Faced with a projected $400 million budget deficit next year, state leaders are considering dipping into school district budgets to take back money school officials haven’t used.
It’s one of many options the Legislative Fiscal Division has proposed to deal with the state’s looming budget crisis and an option Gov. Brian Schweitzer’s office may adopt, as well.
“I know they’re still looking at everything,” said Sarah Elliott, director of communications for the governor’s office. “We have not made any decisions about our budget yet.”
The governor’s budget traditionally is finalized in November.
Calls and e-mails for a reaction from the Montana Office of Public Instruction weren’t returned.
Specifically, the plan would eliminate flex funds — a pocket in school district budgets that allow districts to hold onto money year over year. Under the plan, the state would go into school districts with flex funds and take the money back, approximately $41.7 million from across Montana.
“It’s probably pretty serious,” said Thomas Harper, finance director for Billings School District 2.
School District 2, which operates a budget of about $100 million, has $250,000 in its flex fund, money the district has held onto over the years to create an Indian Achievement Center. Now, the board might consider just spending it on other needs.
Harper called SD2’s $250,000 “our little pittance” and wondered if the state would even bother going after it.
Other school districts aren’t waiting to find out.
“We decided to expend it,” said Bruce Messinger, superintendent of Helena Public Schools. “That’s what we chose to do.”
Helena’s School Board heard rumblings in late May that the state was looking at flex funds and decided then to spend the money on textbooks.
Helena, which has a budget of about $50 million, had “a few thousand dollars” in its flex fund, Messinger said.
Butte School District 1 has just more than $533,000 in its flex fund and will use it this summer.
“We’ve just been holding on to it for that rainy day situation,” said J.R. Richardson, Butte School District’s finance director. Now, “our intent is to spend it.”
The district has plans to make some technology purchases by September to improve classroom learning.
“We’re going to put it to good use,” he said.
But as a numbers guy, he’s sorry to see it go.
“It was nice to have that rainy-day contingency,” he said.
And it’s rainy-day money school districts are trying to build up right now. Like state lawmakers, many districts are bracing for the coming state budget shortfall.
SD2’s budget committee voted Monday night to recommend that the Shool Board go forward with a planned $2 million in cuts despite ending the school year with an unexpected budget surplus. By 2012, School District 2 is anticipating a budget shortfall of anywhere from $5 million to $10 million.
Harper said, as someone who creates budgets, he can understand the state’s motivation in considering taking flex fund money as legislators stare down a potential $400 million deficit.
“I think you would consider a whole bunch of things,” he said.
Contact Rob Rogers at firstname.lastname@example.org or 657-1231.