Board approves cash increase to balance budget
Board members approve using $500k in cash reserves to balance district budget after the state cut $1.5 million in funding to Farmington schools
FARMINGTON — The Farmington Municipal School District Board of Education today approved an increase for the amount of money it will use from the district’s cash reserve to help balance its budget for the current school year.
The transfer was necessary after the district had about $1.49 million in state funding cut this year due to the approval of two bills, according to district Chief Financial Officer Randy Bondow.
When the board members approved the current school year’s budget in April, they included $300,000 from the reserve to help balance the budget. During today's meeting, they increased that amount by $200,000 to $500,000.
Senate Bill 9 included a decrease of about $37.8 million, or 1.5 percent, to the State Equalization Guarantee (SEG) funding for public schools statewide.
Farmington schools lost about $1 million when the bill was signed by Gov. Susana Martinez.
Bondow said the district also lost about $487,000 for the current school year with the approval of Senate Bill 8. Farmington schools lost about $392,000 in transportation funds and $95,000 in funds designated for instructional materials.
The district reduced expenses to account for the the loss of transportation and instructional materials funds.
But the loss of $1 million in SEG funding brings the district's current budget deficit from about $4.3 million to about $5.3 million.
The deficit was caused by a loss of funding last year due to a decline in student enrollment, increases in health insurance costs and using a smaller amount of the district’s cash balance for the budget this year.
Bondow said the district has covered about $4 million to $4.5 million of the deficit by reducing the staff through attrition and moving expenses from its operations budget to its 2 mill capital outlay fund.
The district has saved about $2 million to $2.5 million from using 2 mill funds and about $2 million through attrition.
District officials are bracing for more anticipated changes in state funding as the legislative session opens next week.
Superintendent Gene Schmidt told the board members during the meeting to follow the upcoming session for possible bills that would impact education funding. He cited two areas of concern related to proposals floated by Martinez and the Legislative Finance Committee.
Schmidt said there is talk of imposing a 5 percent cap on a district’s cash reserve. If that happen, then the state would "sweep" the amount that exceeds the 5 percent back into the state's budget. The move could take about $2.5 million from the district’s cash reserve.
In the budget plan Martinez has submitted, Schmidt said there is a proposal to reduce the amount of money a school district contributes to its employees' retirement benefits while asking employees to increase their contributions.
He said the governor’s plan is an effort to shift an unfair cost onto teachers to save money at their expense.
“I think when you take money from teachers, it impacts their morale,” Schmidt said.
Joshua Kellogg covers education for The Daily Times. He can be reached at 505-564-4627.