The Eanes school board may take another look at how the district handles its fund balance, making staff and program cuts as early as next year.

In a meeting May 26, Superintendent Nola Wellman showed the board a tentative plan to spend down the district’s general fund balance by an estimated $3 million in the next four years, reducing that rainy day fund balance to $22.9 million by the 2014-15 school year.

New school board president Paul Stone said he expects further discussion as to whether the board should change it’s direction to administration that the district pull money from the fund balance to protect current programs, yet keep that balance above $18 million-$19 million for the next five to six years.

Board members stretched tentative feelers during the Wednesday meeting as to where the line should be drawn between providing a “soft cushion” for the district to ease into budget cuts and providing an adequate financial safety net against bad economic times in Texas.

“It is a balancing act between how much to spend on employees and programs to continue on our path of excellence versus available dollars,” Stone said. “How long do we make the planned buffer in our fund balance last? I personally believe we need to continue tightening our spending belts now, while the state searches for a long-term solution to education finance.”

Board member Robert Durkee also expressed concern about the escalating state deficit; its impact on school finance and the school district’s current plan to spend down some of the fund balance to protect programs and teachers.

“With the stroke of the pen, those guys downtown could make our lives miserable,” Durkee said.

Earlier in the meeting, district finance director Larry Keiser told the board that he expected to see a significant reduction in tax revenues this year because of falling property values in the area. Keiser said maintenance and operation tax revenue could drop by as much as $6,471,745, down to $92,458,633 – an early estimate for tax revenues next year.

Wellman told board members she has been working under their direction to develop a multi-year fund balance plan that allowed the district to maintain current educational programs and ease into the impact of state under funding.

“The funds are there to protect the programs,” she said. “If we start cutting teachers and programs to save funds, then I am confused about our mission.”

Wellman said the proposed budget plan to use $3 million of budget over the next few years already included cuts to slowly get closer to a balance of annual expenditures and true revenues. She told board members that she would like to have two years to try and slowly cut into the district’s expenses. Any real reduction of expenses would mean a reduction in the district’s staff, she said. Like most school districts, Eanes carries an estimated 85 percent of annual expenses in salaries. Cuts in staff mean cuts in current programs.

“We can try to preserve programs for kids as long as possible,” Wellman said. “In (the) 2011-12 (school year), there will be cuts. Next year, it will be painful for quite a few. Everybody is taking some reduction. But, programmatically, (next year) we will protect ourselves.”

The painful reductions that Wellman referred to included cutting one day out of the staff calendar next year and having employees contribute more to the cost of their health care, both measures approved by the school board at the recent meeting.

“To get a balanced budget, we would have to start cutting this year,” she said.

Responding to questions, she said that every $1 million in savings would result in the loss of 20 teaching positions. Already, the Eanes Education Foundation funds 20 teaching salaries.

The state of Texas capped funding to local school districts based on 2004 operating costs, yet each year, teachers hope for a salary increase and the cost of supplies and services to provide education rise.

“As long as we are giving raises and costs are going up (and we have a fixed revenue source), we have to cut people (to maintain a balanced budget),” Stone pointed out.

He said the school board would continue to discuss how deeply the district should cut into it’s fund balance over the next few years while waiting for relief from the state.

“No one disputes the need to have a balanced budget for the long term,” Stone said. “This is not a new challenge for EISD. We have figured this out before, and we will figure it out again.”

The school board will resume discussion of budget finances, the district’s master plan and a bond process at a study session on June 14 at 7:30 a.m. in the administration building, 601 Camp Craft Road.