The fiscal year is July 1, 2020 through June 30, 2021
Due to COVID-19, Poudre School District’s budgeting process and final, approved budget for fiscal year 2020-21 were markedly different than in the past. The history of how this year's budget evolved is outlined below, along with frequently asked questions.
Here's how we got here
- Early 2020: PSD was projected to receive an increase in state funding, due to student growth and inflation. The State of Colorado was also expected to continue “buying down” the Budget Stabilization Factor – the amount of K-12 funding Constitutionally owed to Colorado’s 178 school districts but held back due to past state budget challenges. This was good news because PSD was owed about $18 million. PSD is among about a dozen “floor funded” school districts in Colorado, or those that receive the lowest amount in the state K-12 funding formula that districts can receive. Colorado also historically ranks among the lowest in the nation for overall K-12 funding.
- March 2020: Economic forecasts started painting a grim reality about the state’s budget. PSD began preparing for potentially behemoth state funding cuts, ranging from about $15 million to $28 million.
- Mid-May: The state announced cuts of about $3.3 billion, or 25%, from its 2020-21 fiscal year budget due to COVID-19. Colorado law requires the state to pass a balanced budget and, because K-12 education funding comprises about 36% of the state budget, cuts seemed inevitable. At the same time, PSD started preparing for declines in specific ownership taxes (I.e. vehicle registrations) and interest income, as well as a decrease in the property tax collection rate – another economic outcome of the COVID-19 pandemic.
- PSD schools and departments were asked to cut staffing and operating budgets; some were one-time and others ongoing in nature. District leadership identified other sources of money – including one-time dollars to make up for the anticipated funding deficit.
- Late May: The Colorado General Assembly reconvened to address the budget crisis. By mid-June, far later than it would occur in a typical year, legislators passed the 2020-21 Long Bill and Public School Finance Act (SFA), which determines the amount of public K-12 funding allocated to Colorado public schools. In PSD, the annual budgeting process starts around January and ends with Board of Education’s final budget approval before the June 30 statutory deadline. This year, the state’s crisis-driven, last-minute cuts significantly condensed that timeline in PSD and required adaptable, focused and rapid-fire financial planning.
- June 2: The Board of Education passed a resolution declaring the existence of a fiscal emergency, pursuant to Article 14 of the PSD Employee Agreement. Specifically, the school board must declare this type of fiscal emergency as a first step before the district may proceed with PSD’s Reduction in Force, or RIF, procedures for classified employees. Article 14.1. stipulates a RIF may be necessary when the Board of Education experiences a decline in its ability to fund district operations, requiring program changes to cut costs and increase operating efficiencies that can’t be achieved without eliminating classified positions (i.e. office managers, bus drivers, etc.). Read more in the June 3 district update.
- June 9: District staff presented the Board of Education with a proposed FY20-21 budget that included a state funding cut of about $11.3 million and a decrease in local funding of about $5.3 million.
- During the meeting, the board also approved both the Memorandum of Understanding (MOU) and the 2020/2021 Employee Agreement ratified by PSD’s three employee associations representing licensed, classified and administrative staff. PSD engages in an interest- and consensus-based negotiations model that involves representation from all three employee groups and PSD administration. Members of the negotiations team use a solution-focused approach to discuss, review, and make recommendations on employee working conditions, benefits, and salaries.
- June 23: The Board of Education approved the 2020-21 fiscal year budget.
- As of June 2020: Financial experts believe the economic impacts of COVID-19 could last an estimated two to four years. For that reason, PSD is anticipating the need to make cuts in future budget years and for other possible effects such as a mid-year rescission (the State of Colorado makes additional cuts, beyond those adopted in the approved budget, and recoups allocated funding from school districts).
With remote education this spring, didn’t PSD save money because staff and students weren’t in school? Why did PSD still have to cut its budget?
Over the course of remote education in spring 2020, PSD did realize some limited savings, such as on fuel for buses that did not operate during remote education and lower-than-planned building utilities following the governor's executive order to close schools through the remainder of the school year. That said, the district also encountered and continues to plan for a whole host of one-time and ongoing COVID-19-related and indirect expenses, such as personal protective equipment, thermometers and more. The district also paid all staff throughout the COVID-19 school closure.
