Belt tightening

Budget shortfall will force schools to be more efficient

Declining oil prices and state tax revenue has forced a 3-percent reduction in funding for common education for this fiscal year.

The Oklahoma Board of Education approved a $46.7 million funding cut for kindergarten-12th grade public education that will take effect for the current fiscal year (ending June 30).

That $46.7 million cut for schools includes $25 million from the school funding formula, $12.4 million from health insurance costs and $8.5 million from the Public School Activities account.

“There is no denying that this cut poses serious challenges for school districts during a time in which every dollar already is precious, and not all districts will be affected the same way. But the State Board of Education and Oklahoma State Department of Education have addressed the required cuts as fairly and judiciously as possible, while attempting to minimize student impact,” said State Superintendent of Public Instruction Joy Hofmeister.

While the cuts are certain to have a significant effect on Oklahoma’s 550-plus school districts (a figure that includes charters and co-ops), Hofmeister and her fellow board members were able to soften the blow by transferring $4.6 million from the Public School Activities appropriation to the State Aid Funding Formula that provides the bulk of money to school districts.

Each line item in School Activities took a minimum 3-percent cut, which includes such programs as alternative education, Teach for America, the early childhood initiative, Sooner Start and the Oklahoma Arts Institute. Four line items are contributing well above 3 percent to cushion a hit on the funding formula. In addition to the transferal, the board approved a $3.9 million cut in the School Activities appropriation.

After the transfer, the funding formula — also known as Financial Support for Public Schools — takes a $25 million funding cut.

Flexible Benefits Allowance funding to districts will be lessened by $12.4 million, a 3-percent cut. The cuts will be reflected in the next six monthly payments to school districts.

On Dec. 23, 2015, the Oklahoma Secretary of Finance declared a General Revenue failure and instructed all state agencies to reduce specific appropriation accounts by 3 percent. Agencies were also required to submit their proposed plan to the state by Jan. 7.   The State Board of Education on Jan. 7 approved a 3-percent budget cut for Oklahoma’s common education system.

State officials are predicting a $1 billion budget shortfall for the next fiscal year out of a discretionary budget near $7 billion.

In the wake of a substantial decline in state revenues, the Oklahoma Secretary of Finance declared a General Revenue failure and directed all state agencies to cut their current fiscal year budget by 3 percent.  For preK-12 public education, that requires a mandatory cut of $46.7 million for the remaining six months of Fiscal Year 2016, which ends June 30.

The Board didn’t eliminate any programs but did loosen the requirements on how some funds are spent. The boards transferred nearly $300,000 from STEM-Ready Schools, which offer support and resources for math and science teachers. Charter schools will also get cut.

If athletic programs are cut, that will be decided by local districts and not the state. Officials said revenues from the “Oklahoma lottery ‘for education” are a “tiny percentage” of funding for common education.

More cuts are expected as the State Board of Equalization indicated that a revenue failure is likely for a dedicated revenue stream dubbed the HB 1017 fund.