School district’s financial bubble has burst

If Santa Claus were to accept helpers from within the public school system for this year’s deliveries, he’d have to check first to see how many are bringing along lumps of coal and bundles of switches for the stockings of state legislators.

He wouldn’t want a mismatch between his list of the naughty and nice and the volunteers’ intentions to give legislators what they believe to be their just deserts.

Now that the actual figures have been published to show the effect of the budget reductions done in the Dec. 11 special legislative session, the impact on South Kitsap School District is a little more clear.

Since the same reductions may well be incorporated into the budget for the next two years when the Legislature meets next year, the impact on both the current school year and the next can be estimated.

A little background information on public school funding in each school year since 2006-07 may help South Kitsap residents understand the impacts.

Actual general fund expenditures for SKSD in 2006-07 were $82.9 million, and then rose each year until reaching $91.5 million in 2009-10.

Most of the increase occurred in school year 2007-08 before the recession’s impact on revenues was known.

SKSD general fund spending totaled $89.1 million that year.

After the recession’s impact was felt, spending rose much less in the next two years to $91.2 million in 2008-09 and $91.5 million in 2009-10.

Enrollment went in the opposite direction, declining by 2.8 percent in that three-year period.

The SKSD budget for the current school year was adopted in mid-August, setting a general fund total of $96.5 million including $2 million as a contingency amount in case additional revenue was received.

At about the same time, the Congress appropriated funds intended to offset reductions in state funding during the 2010-11 and 2011-12 school years that were projected based on declining state revenues across the nation.

SKSD’s $2 million allotment from this “Education Jobs Fund” was identified a couple of months later, along with a cautionary note from the Superintendent of Public Instruction that the Legislature might reduce previously appropriated state funding.

Until the special legislative session, SKSD could hope that the $2 million would be in addition to rather than in place of state funding, but things didn’t turn out that way.

Now, rather than looking forward to preparing a budget for 2011-12 using that extra $2 million to avoid cuts, SKSD must anticipate getting by in the next school year with little or no increase and probably a decrease.

So far, declining enrollment and state revenue problems have not actually caused SKSD to reduce total spending — partly because voters approved a substantial increase in the local levy.

The “bubble” economy that had allowed a big increase in state funding burst three years ago, and spending adjustments are now upon us.

The special legislative session and the probable budget decisions in the coming regular session mean that about $566,000 SKSD had expected to receive from the state won’t be received this school year.

If further cuts include reductions in levy equalization funding, even more of this year’s expected state revenue will not come.

And of course, when the Legislature adopts a state budget for 2011-13, the school district’s revenue from the state will probably be set at a new, lower level rather than rising.

The “bubble” and the significant increase in state spending that came with it raised expectations by increasing school funding to a level that cannot be sustained.

Now we need to reset funding expectations and plan accordingly, so it is more important than ever that SKSD explain the situation using actual spending figures (not comparisons to hoped-for increases).

The district could take its first shot at providing an explanation during the “finance overview” presentation scheduled for Jan. 4.

It may not be as much fun as filling stockings with coal, but making the details available and understandable to South Kitsap residents

could be a more useful activity.

Bob Meadows is a Port Orchard resident.

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