A four-year budget project shows the Longview School District is headed for a budget crunch.
The district now has a $10 million budget reserve, but it will vanish within four years and the district will be running a $2 million annual deficit by then, according to projections presented to the school board earlier this week.
District officials blame the Legislature’s “McCleary fix,” which will briefly increase state basic education funding but sharply cut the amount districts can raise from local property tax levies.
“What a lot of people have heard, from a variety of sources, is that the ‘McCleary fix’ fixed things, but I think the legislators and the school administrators know that it ... created some other problems as well,” said Rick Parrish, school district communications director.
Longview’s four-year budget plan responds to the new funding model. The plan shows revenues exceeding expenses by $120,000 this year, but it predicts deficit spending over the following three years of $3.6 million to $4.7 million. If nothing changes, the district’s $10 million budget reserve would be depleted by 2022.
One of the problems, Parrish said, is that the McCleary legislation will boost revenues next year but diminishes it afterward.
“I think the challenge we were trying to explain ... is (that) while revenue goes up $6 million for the 2018-2019 school year, it actually goes down $2 million (in 2019-2020),” Parrish said.
Longview’s state allocation will also be affected by so-called regionalization, which boosts state funding for teacher pay in districts with high costs of living. To local officials’ chagrin, Longview does not qualify for this supplemental funding.
Superintendent Dan Zorn said this leaves Longview competing with districts in Clark County that are receiving an additional 6 percent in state funding for teacher pay, and one district that is even getting 12 percent more.
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“We are at a funding disadvantage because we do not receive that regionalization factor,” Zorn said. “We are (hiring) some of our teachers out of the Vancouver area, so our primary challenge is remaining competitive with the Vancouver market so we are able to secure the quality of teachers we need.”
The four-year budget projections consider teacher salaries proposed by the district in its most recent negotiations with the Longview Education Association, Zorn said.
By law, the district cannot run a budget deficit, and as a practical matter it can’t operate without a budget reserve, either. “The district recognizes in this budget scenario a budget reduction process will need to take place to ensure minimum fund balance compliance,” according to the budget document.
In other words, over the next several years the district must increase revenues or cut expenses — or get the Legislature to change the McCleary legislation.
“We are working hard to make sure our people are compensated fairly and competitively while we manage our budget in a manner that is prudent and realistic — and sustainable over time,” Zorn said.
With this year’s budget balanced, Zorn says the district is preparing for the challenges of 2019-2020. Already, he is meeting with local legislators to advocate for legislation providing additional financial support.
“Then obviously the other side of it is that we have to look at our expenditures. That will be something we are looking at hard next year as we try to determine areas where we can make reductions to be able to lessen the blow of that lost revenue between 2018-2019 and 2019-2020.”
Zorn said the district will try to keep reductions “as far away from the kids as we possibly can.”