January 27, 2006

ESD board meeting reveals preliminary
outlook for 2006-07 budget

Mixed bag of good and bad news for next year;
several budget quandaries remain for 2007-08

By Diego Abeloos
Editor

A Jan. 19 meeting of the Evergreen School District Board of Trustees revealed a mixed bag of both good and bad news on the district’s operating budget in the short term.

Jim Crawford, ESD Superintendent for Business Services, updated the board on the status of the 2006 budget and how matters at the state level are affecting the outlook for both the 2006-07 school year and to a lesser extent, the 2007-08 school year.

On the positive side of things, Crawford informed the board that funding for the 2006-07 school year will likely see a slight increase in part because of a 5.18 percent increase in the cost of living adjustment (COLA). Other factors calculating in, according to Crawford, are additional and unforeseen tax revenues collected by the state, as well as the state dipping into reserve money.

In turn, ESD will see a deficit reduction of 0.6 percent for the 2006-07 year.

“Those are very good numbers, and we haven’t seen increases like that since three or four years ago,” said Crawford. “It’s very good news.”

In addition, Crawford said ESD will likely get an added $47 per student for equalization, which raises lower-funded districts to the state average of dollars spent annually per student, which currently stands at an average of more than $4,000 per student.

A mandated cost process will possibly see a return for the 2006-07 school year as well. The process, which has been absent from the past three school years, according to Crawford, allows districts to be reimbursed by the state in 10 different areas, including costs for negotiations with teachers’ unions and school-wide health screenings, among other things.

Crawford, who said he anticipates a 75-cent return on the dollar with the reimbursement program, cautioned that the return of the mandated cost process is not a certainty until a June vote at the state legislative level approves it.

ESD will also be eligible for three newly proposed grants for the upcoming school year, said Crawford. Those grants – one each for physical education, art and music, as well as technology – are also still tentative because of the state legislative process.

“They might not survive until June,” Crawford said of the new grants.

In addition, several other grants will likely see a decline in funding for the upcoming school years. Two grants – an innovation grant and another technology grant – will see a decrease in funding by approximately 50 percent,
according to Crawford. Along with those two grants, a drug-free grant will decrease by about 20 percent, while a Title I grant will be down 10 percent for the upcoming school year. Crawford said special education funding will likely decline as well, although he didn’t have an exact percentage at this time.

Coupled with the reality that textbooks are currently under-funded by about $1 billion at the state level, Crawford said he was still in the process of figuring out what these negative trends will mean for the 2006-07 ESD budget.

“We’ll run the numbers, so we can get an idea of how this will affect the budget next year,” said Crawford. “…We’ve got a number of months to review and finalize the budget still.”

Crawford added that he will likely have more concrete figures to work with as soon as March.

Overall, Crawford reported to the board that the state will see an increase of approximately $8 billion in expenditures for 2006-07, while only getting back about $4 billion in revenues. The gap, said Crawford, will be covered by the state once again dipping into reserve funds.

Tough times to come?
But while the short-term outlook is fairly bright, the status of the 2007-08 year is still has several unanswered questions remaining, according to Crawford.

Because of the large gap created by the 2006-07 budget, and with the state using reserve money to cover it, there will be little left for 2007-08, said Crawford.

“We expect fairly large cuts in programs, or revenue reductions,” Crawford said of 2007-08. “We’re expecting no increase in funding and it could go to a decrease.”

Still, ESD filed a positive certification of financial condition for the current school year, as well as for the following two years (see Dec.17-30 Evergreen Times issue), which in turn allows ESD to keep a three percent reserve fund, as mandated by the state.

Another matter – an impending contract settlement with the Evergreen Teachers’ Association - will also affect how the budget for the next school year will turn out. Both sides are scheduled to meet for another round of negotiations on Jan. 26. Susan Hanna, Assistant Superintendent of Instruction for ESD, said the ongoing negotiations have been amicable.

“Both sides are working very closely together to develop a contract that best meets the needs for employees and keeps the district financially solvent,” she said.

Hanna said budget issues have ESD “seriously considering the possibility of another parcel tax measure” for the district. Hanna said ESD recently hired a consulting firm to conduct exploratory surveys to see if a parcel tax is a “viable option in the Evergreen area,” adding that the process is still “very preliminary.”