REGIONAL-St. Louis County Schools Finance Director Kim Johnson had some grim news for school board members Tuesday, a budget forecast for next year with a $1.3 million deficit, one that will undoubtedly lead to more staffing cuts.
The shortfall is in the general fund, a $34.3 million line item used in large part to fund salaries and benefits for teachers, administrative staff, and some categories of support staff. Other educational expenses are also made from this fund, but staffing costs represent the single largest share of the general fund and are the most likely target for cuts. The district accommodated a shortfall this year by cutting ten teaching positions.
“We’ve got to continue to make cuts, and we’ve got to look at absolutely everything,” Johnson said. “We’re working with (Superintendent) Reggie (Engebritson) and administration and trying to make some additional cuts. I would like to see between one million and 1.3 million in cuts next year. That’s big.”
The cuts have to come from the general fund because the rest of the district’s $46.6 million budget is in restricted funds with the money designated for specific types of expenses, such as food service and long-term facilities maintenance. The district, by law, isn’t allowed to transfer any of those dollars to the general fund, so cuts in those items won’t resolve the problem. Johnson applied that to the issue of staff cuts.
“If you talk about teachers, the average teacher salary at the lowest level, including health care and everything, runs about $75,000,” she said. “If you think about how many teachers that is to cut, that’s a lot, and we’re looking district-wide. But I want to make note that food service staff, community ed staff, early childhood staff are paid with funds that are not part of the unassigned fund balance, so cutting anybody in those areas does not help us. The same thing with our Indian Ed staff. They’re paid with designated funds that cannot be spent on anything else. So, the pool of staff that we can cut gets to be smaller and smaller and smaller.”
The shortfall exists in large part due to declining district enrollment, which reduces the amount of state aid the district receives. From a pre-COVID level of about 2,100 students, ISD 2142 has dropped to around 1,800, Johnson said.
“We’ve got more students that are homeschooled, we have more students that are online. At a little more than $10,000 per student, we’ve got a problem,” Johnson said.
That loss in students also causes a decrease in the district’s levy. While the news may be received well by property taxpayers, the projected 11.77 percent decrease overall includes a $234,400 hit to the total referendum market value portion of the levy, which contributes to the overall general fund shortfall.
Legislative aid
Johnson said the district will be working to try to influence the Legislature for certain changes that would bring more revenue to the district. One of those is in the area of reimbursement for transportation costs.
“Our district is 4,200 square miles. We drive 1.4 million miles in transportation every year for 1,800 kids in five buildings,” Johnson said. “We’re the largest school district geographically in the state. We talked with (Jeff Anderson of the Costin Group) about a change in the way that they calculate excess transportation for large districts. I think it’s 34 percent, but the excess is only to and from school. We have to travel for sports, for extracurricular activities, for field trips, and I don’t think it’s fair to exclude those miles and costs when they do their calculations.”
A second avenue for change that Engebritson and Johnson discussed with Anderson was how the district could get more benefit by leveraging the seasonal recreational properties for aid replacement.
“The percentage of our seasonal recreational properties in the entire district last year was 41 percent – that’s huge,” Johnson said. “When we’re property rich, we get less aid and more levy because they see our taxpayers as being rich. However, the seasonal rec property owners don’t pay on a lot of the levy. If we had a $1 million operating referendum that we take to the voters and that legislation passes, the state would kick in 41 percent and then the taxpayers would only have to pay 59 percent.”
And asking voters to approve a $1 million referendum to help avoid the damage caused by the huge projected shortfall appears inevitable.
“It’s going to be really important to go out for an operating referendum next fall, because passing an operating referendum is going to help the district not to have to cut as many staff,” Johnson said. “We’re going to have to start on that right away in January – we need to get some of the committees going and things like that.”