Eureka Springs school board weighs options
EUREKA SPRINGS -- The Eureka Springs School District may get some small relief in having to make its first $825,000 payment to the state in excess millage revenues, Superintendent Wayne Carr told the school board at a special meeting Tuesday.
Last Thursday the state Department of Education, backed up by an opinion from state Attorney General Dustin McDaniel, informed Eureka Springs and three other school districts they were making too much money in basic state-required educational millage revenues and would have to give over the excess during this and subsequent fiscal years for redistribution to poorer school districts.
The state's formula decrees a minimum of 25 mills to generate a "foundation" amount of $6,023 per student. Districts that cannot generate this amount have the shortfall made up by the state.
Eureka's 25 mills generates $7,291 per student, and the state wants that excess to go to poorer districts in order to decrease making up the shortfall out of other tax revenues such as sales and income tax.
For Eureka, the excess means $825,000 per year. Eureka's reserves are at $1.5 million. Unless the school district can drastically cut its budget, such payments would bankrupt it in less than two years.
Tuesday State Education Commissioner Tom Kimbrell issued a statement saying "It is the intent of the ADE to work with these four districts in an effort to recover these excess funds in accordance with the law and in a manner that will hopefully minimize the financial impact to the districts."
What that means, Carr said, is that Kimbrell offered the possibility of Eureka stretching out its first payment over five years. The amount due by June 15, 2011, would be $165,000.
"Spreading it out would help us to plan and not have to make cuts this year," he said.
But in years two through five, the district would have to fork over $990,000.
Carr acknowledged the district has no choice about paying this money. Local tax collections are wired to the state, which in turn wires back the county's, including the school district's share.
If Eureka were to refuse to pay it, the state would simply withhold it.
Board President Rusty Windle said that in a meeting with Kimbrell Friday, he asked whether the state's goal is equality of all school districts.
"He said yes. So then I asked if there is going to be a state salary schedule? He said, 'Well, no.' Then I asked if we go down to the $6,023 per student, are we going to get funding for buildings? He said, 'We're not dealing with that.'
"If they're talking equality of schools, that's a whole other set of issues that is going to come out of this, and the state doesn't want to look at that," Windle added.
Eureka has had a difficult time competing with other school districts for quality teachers because it cannot offer the salaries teachers in cities like Fayetteville or Bentonville make.
Board and community members discussed strategies for dealing with and possibly contesting the state's decision.
Windle made it clear the new high school will be built, but the plans may have to be modified.
"It's not that we don't build the building, but we might have to look at some of the things we wanted to do with the (half-million dollar federal) stimulus money. We might not be able to," he said.
Carr said he can use the stimulus money for maintenance and operations in order to avoid having to cut too many staff and programs this year.
He thought he might be able to cut $50,000 to $75,000 from the budget this year, but said he and the board would have to look at it.
In the meantime, Carr and board members are continuing to talk with state legislators, the other school districts affected, and attorneys.
It is possible, suggested some community members attending the meeting, that a referendum vote could be put to the people next year.
"Who wouldn't vote to keep their local taxes in their local district?" asked several.