Area Schools Now Walk A Money Tightrope

Gayville-Volin superintendent Jason Selchert said Monday’s school board meeting resembled surgeons gathered around an operating table — using an ax instead of a scalpel.

Like many area school districts, the Gayville-Volin board has dropped the hammer on its budget. The board’s action came in response to last week’s passage of the state budget that cuts education funding 6.6 percent.

“I told our school board that if our educational system in our district was a patient on an operating table, we have cut off his arms, legs and now his head, but he isn’t dead,” Selchert said. “One board member replied, ‘Can you live without a head?’”

With Gov. Dennis Daugaard recommending a 10 percent cut in school funding, area districts braced for some sort of reductions from the Legislature. However, school officials were hoping for a last-minute reprieve in Pierre.

“This is a sorry state of education in South Dakota,” Selchert said. “This funding formula and our leadership have driven us in the ditch, and (now) we’re headed for a cliff.”

At Monday night’s meeting, the Gayville-Volin board cut an English teacher and a half-time elementary teacher while also cutting its elementary principal position to half-time.

This week’s cuts come on top of three programs discontinued during the past decade, Selchert said. “In the past 10 years, we have eliminated our business program, art, and our family and consumer science,” he said.

The Gayville-Volin board decided against opting out, Selchert said.

“The board discussed it, and it got very little traction,” he said. “We refinanced our bonds and saved about $110,000 last month. The tax levy will go down, and we think that is where it should go. An opt-out in our district would cost about $1.50 per $1,000 of valuation. It would cost me an extra $210 on my house.”

Gayville-Volin, with its 292 students, is far from the only district in the area making cuts or other changes.

Many school districts are cutting personnel and programs. Some are using reserves to balance the budget. Others are considering a new or extended opt-out — meaning higher local property taxes — to raise additional revenue.

The budget cuts have even forced the Irene-Wakonda school district to adopt a four-day school week in 2011-2012, said Superintendent Larry Johnke. The district is looking at a combination of both higher taxes and $150,000 in budget cuts, he said.

“Irene-Wakonda already has a $150,000 opt-out that is good for one more year, after which we will probably look to extend it,” he said.

In addition, the school district made several cuts at its March board meeting. Those include: the equivalent of a full-time teaching position; limited hours for hourly paid positions; school-sponsored fifth- and sixth-grade basketball programs; a full-time general fund teacher’s aide; some part-time custodial help; the dance team position; an assistant track coach which was made into a junior high track position; and supply budgets.

And the board may take another whack with the budget ax, Johnke said. “Other miscellaneous cuts will be discussed in April with the budget projections,” he said.

The budget woes are not limited to the smallest schools.

At Alcester-Hudson, the school board cut $316,000 — 11 to 12 percent of its general fund budget — at Monday night’s meeting, said Superintendent Shane Voss.

The board didn’t fill three positions by attrition, including math, science and physical education, Voss said.

Those cuts come on top of the district needing to use its full $400,000 opt-out for the first time in a number of years, Voss said. Alcester-Hudson’s opt-out was enacted before the requirement of a time limit for an opt-out, he said.

“Then we went after everything, including athletics,” Voss said. “We cut our K-12 art program, and we nickeled and dimed other things. We made some substantial cuts.”

The Alcester-Hudson board has worked on its budget for two months, tackling a $180,000 structural deficit, Voss said.

“Between the cuts we made and the money we get from the opt-out, it looks like we will balance our budget,” he said.

Alcester-Hudson isn’t unfamiliar with budget issues, as it cut three positions last year, Voss said. He blames the schools’ problems on a lack of commitment in Pierre.

“It’s just a shame what the state does. They should have education as a priority, but they never have,” he said. “I think our test scores are good, and they have not gone down. I don’t think we’re going to get more funding from Pierre until they see our test scores go down.”

The numbers become even worse at larger schools.

Vermillion could face losses totaling nearly a half-million dollars, according to Superintendent Mark Froke.

As a result of the state aid cut, the Vermillion school district will jettison six teachers and two classified personnel to save $282,500, Froke said. One sport and other activity costs will be reduced to save $10,500.

The school district operates with an $800,000 opt-out, Froke said. The opt-out, passed six years ago, was renewed last year for an additional five years, he said. However, the opt-out amount was based at the time on state law requiring an annual state-aid increase of 3 percent or inflation, whichever was less, he said.

“We had no reason to anticipate that the state would freeze the per-pupil amount nor that state aid would be cut for the coming year since the law was in place,” he said.

In addition to the state aid cut, the Vermillion district expects to lose $40,000 in bank franchise taxes and $20,000 in county apportionment funding.

The Vermillion district anticipates a total loss of state aid and other revenue totaling $462,000, while applying the use of one-time state funding, Froke said. However, one-time funding raises problems for future years, he said.

“One-time funding puts schools in a difficult situation in planning for the following budget year, as those funds will disappear which will require even further cuts to be made down the road,” Froke said.

The Vermillion district plans to use an additional $100,000 in reserves to supplement next year’s general fund budget, raising the total use of reserves to $215,535, Froke said. In addition, the district will save $46,000 by delaying textbook purchases and will save $23,000 by cutting supplies 10 percent across the board, he said.

In addition to the lost state aid, Vermillion’s federal stimulus funding comes to an end after two years, Froke said. The loss of stimulus funds means cutting three instructional personnel amounting to $139,000.

“Special education funding will also be frozen at the state level, and federal Title funding is expected to be cut, which will be a reduction of about three personnel,” he added.

The neighboring Elk Point-Jefferson school district will see an impact of $260,000 from state-aid cuts, which climbs to $330,000 with the deduction of one-time money, said Superintendent Brian Shanks.

