Short on funds, districts declare fiscal emergency
MONTICELLO (AP) – These days, Superintendent Bill Brumfield finds himself frequently turning to passages in the brown leather Bible resting on his desk. His school district is losing students. Utility and transportation costs are rising. And he’s expecting to lay off staff – even, perhaps, his own son.
“If he has to go, he has to go,” the ashen-haired Brumfield said on a recent afternoon. “I can’t hold back.”
The rural Jefferson County School District in Florida’s Panhandle declared a financial emergency in April, the second in the state since the recession began. Its reserves have dried up, and the district expects to have a deficit of $500,000 by the end of the fiscal year. In a state where many districts are grappling with sinking property values and budget cuts, Jefferson’s situation is considered the most severe.
Districts that have declared fiscal crises in the last year range from those in smaller cities, such as Pocatello, Idaho, to one in a major metropolis such as Dallas. Typically it means the district is running a deficit and will struggle to finish the fiscal year. In these cases, the designation can be a precaution and give the school board authority to renegotiate contracts to reduce pay or eliminate staff. In others, the state declares the district in crisis after it falls out of financial compliance and requires intervention.
The designations are rare, even in a poor economy, said Mike Griffith, senior finance analyst with the Education Commission of the States in Denver.
“It’s not just bad economy,” Griffith said. “It’s bad economy and the finance staff wasn’t paying attention. Or finance staff was paying attention and leadership wasn’t making the cuts they should have.”
In a good economy, Griffith estimated that a half-dozen districts file for some form of financial emergency. In a downturn, that number rises to as many as two dozen of the more than 15,000 nationwide.