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Hitting the mark

Eben Harrell

No one likes to talk about money when it comes to education. To speak of education as a commodity, quantifiable by a number or monetary value, runs contrary to everything we hope education to be ” pure, wholesome, a basic human right.

Up until the last few months, the news coming from officials in the Aspen School District was reassuringly un-financial. The school board set class-size limits across Aspen’s schools, created policy on out-of-district enrollment and announced strong standardized test scores, all without more than a passing mention of finances.

But come March, the Aspen School District began assembling its budget ” a form of spring cleaning ” and since that time, talk of school finances has been everywhere: school board meetings, local papers, the anxious chatter of parents at school bus stops.

On March 15, the school board announced a budget deficit of nearly $1 million.

Shortly thereafter, Superintendent Diana Sirko made public a bold three-year financial plan to pull the district out of the red. One of the more controversial changes is to begin charging fees for full-day kindergarten.

Coming suddenly and surprisingly, news of the budget crisis in Aspen’s schools has provoked speculation and rumor about both the causes of the deficit and Sirko’s plan to eliminate it.

How did Aspen’s school district find itself in such a hole? And how do district officials intend to pull themselves out? This article attempts to explain.

How it happened

To much of the public, the March announcement of a million-dollar deficit came as a complete surprise. Yet the district’s top officials have known about the impending trouble since October 2003. Last year, former Superintendent Tom Farrell and his finance director left Aspen and handed over the reins to Sirko, a longtime public school administrator in Colorado Springs, and Finance Director Bill Anuszewski.

When Anuszewski arrived last May, he learned that he was about to inherit a massive shortfall. Following a long-term trend of deficit spending, the district hired 11 new staff members for 2003 at a cost of $1.3 million, even though its projected revenue increase was only $500,000, a combination of per-pupil funding and other state and federal grants.

The district’s annual operating budget is approximately $10 million.

The expected $700,000 deficit swelled by about $250,000 in October, when 2003-04 student enrollments came in lower than expected. The district had planned for 35 new kids in 2003; 15 new students enrolled. The district receives state money for each pupil, so fewer students means less money.

Still, the fact that new administrators saw the clouds approaching begs the question: How did it happen? The answer is a confluence of factors ” a gloomy state financial picture and a decision by administrators to put the quest for educational excellence above fiscal prudence.

It’s important to note that the multimillion-dollar construction of the new high school building had nothing to do with the current financial woes. The project was funded independently through capital improvement bonds.

In the early 1990s, thanks in large part to the sale of the Red Brick and Yellow Brick schoolhouses to the city of Aspen, the district saw its reserves swell to nearly $7 million. Trying to ensure that district money be spent on students, the former superintendent started a nearly decade-long streak of deficit spending.

From 1999 to 2003, for example, each district budget ” proposed by Superintendent Farrell and approved by the school board ” ran an operating shortfall of no less than $250,000. In 2002 and 2004 it was $700,000, according to figures provided by Anuszewski. These deficits were covered by the district’s reserves.

“They had the money, and they decided to spend it,” Anuszewski said.

This might have been fine, but many of the expenses the district undertook were ongoing, like teacher salaries. Soon, the costs added up. By this year, the $7 million reserve had been reduced to about $2 million.

It is simple to see how the spending spun out of control ” it’s an educator’s dream to have a multimillion-dollar reserve to spend on students ” but it was bound to catch up with the district. Anuszewski isn’t prone to exaggeration, but he said he was shocked when he inherited Aspen’s books.

“Having come from the private sector, I can’t imagine anyone living with this budget,” Anuszewski said.

Current board President Jon Seigle, who sat on the board that for years approved Farrell’s deficit spending, defends the district’s finances. Seigle believes one must look back to 1988, when Colorado’s school financing act attempted to balance inequities between rich and poor schools by restricting the flow of money to wealthy communities like Aspen.

Unwilling to sacrifice the educational quality that strong spending allowed, the board was forced to rely on its large reserve. Previous school boards simply prolonged Aspen’s tradition of well-financed education for as long as possible, Seigle said.

“School financing is a disaster in this state,” Seigle said. “We had an education system that was pretty well-financed and then the school finance act came in, and it became apparent that we weren’t getting enough money to support our program of excellence. That’s when deficit spending began.

