A tattered buoy has temporarily eased the threat of a budget tsunami in Payson schools’ stormy fiscal sea.
The state cut $291,464 from the Payson Unified School District’s $16 million maintenance and operations budget. The district had carried over from last year exactly $198 more than the state cut.
“That is pure luck,” district Business Manager Bobette Tomerlin said at a Tuesday school board work session.
This year, the district will float. Next year’s budget however, remains a large question mark. Even with the influx of at least $1.3 million in federal funds over the next two years, school officials say cuts are a likely consequence after the state closes its $3 billion proposed budget deficit.
This year, the state also cut $58,000 from the district’s $655,000 soft capital budget, which pays for things like textbooks and computers. Most of the money in that fund had already been spent because it also pays the bills on some lease agreements.
Tomerlin said that while she can’t move money from one fund to another, she can move expenses. Reserves in another fund, unrestricted capital, will cover the nearly $60,000 cut to soft capital.
Unrestricted capital pays for things like land and vehicle leases, along with furniture. Tomerlin expects to end the year with $572,000 in that fund. The soft capital fund, however, is empty.
“The good news is we’re at zero,” said Superintendent Casey O’Brien about the budget cuts in general. Other districts around the state are faring much worse.
The district is also struggling with declining student enrollment, a voter-defeated override and the legislature — the combination of which O’Brien termed “the perfect storm.”
Even without state budget cuts, Payson’s budget will decrease by $788,000 next year due to declining enrollment and the override loss. An expected $1.3 million in federal funds will help compensate.
Payson lost 45 students this year, including 19 from Pine, Strawberry and Tonto Basin, which equates to a loss of $341,000 next year. Districts without high schools pay Payson tuition for students to attend here.
The override defeat means the district will snip nearly $447,000 from next year’s budget.
However, the federal government’s first lifeboat has already begun to arrive. Federal forest fees will help the district survive through fiscal year 2011.
This month, the district received $541,000. Another installment should arrive in July, although that amount hasn’t been determined. Since the forest fees will decrease every year, the money Payson receives will likely decline.
The money is now in a separate fund, and the district will wait to see the ramifications of the state cuts before it allocates the money, said Tomerlin.
The federal stimulus package is expected to provide Payson with another $746,000. That money, however, is targeted for special education and students at-risk of falling behind.
But the state’s projected $3 billion deficit for 2009-10 hovers like a typhoon on the horizon.
The “options” presented by the House and Senate appropriations chairs would require Payson to cut its budget by $2.5 million. Payson’s soft capital cut, for instance, could total $640,000 — more than the fund has now.
However, no one has answers yet. “We’re literally right now juggling on roller skates,” O’Brien said.
If the district cut based on the proposal now floating, it “would be catastrophic,” he said.
Traditionally, the district must spend certain amounts of money on special and at-risk education to remain eligible for federal stimulus money. Federal funds are meant to supplement funding and not replace it.
On Tuesday O’Brien said those rules might loosen to reflect the economic reality.
“The money coming in is a good thing, however, it is a two-year thing,” O’Brien said. “Three years out, is the state going to be back on its feet?”
Normally, the district would soon begin compiling next year’s budget. However, O’Brien advocated waiting to craft a plan until the state’s numbers become more final.
Time constraints could accelerate the usual plodding process, he said. Any teachers not re-hired need notification by April 15. The board should have a preliminary budget by April 13.