State budget uncertainty has school districts 'very concerned'

Until the governor signs or kills the education budget, district leaders deal with unknowns.
Published May 29 2017

While waiting for Gov. Rick Scott to approve or veto the Legislature's education budget, the people in charge of school district checkbooks are trying hard to find a bottom line.

It has not been easy.

First, they see a $24.49 increase in total per-student funding, a minimal hike of 0.34 percent.

Next, they check the "base student allocation," which helps pay for day-to-day expenses, and see a tiny decrease of $27.07 per student, down 0.65 percent.

"It funds only new growth," observed Kevin Smith, the Pinellas County School District associate superintendent of finance.

But school districts also face inflation in areas such as health insurance and utilities, as well as rising contribution rates to employee pensions, he and others pointed out. For many districts, a gap between revenue and expenses appears likely under the Legislature's plan, which officials hope is the worst-case scenario.

"We're very concerned," said Kendra Sittig, Hernando County school budget director. "Any time they cut our base student allocation, that dips into what we're able to provide for our students."

Hernando schools already have faced fairly dramatic cuts in recent years, to get off the state's financial watch list for having too-low reserves. Sittig said she anticipates having to spend from reserves to avoid another round of reductions.

"We're trying our best not to have to cut staff," she said.

To make ends meet, school districts are exploring layoffs and furloughs — as well as reducing or eliminating summer programs, slashing supplemental and bonus pay, and freezing new hiring.

"In a year when the state is not in economic crisis, we should not be in this economic crisis," Pasco County superintendent Kurt Browning told his School Board while reviewing the district's anticipated $8.7 million gap.

Many have called for Scott to veto the education budget, or pieces of it, and to provide more for the system that serves the vast majority of Florida's school children. They're optimistic, in part because they know Scott supported allowing districts to maintain their 2016 tax rates and boost collections resulting from higher property values.

But there's another side to the argument that has fiscal conservatives hopeful. It ties into Scott's regular backing of tax cuts to support businesses and families.

Collier County School Board member Erika Donalds, a founding member of the Florida Coalition of School Board Members, is among those who note the Legislature's budget is essentially flat from year to year. Lawmakers are paying for increased enrollment, she said, and the only material change in directed funding is an increase in retirement contributions.

"I just hear (schools) asking for more money," said Donalds, whose husband, Byron, serves in the state House and sits on the PreK-12 Appropriations Subcommittee.

But the Legislature wanted to set priorities, directing funds to improve the education for children at about 115 persistently failing schools, she said, and to get money directly into teachers' pockets. The only way to guarantee that is to allocate the funding specifically, and not place it into general revenue, Donalds suggested.

That's what lawmakers did in their 278-page education bill, HB 7069.

"I believe that within our districts, if they are well-managed, we are able to find savings without harming services for students," Donalds said, calling much government spending bloated.

Smith, the Pinellas associate superintendent, said it's all well and good to tell districts to live within their means. But there's more to the situation than just that, he suggested.

In 2007-08, Smith said, the per-student funding in Pinellas was $7,369. In today's dollars, he calculated, that would equate to $8,356.

But the proposed state budget sets the county's per-student funding at $7,249 — 1.6 percent lower than a decade ago.

"These are variables we have to deal with," Smith said.

School district financial planners also have concerns with the process, because it carries so many unknowns.

Legislative leaders have yet to send the budget to Scott, who has made no clear statement whether he'll sign or kill it. When district officials ask Department of Education staff for guidance on the provisions, they're told no one will be analyzing the legislation unless it becomes effective.

The closer the decision comes to July 1, the harder that becomes for districts, whose fiscal years begin that day.

For one thing, school boards could find it tough without adequate information to set a local tax rate for the 2017-18 budget by the first public hearing in late July.

There's also the idea of a shut down floating around. That's an unlikely scenario because Scott could declare an emergency if lawmakers don't have a spending plan on time.

Districts generally have enough in reserves to carry them forward — although perhaps in minimal form — until the next property tax collections or twice-monthly state funding resumes.

Senate PreK-12 Appropriations chairman David Simmons said he's not certain why the budgets have been held up in their delivery to the governor. Whatever the reason, he said, lawmakers will be able to deal with Scott's ultimate decision.

"What we need to do, of course, is act promptly," Simmons said. "We can get it done before July 1."

Contact Jeffrey S. Solochek at [email protected] or (813) 909-4614. Follow @jeffsolochek.