Cherry Creek schools facing budget shortfall; ‘hard choices’ to ponder

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Editor’s Note: Due to a reporting error, a previous version of this story mistakenly stated that Cherry Creek schools will consider reducing teacher’s salaries. Instead, the district will actually consider how to maintain competitive salaries with expected budget challenges.

AURORA | The Cherry Creek School District, one of the wealthiest school systems in the state, faces a budget shortfall and a shrinking student body that threatens the high teacher salaries and test scores the district is known for.

School board members approved a budget Monday night that raises spending by more than $60 million despite a $3.5 million budget deficit plaguing district coffers last school year – with “hard choices” about possible spending cuts to be discussed in the future, according to district Chief Operating Officer David Hart.

The district balanced the budget this year by pulling from a reserve fund, but Hart expects the fiscal situation to worsen. He said that, barring creative solutions, including more revenue from tax increases for residents or statewide school finance fixes, teacher salary quality could be at stake.

Hart said that Cherry Creek schools has pride in having teachers paid higher than their Denver metro peers – if not the highest, but added, “We’re at a tipping point.”

The highly competitive teacher salaries are a huge priority for officials and educators. He said about 90 percent of the budget is spent on classroom instruction in some form.

The average teacher salary for the 2018-2019 school year in Cherry Creek schools was almost $75,000, dwarfing metro-area averages near $60,000.

Cherry Creek Education Association President Scot Kaye did not respond to a request for comment.

Board members unanimously approved the budget in a bulk vote with smaller matters. The spending plan combines about $40 million in general fund increases with $23 million drawn from reserves for the $60 million boost in spending.

The general fund increased from about $428 million to almost $459 million from the 2018-2019 school year to the 2019-2020 year budget, mainly from inflation and state funds disbursed for full day kindergarten.

But the budget stress stems mainly from current and anticipated spending increases and rising property values that could, in turn, reduce the state government’s flow of funding in years to come.

That’s a crucial source of funding for school districts.

The district has also expected enrollment to peak during the 2019-2020 school year and then decline for the foreseeable future, further robbing schools of state funding attached to individual students. Superintendent Scott Siegfried said in March that the declines will be the largest plummet in the district’s almost seven-decade history.

Not only are there expected to be fewer students, reducing state per-student contributions, but the district is expected to see a higher percentage of students who require more expensive, specialized instruction, officials said in March. More students are predicted to require extra English instruction, special education and have mental health needs.

That leaves Cherry Creek officials coping with reduced funding but more unfunded mandates from the state to educate students with particular needs.

Hart said there are “significant adjustments” needed to balance the future budget, including looking for alternative revenue streams by boosting online enrollment, possibly expanding district boundaries and even asking voters for more bond and mill tax increases in November 2020.

Officials have also planned to hire more specialized teachers to fit student’s increasingly demanding needs.

The situation has put the Tax Payer’s Bill of Rights, or TABOR, in the district’s crosshairs.

That constitutional amendment limits governments’ ability to keep tax revenues that have increased from economic growth, not tax increases, to spend on government programs including schools.

Democratic state lawmakers have floated repealing the amendment’s cap on keeping extra tax cash by way of a state-wide vote that could be placed on the ballot in 2019.

Hart said officials are “anxiously awaiting” an effort to do so.

Siegfried told Sentinel Colorado that a budget redesign committee will convene in the fall to figure out how to proceed in this uncertain future.

Hart said public input will be necessary before any cutbacks.

“It won’t be without some significant discussion and ultimately, hard decisions,” he said.