Sean C. Morgan
School District 55 could see its ending fund balance wiped and possibly make some cuts balancing next year’s budget if Measure 30 is defeated by voters on Feb. 3.
If Measure 30 is defeated, information provided by the Oregon School Boards Association predicts that Sweet Home schools will see funding reduced by $1.1 million to $1.6 million for the biennium, most likely next year.
On top of that loss in funding, the district faces an additional $500,000 shortfall with declining enrollment, Supt. Larry Horton said. On Dec. 31, the district had 99 students less than it had last year at the same time. The district had an enrollment of 2,325 on Dec. 31.
Total, the district may be receive $1.6 million to $2.1 million less revenue for next year.
The shortfall would most likely complete use up the district’s ending fund balance, which is tentatively estimated at $2 million.
Much of that ending fund balance materialized when the legislature passed an education funding package of $5.2 billion for the state for the biennium. District 55 budgeted based on a state figure of $4.8 billion, and the extra revenues for this year will become part of the ending fund balance.
That ending fund balance was meant to take care of revenue shortfalls based on the potential failure of Measure 30, which would reduce the overall figure for the biennium. The declines in enrollment add to that shortfall.
The best case scenario with the failure of Measure 30 will be an ending fund balance of $376,000, Supt. Horton said. In the worst case scenario, the district will be in the red by $135,000, requiring cuts this year.
In addition, the district is still negotiating a contract with its teachers, and the results of that are not included in the revenue picture. One more variable is a decrease in Public Employees Retirement System rates. If the new lower rates are turned over by the court system, the district will likely have to pay back savings, about $400,000.
If Measure 30 fails, the district will be force to look at additional cuts, Supt. Horton said. “Do we run the reserves down to zero, which is, in my mind, irresponsible?”
Even in the best case, the ending fund balance is too small, Supt. Horton said. “We need at least 3 percent” of a $14 million budget as carryover, and it should be 5 percent or more.
“The fortunate thing for this district is that they (cuts) will not be as severe as other districts because of the carryover that we have,” Supt. Horton said.
The district has held the line on spending, Supt. Horton said. It has been fiscally responsible and accountable over time by making cuts early and seeking “cost-neutral” contracts with its employees.
Because of that, the district did not need to cut classroom days like other districts, such as Hillsboro, which cut 19 days last year, Business Manager Kevin Strong said.
The district has been able to educate its students to meeting standards in 13 of 16 areas, Supt. Horton said. “If we have to cut more, I don’t see that we’ll be able to maintain what I call a good education for our students.”
Strong does not know whether the state would begin reducing funding in the current school year or if it will all come next year, but the question on his mind is where the district will be at the end of next year, the end of the biennium, June 30, 2005.