Montclair schools looking to plug $3M hole in budget
The Montclair school district is looking to make up a more than $3 million deficit in its preliminary 2022-23 budget.
But that deficit is less than half of what the district faced during the past two years as it started its budgeting process. The 2020-21 preliminary budget — a first draft in February of that year, before the now-defunct Board of School Estimate signed off on a final version in April — started off with a deficit of $7.5 million. The 2021-22 preliminary deficit was $6.2 million. The preliminary budget for the 2019-20 year had only a $2.2 million deficit.
“COVID was a blessing with respect to federal grants,” schools Superintendent Jonathan Ponds said at the Wednesday, April 27, Board of Education meeting. “However, it also brought challenges — things like transportation costs and things that increased due to COVID and our circumstances out in the world that are not going away.”
This will be the first year the school board is entirely responsible for approving its own budget. Montclair had previously operated as a Type I school district — with a mayor-appointed school board of seven members, and final approval of the budget going to the separate Board of School Estimate.
Because voters agreed last year in a referendum to make Montclair a Type II district, the board now approves its own budget so long as it can keep any property tax levy increase under a 2% cap; if it wants to exceed that cap, the budget would go to voters for approval.
The board is expected to vote on a final budget Monday, May 9.
The district is projecting $140,796,790 in revenue and $143,875,832 in costs, leaving a preliminary deficit of $3,079,042.
Ponds said staff cuts would be made as part of the effort to close the gap, but also said student services would not be affected by the deficit.
Loss of revenue interest has significantly affected the district, Ponds said at the meeting. Interest earnings started dropping after the 2020 election, he said. In the 2019-20 school year, the district earned $305,921 in interest. In 2020-21, interest earnings totaled $21,787. Between July 2021 and January 2022, earnings totaled $12,730.
And federal grants designed to help the district meet costs during the coronavirus pandemic are also wrapping up, Ponds said. The district received nearly $8 million in Elementary and Secondary School Emergency Relief Funds, according to records on the state Department of Education website.
Tuition revenue is also down, due to a decrease in students enrolled in preschool, which Ponds attributed to the pandemic. For the 2020-21 school year, prekindergarten enrollment was 54 students, according to an enrollment report on the district website. In md-August of last year, the district was expecting a pre-K enrollment of 43 students, according to documents provided to Montclair Local at the time. A final 2021-22 enrollment report has not yet been published.
But the district is seeing some increases. Anticipated extraordinary aid — state aid available to the district for special education costs — is up $550,000 from the 2021-22 school year, to $1.7 million. Gov. Phil Murphy’s proposed 2022-23 budget would provide Montclair public schools with more than $8.41 million in state aid, a 4.73% increase from last year. In 2021-22, Montclair received $8.03 million.
The largest portion of the district’s revenue would come, as always, from the tax levy — totaling $125,498,569 for 2022-23. It was $123,037,813 for 2021-22.
The total expenditures in the 2021-22 school year were $135,791,055. Expenditures in the preliminary 2022-23 budget total $143,875,832.
The bulk of the increased expenditures can be pinned to transportation costs and inflation, according to Ponds.
The cost of transportation for the 2022-23 year is estimated to be $2 million more than it was during the 2021-22 year, totaling $8.9 million, he said.
The increased cost is due to a decrease in bus drivers, and the district’s having to offer higher compensation rates, along with increasing gas costs, Ponds said. These are statewide issues, he said — “we are not unusual.”
The increased gas costs have also significantly impacted the district’s plant operations and maintenance costs, up to $11,938,111 for the 2022-23 year, more than double the spending in 2021-22.
To eliminate the deficit as the district keeps revising its budget, the superintendent said his staff will be looking at ways to eliminate costs — including staff cuts.
The largest expenditure in the preliminary budget is salaries, at $86,469,728, followed by employee benefits, at $23,430,673.
For 2021-22, salaries were $84,924,417 and benefits were $23,373,511. Staff and substitutes were hired at “a much higher rate than before” because the district “had to compete” to fill positions, Ponds said.
The district has seen other fluctuations in staffing plans in recent years. The district eliminated dozens of positions during its budgeting process last year, but added some of those positions back as the budget underwent revisions, or rehired for them in the fall.
Board member Kathryn Weller-Demming said she was concerned about the possible staff cuts.
“I’m concerned that we are repeating this cycle where we cut a bunch of paraprofessionals in a budget and then we scramble to replace them in time to serve our students,” Weller-Demming said.
Cuts would be to untenured staff members, Ponds said. Positions that the district has been trying to fill but hasn’t been able to, and doesn’t anticipate being able to, would be cut as well, he said.
The Montclair Education Association received a line item budget from the district and met with district leadership to share questions, union President Cathy Kondreck said at the meeting.
But the budget draft provided to the union did not match the draft presented at the board meeting, Kondreck said. She asked that there be an opportunity to know what changed and why.
Additionally, Ponds said he and his staff are looking for ways to use grants and the remaining COVID-19 funding to cover programs, such as the restorative justice program.
Kondreck expressed concern about items and positions being funded by grant money, rather than by more routine revenue.
“That money likely will eventually go away and won’t be permanently available to the district,” she said. “What will happen to those positions or items when the grants are terminated?”
Ponds said using grant funds for the restorative justice program could both sustain and enhance it. “My fear is that when we have grant monies like this and we don’t use these grant monies, we find ourselves losing the monies,” he said.
The board was slated to have a workshop meeting for the budget on Wednesday, May 4, after Montclair Local’s print deadline for this week.