The Payson school board has adopted a surprisingly robust budget for the upcoming school year, thanks mostly to a rush of federal pandemic funding.
The budget features raises of between 2% and 3%, capping a three-year, 20% raise for the average teacher.
The district will also add about 15 federally funded positions, mostly to help kids make up the ground lost to months of distance learning during the pandemic.
The unanimous board vote on Monday, June 28 locked in the preliminary budget presented two weeks ago, with some last-minute additions and subtractions.
The influx of federal aid and some changes in state policy narrowly averted a budget disaster, since the district’s enrollment declined by nearly 400 students in the pandemic, dwindling to about 1,900.
Normally, that would have resulted in a roughly $1.6 million hit to the bottom line, and big layoffs of staff — especially teachers.
Instead, the infusion of some $4 million in federal pandemic aid will avert any layoffs, while adding reading and math teachers, a bilingual English language learner teacher, a special education teacher, a life skills teacher, a couple of teachers’ aides, a social worker and two custodians.
The district hopes the added resources will not only help students cope with family crises and learning losses, but keep the district from going on what amounts to state probation due to low scores among bilingual students and special education students.
All told, the district will spend roughly $23 million. The property tax rate will decline slightly, thanks to a rise in assessed values and new construction. The district also continues to benefit from the voter approved override, which boosts the budget every year by about 10%. Because Payson has a relatively low property tax base, it will continue to benefit from the state’s equalization formulas, intended to address the huge differences in spending between rich and poor districts.
The dizzying change in fortunes and a state budget that promises trouble when the federal money runs out left the school board fretting about building up its reserves for the next budget crisis. The district has also proved adept this year in getting state money from the School Facilities Board to make long-overdue repairs on things like leaking gym roofs and drainage problems. But the district still has millions of accumulated capital needs, as well as a long list of expensive modifications recommended by a consultant who studied ways to make the five campuses more secure.
“We can’t count on the school facilities board to save the day for us” when faced with major repairs, said board member Jolynn Schinstock. “We don’t know what’s going to happen next.”
Board member Barbara Underwood said, “Look at the situation we’ve had with school buses breaking down — that is a contingency item, that would be a huge contingency item.”
The raises will bring the average teacher salary to $52,000, for the new, longer, four-day work week — a 20% increase since 2018. The increase comes despite a decrease in average years of teacher experience, thanks to a raft of retirements.
The added positions coupled with the lack of teacher layoffs could lead to smaller class sizes — as well as help for struggling students from math and science teachers. Arizona has the largest class sizes in the country. Moreover, Payson has been forced to cram students into K-3 classes ever since selling one of its elementary schools during the recession. The loss of enrollment and the shift of students into distance learning programs has lowered average class sizes. The extra positions could also provide enrichment and makeup sessions for students on Fridays, as the district in August moves to a four-day instructional week.
The picture could brighten even more if some or all of those 400 students return. The district has no idea where they went. Some may have gone to the Payson Christian School, which mostly remained in the in-person class mode. Some families might have moved away from Payson. Many other parents might have decided to shift to home schooling. If most of those kids return when classes resume in August, the district could collect more money from the state than the budget assumes.
In the meantime, the current school year ended up better financially than the district anticipated. The district had $2 million in unspent carry-over funding in the operations fund and $230,000 in the capital fund as well as a contingency fund of roughly $1.3 million. The contingency fund will provide a cushion if the enrollment decline continues — and will grow if more students return, according to the presentation to the board by finance director Kathie Manning.
Moreover, Congress also approved Forest Fee money this year, intended to help compensate districts with lots of non-taxable federal land. The district will start the year with $350,000 in that account — and has committed $250,000 to various one-time expenses, while hoping Congress will reauthorize another payment this year.
One worrisome cloud over the budget involves the depletion of the more than $1 million the district banked from the sale of Frontier Elementary School to Payson Christian School nearly a decade ago. The money has provided a slush fund for urgent capital needs, but has now dwindled to $50,000.
“That worries me,” said Schinstock. “We had all the money from the Frontier school sale and we don’t have a heck of a lot left. In a few short years, we’ve spent it all down. I feel that we need to bring that back up a little bit. I don’t know what we would have done if we hadn’t had that money.”
“We don’t know what’s going to happen,” said Joanne Conlin, board president.
“We’re driven by the legislature and whether they believe in public education and whether they’re going to fund it.”
Superintendent Linda Gibson noted that the district has been whipsawed this year by the changes in state policy, the extra expenses of the pandemic, and the wait for federal assistance.
“Back in March, we figured we’d end up with a $300,000 balance in contingency,” said Gibson, “Now it’s $1.3 million. So I’m saying, let’s get operational and get our feet wet so we don’t fall back into a place where we absolutely have to drop $500,000. Every district across the country was in the same position this year — and many of them had to resort to layoffs.”
The district also hopes to benefit from changes in the state rules when it comes to online classes. Currently, the state counts district online classes as almost a separate school — and pays 5% less per student. The new rules will make distance learning programs much more flexible. The district will no longer suffer the 5% penalty for students taking online classes from the district’s program. Moreover, the pandemic offered a crash course for the district in online learning. So now the district has Chromebooks for each student, up-to-date software and far more teacher experience in both teaching online and integrating the online tools into the in-person classes, thanks to the initial round of federal pandemic grants.
Still, the district faces a daunting task in repairing the damage done to student academic gains during the pandemic caused by distance learning, the shifts in and out of in-person classes, the loss of teachers and the disruption of all the shifting efforts to cope with the pandemic. Overall, student test scores declined markedly in most areas — with a big increase in the percentage of students who not only weren’t proficient in math and English, but who didn’t make much progress in the course of the year. Moreover, no one knows whether those among the 400 missing students who return will have made much progress while they were gone.