LPS Board grapples with $4 million budget shortfall for next year

Increasing costs and Colorado’s inability to fund schools to blame

At a workshop prior to its regularly scheduled meeting October 24, 2019, the Littleton Public Schools Board of Education was presented with the budget outlook for the 2020-2021 school year. The message? LPS is facing a $4 million deficit and must make cuts.

LPS has faced general fund budget cuts in the past, and many of the reasons for the cuts are the same today as they were then.

How we got here:

  • As has happened every year for the past decade, the Colorado Legislature is withholding millions of dollars from LPS and all Colorado school districts through what it calls the Budget Stabilization Factor, also known as the Negative Factor. The loss in LPS alone for the 2020-2021 school year is projected to be $9 million. The Negative Factor has shortchanged LPS of more than $110 million in the last eight years.
  • LPS is absorbing rapidly increasing costs in PERA, health care, transportation and special education. 
  • LPS has a priority to attract and retain the best employees. Maintaining competitive pay and sustaining it in the future will require new money.
  • LPS enrollment continues to be flat due to our community’s limited capacity for growth. Flat enrollment means no additional state funding for growth.

During the workshop, the Board discussed how costs in special education have increased rapidly due to the increase in the number of students served as well as the significance of their needs. This is not unique to LPS; special education costs are increasing across the state. Increases to salaries and benefits have stayed within budget, but those costs continue to rise with no increase in revenue to cover them. Transportation costs are also on the rise.

What we are doing:
LPS is looking for savings everywhere possible at the district level. However, because 85% of LPS’ general fund budget goes toward people (salaries and benefits), it’s impossible to cut millions from the general fund budget without cutting positions. The goal is to keep cuts away from the classroom as much as possible and to protect services in safety, security and mental health. 

  • All district department budgets were reviewed and evaluated for reductions. No district-level departments were able to carry over funds from last year to this year. Carry-over funds were captured and applied to the deficit. Currently, schools ARE able to keep carry-over funds.
  • Most cuts to positions will happen at the district level.
  • At this time, there is no plan to reduce the classroom staffing formula, which means class sizes should remain stable.
  • Some savings will be captured through retirements and normal attrition. There is a hiring freeze, and every vacancy throughout the district will be evaluated before it is posted and filled.

As part of this process, all employees have been asked to submit ideas to the district finance office for consideration. “We’ve gotten some great ideas from employees, and all of them are being considered,” said LPS Assistant Superintendent of Business Services/Chief Financial Officer Diane Doney. Some of the ideas brought forward from employees include eliminating bus transportation service for high school students, reducing transportation for athletics, replacing grass with Xeriscape, reducing teacher training, increasing facility rental fees, increasing student athletic fees, charging transportation fees and exploring a four-day school week.

The Board noted it is not interested in charging families for transportation or going to a four-day school week to find savings at this time.

Local tax increases have helped bridge the funding gap in many school districts, including LPS.
Other districts in Colorado are facing similar general fund budget cuts, especially those districts that have not passed a local mill levy override election in recent years. A mill levy override is a local property tax increase approved by local voters. The additional property taxes are applied to the school district’s general fund and can be used for ongoing costs such as salaries, benefits, curriculum, programs, mental health, etc.  Voter approval of a local mill levy override is the only way to increase the general fund without the help of the Colorado Legislature. 

LPS voters passed a mill levy override in 2010, which helped stabilize the district following drastic general fund budget cuts totalling $14 million caused by the recession and Colorado’s inability to properly fund its public schools under Amendment 23. Ten years later, the Negative Factor is still withholding hundreds of millions in state funds from public schools and Colorado remains ranked at the bottom in state funding for its public schools.

Simply put, until now, LPS has been able to absorb increasing costs to the general fund with 2010 mill levy override funds, but it cannot do so any longer. Funds from the 2010 override have been depleted.

It’s important to remember that the $298 million bond passed by LPS voters last fall cannot help the general fund. By Colorado statute, bond funds can only be spent on capital expenses, such as facility repairs, upgrades, construction, grounds maintenance, Americans With Disabilities Act modifications, electrical, plumbing, etc.

What’s next?
The Board will continue its budget discussion throughout the rest of the fall semester. Decisions regarding budget cuts will likely be made by the end of December 2019. 

LPS is running out of options to keep core functions of the district operating at the level the LPS community expects and deserves. Solutions can and will be found, but none of those solutions are what we would choose to do in better financial times.“We wish our budget situation was different. These are big money issues we have to wrestle with,” said LPS Board of Education President Jack Reutzel. “I’m happy for the many voices in the room. We need all of our best thinking.”

“We will find solutions,” said LPS Superintendent Brian Ewert. “We will get more clarity in the next month.”