Helena School District leaders said Tuesday there will have to be major changes to the district budget over the coming years, as the current budget framework will soon become “unsustainable.”
“It’s something that we need to come together as a school district, as a community, to collectively consider, discuss and propose potential solutions on,” said Superintendent Tyler Ream.
The district held a special board of trustees meeting Tuesday afternoon at Capital High School. Ream presented a five-year budget projection that showed increasing costs for employee salaries and benefits are likely to take up a larger portion of the district’s revenues. If student numbers remain relatively flat, that could mean the budget will get increasingly out of balance.
Dozens of Helena Public Schools teachers, administrators and other employees were in attendance for the presentation. Ream said leaders held it at a different time than usual, specifically so employees could participate.
“Instead of burying it three hours into a Tuesday evening meeting, it felt right to be able to consider this, view it, discuss it for the first time with as many employees as could make a 4:00 special meeting,” he said.
Ream said a district would typically want to spend no more than around 90 percent of its general fund on salaries and benefits, leaving 10 percent for other operations. He said HSD needs 4 percent of the general fund simply to pay utility costs.
The district has currently budgeted 95 percent of its elementary general fund and 93 percent of the high school general fund for personnel costs. The projection showed that number slightly improving for the elementary budget, but worsening in the high school budget. By the 2023-24 school year, it showed salaries and benefits taking up 130 percent of the expected budget, leaving it more than $6 million out of balance.
Ream said the district will already have to find an additional $949,000 simply to balance this year’s budget.
“We will have to make potentially very difficult decisions around just next year,” he said. “But again, we always have to consider: What does this next year’s budget do for the following year and the year after that?”
School board chair Sarah Sullivan said these budget issues developed over years, and that the board has to take responsibility for them.
“Frankly, I will say that I have been on boards and there have been past boards where we’ve basically kicked the can down the road on the budget,” she said. “It was in the last couple years that we really started doing a deep dive into the budget and recognizing that this wouldn’t be sustainable.”
Trustees asked the superintendent to take a full look at the issues and begin looking at possible options.
“Truly this is something that the board needs to deal with, and probably should have dealt with earlier,” Sullivan said. “But we are dealing with it now, and we hope to do that in a very transparent way.”
Leaders said the district has essentially maxed out its tools for raising more revenue. The board voted during the meeting to put an elementary school levy before voters in the May 7th school elections. The property tax levy would collect an additional $103,000 a year, and raise taxes $1.35 a year on a $100,000 home and $2.70 a year on a $200,000 home. That would be the maximum they could increase their levies.
District leaders did not talk about potential budget solutions during Tuesday’s meeting. Ream and board trustees plan to hold meetings at each of the district’s schools over the coming weeks, to get input from employees and discuss the possible options.
However, Ream said it is clear hard choices will have to be made.
“We will definitely need to reallocate funds,” he said. “We know we do not have additional funds that are coming to us.”
Sullivan said she’s proud that the board is now taking a serious look at what needs to be done to ensure the budget is sustainable.
“The time is now to do it,” she said. “We could wait another year and do it, but we would be in the red probably by then. It’s high time that we take this on.”
-Reported by Jonathon Ambarian/MTN News