Budget cuts likely in Iowa City school district

IOWA CITY – The Iowa City school district likely will need to make budget cuts for next fiscal year, but exactly how much remains to be seen.

Also to be determined is where those reductions would come from. Leftover federal stimulus funds, however, will help offset the potential loss of teachers.

“Without that one-time funding, there definitely would have been more staff cuts,” Superintendent Stephen Murley said Friday, adding that those possibly could have been done through attrition rather than layoffs.

The district received $2.4 million last fall from a federal education jobs program, which it said it would use primarily to hire more teachers. Anticipating tough financial times, Murley said he was conservative with the money this school year, leaving more than $1.8 million left over for next year.

There are still many unknowns with the budget, though. Most prominent is what the state will provide in allowable growth, which is the amount of new state money districts receive.

“A lot of this will largely be driven by what allowable growth is,” said Paul Bobek, the district's executive director of administrative services.

The school board must approve the budget by mid-April, and not knowing what that number will be is exasperating to school administrators.

“That's an understatement,” Murley said. “There's a great deal of frustration that goes along with that.”

Republicans are calling for 0 percent allowable growth, while Democrats are seeking 2 percent. Even the higher figure is less than districts traditionally receive.

In the worst case scenario, the budget deficit could nearly reach $9.5 million in the fiscal year that starts July 1. That's assuming the district spends 100 percent of its budgeted expenditures, allowable growth is 0 percent, employees get a 4 percent salary and benefits increase and the district saves 5 percent of its budget.

The district typically keeps its expenditure level at 98.5 percent, though. A more moderate scenario would be if the district were to do that, allowable growth was 1 percent, employees get a 1 percent increase and 4 percent of the budget is saved. That would result in just shy of a $3 million shortfall.

There are a few situations that put the district in the black, but they mostly require employees getting a 1 percent or less total package increase and the district spending down most of its reserves.

The projections could actually be bleaker. They assume the state will provide $581,128 for preschool and $145,807 for the Instructional Support Program – money the state may not provide.

Administrators say they are not sure yet where the reductions would be made. The property tax rate also is still a work in progress.

Murley said despite the numbers, the Iowa City school district is in better shape than most districts in the state.

“With our

increasing enrollment, with the stability of the tax base and the

property values here in Iowa City, although it may not look like it, we are truly blessed,” he said.