East Grand passes 2020-21 budget with $1.5 million deficit
Weathering cuts from the COVID-19 pandemic, the East Grand School District’s Board of Education moved forward this week with a budget facing a $1.5 million deficit.
With the state cutting education funding due to the economic downturn from the coronavirus, the school district will make up the difference for the 2020-21 budget by dipping into reserves. The district will end the 2019-20 fiscal year at the end of this month with $5.6 million in reserves.
Even with the cuts, the district board approved both a 1.27% cost of living increase and a step increase for salaries of teachers and other employees. A step increase refers to a raise typically allocated annually related to years of experience at the district and varies for each employee depending on a number of factors.
While the district was able to pull back spending in other areas by roughly $400,000, a salary freeze was a place of contention for the board. The step increase will cost the district $191,000 for the coming school year.
Board Vice President Angel Higginbotham expressed her concern at dipping into reserves while giving pay raises.
“The rest of the state is not giving raises,” Higginbotham said at Tuesday’s budget discussion. “Big corporations are not giving raises; they’re doing pay cuts. I don’t know how we could feel good and responsible with our taxpayers’ money (if we) just keep dipping into reserves.”
She said that she wished the board could continue the pay schedule approved earlier this year, but pointed out that no one knows how the economic downturn from the coronavirus pandemic will pan out. If funding is even tighter next year, she feared having to cut positions.
The board also faces funding a multi-million dollar debt associated with a certificate of participation. Last summer, East Grand obtained a $2.1 million BEST Grant for security improvements across the district. The district must provide $5.9 million in matching funds for this grant, which the certificate of participation supplements.
However, a COP is typically only used as a temporary funding mechanism before the district goes to voters to approve a bond or mill levy override. The district might to go to voters this fall to ask for a bond, but with the economic downturn there is some worry that voters will not pass such a measure.
“I don’t see us passing a bond in November when people in our county are losing their jobs and their homes,” Higginbotham said. “That doesn’t even seem realistic to me.”
State ballot initiatives, including a question to repeal the Gallagher Amendment and another to add a tobacco and vaping tax, could increase funding for East Grand. However, this revenue is only a possibility at this point.
The district has received some relief from CARES Act money, but that money comes with restrictions and cannot be spent on salaries. Additional money could be on the way, but that isn’t definite.
The board could have passed a pay freeze this month and revisited the issue in November when funding might be more definite, but other board members wanted to support teachers during this time.
“They’re coming out of a season where what I’ve heard is they’ve worked harder than they’ve ever worked,” board member Shaul Hagen said. “I get the finances of it, but sometimes it’s not just finances. It’s morale. It’s retainment. It’s for the community.”
Even without the pay raise, the district would still be taking more than $1.2 million out of reserves.
“That’s a pretty small price to pay for the morale of our teachers with what they’ve done this past season,” Hagen said.
The board voted 3-2 in favor of the budget with the step increases. Higginbotham and board member Trevor Corbin voted against the proposed budget.
The school board also approved a 1.5% pay raise for Superintendent Frank Reeves.
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