The Roswell Independent School District school board will consider approval of the 2020-21 budget Thursday knowing full well it will likely see a cut of almost $25 million if and when the Legislature conducts a special session.
The board will have a special meeting at 1:30 p.m. Thursday in the Administrative and Educational Services Complex, 300 N. Kentucky Ave. It will be live streamed on the RISD YouTube channel.
As it is now, the district is in a good position financially, Chad Cole, assistant superintendent for finance and operations, told the RISD Budget Development Advisory Committee in a virtual meeting Monday morning.
“If we’re going by what was passed into law in March of 2020, everything looks great,” Cole said.
The budget projects a $3 million increase in the State Equalization Guarantee, the amount of state funding a district receives based on a formula. It covers about 95% of the district’s day-to-day operating costs.
RISD projects $94.1 million from the SEG, up from last year’s $91.1 million.
“That’s the largest I’ve ever seen it in this school district ever, even with the federal stimulus back in 08-09,” Cole said.
The state’s budget for education also includes an average 4% raise for educators and a revenue increase of 3.39%.
But since the state passed its $7.6 billion budget in March, a crash in the oil and gas industry and the COVID-19 pandemic have brought projections of a $2 billion shortfall in state revenue. Legislators are anticipating a special session in June to readjust the budget.
Based on the state’s projections, RISD is expecting a 26.3% cut to its budget, giving an SEG of $69.5 million, Cole said.
That $24.8 million cut would more than wipe out the nearly $18 million boost the district received from the Legislature for 2019-20 that helped raise pay for school staff and increase the wage scales for teachers, among other changes mandated by the state.
“We would lose every bit of that gain, but we’re still saddled with the burden of the additional recurring costs that we have structured in through salaries and benefits costs. And that’s not just in the Roswell schools, that’s school districts throughout the state,” Cole said.
Cole said the 4% raise will likely be among the budget features taken away.
“We know that’s not realistic,” he said of the raise. “We know that 3.39% increase to next year’s revenue is going to go away. We know that we’re probably going to lose, if not all, the bulk of our cash balance as a district,” he said.
The district projects it will carry a cash balance of $2.7 million to next year, far less than last year’s $13.7 million carryover, but Cole said that was expected.
“We did talk about how we were going to be dipping into the cash balance early on in this current school year, so that is not a surprise. That’s not a shock,” he said.
The district does not plan to use that balance this year, but that could change after the budget cuts, or the state could “claw back” part of that balance.
“I do expect both, but there is no crystal ball with regard to the options available or unavailable at the state level or in a special legislative session,” Cole said in an email to the Roswell Daily Record after the meeting.
Carrying a cash balance is important for school districts, Cole said in Monday’s meeting, as federal funds for programs such as Title I and special education are reimbursed after the district pays those expenses from its operational budget.
“If they’re going to take our cash balance, that would pose some very serious problems for districts throughout the state. Like anyone else, the district cannot write checks without having sufficient cash in the bank to cover them,” Cole said.
Draining the cash balance also affects local control of funding, he said. A cash balance is the school board’s primary tool for absorbing cuts and handling adversity.
“So reducing or removing a local school district’s ability to have excess cash really takes away from the local control aspect of the governing body as well, which is problematic,” he said.
RISD did receive nearly $3 million from the federal CARES Act passed in response to the COVID-19 pandemic.
“It does help and we’ll certainly need to use it to fill the gaps, but it is not quite the answer that we might have hoped for,” Cole said.
To keep up with local coverage of the coronavirus, go to rdrnews.com/category/news/covid-19-situation/.
City/RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or firstname.lastname@example.org.