Local schools facing a $1.9 million deficit
June 12, 2008 · Updated 8:47 AM
The costs keep growing, the funds keep shrinking and budget-makers are running out of options.
Thats the message Assistant Superintendent Terri Patton gave to the South Kitsap School District Board on Wednesday evening.
The district must balance out a $1.9 million deficit this year, and unlike previous years it could lead to long-avoided personnel cuts.
It feels like a train wreck maybe more this year than other years, Patton said to the board Wednesday. Were also hearing this from other districts.
Patton blamed rising gas prices, falling attendance and state-mandated wage increases for this years major cuts.
Over the past 10 years, the district lost 1,100 kids, despite long-range forecasts indicating growth.
Thats two elementary schools or a junior high, Patton said.
Personnel numbers have not matched those decreases, Patton explained. Over the past several years of budget cuts the financial department and board have avoided making any personnel cuts.
I dont know if we can afford that luxury much longer, she said.
Recent cost-of-living adjustments (COLAs) also pose a problem. Last year the Washington State Legislature approved 5.1 percent increases to teacher salaries and 4.4 percent increases to classified and administrative salaries.
The good news for school employees poses a challenge to those balancing the budget, however.
The state funding provides money for state-funded teachers, but those funded through levies or through alternate funds like Initiative 728 must be made up by the district.
Additionally, pension rates climbed 2.5 percentage points this year.
With the added pension, the district is adding 7.6 to teacher salaries.
This has been a problem every year, Patton said. But its worse this year because the COLA and pension rates are going up. This really hurts.
Initially the district faced a $2.9 million deficit, but was able to allocate $1 million in surplus from the unreserved fund balance.
The fund intends to keep 3 percent unreserved, but had more than 5 percent after the 2006-07 school year.
That money brought this years deficit down to $1.9 million.
But now the district has to make these cuts after several consecutive years of cuts, and Pattons staff is running out of things to trim.
I think weve picked all the low-hanging fruit we can find, she said.
She noted that personnel costs take up 80 percent of the schools budget, and the district may need to turn there for cuts this time.
That is where we need do address some of these problems now, she said. And its painful as well, because were a people business.
Where and how to make those cuts has yet to be determined. The financial team will draft a document for a June meeting, with a final budget established in July or August.
Board member Kathryn Simpson suggested setting public hearings for residents to give feedback on how the board should proceed.
The Bremerton School District held two similar meetings this week.
But Simpson encouraged the board to act early.
It might be better to engage the community before weve made up our mind, she said.
Board member Keith Garton expressed his appreciation to Patton. Despite the major cuts, Garton said Patton has been making incremental cuts to conservative budgets for some time, preventing a major deficit.
The goal was even accomplished with extra money in the unreserved fund.
At least weve been piecing it a little bit at a time, he said.