Deficit spending: School Board finds red ink is coming if changes not madeThe Jamestown Public School Board took a hard look Thursday at the projected fiscal situation for the 2012-2013 school year and beyond — and found red ink.
By: Ben Rodgers, The Jamestown Sun
The Jamestown Public School Board took a hard look Thursday at the projected fiscal situation for the 2012-2013 school year and beyond — and found red ink.
At the annual finance retreat the board learned of a projected loss in federal dollars and increasing expenses that point to deficit spending for 2012-2013 and beyond if changes aren’t made.
“As you can see, to maintain the district at the current size we’re going to be spending a million dollars more than we’re taking in,” said Greg Allen, School Board president.
The dollars available, or lack thereof, were calculated expenses that could change based on a number of factors.
One major factor will be on the June ballot.
“This budget is all blown out of the water if Measure 2 passes,” said Sally Ost, business manager.
Measure 2 would abolish state property taxes. This means if the measure passes, local funding decisions would be in the hands of state officials.
Regardless of Measure 2, deficit spending is something the board has faced before, most recently prior to 2002 up through 2006.
“We got some real serious issues to address and I think we can be concerned about those things, but we have to be concerned about how we’re going to keep this district going forward,” Allen said. “That’s going to be a tough, tough thing to do.”
Federal funding alone looks to decrease by more than $800,000 from 2011-2012 to 2012-13.
JPS benefited from federal stimulus dollars which are no longer available.
The question is how and whether or not to continue programs and positions created by stimulus, district and state dollars.
Board member Roy Musland was there when the board faced cutting a deficit before.
“That wasn’t fun, it was painful, it was difficult,” Musland said.
The district is projected to carry over an estimated $936,000 this year, but the future was the problem on Thursday.
Superintendent Bob Toso has gone through cutting deficit spending before. He conservatively projected that if the board were to recommend cutting $100,000 a year starting in 2013 it would be 2016 when the board had enough general fund carryover ($2.6 million or 10 percent) to be fiscally safe.
Currently there is a $6 million carryover.
But if board agrees to let the deficit be cut by $100,000 each year, it would take until 2023 until the budget is balanced. That would result in $500,000 in the carryover fund, while running on a $25 million budget.
The district’s largest expenditure is employee salaries and benefits which amount to more than 78 percent of the 2012-2013 budget.
Ost said that figure is normal compared to other districts.
One potential problem comes from full-time equivalents that were once funded by now absent grants and stimulus funds.
That comes out to more than 7.5 FTEs, not factoring in the 2 FTEs for the Gifted and Talented program, which was never funded with grants or stimulus.
This isn’t factoring in an estimated $257,000 in additional staff proposals for 2012-2013 from the general fund.
“We might get additional funds from the state and the federal government, but the likelihood of that is very slim,” Allen said. “That’s the challenge that’s before us.
“It’s not insurmountable, it’s certainly something I believe we can focus on and take care of,” Allen said.
The board then discussed the next step, which would be presenting the administration with a figure it would like to seen cut. Board members will not have a say in what to cut, but will look at different options from administration.
On the plus side, student enrollment in increasing or at least stabilized, which was not the case a decade ago when the district was deficit spending, Toso said. This will result in more money from the state for each student enrolled.
But numbers certainly are not on the same level as in the Oil Patch.
Williston is expected to add 1,200 students a year for the next four years, Toso said. As of Sept. 12, Jamestown was stable but with an increase of 20 students in kindergarten.
“If we’re not increasing our student population we’re stabilizing a little a bit,” he said. “I can remember the year when (former superintendent) Dave Smette said we have to take a million dollars out of the budget, and that was what, Greg (Allen)? A $20 million dollar budget?”
Toso still assured the administration would be careful when looking and how to get the budget balanced again.
“If you want to make cuts, you want to do it with a scalpel not a hatchet,” he said. “You want to do it surgically.”
Sun reporter Ben Rodgers can be reached at 701-952-8455 or by email at firstname.lastname@example.org