Alicia Henderson’s critics say the Aberdeen school superintendent is going overboard in her belief that state school funding will be greatly reduced for next school year because COVID-19 will hit the state’s budget so hard.
Combine that with her uncertainty over falling local enrollment — which determines how much the district gets from the state — and uncertainty over what school will look like next year, and Henderson says the district has to plan for the possibility of a $6.3 million revenue shortfall and 12 percent cut in the overall budget.
The school board has endorsed her plan for dealing with the shortfall and the effect was that 41 teachers with less than three years in the district were not offered contracts for next fall, along with 5.3 veteran teachers and 2.7 administrators. Classified staff, meaning everyone without teaching certification, will also be cut, but those figures were not available.
And it isn’t just personnel, there are deep cuts to the music program, popular vocational programs and special education.
If the budget picture changes and there is more revenue than Henderson and the school board are counting on, some teachers could be called back, even after school starts in the fall, but the “reduction in force” notices for teachers had to be made by May 15. If contracts are offered this spring they have to be honored for the year. If state funding is down because enrollment is down, the difference has to be made up with local funds.
The state’s Basic Education funding is considered safe. The Office of the Superintendent of Public Instruction (OSPI) says that should cover 96 percent of education expenses. The rest isn’t guaranteed by the state Constitution and has to come from other, usually local, sources.
Henderson says that with such uncertainty the district needs to plan for the worst. The district was already in poor financial condition, which means it can’t stand the risk of not getting enough state funding to pay for all the teachers under contract, she added.
Such deep cuts, coming at time of high anxiety to begin with, have hit the community hard. Most of the negative feelings on social media have been directed at Henderson. Some is about specific budget decisions, but much of it is about management style and holdover from bitter labor negotiations two years ago.
The teachers union says Henderson isn’t acting on any hard information and the assumptions she’s using are overly conservative. Michelle Criswell Reed, the outgoing Aberdeen Education Association president, shared this statement from the union: “We consider the actions of Dr. Henderson and the school board to be significantly out of line and not based on any known information regarding available state resources for the 2020-21 school year or beyond.”
The school board has been supportive of Henderson. “I’ve seen the petition for a vote of no confidence (in Henderson)” said school board President Sandra Bielski. “If the people pushing for that had all the information, it wouldn’t be such a strong push. … They would understand more about what the superintendent is doing and saying. Also, the school board is the one that guides the superintendent. In some cases the blame is misplaced. And I’d like to spread that out to our Legislature and its education committees. They don’t understand rural districts at all.”
The school board’s policy is to maintain a 5 percent operating reserve, which the plan does. Some have said reserves should be used now, when needs of students are greater than ever. Henderson says the district needs to have a reserve for possible emergencies. Things are tight enough already that the district had to borrow money short term to make payroll last December, she said. That was a cash-flow issue based on timing of revenue sources and the district knew it would have the money eventually, but when things are that tight, it’s a “red flag,” she said. The reserve fund wouldn’t quite cover payroll for a month, Henderson said.
“The purpose of a fund balance is to remain operational in the event of an emergency or unforeseen event,” read the statement from Reed. “Should the district experience a loss of revenues due to the pandemic, now would be the time to invest those funds in our students, and not to grow the district’s bank account. Our voters and taxpayers expect us to use levy funds to educate our students, not accrue interest.”
Why not spend some of the fund balance, Bielski was asked. “Almost every school district has a fund balance and a policy of what it will be,” she said. “When you don’t have cash flow, that helps you pay the electric bill.”
Everyone seems to agree on the high degree of uncertainty, but not everyone agrees on how bad things will get.
Henderson said she is concerned that paying for unemployment, support for families, added Medicaid spending and other unplanned COVID expenses will force the state to cut funding of items that aren’t squarely considered basic education.
Chief among the funds she is uncertain about is for something called Local Effort Assistance (LEA), designed to help districts that have relatively low property values, which is a disadvantage in the state’s funding formula.
That money isn’t guaranteed as basic education and Henderson has budgeted zero for it next school year, a $2.9 million revenue hole. The LEA funding is currently in the state budget for next school year, but Henderson worries if things get tight enough, the Legislature could direct it elsewhere, either in a special session or when it meets in January.
In a blanket statement, the union disagrees with the district’s budget conclusions.
