SCHOOL MONEY ON THE WAY; FINANCES STILL TIGHT

Cape Girardeau schools can loosen the strings of the year-long spending corset, thanks to word last week the state would finally release $1.83 million in aid promised last year.

But promises of the money's arrival have come often, and administrators said they won't recommend any additional spending for the next school year until the money is in the bank. There also are no plans to back off from a tax increase proposal voters will consider Aug. 7.

"I hope it's not good news that ends up undermining better news," said schools superintendent Dan Steska. "In the long term, the operational needs are really what will be affected by the tax levy."

Steska said the late-arriving state aid will pad the district's skimpy savings, but it's not new money to be added to the budget for reoccurring costs.

If approved, the 58-cent tax hike would provide about $19 million in additional funding over five years to cover increased fuel and utilities costs and salary increases for staff to make the district more competitive with neighboring schools.

Steska said he hopes voters won't think the tax levy is unnecessary "or take it lightly and not vote. It's great news on a temporary basis, but it's really just paying back money we've already spent."

Jana Jateff, mother of a ninth-grade student, said she doubts voters will understand the difference in the state aid and the tax proposal.

"I think it would be helpful for them to try and educate people, but I don't even know how they'd go about trying to get the word out," she said.

Steska said he plans to continue the low-level campaign for support the district has used so far. District staff and other supporters are making personal contacts to garner support for the measure, which requires a simple majority for passage.

Spending controls

The district would have been in the red and risked state takeover had school leaders not put stringent spending controls in place during the past school year.

School business manager Rob Huff was responsible for denying all but the most necessary expenditures. He said the on-again, off-again nature of the funding made for some tense moments this year.

"We'd almost given up on it," Huff said. "We tried to keep our hopes up about it, but we just weren't confident it was coming."

Huff plans to remain cautious even after the money arrives by keeping budget-cutting measures in place as much as possible.

"It would be irresponsible to put the money toward new spending in any way because we'd turn around and the money would be gone," said Huff. "Having it still won't put us anywhere near where I'd like to see us in terms of fiscal ability."

Years of tight funds

The school district's funding has been tight following several years of deficit spending and cost overruns on most of the projects undertaken in an aggressive building program begun in 1997.

Problems worsened in 1999 after bids for a new Career and Technology Center came in as much as $3 million over estimates. The project was scaled back but proceeded after assurances from state education officials that the state historically has picked up the remainder for vocational projects that exceed estimates.

That additional money was held up while lawmakers bickered over budget surpluses and shortfalls and tobacco settlement proceeds.

In the meantime, the district had to pay its bills and faced a budget that would result in a possible financially stressed designation, which would mean state takeover.

Jateff applauded the district's ability to bounce back from a $1 million budget loss.

"I'd hate to be in their shoes in terms of trying to know how to plan," Jateff said. "I think it'd be difficult for anyone to know how to budget or operate for their fiscal year if they don't know if the money's reliable."

Districtwide success

Their success was a districtwide effort. Committees cut spending creatively, trying everything from washing mop heads in-house to canceling plans to order textbooks.

The cutbacks worked, reducing the $27 million budget by about $800,000 and keeping funding reserves at safe levels -- barely.

"Some of it was actually savings, but some was a postponement of things we should have purchased," said Steska. "We're still going to proceed very conservatively."

The state can takeover a school district when reserve balances dip lower than 3 percent of the annual budget. Huff said the district ended the fiscal year June 30 with balances at about 3.5 percent, about two tenths of 1 percent from estimates made two weeks ago.

The additional state aid should bring reserve balances up to about 7.5 percent of the budget.

Budget squeeze timeline Timeline for Cape Girardeau schools budget squeeze

APRIL 1997: Voters approve $14 million to fund, among other renovation/new construction projects. Missouri legislators pledged $3.1 million, one-half the estimate, toward construction of a new vocational school.

JUNE 1999: Bids for the project, expected to cost between $7-$8 million, range more than $3 million higher. Following revisions, the school board approves a bid of $10.9 million.

AUGUST 1999: State education officials agree to request $1.83 million in additional construction costs in their annual budget for the next fiscal year, but neglected to include the project in its budget request. Lawmakers eventually apiproved a $1 million capital improvements allocation.

SEPTEMBER 2000: Funding held up after two lawsuits brought by Missouri business interests and two Republican state lawmakers challenge the state's calculation of revenue under the Hancock Amendment, which limits the growth rate of state revenue. The lawsuits claim the state incorrectly figured the amount owed to taxpayers in order to keep refunds as low as possible.

MARCH 2001: Missouri Supreme Court clears way for capital projects allocation, but Gov. Bob Holden says the money might be needed to cover a budget shortfall.

JULY 2001: Gov. Holden agrees to give out funding for several approved projects, including Cape's $1 million allocation. The remainder of the money was included in the state education department's budget for the coming year.