Chesterton Tribune

Public input sought on school funding crisis

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Duneland School officials say the financial situation facing the school system is dire – and they are turning to the public for input.

Duneland Superintendent Dirk Baer received support from the Duneland School Board Monday to set two special public meetings, on Jan. 11 and Jan. 16, both to explain to local residents why school finances have taken a nose dive and to get input on whether the public wants to see program cuts or new revenue sources.

The upcoming meetings were announced after school administrators gave an end-of-the-year financial report showing quickly disappearing cash reserves, with officials placing the blame squarely on the state.

The state took over funding for school general funds in 2008 by raising the state’s sales tax from 6 to 7 percent. But this was in the midst of a recession, and when state revenues soured, the state cut tuition support to many schools, including Duneland.

The state also gives local schools the ability to seek voter approval to raise additional revenue through property taxes, with the increased funding immune from cuts from the state’s tax caps. When asked after the school board meeting if the upcoming public sessions might lead to a referendum proposal, Baer did not rule out that possibility but noted that the purpose is to seek public input on what direction to take.

Finances in Shambles

Detailing the year-end cash flows, Duneland Assistant Superintendent Dave Pruis said state-funded tuition support has dropped in each of the past two years – a decrease of $150 per student in 2009-10 and a drop of nearly $108 per student in 2010-11. Though the 2011-12 numbers aren’t yet known, Pruis is projecting another decrease of $31.50 per student. With a student enrollment of about 5,700, the loss for just next year is projected at $180,000.

In addition to the state funding cuts, Duneland has lost students, with a decline of 126 students last school year and a drop of 42.5 students this year.

The cash balance now on hand totals about $5 million, which includes the December state support payment. But with payroll and other required expenses, the cash balance actually stands at about $1.5 million.

But Pruis said even that $1.5 million is a bit misleading, since it reflects one-time federal stimulus dollars that helped retain staff in the midst of funding cuts. Pruis said while those federal dollars helped keep Duneland out of the hole financially, the federal funds have now run out.

Even with other year-end encumbrances scaled back, Duneland is now facing the possibility of a cash balance of about $227,150 at year’s end. That’s a far cry from the ideal situation: Pruis said when school finances were stable, the target was to have 5 percent of the school general fund, or about $1.8 million, in reserves, with an 8 percent reserve ideal.

When the school board adopted the 2012 budgets earlier this fall, it was known that the budget was $1.7 million short. Pruis said the cash reserves that Duneland once enjoyed, for all practical purposes “will, before this year’s over, be gone.”

Baer noted that Duneland has made significant cuts without major sacrifices to school programming. Compared to just a few years ago, Duneland now has 21 fewer teachers and administrators and a general fund budget of about $4 million less. The only options left for Duneland, he said, are to further decrease expenditures, which could involve program cuts, or to increase revenues.

School board member Ralph Ayres, the board’s legislative liaison, said that Indiana lawmakers will be back in session by the January meetings. All indications are that lawmakers will not reopen the state budget, he said. He characterized state finances as solvent, but without any excesses that could lead to increased school support.

Upcoming Meetings

Baer said the public input meetings will be held at Chesterton High School Auditorium on Jan. 11 and 16.

Prior to those public sessions, Duneland will host a meeting on Dec. 20 just for staff members to explain the school financial situation.

School board members endorsed the public meetings. Board member Mike Trout said the meetings will help inform the public on the state of school finances in the past three or four years in Indiana. School Board President Janice Custer noted that schools are highly dependent on state funding support. “They’re the ones that give us the money, and they’re giving us less and less,” she said.



Posted 12/6/2011