DPS expects $22.5 million budget shortage

Increasing expenses predicted to outstrip growing revenues next year

Nancy Mitchell, Rocky Mountain News

Published December 16, 2005 at midnight

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Denver Public Schools officials are projecting a $22.5 million budget gap next school year, a financial state they blame in large part on the thousands of city families deserting the school district or choosing charter schools over traditional campuses.

Superintendent Michael Bennet on Thursday released a first look at the district's projected fiscal picture for 2006-07 and 2007-08, which anticipate shortages each year as rising expenses continue to outpace growing revenues, but did not discuss possible ways to close those gaps.

At least, not yet. That's scheduled for board meetings in January, as he and board members try to balance the books while funding the district's ambitious strategic reform effort called The Denver Plan.

"We're going to fight hard not to increase class sizes," he said, when asked about worst-case scenarios.

School board President Theresa Peña said she wants to stay away from a mechanism used in the past two years - charging schools a "head tax" or a per-student fee to be returned to the district.

"I just can't imagine doing a head tax again," she said.

For Bennet and the board, the challenge is this: How to trim the budget - for the fourth consecutive year - while increasing student achievement and encouraging parents to enroll their children in Denver schools?

"It's that vicious cycle," Peña said. "How do you not harm the integrity of the classroom?"

Officials made it clear Thursday that DPS' flat enrollment is a key contributor to the consecutive budget gaps, since state education dollars follow students.

"The real solution is for us all to work together on enrollment," said board member Bruce Hoyt. "It's the only way we're not going to be (in this situation) next year."

Enrollment in DPS has increased by an estimated 449 students in the past four years to slightly more than 73,000 pupils. Based on U.S. census data, district officials believe another 20,000 school-aged children live in Denver but choose not to attend city schools.

Also, the enrollment in Denver schools is changing. More families are choosing alternative options, such as charter schools, contract schools and online learning. The number of students enrolled in DPS' traditional schools has declined by 3,670 students since fall 2002.

At the same time, the number of students enrolled in other options, largely charter schools, has increased. Growth in DPS charters has soared by 3,761 students since fall 2002, up to 6,213 this fall - or about 9 percent of overall district enrollment. The trend is projected to continue, with another 761 charter students next fall and another 771 students in fall 2007.

"They're obviously filling needs that are not being met by the system," said Jim Griffin, executive director of the Colorado League of Charter Schools.

DPS officials say the charters are a drain on the district's budget. Under state law, Denver charter schools receive, for each of their students, between 92 percent and 95 percent of Denver's $6,600 per-pupil funding allocation from the state.

That means, as the number of DPS charters grows to 20 next year, "the fixed costs for the district each year gets spread over a smaller student base," said Budget Director Rich Allen.

Allen identified three other major contributors to the 2006-07 gap and a projected $8.5 million budget gap in 2007-08: increases in retirement costs, raises for employees and repairing a past practice of using one-time funding to pay for ongoing expenses.

School district budget issues

Denver Public Schools officials are projecting a budget gap in 2006-07 as expenses outpace revenues by an estimated $22.5 million. They say flat enrollment is a key contributor to the problem since, in Colorado, education dollars follow students. October student counts tell the story:

Type of school 2002 2003 2004 2005 Change

Traditional 70,038 69,155 66,938 66,368 -3,670

Charter 2,452 3,033 5,230 6,213 3,761

Online 127 301 336 400 273

Contract 0 0 397 85 85

Total 72,617 72,489 72,901 73,066 449

Source: Denver Public Schools

mitchelln@RockyMountainNews.com or 303-892-5245

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