Local schools work out impact of federal funding cuts

Troy school district predicts its budget, to be finalized August 5, might decrease by as much as $72,000 compared to last year, while Libby school district expects its budget to change little from last year.

In the event of a deficit local taxpayers will have to make up the difference, and neither they nor the schools would have a say in any tax increases.

“Recent moves have shifted tax responsibility (of the budget) back to the local level,” acknowledged John Konzen, departing Troy school board chair, at a May 15 meeting.

Funding for public schools comes from federal, state or county tax sources when it cannot be drawn from industry taxes such as timber or mining. Therefore, absent a strong industrial base, Lincoln County has relied on state and federal funding for its schools’ budgets.

Further, schools are allocated both a maximum and a minimum budget by the state that they must meet, and recent cuts don’t decrease the state-mandated budget minimum for schools. However, they do decrease the money available from the state to pay for the minimum budget.

Troy school district’s budget has been affected by the loss of the community block grant, a federal program that feeds into the district’s general operating fund.

“I haven’t seen it [funding] drop quite like this before,” said Troy Superintendent Jacob Francom in a May 18 interview. “Usually we don’t see it drop like this unless there is a big drop in student numbers.”

Community block grant funding is designed to be replaced with an increase in the tax base equalization program. But it will likely take schools years to catch up funding this way, especially in lower tax base areas such as Lincoln County. Nationally, schools will lose about $40 million from the grant program.

Troy’s actual budget deficit will depend on the value of a mill and whether alternative funding can be found in the meantime.

It’s hard to predict the mill value yet, County Treasurer Nancy Trotter Higgins said at the school board meeting, because “everything is late this year. It looks like it’s not going down much, but there’s no guarantee it’s going to go up either.”

Francom said the window of time between getting the information and creating the budget is very narrow.

At the May 15 meeting, Konzen said budget cuts would require the district “to start on plan B,” which could include an increase of $150,000 in local property taxes as specified in a resolution the board passed April 15.

“We don’t know if we’ll need to use it, but we were under the gun to pass the resolution by April 15,” Konzen said at the meeting.

Francom would rather taxes not be raised. “In fact, last year, we decreased them (because we had adequate funds to make budget),” he said.

As to where the cuts in Troy will be felt most, Elementary principal Diane Rewerts pointed to staffing.

“Staffing is our biggest expense, so we’ve had to rethink that,” she said. “Unfortunately, some of our classes will be over the state maximum next year.”

Twenty students is the maximum for kindergarten and first grade, and 28 is the maximum for second through sixth grade.

“Kindergarten, first grade and second grade will all be over (the state maximum),” Rewerts said. “We just felt we couldn’t ask the tax base to fund two classes of nine or 11 kids.”

Francom said salaries make up 80 to 90 percent of the school budget.

In Libby, the school district has seen an increase in students for 2017/2018, funding for whom will offset cuts to federal programs the district has benefited from in past years.

Superintendent Craig Barringer said his district will suffer less from the loss of the community block grant than Troy. But, he added, “Our title funding, which targets at risk students and is based on the economics of the district, will go down this year. We have heard that title two, part A has been cut by $13,000, but we don’t know yet how much title one will decrease yet.”

Last year the district received $597,000 in title one funds, Barringer said.

Overall, Barringer expects his budget to increase from last year as a result of some timely retirements to decrease staffing costs and an increase in students.

“We’ll have a total of 105 to 115 new kindergarteners next year,” he said.

Nothing is set in stone for either school district yet, and while they await final numbers from the state and federal programs other budget considerations come into play.

“Eighty percent of the predicted increase in our budget will be eaten up by a 14 percent increase in our health insurance rates,” Barringer said.

In terms of taxes, Barringer said that the Libby transport levy will go up this year. It’s a permissive levy, so taxpayers don’t vote on increases or decreases.

Barringer expects there will be no other tax increases this year.

“We implemented a build and reserve levy last year so this year we have no plans to raise taxes, aside from transport,” he said.