Blaine school district 4-year budget forecast projects $14 million deficit

The Blaine school board adopted a budget for the 2022-23 school year during its July 25 regular meeting that included a budget forecast for the district’s expenditures exceeding its revenues to a point where, by 2026, it will have a $14 million deficit. As state law requires a district to balance its budget before each upcoming school year, the Blaine school district will need to make adjustments this school year that could include staff reductions if enrollment is as low as projected.

Blaine school district finance director Amber Porter led a public hearing on the district’s 2022-23 budget during the board meeting. Porter went through the district’s five funds and broke down how she laid out next year’s budget and forecasted future balances.  

Two community members attended the meeting.

Porter used a projected enrollment of 2,085 students, based off May 2022 cohort sizes and past kindergarten levels, to budget for the upcoming school year. She mapped out the district’s general fund expenditures being $45.3 million, while its revenue and beginning balance were $40.5 million and $8.5 million. This would have the district’s ending school year balance at $3.7 million. 

Along with the upcoming school year’s budget, the district is required to submit a four-year budget forecast to the state. 

Porter said she interprets the state’s four-year forecast law, which took effect January 2017, as estimating the cost to continue at the district’s current service levels. With that as the benchmark, she forecasted the next three year’s – 2023-24, 2024-25 and 2025-26 – revenue and expenditures based on enrollment and staff levels remaining the same. It had the district spending about $6 million more than its revenue, adding up to a total deficit of  $14.4 million by 2026.

While rising inflation rates have increased expenditures, Porter said the district’s drop in enrollment has not helped revenues. Enrollment peaked at 2,220 before the pandemic. It has declined to 2,085 since 2020. 

Porter said the school district still has enough staff to operate at pre-pandemic levels. This has added to costs, she said, but also left the district in a position to absorb 100 more students if they enrolled. Porter estimated one student accounts for at least $11,320 in current year revenue, plus about $3,000 in future years.

“We will need to take a close look at our enrollment levels and how our operations fit with that,” Porter said. “Because we have not adjusted downwards when our enrollment adjusted downwards, we have a high staff level currently.”

Federal stimulus money has also padded the books the last two years, but the district has about $870,500 remaining.

“I don’t know what the state will do as far as revenues,” Porter said. “This is not a Blaine-specific issue.” She said she’s been in meetings with business managers from different industries around the region who have shared their financing issues and are considering significant cuts.

Board members and superintendent Christopher Granger discussed what actions could lower operating costs. They hoped for an increase in enrollment and current staff leaving positions that could go unfilled. Otherwise, Granger said staff reductions would be necessary.

“I’m personally concerned about the mismatch between the revenues and expenditures being such a large discrepancy,” board member Erika Creydt said.

Board president Dougal Thomas said he agreed and asked Granger what work would be done in the next six to eight months so the next budget is balanced.

Granger said the district will look to save as longstanding faculty, who earn higher wages, retire. Those positions will either be replaced with less experienced staff or, if possible, left open to be evaluated whether they are needed. He also said enrollment hasn’t dropped significantly enough in one grade level for a position to be absorbed. Enrollment losses have been spread through multiple grade levels.

“Let’s say people don’t leave, because they love Blaine, what’s the plan?” Creydt said.

Granger said the district will have to consider the impact of removing a position from a department and make those difficult decisions if necessary.

“We would have to reduce positions based on where we can save the amount of money we have to get to a balanced budget,” he said. 

Granger said he hopes recent school events and productions will give people confidence that a more normal school experience is returning.

“But I would be remiss to tell you that I don’t think that there are people that have found that a more independent educational offering, alternative learning, online learning hasn’t worked better for their student or their family,” Granger said. “I don’t think that’s specific to Blaine. I think that’s a sidebar of the pandemic.”