Friday, January 30, 2015

Mid-Year Cuts in School Funding? Really?!

Trying to figure out a school district budget is an interesting process, especially since we are using historical data along with projected enrollment and funding formulas to support our budget needs for the coming year. As mentioned in a previous post, we spend a lot of time planning. If funding is expected to go up, that requires planning. If funding is expected to go down, that requires even more planning. What we don't anticipate, however, is that the estimates used in the school finance formula will significantly change and cause budget cuts in the middle of a school year...ever. But that is exactly what is on tap in Topeka right now.

Two significant pieces of legislation are currently being considered - both of which could have a dramatically negative impact on USD 373. First, after a number of years of not receiving any equalization aid for our Capital Outlay fund (building projects, maintenance, etc.), this program was re-established for the current year and we planned our budget accordingly. Having the additional resource for that fund allowed us to move some expenses around - which also helped us deal with some needed reductions in other areas. Unfortunately, late this week we have been informed that the Capital Outlay equalization aid (over $500,000 for us) will either be delayed, or significantly reduced, or both. 

Secondly, Senate Bill 71 (SB71) has been introduced in the Senate Ways & Means Committee, and it includes altering the formula used to determine equalization aid in the Local Option Budget. Such an action will reduce the state's total LOB commitment by $39,000,000. This is a major problem...especially when the reduction is not just for future years, but right now.

For Newton, should SB71 advance and become law, we will lose $191,451 in state aid for our Local Option Budget this year. It is extremely hard to make needed reductions this late in the school year, so we will be scrambling to try and find some potential savings or put off needed purchases in order to deal with the shortfall.

Due to the disparity of property wealth across the state, districts like Newton will be significantly and adversely impacted by a mid-year reduction in equalization aid, while districts that do not receive such assistance will incur no loss at all. We are hopeful that this legislation will not advance any further...testimony will be heard before the committee on Tuesday, February 3, 2014.

If you would like further information on the potential impact of these cuts across the state, click the links from the Kansas State Department of Education below:

Effects of SB71 - Columns & Explanation
Effects of SB71 - Computer Printout

© 2015 Russell K. Miller, EdD

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