Talk of the District: Budget causes challenges and possible solutions

 Lunn

Lunn

We’ve been fortunate here in Stillwater for a number of years. Our district had several good years that let us build up a healthy fund balance. That “rainy day fund” carried us through some lean years of unstable state funding and allowed us to continue doing what we’d always done even as neighboring district had to make significant budget cuts and restructure their districts.

But we’re now facing a new era. Our school board intentionally spent down the fund balance and has been deficit spending since 2010-2011 to save and develop programs for students. At the same time, enrollment has declined and state funding has changed to make it more difficult to raise funds locally. All of these factors mean the district can no longer sustain all of its existing programs and staff.

In response the board is expected to approve about $2.6 million in budget adjustments for the 2014-2015 school year. This will be in addition to $1.6 million in one-time reallocations, which will be needed to close the more than $4 million gap projected for next year. These adjustments will allow us to stop the deficit spending, develop a balanced budget and respond to continual increases in the budget due to rising utility costs, property and liability insurances and employee costs.

What’s interesting, I’ve learned, is that we were facing a very similar situation in the early 2000s when our fund balance dipped and we had to make some difficult decisions to cut back and restructure. It’s the ebb and flow of school district funding, and yet, for the general public it’s difficult to understand how in the world we can be talking about budget cuts when we just passed a levy. Two common questions I’m hearing are “why didn’t the levy fix this problem” and “what can we do now?”

 

Why didn’t the levy fix this problem?

The reality is we knew this was coming. When sharing levy information with residents this fall myself and other district leaders could often be heard saying, “Even if the levy passes this will not fix all of our budget issues. We often warned, “More tightening of our belts will be needed” and that “We could not ask for enough dollars to fix the entire budget problems.” We even shared printed materials that documented how levy dollars would be spent – with a portion of it being dedicated to help address (but not solve) our budget shortfall. The good news is our community rallied to support its schools — warding off even more significant cuts and providing an opportunity for us to balance our budget. If the levy had not passed the shortfall would have been double what it is now, nearly $8 million for next year.

 

So, what can we do?

We have an opportunity to rebuild for the future. It seems a bit counterintuitive to add new programs as outlined in our Bridge to Excellence (BtE) plan while at the same time cut our budget. I strongly believe, however, that in order to turn our financial situation around we cannot do what we’ve always done. It seems to me that spending what amounts to about 2.5 percent of our total budget to invest in BtE is not out of line. Considering that one of the largest variables to increasing our revenue is our enrollment, we have to reinvest in something that excites families, draws new students, and better meets the needs of our current students in a new and innovative way.

At the same time, we need to prioritize what is most important for our students and community. We can no longer afford to do everything we’ve always done. We need to reallocate the budget to keep what our students need and what our community values while looking for other efficient models to grow for the future.

The good news is we’re not the first district, nor will we be the last, to face these budgetary challenges. We can learn from others who have emerged stronger as a result. These successful districts abandoned what wasn’t working, set their sights on what students would need five or 10 years down the road, and redesigned their schools to get there. It requires a willingness to change, to work together, to make difficult decisions and to support the courageous leadership that will be needed to get there.

There is no sugar coating the work that needs to be done. We face large-scale change to turn this budget situation around. The good news is that the choice is ours to make. We have an opportunity to control our own destiny … if we act now.

 

Superintendent Corey Lunn can be contacted via email at lunnc@stillwater.k12.mn.us or by phone at 651-351-8301.

 
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