The Newhall School District approved a budget on Tuesday outlining rapidly rising special education costs and the future deficit spending that is expected to occur following the upcoming school year.
While NSD’s fund balance will increase by nearly a million dollars this year, the district’s budget states, the balance will decrease by $629,000 in 2019-20 and $839,000 in 2020-21.
Similar to other districts, Newhall district staff said the balance decreases are a result of employee salary and benefit costs increases, as well as declining average daily attendance projections.
The dues for the district’s two retirement funds are set to increase $121,000 from the prior year, meaning the district will contribute $495,275 to retiree health benefits in the 2018-19 school year, the budget notes. However, there will be a much larger increase to costs associated with special education.
The $6.7 million encroachment on the general fund due to special education expenditures is an increase from last year’s encroachment of $6.3 million, according to the district’s report. District contributions to special education have significantly increased since 2014-15, when the district spent $3.6 million, the budget states.
“Special education expenditure budgets will be reduced where possible,” the report reads, “however, special education budgets are developed based on the needs of the students and therefore cannot be reduced to match revenue.”
Despite the expected encroachment on the general fund, the Newhall district will maintain more than $12.7 million in its reserves, according to its recently approved budget. As an added safeguard, the financial predictions for the years 2019-20 and 2020-21 are built with the assumption that less LCFF funding will be received due to declining ADA projections.
“If a decline in enrollment does not materialize,” the budget states, “then the district’s excess reserve will be used to maintain positive cash flow and to ensure funding for more teachers.”
After adoption, the board said the budget could be revised once the state formally adopts its budget for the upcoming fiscal year.
