Payson schools face a $650,000 deficit for the upcoming school year, a frustrated Superintendent Casey O’Brien warned a sobered school board this week.
Unless the state budget picture changes, the district will have to cut another 5 percent from its operating budget, despite an increase in health costs and other items.
O’Brien didn’t speculate on how the district might close the projected budget gap, but acknowledged the board may have to approve layoffs or other painful cuts for the third year in a row.
Ironically, the grim news for the district came as Gov. Jan Brewer issued a release hailing a sharp improvement in the state budget projections.
The biggest hit to the budget came from the loss of fees the federal government paid to districts that have so much federal land in their boundaries that it narrows the property tax base. Last year the district received $395,000.
In addition, the district has so far lost 80 students as many young families have moved away to seek employment. So far, this loss cost the district $278,000, but this number will most likely increase as students continue to leave the district.
The district continues to lose money as a result of the Legislature’s decision to phase out Career Ladder payouts, which rewarded teachers for getting extra training. That shift will cost the district $107,000 this year.
Meanwhile, medical insurance rates have increased by 2.3 percent and the district’s contribution to the retirement fund increased 1.05 percent.
Even so, the state budget did include a hoped-for increase in performance pay for teachers that will add an estimated $700 to each teacher’s salary, reported O’Brien at Monday’s board meeting.
“This process started in 2009,” said O’Brien of the declining enrollment. “At that time, we didn’t understand the magnitude of the problem going forward.”
He said the true culprit to the school district’s hardship is the economy, but added that the Legislature could cushion the blow by spending money collected as part of a voter-approved, 1 cent sales tax hike. However, O’Brien reported the Legislature has decided to bank those funds to prepare for when the tax ends in June of 2013.
By contrast, the governor’s proposed budget would spend about half of that money to help K-12 schools.
O’Brien reported negotiations between the governor’s office and the Legislature have heated up to release these funds to education.
The Republican governor and the Republican Legislature remain about $500 million apart, although the governor’s office this week issued a release saying state revenues for the first three quarters of the current fiscal year are running $54 million ahead of projections. Brewer cited projections of a 6 percent annual statewide growth rate in 2014 and 2015.
Evaluation Form: Speech 3
“The good news is that most of the data, especially in areas like job growth and state revenues, continues to point toward an improving state economy and fiscal outlook,” said Brewer in a release.
“We must be conservative in our approach to state spending and the budget, but conservatism does not mean pessimism. I will not allow pessimism to guide our decision-making in a way that leaves our state less equipped in key areas like education to meet the challenges of the future.”
However, O’Brien said he’s drawing up worst-case-scenario plans now based on legislative budget proposals.
With the legislative session coming to an end, schools could hear about the funds any day, but O’Brien is not holding his breath. He and school site administrators have started meetings to discuss where cuts may be made.
“There’s going to be pain everywhere,” he said, “Nothing is in surplus.”
O’Brien said he and other administrators will delay making staffing level decisions as long as possible to allow for retirements and resignations.
Currently the administration plans to give out contracts to staff by May 14.
At Monday’s board meeting, high school principal Kathe Ketchem, along with CTE administrator Wendell Stevens, guidance counselor Judy Michel, and math teacher Dan Alm announced their retirements. Special education teacher Kezia Zuber resigned to pursue a career in outdoor education.
In a subsequent meeting, O’Brien discussed other potential areas the school could cut from administration and support staff, to curriculum development, extracurricular activities and facilities.
O’Brien said cutting more administration and support staff would severely limit the district’s ability to complete reports required by the state and federal governments.
“The state is not backing off on requiring the I’s dotted and the T’s crossed,” said O’Brien.
If the school fails to file complete reports, it could lose money, he said.
Business manager Kathie Manning said that in the 26 years of working in schools, she has never seen a district administration do so much with such minimal staff and salaries.
Two years ago, the district made significant cuts in the ranks of administrators. However, last year most of the cuts fell on classroom teachers — especially at the elementary school level. The layoffs last year included about 24 positions total and resulted in a big increase in average class size in the elementary schools.
With the closing of Frontier Elementary, O’Brien said the district has done as much as it can to address major facilities overhead costs. He said because of voters approved a bond issue before the Legislature cut off almost all funding for new school construction and even maintenance, Payson’s school buildings are in better condition than many in the state.
Manning reported when she worked in the Cave Creek district, her office was in a portable building with buckets on her desk to catch water leaking through the ceiling.
O’Brien laments that since his arrival, the state has also eliminated most money to update curriculum.
“Soft capital dollars used to support a curriculum review cycle, but we have not done any adoptions for the last few years,” he said.
He said the state’s imposition of common core academic standards will force major curriculum changes.
New electronic textbooks may help keep costs down, but even then the district barely has enough money to patch the problem — let alone fix it.
Regarding technology, O’Brien said the district can’t afford to buy new computers. The technology department triages the best it can to keep everything working.
Also, O’Brien touched on the subject of sports and extracurricular activities.
“We used to pay coaches salaries through M & O dollars,” he said, “But we would have had to cut a teacher’s salary to keep that up.”
Instead, O’Brien credits parents for agreeing to pay the sports fees the school board implemented a couple of years ago.
He sees the music, drama and art programs continuing as well.
“We manage (our money) well,” he said, “we just continue to get less every year.”