Rural schools slammed by a decline in mining revenue won a reprieve late Thursday night from budget cuts that would lead to layoffs. But just how many of these 10 school districts will find the help they need is under debate at the Statehouse.
Until this year, these districts relied on mining tax revenues from gold, molybdenum, and oil and gas for school funding. As these industries decline, so do tax revenues that once funded the schools. They’re turning to the state for help, but that help could come with a load of painful budget cuts.
The School Finance Act, House Bill 16-1422, would provide $6,367.90 in per-student base funding in 2016-17, an increase of about 1.2 percent. The proposal also freezes the so-called “negative factor” at current levels and pledges not to increase the cuts any further for 2017-18. The negative factor, an attempt to reduce K-12 funding to a level the state can afford, resulted in a $1 billion cut to the state’s school districts.
How the bill’s sponsors respond to funding problems in the 10 rural school districts that are seeking first-time help from the state could be devastating. Under the bill, those districts could be hit with a 12 percent budget cut on July 1 that they aren’t prepared for.
The School Finance Act fiscal analysis shows the budget cuts, labeled as the “negative factor,” in the chart below:
The Clear Creek School District declared a fiscal emergency last month. They’re preparing for a $650,000 budget shortfall for 2016-17, including the $58,000 amount listed in the School Finance Act chart. A resolution passed by the district’s board of education announced they would layoff five teachers, implement salary cuts for kitchen and custodial staff, and put off technical purchases.
In Genoa-Hugo, superintendent Frank Reeves told The Independent that to survive the cuts the district will have to dip heavily into their reserves for about $150,000 and not fill anticipated teacher vacancies in 2016-17.
Initially lawmakers proposed the districts take out loans from a $1 million contingency reserve fund. But those districts rejected that idea. The contingency fund doesn’t have the nearly $7 million that will be cut from the district budgets. Even if it did, they couldn’t afford to pay those loans back.
Thursday, the state Senate amended the proposal to provide the districts with a 50 percent grant to cover half of the 2016-17 budget cuts, which would be about $3.5 million. The districts would have to figure out how to handle the other half on their own in 2017-18
The contingency fund would cover the first $1 million of that grant. The source for the rest isn’t identified, although one idea is to allow the districts to return for a one-time funding increase to cover those cuts after July 1.
Once adopted by the Senate late Friday, the bill returned to the House to see if they would agree to the amendment. That’s not going to happen. Instead, the bill will go to a conference committee which will resolve the differences between the House and Senate.
The bill’s House sponsor is Democratic Rep. Millie Hamner of Dillon, chair of the Joint Budget Committee. Hamner has been adamant about not touching the State Education Fund to help out the districts. She notes that the fund has a $100 million balance, but agrees with JBC staff who have recommended keeping the fund at that level.
But Hamner acknowledged the problem with those districts taking out loans they can’t repay. While she is still working on a compromise, she suggested Monday morning that the districts with the smallest budgets (Genoa-Hugo, Pawnee, Prairie, Clear Creek, Briggsdale and possibly one or two others) get the grants from the $1 million contingency fund until that fund is exhausted.
Larger districts, especially Fort Lupton, Platte Valley and Keenesburg, would be shut out and have to address budget cuts without state support.
There are two school districts, both in mining communities, that will see permanent increases in per-student funding from the School Finance Act due to a change in how enrollment is counted.
Rifle, in Garfield County, will receive a roughly $8 bump per student, for a total of just under $40,0000. Delta, in Delta County, will also have an $8 per student increase.
Rifle is in the district of JBC member and School Finance co-sponsor Rep. Bob Rankin, a Carbondale Republican. Delta is in Hamner’s district.
Photo credit: Tou Omiya, Creative Commons, Flickr.
