BOISE — Gov. C.L. “Butch” Otter’s proposed budget includes something that surprised many focused on Idaho education policy: It recommends no increase in discretionary funding — state funds which come to school districts with few strings attached and can be spent in a variety of ways depending on local needs.
Overall, Otter’s budget would mean $14 million less in such locally controlled funding relative to that proposed in Superintendent of Public Instruction Sherri Ybarra’s public schools budget.
Discretionary funding underwent severe cuts during the Great Recession, as lawmakers struggled to absorb massive losses in tax revenue. Since then funding has been steadily rising as lawmakers sought to fill in the hole the recession created. On a per-classroom basis, discretionary funding has reached pre-recession levels, but local district officials say it hasn’t kept up with rising expenses, particularly for health insurance. Otter’s budget, they said, would leave them with a shortfall and reduced control over their budgets.
Increases in discretionary funding have been a top priority for superintendents and teachers, who argue it’s a key component of local control, allowing districts to tailor budgets to their needs. Ybarra proposed spending $7.1 million more for that purpose in the coming year, bringing the total to just under $425 million, but Otter’s budget includes no increase.
And Otter’s budget doesn’t include any funding for a subset of discretionary spending created last year, which is meant to offset the rising costs of health insurance. Ybarra proposed distributing to districts $7.2 million in the 2019 fiscal year, but Otter has proposed spending nothing. Without additional state funding, the added cost of rising health insurance premiums would either fall on teachers or other areas of local budgets.
In a statement, Ybarra said it’s “not disappointing” when her priorities don’t precisely match Otter’s, and she praised the governor for making education his top priority. But she said she hopes increases in discretionary funding will be included in the final public schools budget.
“This is just the beginning of the budget-making process, and I still hope to secure more money to help our school districts and charter schools cover their increased costs of staffing, health insurance and other operating costs,” she said.
In an email, spokesman Jon Hanian said Otter wouldn’t recommend increasing discretionary funding without a rewritten state funding formula in place. An interim committee, whose co-chairmen are Rep. Wendy Horman, R-Idaho Falls, and Sen. Chuck Winder, R-Boise, has been working on the task, but a final formula isn’t expected for at least a year.
The news of Otter’s recommendation was met with trepidation by some school district finance officials.
“That (is) not something that I would support,” said Carrie Smith, director of human resources and finance for Idaho Falls School District 91.
In 2008-2009, Smith said, about 28.5 percent of the discretionary funding the district got from the state went to health insurance costs. Now, 41 percent of that money does, taking a roughly $2,500 per-classroom bite out of the amount available for other needs.
“I think it’s worrisome to see (discretionary) funding … frozen,” Smith said. “And when we worked with … legislators, I know that they understood our plight. There were districts from all over the state that commented on how insurance had eroded some of the buying power we had. I felt like they had a commitment to make sure that we didn’t lose buying power with our operational funding.”
Horman, a member of the Joint Finance-Appropriations Committee who carries the public education budget in the House, said Otter’s request to zero out discretionary funding increases this year came as “a surprise.” But she emphasized that the Legislature holds final control over the state purse strings.
“The governor’s budget proposal is just that — a proposal,” she said. “JFAC will consider his recommendation and work collaboratively to develop an education budget that I am confident will meet the needs of Idaho students and teachers.”
Districts use discretionary funds for a variety of needs — utilities, property and liability insurance, building supplies, some employee health insurance and transportation expenses.
“It’s pretty much everything other than the salaries and benefits,” said Guy Wangsgard, chief financial officer for Bonneville Joint School District 93.
District 91, for example, uses it to cover classroom supplies, custodial work, textbooks, computer resources, utilities and day-to-day maintenance costs, Smith said.
“That operational funding is stretched very thin over a large amount of different items,” Smith said.
Even if the state’s allocation stays the same, some of those costs will likely go up next fiscal year, although Wangsgard doesn’t yet know by how much. He said the district won’t know until spring how much things such as medical insurance and utilities are going up.
Kari Overall, president of the Idaho Education Association, said the state teachers’ union is still evaluating Otter’s budget proposal, but it views district-level control over funding as a key priority.
“The IEA is very supportive of the concept of local control when it comes to education funding and allocation, because local districts know best what the needs are in their particular situation and should have the flexibility to make the best decisions for their community,” Overall wrote in a statement. “In our view, any proposals or ideas that compromise local control and flexibility are problematic.”
Rob Winslow, executive director of the Idaho Association of School Administrators, echoed the sentiment.
“One of our top priorities over the years, and this year, is that we’ve got to see increases in operational funding, in particular for health care premiums,” he said. “We’re certainly hoping the legislature will make some adjustments and put additional funding in that category.”
Reporter Bryan Clark can be reached at 208-542-6751. Reporter Nathan Brown can be reached at 208-542-6757.