Federal coronavirus relief dollars are helping VCS have a balanced budget next fiscal year, but when those dollars run out, the district will need to find a new funding source.
Federal coronavirus relief dollars are boosting Volusia County Schools' budget, but come fiscal year 2026 when those dollars are no longer available, the district will need to have a new funding source in place to cover operational costs.
VCS is stretching the estimated $223.5 million in ESSER funds for the next couple of years, but if it wasn't for those funds, Lisa Snead, the district's chief financial officer, said during a workshop with the School Board on Tuesday, May 10, that they would be facing a financial problem — a -9.92% financial condition ratio, a result of a $79.7 million budget shortfall.
"However, since we do have the emergency relief dollars and we are utilizing them to help with that scenario," Snead said. "You can see that, although we're only required to set up a budget for one year, we're projecting outwards that we can position ourselves for how we should deal with this and we'll be keeping a close pulse on what our enrollment looks like."
What are ESSER funds? Congress passed three stimulus bills in 2020 and 2021 that, according to the National Conference of State Legislatures, provided almost $190.5 billion dollars to the Elementary and Secondary School Emergency Relief fund, which in turn provided coronavirus aid dollars to states for distribution to its school districts and other education agencies. Volusia's share amounts to $15.3 million in ESSER I funds, $64.1 million in ESSER II funds, and $144.1 million in ESSER III funds, per the Florida Department of Education.
And while Volusia is receiving about $39.5 million more in Florida Education Finance Program funding next fiscal year, the majority of those funds — $31.7 million — have to go toward the Family Empowerment Scholarship program. With over $14.8 million of FEFP funds earmarked for items such as specialized academic instruction, class size and teacher salary enhancement, the district will have a FEFP funding deficit of just over $7 million.
Despite this, because of the ESSER funds, the district does have a balanced budget set out for next year. School Board Chair Ruben Colon said the ESSER funds were meant to help meet the needs of students because of learning loss due to the pandemic, and they are using them for such purpose.
"The needs are greater and the reality is that we have to spend the money," Colon said. "... I'm glad to hear that for the first time as far as I can remember, we're not talking about a deficit, and that is a plus."
Snead explained that the district could sustain itself through fiscal year 2025, one year past when the ESSER funds are budgeted to run out, but by fiscal year 2026, the district is predicting a $53.3 million budget deficit. This is because ESSER dollars are being used on reoccurring costs such as staffing, which accounts for over 80% of fiscal year 2023's overall expenses.
"Since the majority of our budget is people, when we provide compensation to our people, that's a direct benefit to the students because we are keeping and retaining quality people to provide education to our students," Snead said.
Some of the staffing expenses impacting next year's budget include $7.7 million to add 24 schools to the custodial in-house program and $2.6 million to increase all employee wages to $15 an hour by October.
School Board member Jamie Haynes said she wants to focus on staffing classrooms above all other positions. She recalled working at the district during the 2008 recession and seeing teachers with under three years of experience be fired, as well as principals tasked with covering two schools, and said she didn't want the district to do that again.
"I don't want anyone sitting here in [fiscal year] 26 and the bottom falls out," Haynes said. "We're not being financially and fiscally responsible if we don't already have a plan."
Colon agreed with Haynes.
"If we know that we have this many vacancies at a certain point, then at some point we need to say, 'What are the positions that can meet the criteria of that classroom position?' and make a determination on whether or not the district can do without," Colon said.
Snead said her report was preliminary and that she would be coming back to the board in June with more numbers.