Reserves to cover Columbia Public Schools deficit spending in coming fiscal year
COLUMBIA, Mo. (KMIZ)
Columbia Public Schools proposed a 2020-21 budget on Wednesday that relies on $17 million in deficit spending as COVID-19 continues to drag down revenue and a new middle school opens.
Kathy Steinhoff, president of the Columbia Missouri National Education Association teachers' union, said she believes that students or classrooms will not see an effect from the deficit next school year.
She said CPS will not have to borrow money to pay the bills.
“It just means that we're having to dip into our savings account,” Steinhoff said. “Because the amount of money that we're spending is more than the amount of money that we're taking in, but that was completely intentional, because of the opening of John Warner Middle School.”
Michelle Baumstark CPS spokeswoman said yes, of course the district experienced some loss due to COVID-19, but she said a portion of that loss is also attributed to growth and opening new buildings that are one time expenditures.
Steinhoff said the situation could be better explained like the district has been putting some money in savings to open up the middle school, which will be completed this summer.
Baumstark said the district is in good shape as certain revenues for one time costs have been built up in the districts savings account for costs associated with opening a new large building, and also savings that are also intended to keep the district financially solvent during an unexpected situation.
"They've done a good job of managing those reserve funds so that we don't find ourselves in a financial crisis," Baumstark said.
Steihoff said the opening of John Warner Middle School is responsible for most of the deficit, but bigger financial issues could come further down the road.
“We honestly really don't know if that will be the case,” Steinhoff said.
Steinhoff said Columbia Public Schools Chief Financial Officer Heather MacArthur Columbia is planning for a worst-case scenario over the next few years.
Steinhoff said she really doesn’t have any concerns about the next budget cycle because CPS has so much money in its reserves, which will enable the district to maintain what it has for a couple of years.
Baumstark said the district's finance committee and the Board of Dducation have spent significant time developing that long term plan that coincides, not only with what its budgetary needs are as a school district are, but also addressing the districts growth over time and what that looks like.
CPS gets much of its revenue from local property taxes, which have not been affected by COVID-19 the way sales taxes have.
However, state funding to schools is diminishing under the pandemic. Gov. Mike Parson on Monday said he was withholding $131 million from K-12 education, including $123 million from the foundation formula that determines state funding of schools.
The current fiscal year ends June 30 and it's not yet clear if more funds with be restricted in the coming budget year.
Steinhoff said CPS is still committed to salary increases for all employees for the 2020-2021 school year.
“It's very reassuring to know that right now our district is continuing to honor the increases that they committed to," Steinhoff said. "And as far as I know, they are continuing to still position it within the district and keep all of our employees for next year which I know is not happening in other districts.”
Baumstark said its a testament to to the hard and difficult work that the CPS board has done over a period of years to put remain financially sound even amidst a global pandemic.
The district's operating fund balance will be at about $90 million at the end of the current fiscal year and is expected to drop to about $72.5 million to start the next fiscal year, according to MacArthur's presentation at a public hearing Wednesday.
