Budgeting in a pandemic

In the best of times, putting together a school district’s budget is, if not a simple matter, a pretty straightforward one.

These are not the best of times.

And with the start of a new fiscal year just weeks away, area superintendents are trying to draft budgets for their respective districts without all the numbers in place.

The state’s fiscal year 2020-21 budget passed by the Oklahoma Legislature in an override of Gov. Kevin Stitt’s veto hit common education with a 2.5 percent cut or roughly $78.2 million less than last year’s $3 billion appropriation.

But then the federal government’s Cares Act sent $200 million to Oklahoma for schools.

That would seem at first glance to indicate districts will have more money to spend.

Or not.

Dr. Sheli McAdoo, Purcell Public Schools superintendent, expects the district will see a loss of $130 per Weighted Average Daily Membership.

That includes a $95 per ADM cut from the state and a local revenue loss of about $35 per ADM from the drop in gross oil production.

Purcell received $231,688.19 from the Cares Act. That will help soften the blow, but McAdoo said the bottom line is an estimated $75,000 loss for the district.

She anticipates a carryover from the current fiscal year will be 13 percent or slightly higher.

“The reason we have maintained a comfortable carryover balance is to be able to weather a financial shortfall of state funding,” McAdoo said.  “It is important for us to be prudent in expenditures, as well as scrutinizing all vacant positions that we may be able to eliminate or put on hold as long as it does not jeopardize student safety and/or learning.  We will look for ways to cut energy costs and to maximize opportunities to save in other operational areas. 

“Educators are the most resilient group of professionals in our state.  We have constantly done more with less funding.  I am proud of our team for their spirit and determination as we go into the coming budget year.  Everyone’s focus is on our students and providing them with a world class education.”

McAdoo is cognizant personnel costs are the district’s largest expense – and so, too, is the Purcell Association of Classroom Teachers.

“PACT has been a fantastic group to work with in my first year at Purcell,” McAdoo said.  “They are very aware of the budget challenges that are upon us. I think it is fair to say that it would present a challenge to provide raises at this time.”

As yet, the administration hasn’t started its negotiations with PACT for the 2020-21 school year.

McAdoo expressed confidence school will open in the fall with this caveat:

“We also know with the uncertainty of COVID-19 that we have to be prepared for it to look differently.”

Plans will include a number of reopening models and officials will rely on the Oklahoma State Department of Education and Center for Disease Control for guidance.

“Safety of students and staff will be at the forefront of any opening scenario,” McAdoo said.  “We also know that some parents will be concerned about their students returning to school. We will have a virtual school option available for pre-K through 12th grade students to address this concern.”

The district will continue its commitment to provide food service to families through July 31, as well as extended learning opportunities with reading through a partnership with the Pioneer Library System and SORA and online learning enhancement through programs like IXL.

Across the river, Lexington hasn’t yet seen the Cares Act allocation, superintendent Chad Hall said Friday.

He explained that districts have until June 30 to complete the application for the funds, including how they intend to spend the money.

Lexington Public Schools will receive $188,330.40, but is bracing for a larger than that reduction in weighted ADM funding from the State Department of Education.

The difference, Hall said, will be made up from the district’s carryover.

Even the total of the carryover won’t be known until June 30 as the district is still paying bills.

“I think we will be in pretty decent shape for 2020-21,” Hall said. “What I’m worried about is 2021-22.”

Though there won’t be across the board raises for certified personnel and support staff in the new budget, Hall said teachers can expect step raises.

While there is no step schedule of raises for support personnel, Hall hopes to develop such a schedule in the future.

While Hall doesn’t anticipate any program cuts in the new school year – “we don’t have any fat on the bone” – there are uncertain times ahead.

“It depends how much we are shut down next year,” he said. “I think schedules and calendars will look different. I definitely expect intermittent closures.”

At Wayne, superintendent Toby Ringwald is “very confident” schools will open in August.

“Although I can’t tell you at this point how that will look,” he added. “I believe the state will give each district the flexibility to open in a manner that fits their district best.

“We are currently looking at every option, but realizing many factors will change before August.”

Wayne Public Schools has received roughly $100,000 in Cares Act funds.

Even so, the district will be hit by a total revenue loss of about $400,000 in 2020-21.

“We are falling off an all time high enrollment, and we will lose money due to revenue cuts from the state,” he explained.

Still, there’s a silver tint to the lining of that grim cloud.

“Mr. (Zack) Powell left this district in very good shape financially,” Ringwald said of his predecessor. “We are going to be able to raise our fund balance in both our general fund and building fund this year. Between the extra carryover and the Cares Act money, we should be able to offset most of the money we are losing.”

The upside is program cuts aren’t on the table.

“But we will be diligent in making sure we are fiscally responsible in all areas of our budget,” Ringwald said.

Wayne’s teachers receive a step raise annually for an added year of service – a bump that’s included in the state’s teacher salary schedule.

Attempts to contact Washington Public Schools were unsuccessful.

Funding is a different story at Mid-America Technology Center.

Whereas K-12 school districts receive about 75 percent of their funding from the state and the remainder from local ad valorem taxes, the formula for technology centers is the opposite.

Dusty Ricks, superintendent at MATC, explained 75 percent of his funding comes from ad valorem taxes and 25 percent from the state.

So this is how things are shaping up at MATC: Ricks expects an initial cut from the state will be about $122,700.

But with the current oil bust, he’s bracing for an additional $400,000 revenue drop from ad valorem  taxes.

Oil rigs stacked up in a yard aren’t generating local ad valorem taxes, he explained.

“We won’t know the local number until August or September,” Ricks said. “That’s the part that has be the most scared at this point.”

Even the Cares Act revenue is handled differently for technology centers like MATC.

The school received $252,000 and of that $126,000 is paid directly to adult students.

That is a provision of the higher education emergency relief fund paid to students enrolled in post-secondary education.

“It’s pretty challenging to compare our numbers with the numbers of K to 12 schools. We are funded so differently,” he said.

For that reason, the MATC  carryover seems at first glance  quite high. It will be about $5.5 million this year.

That’s because it has to cover the school’s expenses at least until December 31 when property taxes are coming in.

In comparison, K-12 schools receive the majority of their funding in monthly installments.

Operating on a tighter budget may impact purchases of consumable supplies and new equipment.

Ricks is hopeful the 2020-21 school year will open in a “somewhat normal” pattern. But he fears there will be some interruption in the fall.

“But that’s anyone’s guess,” he said.