Schools' fiscal health hinges on Legislature

If the budget Gov. Brian Schweitzer released last month stands, the budget situation in Kalispell Public Schools could be much less dire than anticipated.

Under the governor’s proposed budget, the Kalispell district could see a shortfall of about $520,000 in 2011-12 — significantly less than the $2 million deficit district officials predicted last spring.

That’s largely because enrollment, which drives state funding, increased by about 150 students this year.

But the numbers district clerk Todd Watkins presented at Tuesday’s special school board meeting are far from final. An accurate budget picture won’t be known until after the state Legislature convenes in January.

And school officials and trustees still have to decide where to make cuts to deal with the deficit.

The budget Watkins presented Tuesday is a preliminary draft, a document to give board members and school officials something to work from. The budget duplicates this year’s personnel, he explained, and replaces some salaries that for the last two years have been paid with federal stimulus money with general fund money or federal Title I money.

The preliminary budget does not include adding staff to address accreditation issues, Watkins said. This year the district had 64 accreditation violations, most of them due to not having enough teachers, librarians and counselors for its 5,600 students.

There are some changes from this year’s budget in the document Watkins discussed.

There is a $2,000 increase for student resource officer services — a request from the city of Kalispell.

There is an increase in the general fund’s share of the health insurance burden; while the district would continue to contribute $518 a month per qualified employee, $35 of that would transfer from an insurance reserve account to the general fund.

That would add $220,000 to $250,000 a year to the general fund’s expenses, Watkins said, but it would alleviate pressure on the reserve fund.

Another proposed new expense could occur in the election budget.

Watkins suggested moving to an all-mail ballot system. At a cost of $1.50 to $2 per ballot, that could be costly, he said, but the district likely would gain voter turnout.

The budget also accounts for establishing a litigation reserve account to handle grievances brought by the district’s teachers union, the Kalispell Education Association. The union has a current grievance against the district regarding salary schedule placement, Watkins said.

“We’ll hope that it’s settled to [the district’s] favor, but if not, there’s some money set aside,” he said.

There’s a chance the $61,000 Watkins proposed for the litigation reserve won’t be enough to settle the lawsuit; if it’s not, the general fund deficit could climb. But if the issue is settled in the district’s favor, that money could go back into the general fund to alleviate the shortfall.

The budget also does not take into account raises for most of the district’s staff.

The district will start negotiations with six of its seven unions and associations, including the Kalispell Education Association, after the first of the year.

About 87 percent of the general fund goes toward salaries and benefits. Some staff members, including teachers, will receive more money next year; they receive raises based on their years of experience and additional education.

But Watkins’ preliminary budget proposes no raises to staff members’ base salaries.

There is one exception; Administrators who reach five years’ experience in the district are contractually guaranteed a pay raise. Two administrators will hit the five-year mark in 2011-12.

Human resources director Karen Glasser presented staff and salary information earlier in the board meeting. According to her research, the average salary of a Kalispell teacher is $51,195. The average Kalispell school staff member’s salary is $44,101.

The average salary in Flathead County, Glasser said, is $32,205.

But Glasser pointed out that less than 20 percent of the county’s total population has a bachelor’s degree or higher, whereas more than half of Kalispell schools’ staffers are required to have at least bachelor’s degrees.

School officials and board members will continue to discuss the budget over the next several months; Superintendent Darlene Schottle said she hopes to present trustees with a “springboard recommendation” in January. That budget will propose specific cuts and detail how the district would be affected.

The district will seek input on its recommendations before the board takes action.

Kalispell schools also may ask voters to approve extra tax levies, although some trustees expressed doubt about whether levies would pass. The district’s last levy request for $338,000 in May failed by about 200 votes.

“Is there anything we’re doing different now ... that makes us think a levy will pass?” trustee Rob Keller asked. “Why wouldn’t we want to use program retention funds?”

The district has about $570,000 in program retention money set aside years ago for the proverbial rainy day. It could use some or all of that money to alleviate next year’s shortfall.

“I think if this isn’t a rainy day, I don’t know what is, so I can see using at least some of them,” trustee Brad Eldredge said.

The concern, Watkins said, is that the district doesn’t yet know what its budget might look like in 2012-13; it could be even rainier than next year’s budget. The district also doesn’t know for certain what its 2011-12 budget will look like.

If, for example, the Legislature approves a 2 percent state funding cut, Kalispell schools would face a $1 million reduction. If the Legislature approves a 5 percent reduction, the district’s deficit would climb to $1.8 million.

But trustee Ivan Lorentzen said of the governor’s proposed budget: “It would be great if that scenario took place. I think that’s not going to be the scenario. ...

“I think we’re going to have to keep our eye on the Legislature and watch for something more dire.”

Reporter Kristi Albertson may be reached at 758-4438 or at kalbertson@dailyinterlake.com.