by David Tesitor
HUERFANO- During the past several months, we have read about the budgetary crisis in our schools and learned how each respective school board has attempted to solve the problem. What has not yet been explained in any article is the complexity of the budgeting process and just how the revenue is calculated.
The general assumption of many school board members and of the population in general is that the amount paid by the state is a fixed dollar amount times the number of students enrolled in each district. That is almost a true assumption, but it is not as simple as multiplying two numbers.
The formula for deriving the base number goes back to 1994 when the Public School Finance Act was first enacted. To add to the confusion, while the same formula is used for every school district, the net results are different for every district. For example, in Huerfano County, RE-1 and RE-2 are quite different.
The total funding is based on a per-pupil census taken in October. This means that the count on day one of the school year and the count sent into the state can vary. Once the count is received, the state will release the funds to the school districts. To arrive at the amount the schools will actually receive, the calculation involves several factors, starting with a base number of $5,529.71 per pupil. Funding is then added based on specific factors as outlined below to get to the total per-pupil funding amount for each district.
There is a cost of living factor, which reflects the differences in the costs of housing, goods and services in the 178 school districts. The poorest districts receive more money based on a factor ranging from 1.01 to 1.650. There are also personnel costs. These costs are the fixed, administrative, benefits and wages paid to the employees. They vary by size of the school and represent the single largest expense of any budget.
For Walsenburg RE-1, the personnel costs represent 83%. The personnel costs for La Veta RE-2 equal 75%. Then at-risk funding must be considered. Eligibility in the free school lunch program is used as a proxy of each school’s at-risk population. This category generates from twelve to thirty percent additional funding. There is also variable funding for on-line students.
The biggest change, starting this year, is the State Budget Stabilization factor. This is an additional factor which is now included in the school finance formulas. This factor acts as a reduction to other existing factors in the school formula calculations and is based on the fiscal strength of the state. It determines how much money becomes available to the schools and is equally applied as a percentage to all districts which receive funding.
The statewide allowance will be no less than $5,438 billion as set by the General Assembly. Simply put, once the districts arrive at the final per-pupil number, the actual amount can change. In the case of RE-2, the board included an $85,000 line item amount in the event money needs to be returned.
The final calculation is derived from the total pupil count. It can be the greater of the actual projected count or a rolling five-year average.
These are but a few of the complicated calculations that are used to start the budget planning process.
So, that being said, what does this all mean in dollars and cents for our local schools? According to Dawn Olson, Superintendent of RE-1, the board voted to use the student count based on a five-year average, which they were allowed to do by the School Finance Act rules. This will be beneficial because their actual count will be lower this year. Their budget is based on 574 students, but the actual per-pupil amount will likely will be lower, once the school year begins.
When the prison was open, the student population was higher than the current student population, and that number is trending downward. If RE-1 does not reach their student base, based on that five-year average, their estimated per-student number of $6,969 will change and the budget will sustain a hit down the road. When the board passed the preliminary budget last month, they did so anticipating they may need to make further cuts.
La Veta based their budget on 180 students in their five-year average, but according to Principal Bree Lessar, the school will likely have 190 to 194 students. They could have requested funding for 228 students based on prior years, but chose to begin with the lowest, most conservative number. Based on their original budget (at 180), the school faces a $20,000 shortfall for 2011-2012, but the additional projection in student population will generate an additional $27,000 in revenue, thus creating a balanced budget.
In the case of both districts, their final budgets are due in January once the final student count is made, and the budget then will likely be different. If that occurs, then they will be preparing for round two in the ever-changing financing of our local schools.
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