Socially distanced school board

The Payson school board’s been meeting almost every week during the school closure, while observing social distancing rules. Only 10 people are allowed in the board room during meetings, each sitting some six feet apart. Most administrators and presenters participate via conference call.

The Payson Unified School District budget’s looking good.

If you don’t peer over the pandemic cliff edge.

The Payson school board Monday approved an updated budget for the current school year that envisions a roughly $1.4 million cushion — thanks to rising enrollment and federal bailout money.

Payson has gained about 70 students this year, with another 30 additional students transferring from Pine and Tonto Basin — signs of the recovering economy before the pandemic hit. Moreover, the district hopes to receive $460,000 from the federal CARES Act, intended to soften the blow of the pandemic shutdown.

If all goes well, the district could add some $1.4 million to its $16 million operations and maintenance budget this year. The board on Monday approved using much of that money to prepay insurance for its nearly 300 employees, giving it some padding as it prepares a budget for the 2020-21 school year.

However, the discussion took place in the long shadow of the pandemic — expected to turn a previously projected billion-dollar state surplus into a potential $1.1 billion deficit, according to the Joint Legislative Budget Committee. That projection was made several weeks ago. The economy’s already in a recession much deeper than in 2008. Economists hope the economy will recover quickly once businesses reopen, although a surge in new cases could dash those hopes.

No one knows how the fitfully-convened Arizona Legislature will react once the effects of an unemployment rate above 15% and plunging retail sales hit home. During the 2008 recession, the unemployment rate never climbed above about 10% and the state’s revenue dropped by a third. The Legislature responded with the deepest education cuts in the nation, since K-12 schools and universities account for more than half of state spending. Some of those cuts have lingered for more than a decade, leaving Arizona with among the lowest per-student spending rates in the country.

State lawmakers adopted a “skinny budget” before going into recess a month ago. The slimmed down budget included money for the last installment of a three-year, 20% teacher pay raise — but skipped funding most new programs. The senate and house this week were locked in a dispute about whether to go back into session to pass a few high-priority bills or quit for the year — leaving Gov. Doug Ducey to deal with the impending financial crisis.

The “skinny budget” as it now stands includes some added education funding including $175 million for the third installment of the three-year, 20% teacher pay raise, $90 million for capital improvements unfunded since the Great Recession and $67 million for added technology, textbooks, building renewal and personnel.

The district is preparing a 2020-21 spending plan based on the state’s “skinny budget,” with the addition of $460,000 from the federal CARES Act. The Monday meeting finalized the budget numbers for the current year, based on enrollment increases, extra money produced by a spending freeze and year-end surpluses by category — after two months of lockdown and remote learning.

The board opted to prepay insurance partly to avoid having leftover capital and operations money sitting in its accounts. Chief Financial Officer Kathie Manning said she’s worried the state might sweep any leftover, year-end money to cope with its own growing financial problems.

Manning said officials at the state Department of Education said the district will most likely get $460,000 from the CARES Act, which it can spend next year. The district has tentatively spent the money on Chromebooks, so each student can check out and take home one of the low-cost, internet-connected computers. This would allow them to view lectures, do research, take tests, complete assignments and work in groups at home. When the district had to shift abruptly to a mostly online learning model this year, somewhere between 10% and 30% of students had no computer or internet access at home — hobbling their ability to keep up. Payson’s a Google Reference District, which means it has trained teachers and students to use Google’s software, classroom management and curriculum programs. The district had a crash course in using all those tools during the shutdown — except for the large number of students with no access at home.

The federal rules in the CARES Act allow the state to take all the money earmarked for districts to cover its own shortfalls. So far, the Department of Education has said that’s not likely — but the district won’t know for sure for several weeks.

“They can (supplant the money), but so far the state doesn’t plan to pursue that. So they could supplant, but it’s not likely,” said Manning.

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