Durango School District 9-R declared a fiscal emergency Tuesday as estimates of state revenues decline with COVID-19 restrictions squeezing tax collections.
Members of the school board were given budget projections showing a drop in total revenue from $62.24 million for the current year to a range of between $56.01 million to $51.53 million for next year.
The main state revenue fund for the district brought in $34.01 million in the current school year. Next year, the main state revenue fund, called the equalization fund, is estimated to drop to range between $29.98 million to $25.51 million. A secondary source of state revenue, which brought in $1.67 million in the current year is expected to drop to about $1.12 million next year.
Superintendent Dan Snowberger told board members: “We’re at a point where we have to make additional tough decisions.”
According to District 9-R policy, declaration of a fiscal emergency will bring representation from the two unions for district employees, the Durango Education Association and the Durango Education Support Professionals Association, into budget consultations to assist in identifying budget options.
Further straining the budget situation, 9-R anticipates an enrollment decline of at least 100 students next year, which would bring an additional decline in state revenue of an estimated range between $758,761 and $674,454.
The district has a fund balance reserve of about $5.6 million, but Snowberger cautioned about excessive reliance on dipping into the reserve to cover next year’s projected shortfall.
“It took us 10 years to get back to pre-recession funding levels after 2008,” he told the board.
If the fund balance is tapped too heavily next year, Snowberger said the district will not have reserves to deal with subsequent years of falling state revenues, which are likely based on the ratcheting-down effect of the Taxpayer’s Bill of Rights, a Colorado constitutional amendment that limits state taxing and spending.
Snowberger sought guidance from board members to identify further budget savings – presenting what he described as an admittedly unpalatable array of potential programs and offerings that might require trims. He asked board members to identify programs where they could support trims or those areas where they would be opposed to cuts.
Programs and services where savings might be found included middle school sports, high school sports, Kids’ Camp, the custodial staff and across-the-board staff pay cuts.
Snowberger cited problems in cutting all those areas – sports often keep students engaged in their studies, preschool helps prepare children for learning and Kids’ Camp helps families struggling to find child care.
Other ideas where budget savings or new revenue might be found included the potential closing and consolidating of schools, increasing fees, eliminating attendance incentives for teachers, standardizing curriculum across schools and increasing facility rentals.
School board member Mick Souder said the board faced similar budgetary cuts five years ago. “Everyone said: ‘No, you can’t cut that.’ It became very difficult to make decisions.”
Board member Kristin Smith said painful decisions about where to trim should be guided with input from the community and DEA and DESPA.
The district plans to schedule a public budget presentation May 27 that will likely be on Zoom.
The board was shown a number of different budget scenarios. In one scenario, assuming all currently recommended cuts are made, that enrollment falls by 100 students and no salary raises are granted, the budget still has a $2.03 million deficit if state funding is cut 10%.
In the end, Snowberger cautioned no widespread consensus on where to cut will emerge, and the ultimate difficult decisions would come down to the board.
Board member Andrea Parmenter said, “I hope everyone appreciates that these are very difficult decisions and they are not easy to make.”
Currently, the state is looking at having to cut as much as $3.1 billion in total state spending, a 25% budget reduction. Spending for K-12 schools constitutes about 36% of the state budget.
State lawmakers, Snowberger said, have told school officials their first priority is to protect K-12 spending, but still they’ve warned school districts to anticipate a 10% to 20% reduction in state funding. Other state agencies are being warned to expect at least a 20% cut in state spending.
The school board also approved the nonrenewal of nine contracts of teachers and other educational professionals at district schools for next year after they initially delayed their approval of the cuts last week.