School districts in money crunch
July 5, 2004
STAFF AND WIRE REPORTS
School districts across New Mexico say they are making do with less state money than expected this year by cutting positions and dipping into reserves, according to a survey conducted by the Albuquerque Journal.
Those cost-cutting measures come during a year in which the state increased its draw from a state permanent fund for public schools and other beneficiaries.
Almost all of the districts responding to the Journal survey said they didn’t get the anticipated state money to cover rising costs, even though lawmakers increased educational spending by 6 percent.
“It was a nightmare,” said Logan Municipal Schools Superintendent Carolyn Franklin. “We’re using all of our cash balance for things like mandated raises.”
“This was the most difficult budget year I’ve experienced in 20 years,” said Hobbs Municipal Schools Superintendent Stan Rounds, whose district had to cut 13 jobs.
Clovis Assistant Superintendent for Operations Lonnie Leslie said the district faces similar problems.
“Things have to get better because we can’t continue to reduce positions year after year without cutting programs,” Leslie said. “We met the state mandate for raises for teachers and support staff but that required using cash reserves as well as reducing positions.”
While Clovis still has $1,591,837 in reserves, according to data presented at a June school board meeting, cash reserves in Portales will drop to less than $50,000 next year.
“I have $50,000 left out of a $2.2 million budget; we had close to $400,000 two years ago,” said Portales Superintendent James Holloway.
Holloway said the district would be in even worse shape without staff cuts.
“In the two previous years I have reduced 13 staff members, nine teachers and four administrators,” Holloway said.
He said Portales schools will be in danger of exceeding student-teacher ratios if any more cuts have to be made.
Of the 53 school districts that responded to the newspaper’s survey, 68 percent said they had to use cash reserves, 51 percent cut jobs and 32 percent cut classroom budgets. In addition, 32 percent said they ordered hiring freezes and 28 percent had to skip the 2 percent employee raises recommended by the state.
The districts cited the rising costs of insurance, student tests, employee raises, fuel and utilities and state and federal mandates.
One former lawmaker said the state did its best doling out education money given available revenue. The state’s finance and administration secretary says part of the problem is districts have not changed their priorities to match new state and federal mandates.
Voters last fall narrowly approved a constitutional amendment to boost the annual payout from a state permanent fund to public schools and other beneficiaries.
Lawmakers appropriated nearly $58 million in permanent fund revenues for several school reform initiatives, including phasing in licensing systems with higher minimum annual salaries for teachers and educational assistants.
The annual payout from the state’s $7.5 billion Land Grant Permanent Fund to public schools increased from $296.6 million last fiscal year to an expected $349.8 million in the current budget year, said Charles Wollman, spokesman for the State Investment Council.
“The school districts are always crying, ‘Poor me, I never get enough money,”’ said former state Rep. Max Coll, D-N.M., who chaired the House Appropriations and Finance Committee before retiring this year.
He said school districts have faced bigger budget crunches in the past.
State Finance and Administration Secretary James Jimenez and state Secretary of Public Education Veronica Garcia called for an examination of the state’s public-school funding formula to ensure that it keeps pace with new initiatives.
“We’ve had kind of a sea change in our expectations,” Jimenez said.
Overall, school districts are scheduled to receive $112.8 million more in the 2005 fiscal year which began July 1 than they did in 2004. The 6 percent increase compares with a 4.4 percent increase last year and a 0.15 percent increase the year before.
Even so, 85 percent of the school districts that responded to the Journal survey said the extra money wasn’t enough to cover skyrocketing costs.
Coll and Secretary Garcia pointed out that local school boards have great latitude in setting their own budgets.
Garcia said some school districts brought budget shortfalls on themselves by choosing to surpass employee raises approved by legislators in previous years. Districts also used nonrecurring revenues, like reserves, to cover the raises, a recurring cost. Now that money is gone, she said.
Some districts with declining student enrollments have also failed to prepare for the accompanying drop in state dollars, Garcia said.
“If you don’t make those changes, that comes home to roost,” Garcia said.