Does PSD get any of the federal CARES Act money?
PSD staff anticipate the district will receive the following from the Coronavirus Aid, Relief, and Economic Security, or CARES, Act (passed by Congress and signed into law March 27, 2020):
- $2.2 million from Elementary and Secondary School Emergency Relief (ESSER) Fund
- $14 million from the Coronavirus Relief Fund (CRF)
Colorado also received about $44 million from the Governor’s Emergency Education Relief (GEER) Fund. PSD has not applied for this money, as of June 2020.
How is PSD planning to spend its portion of federal CARES Act money? Can’t that “fix” the budget deficit?
In fiscal year 2019-20, Poudre School District received federal Coronavirus Relief Funds through the Coronavirus Aid, Relief, and Economic Security, or CARES Act. PSD expended a significant portion of the CRF funds in FY19-20, thereby freeing up general fund resources to use for district COVID response in FY20-21.
PSD created a COVID-19 response reserve of $12.8 million, approximately equal to the general fund resources freed up using CRF funds in FY19-20.
In addition to the CRF funds, the District anticipates receiving approximately $2.8 million in Elementary and Secondary Emergency Relief (ESSER) funds, also through the CARES Act.
As of Aug. 24, 2020, the following purchases have been made in direct response to COVID-19:
Purchases for FY20: Information Technology (purchases for Integrated Services and Early Childhood Education); operations/health (personal protective equipment, such as face coverings, gloves and hand sanitizer; and cleaning supplies (disinfectants, etc.); and communications (translation of district communications into Spanish, Arabic, Korean and Mandarin). These purchases were made using CRF funds.
Purchases for FY21: Information Technology (purchases for integrated services and Early Childhood Education); operations/health (personal protective equipment, such as face shields and gloves; and cleaning supplies (disinfectants, ionizing hydrostatic backpack sprayers, etc.); professional development learning application licenses (for remote learning platforms such as SeeSaw, Parlay, GoFormative, and more). These purchases were made using CRF funds and/or the general fund COVID-19 response reserve.
The district anticipates making additional purchases that will be charged to the COVID-19 response reserve and ESSER funds for PSD's continued response to the pandemic.
I don’t understand why PSD had to cut its budget. I pay different types of taxes and so do others.
Following the COVID-19 outbreak, people were buying fewer things and state sales and income tax collections plummeted, which means less money for schools. For fiscal year 2020-21, PSD will experience a $5.3 million decrease in local funding, which is made up of things like specific ownership taxes (i.e. vehicle registrations), property taxes and interest income.
I thought tax money from marijuana sales funded schools. Didn’t that fix the school funding issue in Colorado?
- Marijuana tax dollars do not fund school operating budgets. Instead, these dollars fund a competitive grant program. All 178 Colorado school districts are eligible to compete for these funds via the grant program. If awarded, these grant dollars can fund:
- Capital construction through a matching Building Excellent Schools Today (BEST) program,
- Early literacy
- Substance abuse and health-related program
- School bullying prevention
- Drop-out prevention.
- There is not nearly enough “pot money” earmarked for schools to make a significant difference for Colorado’s education funding. In fiscal year 2017-18, the Colorado Department of Education’s total marijuana revenue was $90.3 million. The State of Colorado’s entire K-12 budget that fiscal year was $5.6 billion. That means marijuana revenue comprised less than 2 percent of the state’s education budget.
- Since voters approved Amendment 63 in 2012, PSD has received two BEST grants from a state program partially funded by marijuana tax dollars. PSD has used these grants for bullying and substance abuse prevention as well as for upgrading old dust-collection systems in school wood shops. PSD is not allowed to use money from these grants to fund general operating expenses, such as funding salary increases for existing staff.
- The Colorado Department of Education’s (CDE) Marijuana Revenue web page shows marijuana tax funds collected and disbursed. CDE marijuana tax revenue and education information is available in this fact sheet, as well.