The budget process is underway at the Haines School. As the district develops a spending plan for the next fiscal year, they’re facing an unexpected reduction in state funding that could lead to cuts. The superintendent wants feedback from the staff and the public before deciding what programs and positions might be on the chopping block.
“We’re going to have to find half a million dollars somewhere,” says Superintendent Tony Habra. “Combination probably of reductions and savings account.”
Enrollment declined at the Haines School this year. Fewer students means less state funding, and the school budgets for that. Next year enrollment is predicted to be 252 students. That’s about 10 less than this year, following a downward trend. At first the district thought they’d be getting more money from the state.
“Initially the thought was ‘well we’re in pretty good shape,’” says Habra. “But we were basing that on what the preliminary estimates were from the state.”
But the initial state funding estimate was based on the wrong number of students. Now that the district has updated information about how much state funding it will receive, it looks like they’re in for a $487,000 deficit in FY18.
That is, unless action is taken. In the past, the district has relied on reserves to deal with budget shortfalls. But right now, there isn’t enough money in that savings fund to cover the gap. They have $481,000, about $6,000 less than the expected deficit.
“If we just wanted to use the fund balance – and we will certainly have to use some balance—but we do not want to use all of our fund balance. The following year we’d be at zero, that’s unsustainable and we can’t have that,” says Habra.
Instead, they’ll start looking at making cuts to save money. Assistant Principal and curriculum director Cheryl Stickler is retiring this coming year. But, they’d already taken that into account before finding out about the state funding. So, even though that will save money, it doesn’t help chip away at that half million dollars.
Habra says relying just on cuts to make up the deficit would be too severe.
“That would be a scorch-to-earth kind of a policy and we can’t have that for our students and our staff,” says Habra. “But we will have to make some adjustments to get things closer in line and part of it will be we’re budgeting conservatively. But we need to make sure that if the worst happens we are able to maintain and keep the school district open.”
And, drawing solely from reserves isn’t an option either.
“We could not make them but if that happens we run the risk of having either zero fund balance meaning no savings left at all or running a deficit in which case the state comes in and takes over the school district,” says Habra.
The district could make up some of the money toward the end of the next fiscal year. If, for instance, new students move to town. Habra says when they make projections about how many students they’ll have, they guess conservatively. If they end up having more than projected, the state will make up the difference.
In general, Habra says developing the budget for the next fiscal year is a guessing game.
“Even now we’re building something based on what we think might happen in the state legislature,” says Habra. “We don’t know, they could cut school funding there. And then we’re making it based on what we’re guessing are hoping at the federal level, because we do get federal grants too and if they feel that they need to cut money out of there for whatever reason, we could see another pinch there.”
And, there are still some other factors that the administration is waiting on.
“We have negotiations with the teachers coming up, we don’t know what the insurance increase will be, those are two big things we need to find,” says Habra.
In the meantime, he’s planning to meet with staff at the end of the month, and with the public at the beginning of February. There, Habra hopes to have a conversation about what the priorities are. After that, the administrative team will work together on what cuts should be made. Then, it goes back to the school board. They’ll vote on the budget in June.