The last few weeks have been kind of a financial roller coaster for the Haines School. At the end of January, the district realized they were facing a bigger deficit than expected for the coming year. They started brainstorming how to make up about a half-million dollars. But the district just discovered one factor that will save a big chunk of that shortfall.
The budget process is pretty complicated, but what’s going on at the Haines School right now mostly centers around one thing: enrollment. That’s what state funding is based on. The more students a school has, the more money they can expect from the state.
For the Haines School these days, that means less money. Enrollment declined this school year and is projected to go down again next year by about 10 students. But based on preliminary estimates from the state, the district initially thought they were in pretty good shape. Then they realized last month that first projection was based on the wrong number of students. And the updated estimate meant the school would be facing about a $487,000 deficit in FY18.
A half-million dollars is a daunting figure, especially given the school has about $6,000 less than that in reserves.
So, Superintendent Tony Habra began meeting with staff and community members to gather input about spending priorities as the budget process moves forward.
But this week the district was able to knock about $123,000 off of that deficit. The savings tie back to the state’s calculation process. According to Habra, one key factor wasn’t taken into account. That factor is something called hold harmless, a measure that helps districts that see a significant decline in students handle the burden of funding loss.
“We lost 10 students between FY16 and FY17. So we got back into hold harmless and it tapered off that loss instead of losing all those students at once,” said Habra at the latest school board meeting.
According to Elwin Blackwell, the school finance manager at the state Department of Education and Early Development, the state makes their projections based on the data that is available to them at the time.
“Back in November when we were publishing the projections from FY18, that was the most recent information we had, that’s what we published, and that’s what most districts would have been looking at as a starting point for their budgeting,” says Blackwell.
He says the state did not have the hold harmless information when it made the first projection Haines’ FY18 funding.
“So when they gave us our amount of money we were receiving, it failed to recognize we should be getting about 123,000 more dollars,” said Habra.
Blackwell says they don’t normally go back and make adjustments to the projection – that’s normally sorted out when the funding is actually provided. But, when Habra inquired about the difference, they were able to make the adjustment to reflect that change.
With the updated estimate, the school is already in much better shape. But they are still facing a shortfall of about $364,000 and continue to look at how to make that up between drawing from the savings account and making cuts.