Elk Point-Jefferson will be forced to use capital-outlay funds for the next three years to slow down the budget cuts, Shanks said. However, he calls it only “a temporary fix” which, combined with teacher retirements, “will help us make good decisions and provide the time for us to adjust as a school district.”

The cuts come at a time of increasing demands on school districts, Shanks said.

“Part of dealing with the reality of insufficient school funding is trying to find ways to teach our students 21st century skills,” he said. “Our state government, from top to bottom, is not committed to providing the type of education our kids deserve.”

The problem goes back nearly 20 years, with changing state aid to a per-student formula, Shanks said.

“At that time, we were told, since (state officials) were now in control of the funding, they would provide an adequate level of funding,” he said. “It hasn’t materialized. In fact, quite the opposite has occurred. We have had to fight and scratch for every penny since that time.”

Opting out has become part of doing business and will be considered as an option, Shanks said. However, he pointed to the issue of unequal education around the state as “richer” districts have more property valuation and resources than others.

In the meantime, Shanks said his district would do the best it can with less funding.

“We are attempting to cut things that will not directly affect our curriculum, (otherwise) we will become a shell with few enhancements,” he said. “We have no further to fall as we are already last in all categories of education funding. It seems that our state government is willing only to manage problems, not solve them.”

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The Press & Dakotan sought information on area districts’ financial situations and the steps they are taking. The following is a round-up of other responses received this week.

AVON: Faced with $90,000 in lost state aid, the Avon district will use its capital outlay funds to cover the reduced per-student allocation in state aid, said Superintendent Tom Culver.

The Legislature passed a two-year extension of state law allowing the transfer of funds from the capital-outlay fund to the general fund under certain circumstances.

Avon will also cut its personnel costs, Culver said.

“We have one teacher that has resigned and that we are not going to replace,” he said. “(We will) cover the teaching duties in house and make up other areas with an aide.”

The Avon district currently doesn’t use an opt-out but has discussed the possibility, depending on future legislative action, Culver said.

BON HOMME: The district, which includes Tyndall, Tabor and Springfield, will lose about $185,000 under the state cuts, according to Superintendent Bryce Knudson. On the revenue side, Bon Homme opted out last year in the amount of $400,000 for each of five years.

“We are making do with the opt-out but will be looking at options that least affect students over the next couple of years,” Knudson said. “Many cuts were previously made with the failure of the first two opt-out attempts in 2001-02.”

MENNO: The Menno district operates under an ongoing opt-out of $180,000, said Superintendent Chris Christensen.

“At this time we do not have plans to increase the opt-out,” he said. “We will be looking at budget cuts for the following years, but (we) will be looking at shifting our budget this year to help with our deficit.”

PARKSTON: The district faces a structural deficit of about $285,000, said Superintendent Shayne McIntosh.

“We do not have a current opt out,” he said. “Currently, we have reduced two positions via attrition, made other cuts to teacher training budgets and are looking at negotiated items to save additional funds.”

The Parkston district has not made final decisions on how to proceed, continuing to collect information and data from the public, McIntosh said. “No options have been accepted or ruled out,” he said.

Public meetings have been well received and watched by many on television, McIntosh said.

“At this time, we have held public meetings informing them of the problems the state-aid reduction will create,” he said. “This, of course, includes not only the immediate crisis of slashing expenditures to make budget, but also the long-term implications for teacher salaries, teacher recruitment, class size and student performance.”

PLATTE-GEDDES: The district is collecting information and analyzing its budget caused by the state-aid reduction, said Superintendent Tony Glass. The district currently does not have an opt-out, he said.

Platte-Geddes has reduced one position through attrition and will continue looking at budget areas that hopefully don’t affect student achievement, Glass said. The district is also looking at the long-term impact of cuts.

“We are not only looking at next year, but at the implications that the reduction in state aid (will have) over the next several years in terms of staffing, salaries, class sizes, student achievement and activities,” he said.

SCOTLAND: The board hasn’t made specific decisions, but “everything is on the table,” said Superintendent Damon Alvey.

Teachers and administration have come up with ideas for smaller cuts, Alvey said. Those ideas include ordering fewer supplies, becoming “greener” in everyday operations and assigning extra duties to personnel, he said.

Scotland operates with an opt-out in place but hasn’t fully tapped into the amount, Alvey said.

“We are more fortunate than some schools. We have had more students enroll the past couple of years than we projected, so we have been able to use less reserves and less opt-out dollars,” he said.

“We have also made some difficult cuts over the past several years which have allowed us to save money as well as position us better for these education cuts.”

The board and committees continue looking for ways to save money and programs, Alvey said.

“Education is an investment, and we have to do whatever we can to hire and retain quality teachers as well as maintain solid educational programs for our students,” he said. “They are our future, and our state needs to view education differently or we will continue to struggle with funding issues each legislative session.”

WAGNER: The district will cut its budget rather than opt out to offset its $250,800 in lost state aid, said Superintendent Susan Smit.

Those cost savings include possibly sharing a librarian with a neighboring school and cutting two teaching and one para-professional positions because of resignations, Smit said.

The district will try to negotiate on its insurance by looking at a higher deductible, she said. On the other hand, the district was originally told to expect an 8 percent insurance increase, which could be as high as 15 percent, or $150,000, she said.

The district also anticipates increases for electricity, food and fuel that need to be added into the budget, Smit said.

Personnel remains the biggest item in most school budgets, and Smit said those costs need to be determined.

“I am anticipating no increases in salaries,” she said. “Of course, these are all in the discussion stages with the school board budget committee, and some of the items must be negotiated with the teacher’s union.”

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