Budget Matters
View the results of the budget survey
As most of you know, the State of Colorado has just begun the process of developing the state budget for 2011-2012. The state budget has enormous impact on school district budgets.
The budget development process for Thompson School District is one that values broad, diverse participation. The Budget Proposal Team (BPT) is made up of parents, community members, students and employees of the district. The BPT is the primary means for accomplishing the development of the district's budget.
Non-members of the BPT can provide input to this process by participating in an online survey, the results of which will be presented to the BPT by March 17, 2011.
By reading and understanding the information included in the exhibits below before taking the survey, the value of your input will be increased.
EXHIBIT 1
Exhibit 1 is the list of different funds that comprise the entire district budget. It gives notes about the purpose and restrictions of each fund in order to create an understanding that the resources of individual funds often times cannot be shared with other funds. So, while the general fund budget for 2011-2012 faces a significant funding challenge, the possibility of using other funds to positively impact or mitigate this challenge is very limited.
Exhibit 1 also depicts the reliance several other funds have on the general fund as a funding source (see "Transfers In" and "Transfers Out"). So, while the primary discussion in the 2011-2012 budget challenge will be focused on the general fund (the group of funds whose "Name" and "Purpose" are shown shaded), there will be other funds impacted as well because of their reliance on the general fund in the form of "Transfers In."
EXHIBIT 2
Since the focus of the 2011-2012 budget challenge is on the general fund, this document is intended to provide an understanding of the primary funding sources for the general fund.
Table A depicts the various funding sources of the general fund. Line 1 of the table shows 83 percent of general fund revenues come from the School Finance Act (SFA). This amount is determined by a simple formula for each district across the state: pupil enrollment times Per Pupil Revenue (PPR). For our district, the factors used in the 2010-2011 budget are shown on line 1 of Table A.
Table B shows who actually pays for the SFA revenues the district is entitled to receive as calculated by the aforementioned formula. Note that 65 percent of those revenues come from the state budget.
State sales and income tax revenues have been impacted by the recent economic recession. Forty-three percent of the state's general fund expenses are K-12 school districts across the state and the state is currently unable to fully support the statutory funding demands. As a result, PPR across Colorado will decline for the second year in a row.
EXHIBIT 3
This chart shows the district's history of per pupil funding over the last six years. Note that current 2011-2012 projections create a PPR funding level comparable to that of fiscal year 2006-2007.
As a result of declining PPR, the district expects to yield almost $7 million less from the SFA in 2011-2012 when compared against level enrollments. The district absorbed almost $6 million in SFA revenue decline during 2010-2011. As a result, the district is challenged to find ways to provide its services to the same number of students on almost $13 million less in revenue than in fiscal year 2009-2010.
EXHIBIT 4
This chart illustrates that not only are district revenues in sharp decline, but the inflationary impact of key expenditures are compounding the challenge. While not all costs can be clearly identified yet, this table shows preliminary estimates for some and placeholders for others while further calculations take place. The cumulative potential impact (revenues and expenditures) yields a range of potential deficits.
EXHIBIT 5
How to solve a potential deficit that ranges from approximately $9 million to perhaps $13.5 million requires a closer look at how the district currently spends its general fund monies. Exhibit 5 is a summary view of the expenditures budget for 2010-2011. The exhibit shows that 77 percent of district expenditures in the general fund are for staff in the form of salaries and benefits. The remaining 23 percent are highly summarized into seven different broad categories.
This highly summarized budget view is intended to illustrate one primary point: The magnitude of the deficit the district faces in 2011-2012 cannot likely be resolved without impact to the 77 percent portion of the budget.
EXHIBIT 6
Exhibit 5 ends with a summary of non-salary and benefit costs in seven different categories (School Sites, Learning Services, School Support, etc.). Exhibit 6 presents a more detailed listing of the costs that make up those category totals.
One additional explanation is necessary. Anywhere the "DEPARTMENT OPERATING BUDGET" appears on Exhibit 6, there is another level of detail available for that data on the "Exhibit 6 Appendix."
The district's Budget Proposal Team convened for the first time in late February and will continue their dialogue over the next several weeks, researching options with district budget managers before proposing a budget solution(s) approach that will be shared in a series of public forums beginning in early April.