As the Summit Board of Education prepares to vote on a multimillion-dollar budget later this month, officials are raising concerns about spending levels that are likely to be unsustainable in the near future. 

The district’s 2023-24 school year budget is likely to approach $53 million, a roughly $5 million increase from last year. Despite an influx of funding from property taxes and state spending, officials estimate the district’s spending will continue to exceed its revenues, putting it on track to hit a deficit as soon as the 2025-26 school year. 

Board members, who will be voting on June 22 to approve next school year’s spending plan, said they are seeking a course correction. 

“I am very uncomfortable with continuously going into the hole further and further along without a plan in place to get back out of it,” said board member Johanna Kugler. 

Board member Julie Shapiro, who during the April 26 board meeting called for seeing an “alternative budget,” reiterated her stance. 

“Can we claw back on some things, and what does that look like?” Shapiro said. “It might not look pretty, but I would just still love to know what that looks like so we can know.” 

According to Finance Director Kara Drake, the district is expected to receive just over $4 million in new revenue from the state. Revenue from property taxes, which account for the vast majority of the district’s general fund, are also projected to increase by more than 36% next school year — totaling about $45 million.

But amid inflation and the rising cost of living in Summit County, spending has continued to surpass those revenue increases, Drake said. 

District leaders, including Superintendent Tony Byrd, have pledged to raise salaries next school year in a bid to attract new hires and retain current employees. 

That includes increasing principal and assistant principal pay to 75% (25% above average) of the market rate and support staff to 60% (10% above average). The market rate is determined by comparing pay to a handful of comparable districts in mountain resort regions and the Denver metro area. 

The district is also planning to boost hourly pay for bus drivers to $28.25, a roughly $5 increase, amid a years-long driver shortage that has threatened routes. District leadership remains at an impasse with the teachers union over salary increases. 

Salaries and benefits are projected to eat up nearly 90% of the 2023-24 budget, according to Drake. Per district policy, officials must also retain at least 7% of annual revenues for the district’s fund balance, which acts as its savings account. 

As spending exceeds revenue, the district has continued to siphon money away from that fund year-over-year. While next year’s budget will maintain a fund balance of just over 7%, it could dip below that in 2024-25 and ultimately become negative if costs continue to increase. 

“If the light doesn’t come, meaning more money, next spring … we’re going to be looking at some significant challenges,” Byrd said. 

To avoid a deficit, annual spending would need to remain flat after next school year, according to Drake. The district may also have to freeze hiring or consider cuts, something board members expressed unease with. 

“If we get to a point where we’re just cutting positions … we’re then losing the structure of educating our kids,” said board member Chris Allemand, adding such a scenario would put “students, who are on the front line, in turmoil.” 

With a vote coming within weeks, board members acknowledged there would be little time to make serious budget amendments for next year. But they signaled that efforts to rein in spending are likely to dominate subsequent discussions.

Byrd said he was committed to only supporting budgets that maintain the district’s fund balance at 7%, meaning significant changes would need to be made to the 2024-25 spending plan. 

Byrd maintained that in his career as a superintendent, “I’ve never signed off on anything that went below the parameters that were provided by the board.” 

“Next year, we’re within our terms,” Byrd said. “But those parameters predict not a great situation after next year.”