Kalispell Public Schools will operate on a $72.9 million budget for the 2021-22 school year, with a shortfall balanced by federal Covid-19 relief funding.

The district also will delay imposing a $557,158 elementary levy Kalispell voters approved in May, following a school board decision on Aug. 10. Factoring in the decision was that a $1 million deficit will be covered by Covid-19 relief funding, according to Gwyn Andersen, the district's clerk and director of business services. The district has five years to impose the levy.

State funding and property taxes are the primary sources of revenue for the budget. The high school district and the elementary district (which includes the middle school) operate on separate budgets.

Property taxes accounted for about 36.5% of funding for the elementary district budget and 36% of the high school budget.

The elementary district will operate on a $34.9 million budget for the 2021-22 school year. That's a $987,351 million increase from the 2019-20 school year.

The high school district's budget is $38 million. That's a $3.8 million increase from the last school year. Andersen said the large increase came from a bump in enrollment, which is tied to the amount of state funding, and minor increases across funds.

"The levies remain certainly level even though there's a $3 million increase because of taxable value increases," Andersen said.

Since 2019-20, the taxable value has increased across the board by about 16%.

While budget accounts for the bulk of the cost to operate a school district, there are also cash funds for food service, student activities, employee health insurance, traffic education, endowments and an interlocal fund. It also contains the Covid-19 relief funding known as Elementary and Secondary School Emergency Relief, or ESSER. In total, cash funds contain $32.2 million.

The Covid-19 relief funding, however, is only a stopgap measure to solving budget shortfalls since it ends in 2024, or what Andersen referred to as the "ESSER cliff."

Happening around the same time, the district anticipates a decrease in state funding, which is based on a formula that averages three years' worth of enrollment data with the intent of preventing significant fluctuations in funding year to year. With the pandemic, enrollment has taken a turn.

"That three-year rolling average is what's holding us up, but two years from now that last high [enrollment] year is going to drop off and our three-year average is going to be three low [enrollment] years," Andersen said.

"We hope to be doing things to address that this year and the next year," Andersen said. "We're not going to wait until it's a crisis."

Projecting to the 2022-23 school year, the elementary district may face another $1 million deficit even if the district decides to impose the $557,158 general fund levy.

Without a voter-approved levy in the high school district, a $1.2 million deficit is projected in 2022-23

The projections take into consideration a 1% enrollment growth, salary increases, Covid-19 relief funding, utilities and the previous school year's budget shortfalls.

Reporter Hilary Matheson may be reached at 406-758-4431 or [email protected].