For a third consecutive year the South East Cornerstone Public School Division is going to send a deficit budget to the Ministry of Education for approval.
The 2021-22 budget includes an operating cash deficit of nearly $4.6 million and that is similar to the 2020-21 budget deficit approved last year.
While Cornerstone had been fortunate enough to have operations surpluses for a few years following the amalgamation of school divisions into more regional entities, there could now be a growing feeling of anxiety among board members and financial administrators.
“It’s not desperate … yet, but there is some angst. We can’t continue down this path without some cash infusions or making even more tough decisions,” said Shelley Toth, the division’s chief financial officer and superintendent of division services.
So far Cornerstone has been able to maintain a good student to teacher ratio in classrooms and have maintained all programs, but unless provincial funding is hiked to keep pace with the day-to-day operational needs, there could be tougher times looming in the not-so-distant future.
Without a lot of financial autonomy with the province taking over most of the fund-raising elements of school divisions a few years ago, Cornerstone, along with a number of other rural divisions, is entering a new era of anxiety.
Toth made a power point presentation to the board members on June 16 during their monthly open business meeting. She noted that total revenue for 2021-22 is expected to be $102.6 million while operating expenses will come in at $112.2 million, showing an overall deficit of $9.57 million.
Looking at it on the operations side, Toth said the operating cash deficit will be around $4.6 million, about the same as last year.
“Unfortunately, a balanced budget is again, not possible,” she told the board. That is mainly due to increases in salaries and benefits for non-teaching personnel, who make up about half of the total work force of 1,080 full time equivalent positions, as these wage increases have not been adjusted for in the provincial funding formula.
There are also pressures being applied by natural inflation while the provincial funding level for Cornerstone was reduced by 1.2 per cent or $1.1 million.
The hard-earned surplus that once amounted to well over $30 million will be reduced to just under $17 million following these consecutive deficit arrangements.
Provincial funding amounts to 95 per cent of the total revenue stream, or about $97.3 million for Cornerstone. Salaries and benefits for teachers alone takes up $81.8 million of that income while another $22.6 million is used for goods and services and $7.1 million is gobbled up by amortization of capital assets and $600,000 is spent on servicing debt interest on capital loans.
Capital expenditures in the 2021-22 budget will be a modest $2.4 million with over $1 million of that being required for computer hardware as six schools in the 37-school facilities division are needing technical refreshment and upgrades. Another $1 million is slated to be spent on the purchase of new school buses to replace aging units while a couple of fleet trucks and general furniture and equipment purchases will absorb another $270,000.
“We have found savings in the past, made some drastic cuts, and have managed to maintain teaching positions and programs. The province has covered costs related to recent teacher salary increases, but not others,” said Toth.
Now with a descending surplus and no immediate sign of increased revenues of significance, SECPSD and its administration and governance bodies may have to start looking for even more stringent action plans to meet future education services needs.