OLYMPIA — A bookkeeping change to help the state balance its budget next summer already is causing concern for area school leaders.
Gov. Chris Gregoire wants to delay a scheduled payment to all 295 school districts by one day so the state can end the 2010 fiscal year in the black.
She is proposing to push back the $379 million payment from June 30 — the last day of the current fiscal year — to July 1. This would let the state wipe a large expense off the books this budget year and push it onto the next.
Because Washington operates on a two-year budget cycle, the maneuver does nothing to close the $2.6 billion deficit facing the state through mid-2011. The accounting advantage is that a sum equal to nearly 15 percent of the shortfall won’t need to be covered as quickly.
Doing so would put cash-strapped districts in a bind.
Each month they receive allotments of state dollars that they use to pay salaries.
Even a one-day delay will force some districts to get a short-term loan to ensure no employee’s check bounces because of a lack of funds in the district’s treasury.
“Some of our districts are going to have to scramble,” said Snohomish County Treasurer Kirke Sievers, whose office distributes the funds to districts. “I’ve never seen the state move the money around like this. We’re still bewildered with what the rationale is behind this.”
In Educational Service District 189, which encompasses schools in Snohomish, Island, Skagit, San Juan and Whatcom counties, 17 of 35 districts may need short-term assistance to make ends meet, according to ESD superintendent Jerry Jenkins.
One of those is the Oak Harbor School District. Superintendent Rick Schulte estimates his district will be about $1 million short of its needs.
“We may be able to borrow that amount from our capital projects fund for one day,” he said. The money would be paid back with a day’s worth of interest, he noted.
By law, on the last day of each month, Washington school districts receive an allotment of state funds known as an apportionment check. The Legislature will need to amend the law to allow this one-time change.
Districts with healthy reserves will face less of a challenge coping with the delayed arrival of the monthly check. For some, an infusion of levy dollars from April property tax payments will make the difference.
“We’re fortunate that the tax collections should carry us over that one day,” said Jeff Moore, executive director of finance and operations for the Everett School District. “We believe in this circumstance we will be OK.”
The Mukilteo School District is not fretting, either.
“We are fortunate enough to have a fund balance that will allow us to cover it,” district spokesman Andy Muntz said Wednesday.
Jenkins is doing his best to keep it in perspective.
“Given the $2.6 billion shortfall that needs to be made up, this is a headache but a manageable headache,” he said.
School leaders are working with staff in the offices of the governor and Superintendent of Public Instruction on other changes to let districts move money between accounts more easily and without having to pay interest.
“If we work together to ease the loan process, this will work out. If nothing is done to simplify the process, the headache will become a migraine,” Jenkins said.
Jerry Cornfield: 350-352-8623; jcornfield@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
