State budget shortfall leads to cuts at R-5 schools

Thursday, April 8, 2010

The Nevada R-5 School District is making changes to cope with the loss of state funding which is being reduced in order to balance the state budget. "The state is experiencing some pretty significant shortfalls on the state budget and that's going to be reflected in the school's state funding," said R-5 superintendent Dr. David Stephens.

The R-5 district currently receives about 48 percent of its budget from the state. The rest comes from local, county and federal sources and some forms of income like tuition and things like that, said Stephens.

In order to balance the state budget, there have been cuts proposed equaling $500 million and the state has experienced a substantial decrease in general revenue collections for the past year. A news release issued last month from the State of Missouri Office of Administration states that the 2010 fiscal year general revenue collections "declined 13.3 percent compared to fiscal year 2009."

State revenue is derived from a variety of sources. Collections come from individual income taxes, sales and use taxes, corporate income and corporate franchise taxes and other sources. State collections have declined in these areas from 6.8 percent in the sales and use tax to 12.5 percent in the two corporate tax categories.

As a result of this loss of revenue, and a constitutional obligation to balance the state budget, the state has cut its funds to schools. "We are anticipating a 2 percent cut in expected revenue," said Stephens. That 2 percent reduction amounts to about $200,000 a year to the R-5 District. "We have to make adjustments in the current budget to offset a $200,000 loss," he said. Those figures apply to the 2010-2011 school year.

The situation doesn't look any better for the following academic year. In fact, it looks even worse, because the cuts in funding will amount to 4 percent of the state funding, or a total amount of $400,000 in cuts, that the R-5 district will have find some way to absorb.

Stephens pointed out that the district wanted to achieve the offset without getting into the fund balance. "The fund balances are in pretty good shape," he said. The fund balance is a reserve, or savings account if you will, that is equal to 20 percent of the yearly expenditures for operation. Next year that figure will drop to about 19 percent, but many schools, Stephens said, operate on much less.

Stephens also pointed out that part of the fund balance is money from what is known as the Maxwell Trust, which was bequeathed to the district. Maxwell Trust moneys can only be used for improvements not operation. Taking the trust money out of the fund balance will still leave it at 15 percent, said Stephens. "If we can maintain a 15 percent fund balance, that's pretty good," some districts operate on a 5 percent fund balance, he said. Stephens also said that if the district lost every bit of its funding: state, federal, local, everything, it has enough money on hand to operate for about three months.

So what does all of this mean to the students of the district? There are both long-term and short-term plans to manage the budget cuts with minimal impact on students. The superintendent said, "One of the things we are doing this year is we are significantly reducing our summer school program this summer." Stephens said he knows this will have a big impact on families. Summer school will continue for those students needing remedial instruction, but there will be no enrichment courses offered. Stephens has hopes that this move would be all it takes to balance the $200,000 loss the district will experience.

Stephens did say that next year the state is looking at eliminating all summer school funding to further help balance the state budget. "If they do that, we probably would not have summer school at all" during the summer of 2011. The Lights on After School program will also be affected during the 2010-'11 school year. The program will continue as is through this school year, but next academic year it will be for remediation only.

It will be "only for students with recognized academic deficiencies," Stephens said. It is that way for the fourth and fifth grade students now. "We don't want to cut it all together, so we're just going to limit it. People need to know that that opportunity will not be there for their kids," he said.

The district also is looking at reducing the number of classes as a way to trim its budget. Stephens wanted to be sure that it is clearly understood that "we don't want to tell anybody they don't have a job." Consolidating classes is a more accurate description, and the consolidation will be achieved through attrition rather than any layoffs. A retired teacher will not be replaced, but their class will folded into another class of the same grade as long as class size remains at an acceptable level.

According to the Missouri School Improvement Program class size standards there are two terms that apply here. The first is a desirable class size and the second is a minimal class size.

In the case of kindergarten students, the desirable number is 20 students per class. As of right now almost all of the classes in the district fall within this category. If one of nine kindergarten teachers were to retire, the 20 students of that class could be distributed to the remaining eight classrooms and still remain below the minimum recommended number of 25 students per class. The 25 is still considered a good number, but when there begins to be more than that in a class it takes away from the students' learning experience.

According to Stephens, "We have that room to make those moves without hurting kids."

The district is not likely to be hiring any new teachers either. For those openings that require fairly common certifications, the positions will be filled from within, said Stephens. But to acquire a teacher with a specialized certification, the district will probably have to bring someone in from outside the district.

For the second year, the R-5 staff will not receive a cost of living increase. "The staff has been great about understanding," said Stephens, but it's very important to get to a place where we can compensate them for the good work they do here.

Various district departments are making cuts wherever they can in order to tighten things up a bit. They are "just trimming the fat," concentrating on reductions "that will not have a significant impact on kids. We want to make sure that any cuts we put in are as far away from kids as possible," Stephens said. All of the district's ancillary programs are being scrutinized, he added. The Parents as Teachers program has experienced cuts and the Adult Education program is also being closely examined.

Stephens said "all of this affects the community," and he just "wanted the community to know what is going on with the budget," that there's going to be some cuts and changes. "I'm looking 3-5 years down the road," he said. "We are preparing ourselves for the worst case scenario." His goal is to "get the most bang" for every educational buck the district spends. "Even in a good economy, we need to be frugal," he said. "We're treading water right now, and as long as we can keep treading water until this storm has passed we'll be OK."


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