“We had models that showed us that we were eventually going to run out of money, but there was always an amendment here or there to the school finance act that allowed us to continue on from the initial forecast. There was always the hope that [the state] would continue to tweak its finances to our advantage. That hasn’t happened in recent years.

“I wouldn’t change anything we did,” Seigle added.

The timing of the current troubles could not be worse. As Seigle points out, Colorado ranked 37th in the nation in 2001 in per-pupil public education funding and has seen its education money dwindle further in subsequent years.

School funding is limited by the 1991 TABOR amendment (Taxpayer Bill of Rights), which links state spending to the rate of inflation. The anemic post-September 11 economy translated into less money than expected for school districts.

Looking forward to the 2004-05 fiscal year, Aspen originally projected a 2.1 percent increase in funding. At one point, it appeared that number might be closer to 0.5 percent, but with the Legislature in session and the economy still in flux, it’s yet to be determined.

Complicating the matter is Amendment 23, passed by Colorado voters in 2000, which attempts to make up for years of dwindling school funds by boosting per-pupil funding at the rate of inflation plus 1 percent.

What this means is that, in years of economic stagnation, the school-friendly Amendment 23 comes into direct conflict with the frugal TABOR amendment. Several proposals are currently on the table in the state Legislature ” such as a one-time bailout for schools using money from Colorado’s legal settlement with the big tobacco companies ” but nothing is certain.

Whatever the outcome, at best the school can only hope for a 2.1 percent increase in per-pupil funding from the state next year, hardly enough to pull itself out of the red.

What they are doing about it

Looking over the books last fall, Sirko and Anuszewski decided they had to act decisively to stop the bleeding.

Earlier this spring, the new board passed an executive limitation (the most powerful action available) that forbids administrators from constructing a budget on projected enrollment. After getting burned this year when 20 projected students didn’t show, the board mandated that Sirko build a budget based on flat enrollment.

This helped, but it was only the beginning.

Since then, Sirko and Anuszewski have constructed a three-year program to eliminate the nearly $1 million deficit. Some $450,000 in cuts will come next year, followed by another $250,000 in both 2005 and 2006.

Peripheral expenses will be emphasized next year. Every little bit helps ” fees to play team sports are proposed to rise from $40 to $60. A cut in school supplies, particularly for art classes, should save $50,000. A reduction in teacher-training programs will save another $150,000. And switching to a different insurance carrier that offers more options to district employees could save nearly $120,000. Ten percent of the current budget is allocated to the district’s health insurance plan.

Yet Sirko’s most controversial move, approved by the board last Monday, was to stop funding Aspen’s free full-day kindergarten.

The state government only reimburses schools for a half-day of kindergarten. Aspen had traditionally picked up the costs of the extra half-day.

Starting next year, however, most parents will have to pay $200 per month if they want their children to attend full-day kindergarten. Those with other children in kindergarten or preschool, and parents who work for the district, will be charged $100 a month. Families who qualify for the federal government’s free or reduced lunch programs will be charged $50 a month.

Officials hope the tuition will bring in approximately $95,000 next year.

Sirko said that next year’s cuts will avoid staff reductions and core educational programs. All of Aspen’s kindergarten teachers, for example, will be retained despite the potential drop in full-day enrollments.

Yet Sirko has already confirmed at least one retiring teacher will not be replaced next fall and as many as two employees might lose their positions. Sirko and Anuszewski say they haven’t determined which jobs will go, but confirmed they were considering eliminating the assistant principal position in the elementary and middle schools.

No matter who is forced to leave, it is clear they will likely be the first of many.

“Eighty-seven percent of our budget goes to salary and benefits,” Sirko said in March. “With such a large budget deficit, you can’t stay away from that for long.”

For 2005 and 2006, additional cuts will come from an advisory task force of teachers, administrators, and parents. Kindergarten tuition could be abolished, but it could also be increased. Sirko said the High School’s vaunted International Baccalaureate program, which offers college-level courses to High School upperclassmen, is probably safe, but she cannot guarantee immunity for any department or program.

For the foreseeable future in Aspen’s school district, to the dismay of idealists and educators alike, finances will sit firmly at the top of the priority list and the front of the class.

Eben Harrell’s e-mail address is eharrell@aspentimes.com


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