School administration announces budget trouble, staff cuts

Tensions ran high at a special school board meeting at the New Underwood school Thursday, March 30. 

The meeting was announced the prior week, when staff and faculty were alerted via email, including an attached presentation, that the school had run into budgeting trouble and would be considering ways to cut their budget, including looking at eliminating positions among the faculty and staff. 

 

According to information presented by New Underwood superintendent George Seiler, the school has been deficit spending for roughly the last eight years. This means that the school has been overspending what they had budgeted, and it has become a habitual trend. 

 

A school’s revenue comes from three different sources, all of which dispense some form of tax money. These sources include local property taxes, revenue from the state through sales tax in the general state fund, and federal dollars funneled to the schools via grants, Title I, and special education funds, which are again comprised of tax money. Each school district receives its revenue in a slightly different way.

 

Each student is financed through a student-to-teacher ratio. This allotted amount is achieved first through local property tax funding. If the property tax revenue in a district is sufficient to meet this allotted amount, the state does not step in to help in that area. This is how students from within the district are financed. If, as is the case with small districts like New Underwood, the property tax collected does not fully provide the allotted amount for each student, the state steps in and makes up the difference.

 

Many of the students ­– ­roughly 30 percent – in the New Underwood school are not from the New Underwood School District. These students come to the school through open enrollment provisions. This allows for students to enter a district, bringing extra money with them. In order to open enroll in a school, the student must apply for open enrollment. Each school sets their own class size standards, and, provided that the class size standards are not exceeded, may accept open enrollment students. The state provides the funding for these students. 

 

In order to provide funding for the open enrollment students, a Count Day, set in late September or early October each year, is designated as the cut-off day for open enrollment funding. This means that students enrolled in a school on this day are counted toward the revenue of the school. Students from outside the district who enroll after this day do not bring funds with them, so the school is basically responsible for educating late arrivals without additional funding.

 

According to Seiler, the cause of the deficit spending in New Underwood is due to having expenditures that exceed the revenue brought in by the students, which is largely due to a declining enrollment in the school. 

 

Once funding has reached the school, it is allocated into different funds, thereby dictating how the monies can be used. Capital outlay funds may only be used for building upkeep and large purchases, such as buses. 

 

However, after state funding was cut in 2011, leading into 2012, the rules regarding the use of capital outlay were changed. Prior to that time, schools were allowed to use up to 35 percent of their capital outlay for general education funding, including the paying of salaries. After the rule change, this limit was raised to 45 percent. Currently, New Underwood is using 31 percent of the capital outlay to pay for things outside of the building upkeep and large purchase categories, Seiler said. 

 

With much of the New Underwood school building being an old edifice, and one that will likely need major upkeep or overhaul in the near future, the administrative team saw the need for the capital outlay money to stay in an account specifically to meet those building issues when the need arises. 

 

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