Every program and department in Colorado Springs School District 11 is coming under scrutiny this fall as the district prepares for up to $15 million in cuts to the 2010-11 budget.

“We are talking about a very dire budget situation,” said Glenn Gustafson, D-11’s chief financial officer. “We’ve been making cuts and the easy stuff is gone. Now we have to talk about the hard stuff.”

That would include jobs and salaries, because about 85 percent of the budget goes to pay and benefits, he said.While school officials throughout the area have been warning of pending financial woes because of a massive shortfall in money coming from the state, Gustafson last week gave the D-11 board the first look at some potential scenarios.

He said under the best scenario, K-12 education would lose about $150 million in state funding – about $180 per pupil. In the worst case, it would lose $350 million or $450 per pupil.

Gustafson said he’s expecting something in the middle, probably a $250 million reduction in K-12 education spending, or about $300 less per pupil.

That would translate to about $8 million less for D-11 next school year, but other factors will affect the budget, including a likely requirement to boost district contributions to the Public Employees Retirement Association by 1 percent next year to make up for losses on PERA’s investments during the recession.

Add increased costs for health insurance, gasoline and utilities, and the district likely will have to trim the $8 million and reappropriate another $2 million to $4 million to cover increased costs. But the cuts could go as high as $15 million, he said.

This year’s general fund budget is $243 million, including $24 million in reserves that can’t be used. That’s up slightly from the previous year, not accounting for inflation or such things as increased fuel costs.

The operating budget is $219 million, and a $15 million cut to that amount would be nearly 7 percent.

The board last spring cut about $3.5 million before the budget was adopted in June.

Superintendent Nicholas Gledich said he’s directed the administration to begin identifying potential budget cuts now so there’s plenty of time for board review and public input. He’s also told staff to look for savings and efficiencies this year that could help blunt future cuts.

Gustafson said he is developing a rubric to assess every program that gets money from the general fund. A district evaluation team and the District Advisory Accountability Committee will independently use the rubric to score programs against the district’s goals and priorities to develop a list of potential cuts.

The board will begin to consider the proposed cuts in January, well before work on developing the budget begins in March.

At a work session last week, board member Bob Null asked how the rubric was developed and whether the board would be able to weigh in on it before the evaluation begins. Gustafson said he drafted it, and revisions suggested by other staff were being incorporated. He added that board members could review it, and the DAAC — a citizen committee that advises the board — could change it or come up with its own measurements.

Board members also questioned whether there might be a legal fight over state funding, because the governor’s office has said it plans to adjust the formula used under Amendment 23 to determine per pupil funding so that funding will decrease. Amendment 23 requires K-12 education spending to increase each year by the inflation rate, plus 1 percent. The 1 percent factor is to expire after next year.

Gustafson said legal action is possible, but added that the governor’s office received legal advice indicating that it can adjust the formula, although details have not been released. He said the cuts to education are being forced by the state’s shortfall, and that while the Colorado Constitution requires the state to fund education, the governor has pointed out that it also requires the state to ensure the welfare and public safety of its citizens.—Call the writer at 636-0251.

BUDGET TIMELINEOCTOBER: Develop rubric to assess every general fund program against the district’s seven goals, with particular emphasis on the goal to increase student achievement.NOVEMBER: Training for the evaluation team and DAAC; work begins on program evaluation. Budget department scores rubric, and it is reviewed and adjusted by DAAC and superintendent’s team.DECEMBER: Budget department summarizes proposed cuts, which are evaluated by superintendent and division heads. Prioritized cut list publicized.JANUARY: Board of Education work session on proposed cuts.MARCH: Preliminary board action on cuts so budget development can proceed.SPRING: School finance act must be approved by Legislature before it adjourns in early May. This sets the state funding level for districts.MAY 26: Proposed budget delivered to board.JUNE 2: Board work session on budget.JUNE 9: Board action on budget modifications.June 23: Board adopts 2010-11 budget, for fiscal year beginning July 1, 2010.

Don Coyhis is the founder of local nonprofit White Bison. He won a $100,00 national award for social innovation. Photo by JERILEE BENNETT, The Gazette