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Billings administrators estimating $3.1 million elementary school budget deficit in 2021-22

Posted at 11:54 AM, Mar 16, 2021
and last updated 2021-03-16 13:54:42-04

BILLINGS — The Billings elementary school budget is in trouble, with a $3.2 million deficit expected in the 2021-22 school year, Billings School District 2 Superintendent Greg Upham told trustees at a Monday board meeting.

“Is it anyone’s fault? It really isn’t. I think there were some decisions made years and years ago that set all of this into motion and I just don’t see it as pointing the finger. I don’t see it as going back. I don’t see it as this or that. It’s an issue that we have to solve and regardless of who the superintendent is," Upham said.

Upham said a contributing factor to the deficit is a loss of 635 students in the elementary schools in the 2020 school year. About 400 of those students made the switch to home school due to the COVID-19 pandemic.

Upham said the district stands to lose $1.4 million in state funding if the home school students don't come back to public school in the 2021-22 school year.

Elementary school administrators are personally calling parents of the home school students to invite them back to the classroom in the fall, Upham said.

Another problem facing the elementary budget is the rising cost of health care for staff. The district usually estimates a one percent increase in health care costs per year, with the one percent costing $1 million across the district.

Word is now that health care costs could jump 10 percent next year, with the increase tied to increasing costs for specialty prescription drugs, said Craig Van Nice, chief financial officer for the school district. Administrators haven't seen exactly how much the cost of health care will increase next year.

“The cost to operate is exceeding what our surplus is. So we have to examine all areas that go with this," Upham said.

These elementary budget woes come on the heels of $4.1 million in cuts made to the budget in the 2019-20 school year. As part of the cuts, Upham eliminated 37 full-time positions, 11 of which were interventionist teachers who help students struggling in reading and math.

After $4.1 million in cuts were made to the elementary budget, Upham said it was close to balanced, but the unknowns of teachers' union negotiations, enrollment levels were still up in the air.

“The solution out of this is incremental adjustments for a long period of time, hoping that our enrollment grows and hoping that the (consumer price index) grows with us. As I said when I authorized the $4.1 million in reductions, I felt at that time that I was going to have to go back into the elementary budget and reduce again. My concern is that we cut deep the first time. There’s not a lot left to reduce in the elementary budget," Upham said.

In 2020, Billings voters approved a $1.6 million operational levy for the elementary schools that helped pay for operations costs related to heat, lights and employee salaries.

For the past three years, the district has spent $6.8 million in "one-time-only" money to shore up the elementary budget, which is a strategy that is unsustainable, Upham said.

“We’re not able to backfill one-time-only and reach in and grab it at a rate that would stay even. If it was, it wouldn’t be considered one-time-only," Upham said.

School Board Trustee Janna Hafer said something must be done, because the school district has been facing the same problem for years.

"This has got to stop. We've got to stop the bleeding. I was here when we cut all that $4.1 million, and that wasn't fluff. That is necessary, but we can't even touch that until we get our basics, income and (expenses) and everything has got to be on the table to make this happen. I'm tired of doing this every year and it's not getting any better," Hafer said.

Upham cited the budget uncertainty as a reason he didn't sign a memorandum of understanding with the Billings teachers' union to roll over this year's teacher contract to next.

“I have grave concerns about how to handle this, which lends itself to my reluctance to sign the MOU, which could inhibit or hamper ongoing talks and negotiations about how to solve this problem. Because I think in order to solve this problem, it’s going to take a lot of different solutions and I don’t want to restrict, for the lack of a better term, any tools in the toolbox to address it. And I say that respectfully," Upham said.

The 2020 Billings teacher contracts contained a small raise for teachers and gave all staff $1,500 in "essential worker" pay.

To save the taxpayers tome money, trustees unanimously voted to start the process of refinancing the district's bonds. Van Nice said the district's accountants at D.A. Davidson found a lower interest rates on some of the district's bonds. The refinancing is expected to save the taxpayers $6 million over the next 14 years.

With another year fraught with COVID-19 expected for teachers and students in 2021, administrators are trying to nail down a school day schedule for next year. Upham said the elementary school day schedule will likely stay the same with a few minor changes.

Administrators are considering keeping block scheduled days, Upham said. For this school year, middle school students have attended six total classes, rotating to three classes every other day. High school students have been attending three classes per day for a week, then attending three different classes the next week.

Upham said the opportunity to switch up what a normal class day looks like doesn't come up very often and staff should be ready to roll out a 2021 school day schedule sometime in April.

RELATED: Contract rollover refusal latest sign of growing rift between Billings teachers and administration

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