While predicting budgets years down the road is difficult, no crystal ball is needed to see the Stoughton Area School District will be facing tough choices in the near future without more revenues.
Monday night, school board members heard the district’s latest five-year financial forecast, and while next year’s budget is considered manageable, district director of business services Erica Pickett said beyond that, “it gets a little bit uglier.”
First, the good news.
Pickett said based on information from district financial advisor Baird Financial Services Company, the 2020-21 school year has a projected deficit of around $300,000; a number she termed as “very manageable,” given the district’s $45 million budget.
“That’s definitely something we can manage through some minor reduction, or just some shifts in what we might see in any given year,” she said.
Then things start to get scary.
Based on the Baird models, Pickett and the finance committee ran through three scenarios for the next five years: one with no increase in state aid, one with a $150 increase in revenue limit for 2021-22 and 2022-23 and one with a $150 per pupil increase in 2021-22 and another $150 in 2022-23.
In a worst-case scenario, the district would be facing deficits of around $1.9 million in 2021-22, and more than $7 million by 2024-25. In the best-case scenario, there would still be deficits of around $1.4 million and $6.3 million during those years, respectively.
Pickett said the financial forecast, updated every year, is a “very comprehensive tool” the district has used successfully to predict how their budgets will be a few years into the future. She said the district’s enrollment decline since 2002 has been “fairly predictable” at around 50 students lost a year and is used as a starting point when estimating future budgets.
One factor that could change, though, is state funding, which has been in general decline for nearly a decade.
Pickett said the district used a $150 per pupil increase as a baseline for a potential state aid increase, though that’s far from a certainty.
“(That’s) less than what have probably gotten in the late ‘90s or early 2000s, but it’s a lot more than what we had (since),” she said. “Even if we were to make that $200, it’s not going to have a significant impact on that deficit line.
“I want to be optimistic but I want to be realistic,” Pickett added.
Board member Joe Freye said the projections highlight some “difficult conversations” the board and administrators will need to have in the near future.
“We have to work through it, and we will,” he said.
Communications director search
The district is looking for someone to coordinate their communication efforts, as community information and resource coordinator Derek Spellman has left the district to take a job with the State of Wisconsin.
A former Unified Newspaper Group reporter who covered SASD, Spellman was hired by the district in May 2013. His last day was Jan. 20.
At Monday night’s school board meeting, district superintendent Tim Onsager said the job has been posted and will be for another week.
“Then we’ll filter through applicants to determine which ones we want to interview and see if we can find that candidate who will be a fit for us.”