Budget projections for the 2020-21 school year changed considerably between the Jeffco School Board’s March 5 and April 2 meeting.
A month ago, state projections anticipated $16.6 million in new funding for Jeffco. Based on that information, Jeffco school board members recommended that $17 million be directed to staff compensation at their March meeting.
However, due to drastic changes in revenue projections because of COVID-19 and the associated Colorado Stay-at-Home Order, the outlook was much different at the school board’s April 2 meeting, which was held virtually. Kathleen Askelson, Jeffco Schools chief financial officer, told school board members that the district should anticipate no new dollars from the state for the next school year.
State budget projections drop drastically
Askelson told board members that the March 16 state budget projections suggested that Colorado may only see $27.3 million in additional revenue overall due to the economic slowdown. A month earlier, the state had been projecting an $832.5 million in additional revenue that could be used to fund education, transportation, prisons, and more.
Jeffco’s March budget projections had also included assumptions regarding specific ownership tax revenues, Askelson said, but she cut those numbers because have dropped significantly.
Jeffco will receive an inflationary increase of $600,000 from the 5A mill levy, Askelson said.
COVID-19 expenses
The COVID-19 pandemic also resulted in additional expenditures for Jeffco. Askelson told board members that she estimates $15 to $20 million in additional expenditures, not including savings or relief packages.
However, Jeffco has somewhere between $10 and $14 million in vacancy savings, discretionary savings, and ongoing savings from salary estimates that can be used toward those expenditures, she said.
The additional costs include revenue loss from child care and food service, additional supplies for remote learning, and overtime for some classified staff.
Superintendent Jason Glass told board members that the district decided to keep paying all employees during the stay at home order to stabilize income. However, a small subset of hourly employees, including food service workers, school safety officers, some office staff, and central office staff, are still being called in to work. Glass said the hourly employees who are being called in to work are receiving time and a half.
Board member Brad Rupert expressed concern about the additional expense when people were getting paid to do their job.
Glass explained that the district needed an immediate response and there was a substantial difference in the work being done by those who were required to stay at home and those who are needed at the school.
However, Glass is also working with the human resources department to establish a different structure as they work on a more sustained response to the COVID-19 crisis.
Jeffco Schools may receive money from the CARES Act, which made $13.5 billion for schools nationwide. If it is funded in a manner similar to Title I funds, Askelson estimated Jeffco might receive $6-7 million. However, CARES Act funding is one-time funding that can only be used for specific expenditures. Those include:
- supplies for cleaning and sanitizing schools
- coordinating long-term school closures, including meals, technology, and serving students with disabilities
- mental health services
- continuing to provide district-level services and employing staffers
- planning and providing in-person or online summer programs and after school programs
Jeffco won’t know the full costs until the end of April after they see what the payroll and classified costs are, Askelson said.
New budget scenarios
Askelson presented four budget scenarios at the April meeting.
All four scenarios include a $600,000 annual 5A inflationary increase and retirement/turnover savings of $6 million. All four scenarios also factor in a new $2.6 million mandatory PERA expenditure, and a $3 million loss in revenue from a projected 350-student decrease.
The first two scenarios assume new state funding and direct $17 million to compensation. The third and fourth scenario assume no new state funding.
- Scenario 1: $16.6M in new state funding ($23.2M in new revenue), and $17M directed to staff compensation, leaving $600,000 remaining.
- Scenario 2: $12.5M in new state funding ($19.1M in new revenue), and $17M directed to compensation. That scenario would require the district to cut $3.5M to balance the budget.
- Scenario 3: $0 in new state funding, requiring Jeffco to cut $16M from other parts of the budget to accommodate a $17M compensation increase.
- Scenario 4: $0 in new state funding and no assumptions about compensation or any other new spending, leaving $1 million that could be programmed in the budget.
Askelson recommended that board members strongly consider Scenario 4.
In addition, there are no hiring freezes for schools in place currently, Askelson said. However, Jeffco is implementing a central hiring review process for all central administration positions to see if the position really needs to be filled. There is a hold on promotions, she said.
School board member Ron Mitchell acknowledge that the new budget numbers meant the board will need to reconsider their plan to allocate additional money for compensation. “I understand the necessity,” he said. “I don’t like it, but I understand it.”
Rupert added that board members should also plan for a budget revision in August or September to make appropriate adjustments.
Community budget feedback
Board member Susan Miller asked whether the district could re-promote the budget survey that was originally opened on March 9 and was scheduled to close on April 27.
Glass responded that the questions in the original survey no longer make sense with the new numbers, and a new survey was probably necessary.
“It’s going to be a survey of ‘do you want to hang on to people or do you want to pay them more’ or ‘how many people are you willing to lay off in order to pay a raise,” he said. That’s the scenario Jeffco is likely to face if the state budget numbers reflect Scenario 3 or 4.
Two community budget forums had also been scheduled for April. The first one has already been canceled due to the stay at home order. The second was, at meeting time, scheduled for April 25 though Glass noted they might need to move it to Facebook Live if circumstances changed. Since the board meeting, Governor Jared Polis extended the stay at home order through April 26.
The school board is scheduled to vote on a preliminary budget on May 7 and on the final budget on June 4. However, Askelson said board members should be prepared for additional meetings before June 30.
According to Colorado state statute, the Jeffco School Board must pass a finalized budget by June 30, Askelson said. However, the school board can modify the budget after June 30 to reflect current financial circumstances.
In addition, if the state budget numbers drop further this summer, the state could do a mid-year rescission. A rescission would likely require the district to make further cuts during the school year.
State legislature plans to finish school finance act before June 30
The state legislature has been in recess since mid-March due to COVID-19 concerns. On April 9 the Joint Budget Committee (JBC) released a statement with an updated timeline for finalizing budget-related bills that affect school districts.
According to the statement, the JBC plans to release revised budget projections around April 27 to the public. In May, the JBC will begin meeting to review revenue scenarios.
An updated revenue forecast will be available on May 12, and the JBC plans to introduce the Long Bill and any other budget-related bills by the week of May 18. That timeline should give the bills enough time to move through the state House and Senate so that school districts can pass their budgets by the June 30 deadline.
