How Eagle County School District is budgeting for the future
The district’s approved budget for the 2023-2024 school year accounts for ongoing challenges and new statewide programs
Chris Dillmann/Vail Daily archive
As the Eagle County School District prepares for another school year with inadequate funding from the state, it is budgeting for salary increases, the new universal preschool program and changes to nutrition services — all of which are happening as the cost of living continues to rise and the district grapples with recruiting and retaining teachers and staff members.
At its Wednesday, June 10 meeting, the district’s Board of Education approved the final budget for the upcoming 2023-24 school year.
In total, the district is anticipating revenues across all funds of $153,903,886 (a 4.56% increase from the estimated 2022-23 estimated total revenue) and total expenditures of $163,933,468 (a 6.63% increase from the previous year).
How the schools are funded
The bulk (typically around 70%) of Eagle County School District’s revenue comes from the state’s School Finance Act. Each year, Colorado’s legislators allocate this revenue on a per-pupil basis and based on a funding formula. The formula takes into account — and distributes funding based on — local property taxes, state-equalized specific ownership taxes and state funds. All of this funding is allocated to the district’s general fund.
For the upcoming school year, based on the School Finance Act, the local district will receive a 10.6% increase in per-pupil funding. This equates to $11,097 per pupil, which is approximately $1,068 more per student than the previous year.
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As revenue assumptions are based on projected enrollment and staffing as a result of the enrollment, the projected enrollment for the district in 2023-24 is 6,342 (including Eagle County Charter School). Per-pupil funding is based not on the exact count but on the average count over the past 5 years. Student count is finalized each fall.
According to Sandy Farrell, the district’s chief operating officer, while enrollment is projected to decline next year by 1.5 students, taking into account the 5-year average, “for funding purposes, we’re actually having a declining funding of 65.1 students.”
“That has a pretty significant impact on us,” she added.
This year’s School Finance Act will also include an 8% cost of living factor as well as a 6% increase for special education funding.
While this year’s state budgeting did see increases in funding for schools, there are still substantial challenges.
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At the May 10 Board of Education meeting, the district’s Superintendent Philip Qualman reported that “increased costs due to change in enrollment and inflation were met in this budget,” but reminded not to “mistake that inflationary increase as discretionary revenue; it covers increased costs.”
One of the biggest challenges in Colorado education funding is the existence of the Budget Stabilization Factor, which as Qualman described it is a way for the state budget to “withhold money from public education in order to balance the rest of the state’s budget.”
The Budget Stabilization Factor — or BS Factor — was introduced in 2009 as a way for Colorado lawmakers to legally cut the education funding required by Amendment 23 amid an economic downturn. Amendment 23 is a measure that, among other things, requires the state to increase per-pupil school funding by at least the rate of inflation each year.
Since 2010, this factor has been responsible for over $10 billion being withheld from school districts since the 2009-10 school year. In the Eagle County School District, it has been responsible for $83.7 million in funding being withheld in that same time frame.
While legislators did approve a significant buydown of this factor this legislative session, $1.17 million is still being withheld from the Eagle County School District.
“When we talk about the impact on our operating, it’s very significant and it will take a long time to recover if that’s even possible,” Farrell said.
Where the money is going
The district has numerous funds — including specific funds for nutrition services, Eagle County Charter Academy, transportation and more — but its largest fund is the general fund.
For the 2023-24 school year, the district is projecting revenue in this fund around $99 million and expenditures around $98 million.
By far, its largest cost is staff compensation and benefits, which Farrell said is 80% of its general fund expenses. For the upcoming school year, this expense also includes a compensation increase for all staff.
In May, the Board of Education approved an increase that will bring the starting salary for certified staff to $50,500 (which in turn raises compensation across the salary schedule) as well as a 10% increase in salary for all other employee groups.
