School districts will be tackling budgets, with many unknowns

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As the end of April approaches, area school districts are tackling budget plans for the 2020-21 school year, but the COVID-19 pandemic has thrown a loop in the school budget process.

School leaders don’t know what the long-term effects of the pandemic will have on schools or what a “new normal” might look like, and they have concerns about the 2020-21 subsidy and any proposed legislation that could impact school funding.

“Information in this regard is fluid and seems to change daily,” wrote Dr. Helen McCracken, superintendent of Central Greene School District in an email.

McCracken said the school district has made cuts in the budget in areas over which the district has control, such as supplies. But some areas, including special education and cyberschools, are variables over which the district has less control.

“I don’t suspect we will see the full economic impact of the pandemic in the immediate future, but over time,” McCracken continued.

Dr. Michael Lucas Trinity Area School District superintendent, said the district’s 2020-21 budget will not include a tax increase.

“There’s a lot we don’t know right now, but we do know for sure no one needs a tax increase,” said Lucas. “Too many families are experiencing things at this time, and raising taxes now is not a plan or an option.”

Planning a budget for next year is complicated for several reasons, Lucas said, including the difficulty in predicting local revenue, such as earned income tax and real estate tax.

“We know it’s going to be lower, we just don’t know how much lower, and that part makes it pretty darn difficult,” he said.

Trinity, like other school districts, has spent money in areas that it hadn’t expected, including an additional $130,000 in technology to implement distance learning and $20,000 on cleaning supplies.

It’s hard for districts at this point to know in which areas they might see increases and decreases in spending next year.

Canon-McMillan School District is planning to have a proposed final budget ready for the May school board meeting and a final budget recommendation in June. Administrators said the budget is expected to be “very different from the preliminary budget the district was building.”

The school district is concerned about the state of local, state and federal revenues not only for the 2020-21 budget, but for at least the next couple of years.

“There are many unknowns, and none of them positive for the school district,” the school district said in an email statement.

The budget and finance committee had initially established budget priorities because it has just completed high school and stadium renovation projects and is in the early stages of the new middle school construction project.

The increase for the bond payments due for that project was one of the initial priorities.

However, now that COVID-19 has created an unprecedented environment, the district is bracing itself for a challenging budget process over the next two months and in the next few years.

The administration noted key factors that could greatly be impacted include property tax collection rates, delinquent and interim taxes, state funding impacts, and more.

In the email statement, the district said, “Reducing these line items to be in line with what could occur next year will greatly impact the school district budget. These areas have been growing and increasing due to the real estate and economic growth our area is experiencing. The district relies on almost 72% of their revenue from local sources. To now have to reduce these major revenue streams will cause budget shortfalls that will need addressed in the 2020-21 budget.”

Administrators said they acted quickly to begin the bond refinancing process to take advantage of market conditions that could yield savings to the district over a three- to five-year period and help phase in the bond payment increases affecting budget cycles for that period.

It could help the district weather or soften the impact of the 2020-21 budget crisis.

But the district has not ruled out hiring freezes, wage freezes, using the fund balance for non-recurring expenses, and as a last-ditch consideration, budget reductions.

Like Canon-McMillan, school districts could be forced to make difficult decisions in these uncharted waters, in a way that has the least impact on education.

Said McCracken, “When faced with such an unprecedented crisis, one can hope for the best, but we must realistically prepare for a less optimistic economic scenario.”

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