Nanaimo school district’s secretary-treasurer has crunched the numbers and predicts a budget shortfall of almost $5 million next school year.
Phil Turin delivered a four-year financial forecast to trustees at last week’s business committee meeting that predicts growing shortfalls over the next four years.
“It’s not exactly Christmas cheer I’m bringing,” he said. “We’re in hot water, based on what I know today.”
Turin said the problem is the district’s funding protection – a special grant given to districts to protect against a drop in funding due to declining enrolment – which will drop by 1.5 per cent of the district’s funding allotment every year. Next year the district loses about $2 million.
At the same time, expenditures are going up – for example, the amount the district pays into the teacher pension plan will go up by about $800,000 next year, he said.
Predicted shortfalls are $4.9 million next year, going up to $7 million for 2014-15; $8.7 million for 2015-16; and $9.7 million for 2016-17.
Turin said staff will now examine the entire budget to determine how to balance the books.
And that’s not the only piece of bad news he gave trustees – the board also learned that the province is asking districts to find savings in this year’s budget to help provide compensation increases for support workers.
“The reaction was pretty instant and pretty hostile,” said Jamie Brennan, school board chairman. “It’s very unreal what’s happening. We’ve been very compliant, we’ve played by the rules and now this, out of the blue.”
Education Minister Don McRae sent districts letters asking that boards develop a savings plan by mid-January that would reach a target of 1.5 per cent of support staff compensation in their districts this year.
The ministry asked trustees to find another 1.5 per cent next year to pay for wage increases for support staff, with the stipulation that service levels must remain the same.
Support worker contracts expired last June and the province’s co-operative gains mandate requires employers to pay for any wage increases within the existing budget.
Turin said for Nanaimo, the savings plan means finding $412,000 out of this year’s budget and compounded with the additional 1.5 per cent, the total savings the district would have to find next year is $824,000.
While he expects to finish the year with nearly $1 million in unrestricted surplus, the plan is to use this money toward next year’s budget.
Brennan said the district cannot find $412,000 in savings without affecting educational services for students.
“There is no slack in our budgets – we’ve been cutting, cutting, cutting for a decade now,” he said. “We’ve developed a budget, the budget is intended to meet the costs. What the system needs for salary increases is new money.”
The board will talk about the request at next Wednesday’s board meeting, but Brennan said the sentiment expressed by trustees so far is not to do anything and continue rolling out the actions required in the district’s newly approved strategic plan, the first of which is developing a 10-year facilities plan by April.
McRae said the province is simply asking districts to do the same thing that other public sector employers have already done.
“We’re not asking them to find more money, we’re asking them to re-task existing money,” he said. “If they can’t, we can assist them to explore other opportunities. I think there’s a real opportunity here to see if we can minimize the burden to the taxpayer.”
McRae said there is no more money from the province and if districts are unable to find the savings, an agreement with support workers cannot be reached.
Tara Brooks, general vice president of CUPE Local 606, said in an e-mailed response that the province’s cooperative gains mandate demands cutbacks from a system that is already stretched to the limit by years of underfunding and that it is the province’s responsibility to adequately fund public education.