State revenues are projected to be halved due to the pandemic, leaving possible cuts to Manhattan-Ogden USD 383 for 2021.
Preliminary numbers related to the 2021 budget planning process were presented Wednesday to the USD 383 school board. Business Services Director Lew Faust says overall, their general fund and local option funds are down around $300,000. However, since they are not over the budget authority, this is good.
Recent spring state revenue estimates from the Consensus Revenue Estimating Group show an estimated $827 million decrease for this year, with an additional $445 million next year for a total of $1.3 billion. Faust says the ending balance for next year is over 600 million in the hole, which the state cannot be in. A fix may include an allotment from the governor, which is a cut across the state.
“An allotment of 1% for each student in the funding formula would equal $46. We have about 10,200 FTE, which would amount to over $469,000. If the entire 9.8% was covered through allotments, it would equal almost $4.6 million dollars for the district,” says Faust.
Faust remains hopeful that won’t happen, but admits if the money is not there, budget cuts would be almost impossible to avoid. The state is supposed to receive an additional 1.7 million dollars for the 2021 budget due to additional funding from the state. However, this may not occur due to potential allotments.
Faust presented a projection for the district’s budget authority for next year. He says by itself with an increase in the base aid per pupil, the projections look good with increased based funding.
With COVID-19 costs, the projection show a “ballpark” estimate of $400,000 in savings from having the buildings closed. This is due to reduce costs from transportation, over time, and utilities. The district is also expected to receive around $669,000 from the CARE stimulus revenue. This is a one time use money to be used for additional expenses due to continuous learning.
Looking at the figures for the projected additional $1.7 million, the district has additional expenses they are anticipating. The health insurance update is the largest increased cost to around $1.715 million. All the addtional costs add up to $2.43 million. With the additional funding, the district will start the school year in the hole of around $766,000.
“That’s bad news, but we will get through this year fine. Even if there is an allotment that comes down this year, we can handle and cover that. What it looks like next year is uncertain,” says Faust.
Currently, the district does not have the actual renewal rate for their insurance. Faust says they should be getting that rate within a week and are hoping it won’t be as high.
Assistant Superintendent Eric Reid says he knows this is isn’t the best news, but wants the board to keep something in mind.
“We have been growing our budget in anticipation of Oliver Brown Elementary coming online. To create transition, we knew we were going to have to grow the budget in both ways to take on those additional expenses,” says Reid.
Reid says the district has some cushion in the budget for now. However, it may put a dent in their plan for the next year.
“We’re probably going to be looking into some choices coming up over the next year, but we don’t want to overreact to that quite immediately,” says Reid. “It’s going to be different. We are going to have to make some different spending choices along the way.”
Reid thanked everyone who has been involved in the process so far, taking the bad news.
