The ABCs of school district funding
Decreased enrollment numbers in Petersburg schools is playing a big role in how district staff prepare next year’s budget.
Student enrollment has steadily dropped for more than a decade. During the 2004-2005 school year enrollment was up to 630 students. Next year though, the district’s numbers are approaching a low enough number—424 students—that would change its classification in a state funding equation called the ‘foundation formula’.
According to state guidelines, school districts receive funding based on enrollment and the student count along with many other factors get crunched through an the equation. The more students a district has, the more funding a district receives from the state.
PSD Finance Director Karen Quitslund said when a district drops below an enrollment threshold of 425 students it changes the funding calculation—meaning less multipliers enter into the formula and less funding flows to the district.
For Petersburg schools, projected enrollment next year is 424.
“What I have been tasked to do is build the budget at 425,” Quitslund said.
With an enrollment at 425 students the budget comes out to $5,494,118 for the next fiscal year. That’s around $300,000 less than this year’s foundation budget.
If enrollment comes out at the 424 projected students, the budget shrinks slightly to $5,448,550 and the district will have to dip into its reserves. More than $340,000 of the foundation formula funding comes from a provision added to the equation that supplements funding for school districts experiencing enrollment decreases. The state formula reduces that amount by a certain percentage each year enrollment decreases. PSD is in its third year for receiving those dollars.
Whichever side of the pendulum enrollment numbers tip, it’s evident that the school system is going through changes.
“It’s (the budget) better than bare bones but there’s clearly going to be a reduction,” Superintendent Rob Thomason said. “We’re hoping to do that without affecting staff negatively or even our program negatively. We’re going to get to a point where you can’t have classes of ten and five and seven.”
Between 2009 and 2013 the high school’s enrollment has dropped from 174 students to 140.
“That’s 34 kids,” Thomason said. “That’s a whole class. What we’ve been doing over the years is through attrition, someone retires, we try not to replace them depending on what position it is.”
Eighty percent of the district’s budget is payroll.
Other funding considerations include rising energy costs—electric rates increased by eight percent this year—and the unknown impact of health insurance.
The enrollment numbers of ‘intensive students’—a special education designation—also impact the budget, especially with numbers so close to the state’s threshold. An intensive student, according to state standards, counts as 13 normal students and are worth around $70,000 each because of the additional staff and time needed to work with them.
The district added two intensive students to its enrollment numbers this year, making up for a budget shortfall. The district loses two intensive students next year.
Thomason said the incoming superintendent who will replace him won’t likely be shocked at these trends and that enrollment numbers across the state are on a similar downward slope.