase to teacher salaries for FY2022/23. “If there is no change over the next three to five years in state funding or enrollment for the district, we will have to look at ways to reduce expenses to stay within our budget and keep the general fund balance at an appropriate level.”

However, Mills also stressed that the district wants to do everything it can to accommodate raising salaries. “We felt it was time to make movement on staff salaries and this budget really shows the commitment to all staff of the district.” 

Mills said that the proposed budget is based on HB22-1390, the School Finance Act that recently passed through the state legislature. “This bill reflects the closest the legislature has come to fully funding public education since 2008,” she wrote in her proposed budget summary. “The intent was to fully fund K-12 with this year’s budget, but rising inflation, a desire from citizen groups for property tax relief, and too much economic uncertainty held that movement back.”

According to Mills, the School Finance Act as passed funds K-12 education at more than $5 billion, which constitutes a 7.5% increase of the FY21/22 budget year and allowed the legislature to buy-down the overall amount of the budget stabilization factor. This resulted in the base statewide per pupil funding increasing by $252.88 to $7,478.16. “While this is good news generally, due to constitutional budgetary restrictions, Colorado is still behind the national average for school funding,” she said. 

Mills noted that the district’s proposed budget is the first budget since COVID started where no base expenses will be covered with federal stimulus funding. “All services and expenses covered with COVID funding will be reduced out of the budget when the stimulus funds expire at the end of school year 2023-2024,” she said. The proposed budget will use $653,000 of the stimulus funding for mental health support, interventionist support, elementary online learning, custodial and ELL support.

Overall, “I’m relatively comfortable with the budget that we’re presenting tonight,” said Mills. The school board will hold a budget hearing during its regular meeting on June 13, with the goal to adopt the proposed budget during its regular meeting on June 27.