Madison BOE Grapples with Budget Deficit Concerns
With the June 30 close of the current fiscal year just around the corner, the Madison Board of Education (BOE) is looking at how to cover special education expenditures that exceeded estimated costs by about $250,000 this year. At the BOE meeting on May 8, board members discussed the deficit and its effect on surplus funds the board hoped to use to reduce special education costs in the future.
Special education is one of the most difficult budget items to plan for. Boards across the state look at numerous factors to try to accurately predict expenditures for the year, but the movement of students or a change in needs can often throw that particular part of the budget completely off kilter in the middle of the year, leaving boards to try to pull funds from reserve accounts or other parts of the budget to try to cover the costs.
There is currently approximately $190,000 available in other parts of the BOE budget and if all of those funds can be used, that leaves a total budget deficit of roughly $60,000.
The town has an External Placements Reserve Fund, an account established to help cover the cost when a student requires services that town schools cannot provide and the money required to provide those services elsewhere exceeds the budget. If at the end of a fiscal year the board has a surplus, it adds those monies the reserve fund. The account currently has about $280,000.
The board can move the $190,000 from other parts of the current budget and then use monies from the External Placements Reserve Fund to cover the total deficit, but that would leave the BOE with no money to return to the town at the end of this operating year. Having no money to return is not a problem in and of itself, but the BOE was counting on having unspent money returned to the town this year to be used to fund a specific program next year.
The ESS Program
The desired position is an Effective School Solutions (ESS) contractor for Polson Middle School. ESS, brought to the high school three years ago, is designed to provide intensive clinical programming for students with significant emotional and behavioral problems so they can stay in the public school system. The high school currently has two ESS contractors and the district wanted to expand the program to Polson. In the approved budget proposal, the board elected to hold off on the position for one year as the district works through a configuration change.
Since the position was excluded from the main budget, over the course of two meetings the board ultimately decided to approve funding the position by “requesting from the Town of Madison for the 2018-’19 fiscal year an assignment and/or appropriation of $120,000 for the purpose of funding the ESS program at Polson Middle School.” The condition of the appropriation was that the $120,000 come from unspent funds the board would return at the end of this year from the current budget.
There was no other plan approved to fund the program because typically the BOE does return some money to the town each year; this year proved to be atypical. The debate at the BOE meeting on May 8 was not over the merits of the program, which the administration has said is a cost container because it can help avoid outplacements and keep students in district, but how the board can now fund the program in light of the deficit.
The Options
BOE Finance Committee Chair Happy Marino brought the issue of the deficit to the full board’s attention at the meeting. She said because of the deficit and because the board originally voted to fund the ESS program with surplus funds, she would like the board take another vote if the program has to be funded another way. She said taking another vote would ensure process is being followed.
Two options discussed at the meeting were to either tap into the External Placements Reserve Fund now to try to help with the deficit and still be able hold $120,000 aside to fund the ESS program or wait until the end of the year, exhaust all funds in the current budget, and request a smaller amount out of the External Placements Reserve Fund.
“What I am saying to the board is if this is a path you would like to continue to go down out of this year’s budget, there needs to be another vote,” she said. “There needs to be a vote to ask for additional monies to cover the ESS position so that we have money to return. The way we worded the motion it specifically says ‘provided we utilize unspent funds.’”
Marino said another possible solution is to go into next year’s budget, once approved, and find the money to fund the program there rather than try to piece the funds together in this budget.
“I think the better solution is to go into next year’s budget and go and encumber the money across multiple accounts because this is a priority for a majority of the board and look and see how we can fund this position,” she said. “…I think it’s the simplest option and the cleanest option because we don’t have to go to the other town boards. We could identify 15 to 20 different lines and encumber a little bit from each and use that to establish the position.”
Marino said she like the idea of going into next year’s budget because she said pulling so much out of the External Placements Reserve Fund this year makes her nervous.
“I am afraid that we are really depleting the special education reserve,” she said. “The expenses that we have this year are not necessarily going to go away. That reserve is targeted to pay for outplacements and there is no guarantee that the outplacements that we are paying for this year are going to come back next year. It is hopeful that implementing this program may attract some of those kids back into the district, but there is no guarantee, so it is making a judgment call over a possible cost container over definite costs.”
The board will likely vote on how to proceed at their next meeting on Tuesday, May 22. BOE Chair Katie Stein said no matter the “how,” the board wants to find a way to fund this ESS position.
“The ESS program has been not only a cost benefit for the town in helping to keep kids in district and at home, but also it ends up being a program that can really benefit kids and families who are undergoing a period in their life where they need extra support and to be able to do that at home is helpful,” she said. “Given that we are in such difficult financial times in our state, I recognize that adding programming can add anxiety, but it has proven itself at the high school to be a cost saver and a cost container, so my feeling is that the board is united in their support of the program for those reasons.”