Local School Districts Face Painful Budget Cuts

March 18, 2010

Facing severe budget cuts from the state, which could be almost nine percent next year but go up to 12 percent over the next three years, local school district officials are desperately searching for what little if any “fat” can be trimmed to compensate for drastically declining revenues.

For some districts, budget-balancing measures may include larger class sizes, teacher layoffs, staff furloughs, frozen salaries, new athletic fees, and even the possibility of four-day school weeks.

The official K-12 budget cut the State of Colorado plans to hand to school districts for next fall is 6.12 percent, although that number is expected to climb to 8.8 percent faster than you can say “TABOR Amendment.”

While final numbers won’t be available until April (or possibly even May, depending on when the Colorado General Assembly adopts the 2010/2011 state budget), school districts are preparing for the worst-case scenario.

For small a small district like the Ouray School District, with a current budget of approximately $3.1 million, an 8.8 percent budget cut amounts to a $272,000 budget reduction next year.

But for Ouray Superintendent Nick Schafer, that number is just the starting point.

Shafer said in an interview this week that a mandatory one-percent increase in the district’s contribution to the Public Employees’ Retirement Association fund, along with a 13 percent increase in insurance costs, will amplify any state-mandated budget shortfalls next year.

“We a re looking at $322,000 in reductions for next year – and that’s if it stays at 8.8 percent,” Schafer said. “It could go up from there. We have been told to look at an 18-22 percent cut over the next three years. That is the worst case, and it’s devastating.”

So far, the Ouray School Board has offered incentives for early retirement to five staff members (see story, page 12), Schafer said, which for the time being will constitute the majority of cuts coming next year.

“We are not to the point where we have to cut any programs,” Schafer said. “We are not to the point where we have to go to a formal and forced reduction process, but it will be different next year.

“Everybody is going to have to do a little more with a little bit less.”

The story remains the same for school districts across the region. If the state cut remains at about 8-9 percent, Ridgway Superintendent Cheryl Gomez said her district faces cuts of just under $300,000 next year and that the Ridgway School Board will begin to look at budget reduction options this week.

At the Norwood School District, Superintendent Dave Crews said the district faces about a $250,000 cut next year (at the 8.8 percent rate cut). “Our cuts will be across the board,” Crews said on Monday. He said the district will consider going to a four-day school week, which he “conservatively” estimates, could cut approximately $40,000 from the district’s budget. “The savings on that is sustainable, but it is not a lot,” Crews said. “What that includes is a reduction in the hours of staff, transportation, fuel costs and substitute [teachers]. Those are the things we know of if we go to a four-day week. We don’t know what the savings will be in the building use and energy use part.”

Crews said the Norwood School Board would consider going to a four-day week this week, but that, even if it does, cuts are going to have to be made in other areas as well.

“The rest of the cuts are going to be absorbing some positions, which means we will go from three administrators down to two in the district. Then we will look at some personnel cuts. We have a custodian vacancy and we are trying to cut that from full-time to half.”

The Telluride School District is facing cuts of somewhere between $500,000 to $800,000. A group of faculty, principals and administrators has already begun to look at various budget reductions in three tiers, with goals of savings or new revenues to offset reductions of $500,000 in tier one, and $150,000 in tiers two and tier three.

Tier one reductions include attrition savings from staff retirement, supply and travel cutbacks and new revenues from kindergarten tuition, athletic fees and vocational education reimbursements.

Tier two reductions include a 50 percent reduction in continuing education, and the reduction in force of 2.16 full-time employees (that could grow to four full time employees, worst-case scenario).

“We are concerned about the uncertainty of having to wait so long to finalize the budget,” Telluride School District Superintendent Mary Rubadeau said. “It creates a lot of stress on our whole system. We have had to let seven teachers know that their contracts could be cut back or eliminated as a result of going to tier three. That is a process that is very difficult for the school environment.”

Rubadeau added that the budget reduction talks have been a good exercise in finding possible efficiencies and cost-savings, but that on the whole, the district’s budget is 83 percent personnel.&l t;br />

“There is really nowhere to go,” she said. “You are losing jobs and cutting special opportunities for kids.”

With its 850 contracted employees serving over 6,000 students and an annual budget of $65,056,900, the Montrose School District is facing $2.8 million in budget cuts (at the 6.1 percent figure) from the state. That, along with a $450,000 increase to PERA, means the district will face approximately $3.2 million in budget cuts. The district does have the opportunity to reduce that amount to $2.5 million in cuts, with help reclassifying teacher training funds and the holdover of American Recovery and Reinvestment Act funds.

While the state has yet to set a final number on its funding to education, Montrose School District Superintendent George Voorhis said the district has contingency plans built to deal with state cuts of anywhere from 6.1 percent up to 9 percent.

A number of hiring freezes, a 10 percent reduction in athletic funding, postponing textbook adoptions by 50 percent and postponing the technology budget for a savings of $200,0000 are among options the Montrose District is exploring. Overall, since the district has invested in small classroom sizes over the past 10 years (that remain below the state average), it has some wiggle room to increase class sizes to manage the budget crisis.

“One of our two areas of strength to combat the decrease in revenue is our class size,” Voorhis said. “That’s essentially a resource and I think we can increase class size through a hiring freeze without lessening our ability to provide instructional time for our kids.”

The district’s other area of strength, Voorhis said, is that it has a very low debt ratio.

“We have not had to us e our bond or mil levy capacity, so there may be other opportunities to garner additional revenues. We may have to cash in on some of our financial strengths to ease the pain this time around.”

For Some, It Gets Worse

As if the state budget cuts weren’t devastating enough, some school districts in the region fear a declining student population could also lead to a significant drop in funding from the state.

“We lost students last year because of the recession,” Rubadeau said. “It is the first time we have seen a drop in enrollment. It was usually flat or growing, so we were always adding to the budget. Next year we anticipate we will be down a few kids.”

Each student generates approximately $10,000 in revenue for school districts, and an increase or decrease in student population is an important factor in budget development. While the state does allow for three-year averaging to mitigate significant drops in enrollment, an enrollment drop nonetheless has budget implications.

“We have 24 seniors leaving this fall and we have seven first-graders coming in,” Schafer said of the Ouray School District. “First grade is going to lose 17 kids unless we get a bunch of kids coming in we don’t know of yet. We get on average $12,000 a kid. With all the averaging of the numbers, we may only lose $30,000 next year because of this, and it is not as bad as it sounds – although it is almost the price of a teacher.”

Gomez said the Ridgway School District has not seen a recent decline in student enrollment, but worries that it is “reasonable to expect that we will have some families leaving Ridgway because of the economy.”

The Telluride School District, in addition to facing declining student e nrollment, can also expect a hefty drop in revenues from the state’s Mineral Lease program, from this year’s $220,000 to $30,000 for the next school year.

In Ouray, too: “Things look very, very gloomy,” said Superintendent Schafer. “But the good thing that comes out of times like this is that we have to come up with better ways to teach our kids if we want to keep the quality up. It forces us into getting creative.”

The Telluride School District will host a community meeting regarding the upcoming budget on Tuesday, March 23, at 5:30 p.m. in the High School/Middle School Band Room.

The Montrose School District’s website, www.mcsd.org, has been set up to inform staff/parents/community members about the district’s current fiscal situation with a series of videos as well as budget documentation. It has also been set up so the community can make suggestions on any other budget cuts that have not yet been thought of.