“There is no new data out of the state that indicates a reduction in funding for this upcoming school year,” says the statement from Reed of the union. “While we agree that the state will likely take some action to mitigate the revenue losses due to the coronavirus pandemic, there is no indication which path the state may take. It could increase revenues, cut spending or do some of each. Regardless, the vast amount of state funding that the Aberdeen School District receives is for basic education, which by law can only be cut for educational, not economic, purposes. Further, we can anticipate that Aberdeen will receive federal stimulus funding.”
Henderson said federal money the district expects to receive requires that it be used for expenses tied to COVID, for technology and food programs, for instance.
Rep. Brian Blake, D-Aberdeen, says he thinks the LEA money won’t be touched. “Basic education allocations can’t be cut, and it’s my position that LEA would be cut over my dead body,” he said. “I get the uncertainty they are feeling. I understand why they put out the budget they did, but I would hope they would also do some different scenarios — with full LEA and a budget where they don’t lose 290 students.”
T.J. Kelly, the chief financial officer for OSPI, said the LEA money is in the state budget through June of 2021. “We don’t feel that that money is at risk through the end of next school year, but we can’t offer any guarantees (in regards to) future acts of the Legislature.”
It would take a bill or amending the state budget to remove the funding for the coming school year, he said.
The school district got notice last week that the state is essentially skipping LEA payments in May and June, pushing them out to July. Kelley said the shortpay was because property tax assessment figures from the counties weren’t ready at the time the Legislature passed the budget in March so an adjustment had to be made. Typically when that happens, the Legislature will square it in the following year’s funding, he said, but there are no guarantees.
Kelly said Superintendent of Public Instruction Chris Reykdal “believes the school year allocations for 2020-21 are at low risk for reduction. It’s not a guarantee, but the risk to non-basic education funds will be greater for the following school year.”
Henderson’s projections estimate a revenue loss of about $1 million in cuts to various programs that fall outside basic education.
Henderson says she has heard from local and state sources that the pandemic could affect property tax revenues as people delay or miss tax payments.
At the beginning of April, Shawn Hill, deputy treasurer for Grays Harbor County, sent a mass email to local taxing districts telling them: “Please be aware of the impacts of the pandemic. If unemployment continues to increase through the next several months, property tax revenues may not be as expected. We advise all districts to watch their expenditures closely. “
He said he first thought uncollected taxes could be three times the usual level, which would put collections at about 90 percent of the full amount. If tax collections are down, the effects wouldn’t be felt until mid-year for schools.
He’s more optimistic now after looking at tax collections during the mid-2000s recession when collections were still over 95 percent.
In a followup communication, he told taxing districts, “If you have the means, definitely set aside some money. Budgeting for the schools is going to be tough. Like I said, we are on pace for the first half (tax collections), so I don’t have any downward trending numbers to give you before your budget is due. With the next taxes due date not until October 31, we probably won’t have any good comparison data until mid-September.”
Enrollment is the biggest factor in determining school funding. The state pays almost $12,000 per student on average, most of that goes to salaries, by far every district’s biggest expense.
Aberdeen’s budget for next school year is based on a guess that enrollment will drop from 3,290 students to 3,000. It had already dropped by 50 this year in the secondary grade levels before the pandemic hit, alarming administrators. Now, with students not physically in class to be counted, the district can’t reach some parents to ask if the students will be back in the fall. Henderson said they have tried to text, email, snail mail, phone calls to emergency contacts and in a very few cases even knocked on doors.
Henderson had hoped that the state would lock districts in to the current year enrollment figures, but OSPI’s Kelly has said that is very unlikely.
“Some families just disappeared for a while,” Bielski said. “Sometimes it’s a language barrier, or they have gone to live with someone else.”
At a school board meeting last week, board member Jessica Jurasin called for unity.
“Now, more than ever, is a time for a unified front. This is how we are strong. It is natural during a time of great unrest to feel like things are out of control. One way we try to make sense of the situation is by finger pointing or blaming. If we can say, ‘it’s the district administration’s fault’ or ‘it’s the school board’s fault. … if, we get rid of them our problem is solved.’ But is it? We are all in this together and the more we realize that we all want the same outcomes, the stronger we are. If we point fingers and blame, we are divided and weakened.”