Message on the Budget Outlook

This message was sent to the Jeffco Public Schools community via the 4.21.2020 Community Update regarding the budget situation for next school year.

Dear Jeffco Community,

Last Friday, I sent a message to employees of Jeffco Public Schools regarding possible budget cuts we will likely be facing for next school year. Today, I’d like to bring you up to speed on the magnitude of what we are expecting and what steps and options we have going forward.

The restrictions our state is experiencing in response to the COVID-19 pandemic are creating a significant and negative economic impact as spending has constricted and tax collections have plummeted. Our funding is determined annually by the state legislature. While they are not presently in session, legislative financial staff have continued to work in evaluating dollars available for the next budget year (the 2020-21 school year).

At this time, school districts have been told to expect reductions between 1-10% below current funding levels. For Jeffco, this range would mean a cut of between $7 million and $70 million. Presently (and based on the best information we have available), we are modeling a reduction somewhere between those numbers at 5%, or around $34 million. Charter schools would also receive a proportionate reduction out of this amount.

In addition to expected cuts due to falling current year revenues, we should also expect a multi-year budget impact due to the “one-way ratchet” provision in the state constitution’s TABOR Amendment. Simply put, it requires tax collections to fall when the economy declines, but then to return slowly over a period of years based on a formula. As a point of comparison, our schools still have not financially recovered completely from steep declines in the economy related to the Great Recession over a decade ago.

So what does this all mean?

For this present school year, we are managing the district’s expenses and working toward finishing this year with a balanced budget. We are planning on continuing to pay our employees as expected with no disruptions. 

For the next budget year, we will likely have to look at making some difficult choices in order to bring our expenditures in line with a new (and lower) revenue reality. While we may receive some federal funding to help offset these cuts (which we will share with our charter schools), we are still going to be looking at significant reductions. I have provided some options below, in order of how disruptive or painful I believe they are to school staff and communities. 

  • District emergency reserve spending
  • District level cuts and reductions
  • Freezing salaries (including steps/lanes & reductions)
  • Furlough days
  • Reducing salaries 
  • School closures & consolidations
  • Staff layoffs

All of these options will create some level of disruption or bring financial pain. There are also limits to what we can do with any of these options – at some point they all become destructive and will limit our continued ability to serve students.

While I do not get to make the decision on how we balance the budget for next year (our Board of Education makes the final call), I will advocate for a balanced approach designed to help moderate and limit this disruption and financial pain. 

Decisions about budgets are also decisions about values – and hard times test us on what we value most. 

While (again) I am not the one who will make the final decisions, I want to state my values and what I will advocate for through this process. I value:

  • Our students. We must protect the organizational capacity to serve our students in this next school year and beyond. We will likely have students returning to us next year who have significant needs for supports. We must protect services and programs that are vital to our students.
  • Our people. We must work to keep all of our staff positions and avoid layoffs. We will need all the talent and effort we can gather to meet the challenges that will come with next year.
  • Our community. School closures and consolidations will likely need to be considered over the long haul, but we should avoid them in the short term because of their disruption to the community.  
  • Short and long-term district stability. We must avoid over-reactions and quick-fix solutions that would imperil the district’s financial status and quality credit rating.

Looking ahead, we will all need to consider and clarify our own values. All of these decisions are going to come quickly. The legislature is reconvening May 18th with the sole purpose of passing a budget for next year and putting that before the Governor by the end of May. That will determine the final number we must work to solve and then our Board of Education must approve a final budget in June. We will be sending out multiple opportunities for you to share your values and to have your perspective included as we navigate this budget.

From a metaphorical standpoint, a budget problem might be thought of as a large hole in the ground that we have to fill. We can fill that hole with boulders, rocks, pebbles, and sand. The challenge we face is potentially one of tens of millions of dollars. In terms of dollar amounts, it will be important that we not confuse what are boulders (large budget impact) versus what is sand (small budget impact). 

As a final point, while budget cutting on any scale is never easy, Jeffco has the advantage of having a balanced budget going into these decisions and we have a robust cash reserve. If we are able to come together on our values, there is a path where we can weather this storm and continue to serve our students and community while also taking care of our people. 

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