This increase will have an impact on the district’s budget. In May, Qualman indicated that the raise — which will cost $6,182,512 — was met by the district spending into its reserves. The state requires that school districts maintain a minimum fund balance of its reserves that is 3% of its total budget. Even with spending into the reserves to make these salary increases, Qualman said the district would still have a 6% fund balance.
On June 14, Farrell generally responded to some of the prior “questions asked about the sustainability of this.”
“We need to make adjustments on an annual basis, based on whatever new revenues we have and required, incurred expenses, but we’ll adjust it every year to maintain financial sustainability for the district,” she said. “So, it’s a change we have to make annually anyway, but we’ll do what we need to do to help support our staff right now.”
Farrell noted that the district is projecting to build up its reserves “back up” to 10% in the years to come.
Additionally, Farrell reported general fund expenditure increases due to health insurance costs and utilization (a 10% increase), staffing adjustments made at Homestake Peak as well as a “small increase” for the district to hire a full-time grant writing position.
Outside of the general fund, the district is preparing for some significant changes in some of its other specific funds.
Universal Preschool
One of the biggest changes to the district’s 2023-24 budget is the addition of a new fund for preschool as it prepares to implement universal preschool in the upcoming school year. The program will provide tuition credits for all 4-year-olds (and some 3-year-olds) attending preschool across the state.
During this year’s state legislative session, the state allocated $10 million for the program. In May, Qualman told the Vail Daily that “districts don’t expect that $10M will be nearly enough to cover the costs of this program.”
“So districts will be dipping into general fund dollars to offset the costs of universal PreK,” he said. “I suspect funding for this will improve over time, as districts learn more about enrollment and costs.”
Additionally, Farrell at the June 14 meeting, clarified that “just because the state is funding universal preschool, that does not mean that all students get to attend for free. It means that the state is paying for an additional up to 15 hours of educational services a week.”
As such, Farrell indicated that the program is “still not fully funded by the state even based on a per-pupil funding amount.” This per-pupil funding will include a base amount as well as additional allocations for students on individualized education programs and that are identified as at-risk.
This new fund will also receive revenue from tuition for preschool as well as infant-toddler students that are not covered in the universal preschool.
The district will also receive funds from the state because it — alongside Early Childhood Partners — is acting as the local coordinating organization in Eagle County. These local coordinating organizations were appointed by the state to support local child care providers and families through the new universal preschool implementation and programming.
For the 2023-24 school year, the district has estimated that revenue in this preschool fund will amount to $5,554,569. It has budgeted expenditures of $7,823,634 (for salaries and benefits, purchased services as well as supplies and equipment). To account for this delta, the district will have to transfer funds from the general fund.
This budget, Farrell added is based on the assumptions that all preschool classrooms will be fully staffed, which she said “has potential to not come to fruition.”
As this is the program’s first year, it’s anticipated that state funding around universal preschool will improve and districts will get a better idea of what expenditures will be over the next few years, Farrell said.
Nutrition Services Fund
One other change will be coming to Colorado school districts this upcoming school year: universal free meals, an initiative that was passed by voters in November 2022. The program will supplement funding from the federal government, to reimburse the district for meals for all students, regardless of their free and reduced status.
With this change, the Eagle County School District anticipates seeing both “increased participation and food costs,” Farrell said, adding that it also means increased revenue.
In total, the district estimated $3,414,334 in revenue and budgeted $2,454,003 in expenditures in its nutrition services fund
As the district prepares to transition to the universal meals — similar to what was created during COVID-19 — Farrell reiterated that the importance of students and families still completing free and reduced lunch applications. While students will receive free meals regardless, these numbers are important for families as they allow for other student and activity fees to be reduced or waived as well as for the district as it applies for federal and state grants.
Looking ahead to the upcoming school year, the district is budgeting for increases in order to address some of the challenges and some of the statewide programmatic changes coming. However, it continues to battle for funding and resources from the state.
The Eagle County School District has multiple other funds for capital improvements, transportation, student activities, housing and more. To view the district’s budget book online, visit EagleSchools.net/Departments/Finance.