Community Education

Peninsula School District to eliminate 40 non-teaching positions

The Peninsula School Board on Thursday approved a plan to cut $12 million from next school year’s budget by eliminating 40 staff positions, none of them teachers.

The district needs to make the cuts, Chief Financial Officer Ashley Murphy said, because of lower enrollment coupled with the end of pandemic aid. School districts around the region and across the state are facing similar budget woes, she said.

Salaries and benefits make up 85% of the Peninsula’s current budget of just more than $153 million. Reducing staffing next year in line with enrollment and existing resources will make for a sustainable budget going forward, Murphy said.

Teaching positions spared

The staffing cuts will affect classified employees, including clerical staff, paraeducators and custodians, among others. Certificated instructional staff (teachers) have been spared.

“PSD’s goal is to keep any necessary reductions as far from the classrooms as possible,” said Danielle Chastaine, district spokeswoman. “We are prioritizing levy-promised staffing and programs in our district.”

The largest number of cuts, 24 positions, will be among “clerical and instructional support staff.” The latter are paraeducators who assist teachers in the classroom with students who need extra help, often including those with special needs.

The district also plans to eliminate 8.6 custodial positions and 10 “non-represented employees,” who are not part of a union. The “non-represented classified support staff” includes miscellaneous positions such as executive assistants, aquatics manager and transportation dispatcher. A half-time IT position is also to be cut.

Notifications by end of March

Administrative positions are also categorized as non-represented employees. As a group, they are paid significantly higher than non-represented classified staff. The district did not clarify whether the cuts would impact both categories. Nor have specific job positions been publicly identified.

“We cannot comment on which specific roles will be affected,” Chastaine said.

Also unclear is whether layoffs will be needed. Many of the reductions could happen through resignations and retirements. The district has been working with union leaders on the plan.

“Affected classified and non-represented employees will be notified by the end of March,” Chastaine said.

Lower enrollment the driving factor

Like other districts, Peninsula is seeing a decline in enrollment since the pandemic. When public schools re-opened, some families remained in homeschooling and some moved to private schools. Other students simply left school or are unaccounted for.

About 500 fewer students attend Peninsula schools than in 2019, a 5% decrease. Since the state funds on a per-pupil basis, that means a lower state allocation.

Throughout the pandemic, the state allowed districts to collect money based on 2019 enrollment. The state no longer permits that. And the district has used up extra funds allocated by the federal government to help schools through the pandemic. Existing state allocations don’t cover the district’s current costs.

What about the levy?

The state’s funding formula allows for a certain number of staff for each “prototypical school,” factoring in the number enrolled in elementary, middle school and high school grade levels.

Peninsula and most other districts have determined those staffing levels to be inadequate and historically have leaned on local levies to enhance salaries and pay for additional positions not covered by the state.

Voters in February approved renewal of Peninsula’s local operations levy, which makes up about 18% of the district’s budget. In addition, the district passed a six-year technology levy.

Without the levy, the district would be facing an even more bleak budget scenario, Murphy said.

Even with the levy, however, the district is on a trajectory to exhaust its reserve fund, the cushion that makes a district solvent as revenue fluctuates.

Districts typically use reserve funds to balance the budget year by year, and like a savings account, the amount goes up and down. But the current trend shows levy funding won’t be enough to stop Peninsula’s bleed. If the districts uses its reserves, they’d be depleted by the end of 2025.

Right-sizing needed now

The district pays an average of $131,390 in salary and benefits for teaching positions, 40% more than the state’s average of $78,399. There’s a 38% gap for classified staff and a 27% gap for administrative positions.

The state’s salary and benefit schedule includes cost-of-living increases. The district must fund COLAs for positions the state doesn’t fund, so the gap increases over time, Murphy explained.

Peninsula’s levy collections are tied to enrollment and capped at a per-pupil amount of $2,500 adjusted for inflation. So, the end of the pandemic waiver also reduced the total levy the district can collect. District officials anticipated this and lowered total annual collection amounts on the ballot.

On top of all that, pending legislation would limit Peninsula’s ability to collect extra state funds based on the training and experience of its teaching staff. The estimated budget hit is $2.5 million less in revenue. The district is tracking other bills some of which could negatively affect the district’s finances or have little positive effect.

A sustainable plan

The dismal fiscal scenario didn’t catch Peninsula’s finance officials by surprise, Murphy said. Over the past year, they’ve been refining their projections. They will continue to do so through August, when staff finalizes the budget and the board approves it.

Murphy said she and her staff have based the current plan on conservative estimates for enrollment and revenue to avoid a shortfall in the upcoming school year. And they’ve structured to plan to “right-size” the budget in years to come “so that we won’t be sitting back here at this time next year discussing this once again,” Murphy said.

“We fixed the $12 million shortfall, and we did it in a way that we can repair our declining fund balance and then we can remain sustainable in future years, assuming the state Legislature does not come through and start taking more stuff away. I just want to put that caveat out there.”