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Hillsborough schools’ budget setbacks prompt worry, and a Zoom call

Community leaders express concern as the district’s reserves continue to decline.

TAMPA — Lawmakers in Hillsborough County and beyond are expressing concerns about financial problems in the Hillsborough County School District, and possible consequences from the state.

While there is no evidence that the state plans to take any action, a conversation between two lawmakers appears to have prompted a Zoom meeting on Tuesday with more than a dozen participants.

Some were lawmakers, others were community leaders. The word “receivership” was uttered. “Everybody is committed to making sure it doesn’t happen,” said Rep. Andrew Learned, a Democrat who listened in on part of the call.

Education advocate Damaris Allen was on the call too. “The word receivership hasn’t been tossed around previously,” she said. “That’s what caught my attention.”

State officials have not described any plans for the school district to enter receivership, a legal tool where control of an insolvent organization is given to another party, a “receiver.” District leaders say they are working collaboratively with the state to stabilize their budget of more than $3 billion.

But, according to an email that superintendent Addison Davis sent the School Board after hearing about the Zoom meeting, the outlook right now isn’t good.

School districts, he wrote, are required to alert the state if their reserve balance falls below 2 percent at the end of the calendar year. State law requires a reserve of 3 percent of yearly operating revenues.

Hillsborough, Davis wrote, had to send such a letter. He added that the district is on course to show a negative balance in its reserves at the end of May and a $120 million decline in the fund from the previous year at the end of June.

A School Board workshop is planned Jan. 12. At that time, Davis wrote, he will present a corrective action plan, as the state requires.

Since summer, Davis and his team have been sounding alarms that the district must rein in spending. A study by the Council of the Great City Schools confirmed Hillsborough Schools cannot support its current workforce of more than 24,000 without deficit spending. To protect its main reserve, the district transfers money yearly from a capital account. A bridge loan of $75 million enabled the district to meet payroll in recent weeks.

Hillsborough’s predicament came up at a meeting of the Florida Senate’s Subcommittee on Appropriations for Education, of which Pensacola Republican Doug Broxson is chair.

Broxson said that as a courtesy, he placed a call to Sen. Janet Cruz, a Democrat in Tampa. “I said, this is in your backyard,” Broxson recalled telling Cruz. “You can dig into it and see what’s going on.”

The Zoom meeting came together, and speculation spread throughout the week.

Neither Cruz nor Davis were available to comment on Friday. Davis, called away for a family emergency, did manage to have a phone conversation with Learned. The newly elected Brandon representative was reassured by Davis’ response to the financial situation. “He seems to have his hands around it,” Learned said.

District spokeswoman Tanya Arja blamed a number of factors for the reserve loss: decreased student enrollment, costs associated with the pandemic, and a drop in tax collections.

“We will work with the board in January to discuss strategies and receive the board’s direction as we move forward with the state, and to ensure Hillsborough County Public Schools maintains a fiscally stable organization” Arja said.

Times writers William March and Jeffrey Solochek contributed to this report.

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