With all the federal stimulus dollars, why don’t I feel very stimulated?
Education in Utah received $293 million last year from the American Recovery and Reinvestment Act (ARRA). The State had three years to expend these funds. The State decided to use all the funds this year to “back fill” much of the deficit in State revenues. In essence, the money really didn’t “stimulate” anything or anybody. It did postpone the consequences of decreases in available State funds. It was hoped that a large portion of these funds would create jobs and ultimately stimulate the economy through State and consumer spending. Not much of this has happened. Many jobs were saved due to ARRA funds, but few, if any, were created. Exceptions to this for most school districts in Utah are in the areas of special education and Title I. They qualified for significant ARRA funds.
I don’t want to get into the politics of ARRA funds, but I do know that without these funds, cuts in education would have been much deeper. For this, I am grateful. Nevertheless, the nickname of “stimulus funds” leaves me with a puzzled feeling.
It’s very nice to be back and into a new school year. The summer has been filled with many activities and charged with lots of excitement, emotion, and many difficult decisions. You, our employees, make all the difference in the world and repeatedly demonstrate why people love to live and educate their children in Jordan School District!
One of the most frequent questions I am asked is, “What about education funding for next year?”
Everything I receive from the Legislature indicates there will need to be additional funding reductions next year. The most frequent amount used to describe the size of next year’s deficit is $700 million. We are being encouraged as a District to maintain reserve accounts wherever possible and prepare for possibly several years of reduced State revenues. I also urge caution when listening to news reports that say the recession has “bottomed out.” Economic indicators viewed in isolation can be misleading as to the overall state of the economy.
As a District, we need to anticipate various financial circumstances that could present themselves. We cannot completely rule out mid-year reductions in funding if second and third quarter revenues are down from projections. However, we are encouraged at the State’s projected revenues during this period of time which would be sufficient for this year’s expenses. We will be working on options and strategies in the event the State were to reduce the value of the WPU mid-year, or cut additional categorical funding to our District this year and next.
The District financial condition is stretched to its limit. Our financial needs are in excess of $30 million for this school year. Through property tax increases, use of fund balances, reductions in staff, and other budgetary action, we will neutralize this deficit for this year, but still need to be very proactive in anticipation of another year of state funding cuts.
Another phase in developing the District budget for next year has taken
place. Preliminary results from a Dan Jones & Associates survey indicated preferences of patrons in meeting our budget deficits (watch for a more complete report of the results to be available in about two weeks).
Patrons rank-ordered their preferences for budget balancing. An increase in class size was clearly an area the patrons did not want used to balance the budget. Patrons also did not favor eliminating academic programs in the District. There was support for reducing non-teaching staff and administrative costs. Increasing taxes was the least acceptable option, although the public did express some support for a tax increase.
The Board spent considerable time discussing these results. As a result, they have chosen at this time to leave the student/teacher ratio unchanged for next year. They did authorize an additional $1.8 million in additional reduction in force from all employee groups in non-teaching capacities. That’s about 35 additional FTE positions. All items of the budget have not been finalized, but many things are beginning to take shape.
We have entered a season of significant events. Between now and June, the
Board of Education will prepare next year’s budget, we will enter into
negotiations with employee groups, and the class of 2009 will graduate on
June 4. Employee negotiations begin next month. Preparation of next
year’s District budget is already in full swing.
The budget deficit for next year is approximately $25 million. The Board
is adopting a multiple-solution approach in large measure because there is
no single solution to resolving the deficit. Much discussion will continue
to be held regarding the mix of program restructuring, budget reductions,
reassignment of employees, reductions in staff, tax increases, and employee
compensation. The relative roles of these elements have not been
finalized. It’s as challenging a year financially as I have ever seen in my
professional career. Coupled with the financial implications of the
District split, we are faced with sobering choices. There’s likely to be
lots of rumors about what will happen. Reliable information about how we
will meet our financial challenges will come through proper channels as
“official information.” Beware of “I heard . . .” this or that. Some of
what you hear may be true or close to the truth, some may be partly true,
and some will be absurd. I will keep you informed as we move through the
next several months to help you know what’s happening. We’re in this
together and we’ll find the solutions together.