Meeker School District to use reserve funds on budget shortfall

MEEKER I Meeker School District unanimously passed a revised budget Tuesday night that included the projected $1.26 million shortfall being covered by the district’s reserve funds.
The approved budget meets 2013-2014 obligations with no major cuts in teachers or programs, Superintendent Mark Meyer said.
Reserve funds are saved for financial crisis or to meet unanticipated costs.
The Colorado Division of Education recommends that six months of reserves be kept by school districts.
Prior to Tuesday night’s meeting, the MSD had $3.9 million in reserve, enough for 7.5 months of the roughly $6.27 million in expenditures identified in the approved 2013-2014 budget. By comparison, the diminished reserves would cover slightly in excess of five months.
MSD Trustee Todd Shults said, “Reserves are to be saved for a rainy day, but it’s flooding.”
Meeker High School Principal Kim Ibach thought teachers would be relieved to see the passage of the revised budget. She said the tension over the last few weeks due to budget shortfalls compounded by per-pupil funding cuts has been very high.
In an open letter last week in the Jan. 16 edition of the Herald-Times, MSD Board President Bill deVergie and the board declared a fiscal emergency due to the 2013-2014 budget shortfall and called for a public forum to be held this evening at the Meeker High School auditorium. The board believes every option is on the table and wants to hear from the public.
In a working session before the main meeting Tuesday, Kathy Gebhardt, the executive director of the non-profit law firm Children’s Voices, said the mid-year cuts in per-pupil funding came at an especially bad time. She said the cuts “hit you guys like a bull’s-eye.”
In November’s election, two school-funding ballot measures failed. Initiative 66 would have increased funding statewide by $452 million and local Meeker initiative 3A would have increased local property taxes by $790,000 for 2013-2014. Having the $460,000 cut mid-year in per-pupil base funding is unusual and comes on top of a decrease in assessed property values, federal cuts due to the sequester and increased educational costs, Gebhardt said.
Paula Stephenson, executive director of the Colorado Rural Schools Caucus and Gebhardt described how school finance is structured, the history of school finance in Colorado and discussed some measures that might be tried to address the current crisis.
Stephenson represents 153 rural school districts and she said she has seen dramatic impacts to fully funded districts like Meeker from these statewide funding trends.
Funding for public education in Colorado is provided through the Public School Finance Act (PSFA) of 1994.
The PSFA sets a financial base of support for each school district by a pupil count multiplied by a per-pupil funding amount. The base funding for each pupil in 2013-2014 is $5,954.28. To come up with a district per-pupil finding amount, the base amount is multiplied by factors meant to make up for differences between districts such as the cost of living factor and the at-risk factor.
According to the Colorado Department of Education, in budget year 2013-14, Colorado provided $5.5 billion of funding to school districts in per-pupil funding amounts from state taxes ($3.55 billion), local vehicle registration taxes ($131.4 million), and local property taxes ($1.85 billion).
According to Great Education Colorado, the state ranks 42nd in per pupil expenditures corrected for regional differences.
Over the past two decades, Colorado has seen a steady decrease in per-pupil funding as compared to the national average. Since the early 1990s, school funding has not kept up with costs due to restrictions in increasing revenue such as the Tabor and Gallager acts, according to the National Center for Educational Statistics.
Amendment 23 was passed by Colorado voters in 2007. It requires that public school funding be brought back to 1988 levels, but the ratio of educational spending to overall spending is not close to the 1988 ratio, both women reported.
During Tuesday’s meeting, board member Dan Chinn expressed a concern about losing quality teachers to surrounding states if funding is not increased.
“There is concern that we are devaluing the professionalism of our teachers and may chase them away to surrounding states that have better public school funding,” he said.
Starting in 2010-2011, a new factor was introduced in the school finance formula. This new factor was originally called the “State Budget Stabilization Factor” but was renamed the “Negative Factor.” Where other factors are meant to equalize differences among districts by adding funds, the negative factor decreased per-pupil funds to meet statewide budget shortfalls.
Stephenson said that the negative factor disproportionally affects fully funded districts like Meeker, and in many cases overwhelms other positive factors.
Gebhardt estimated that $1.1 billion would reimburse school districts, and she said she thought there was mounting pressure to implement this solution.
A measure would need to be prepared quickly and introduced in the pending School Finance Bill in March.
In response to the board’s questions about what could be done to address the school finance problem, Gebhardt suggested lobbying the Legislature by letting members know what could be done locally if the negative-factor funds came back to the school district, and they encouraging local businesses through the Meeker Chamber of Commerce as well as directly by businesses and individuals to lobby the local legislators about the need for more funding.
The State Education Fund gathers left-over general funds, and the reserve funds for the Colorado Department of Education (CDE), have been growing the last few years, currently at $1.6 billion to $1.7 billion.
In the past, when assessed property values have gone down as dramatically as what has happened in Meeker, the CDE would distribute monies from State Education Fund to meet local school district needs.
The CDE has not offered similar help to the Meeker School District as of Tuesday night.