By: Bill O’Connell
Faced with a large and unexpected cut to state funding for the last two months of the school year, the Swanton Board of Education (BOE) called an emergency meeting to discuss the impact the cut would have on the upcoming five-year forecast and how to handle other potential decreases in revenue going forward.
“We kind of got hit in the gut with a budget reduction for this year of $237,000,” said District Treasurer Joyce Kinsman. The timing of the reduction appeared to catch Swanton Local Schools and many other school districts across the state off guard.
Ms. Kinsman told the Board that she and Superintendent Chris Lake had participated in several webinars regarding school funding “for next year” and where the state budget is going given the economic shutdown of the state that began in March, indicating that the pullback on funds for the end of the academic year was a surprise.
Strictly from an income tax revenue standpoint, Ms. Kinsman presented data that showed that initial unemployment claims were trending down for Fulton County and Lucas County as well as the state. Continued unemployment claims were not trending down but were starting to level off.
If these trends continue, Ms. Kinsman estimated that the income tax revenue for the year 2020 overall will be approximately 96%. That estimate will help in determining the five-year forecast which is due on May 20, 2020 but there is still a lot of unknown information needed for some semblance of an accurate projection.
In April, before the sudden funding cuts, Ms. Kinsman assumed her five-year forecast with state funding being flat and would reevaluate in late fall. “But now we’re hearing of possibly a 10 or even 20 percent cut in state funding, she stated. “Twenty percent I think would be worse case, 10 percent would be more realistic. Next year, if we take a 10 or 20 percent cut in state funding, that’s going to be a little rough.”
She displayed a spreadsheet to the Board showing several scenarios considering state funding decreases of 10 and 20 percent and a decrease of income tax revenue of five and 10 percent.
“We cannot sustain a 20 percent cut in state funding and have it stay at that level,” explained Ms. Kinsman. “With a 20 percent cut in state funding and a five percent cut in school district income tax, we’re going to be out of money in fiscal year 2022 if we don’t make any changes.”
Several economic decisions for next fall have already been made including the elimination of three staff positions (two teaching and one custodial) through attrition, however, many unknowns remain creating obstacles to making other critical choices.
“The difficult position we find ourselves in is that it’s anybody’s guess what’s going to happen in the fall and we’ve not gotten any specific guidance as of this point. So, it leaves us making contingency plans from “A” to “Z” on what a school year could look like.
It could be anything from completely normal to we stay on-line to anything in between. All of that is going to impact how much money we spend.” commented Mr. Lake.
He also stressed the urgency of the matter and how little time there was to make key decisions. “We’re in an unenviable position that we need to come up with a five-year forecast in seven days to give to all of you (BOE members) to approve and we don’t know what the future is going to look like.”
“We’ve encouraged our legislators to give us some direction, sooner rather than later,” continued Mr. Lake. “There’s a lot of work that goes on during the summer to prepare for next year. We need to know, for example, how many kids will they let us put on a school bus. That’s going to impact how we transport kids. How many kids can we have in a classroom? How many kids can you have in a cafeteria? All these things factor in to how we approach bringing school back to something approximating normal. We just don’t have those answers right now.”
The regular school board meeting is Wednesday, May 20, 2020.
Bill can be reached at firstname.lastname@example.org