Energy Budget Sufficiency and Insufficiency in Fiscal Year 2001

Results from the survey provide information about the sufficiency of public school districts' budgets to cover energy expenditures in FY 01. The data address questions such as the following:

• How many districts experienced energy budget surpluses and how many experienced shortfalls in FY 01? How large were the surpluses and shortfalls?

• To what factors did districts attribute energy budget shortfalls?

• How difficult was it for districts with shortfalls to respond to increased energy costs, and why did they find it difficult to respond?

Characteristics of Districts With Sufficient and Insufficient Energy Budgets for FY01

The questionnaire asked districts to report the total energy budget for FY 01 and the total energy expenditures in that year. As shown in Table 4, 61 percent of public school districts experienced a shortfall in the FY 01 energy budget; these districts spent an average of about $653,500 (not shown in tables in text) for energy needs during that year. The mean shortfall among these districts amounted to $25 per pupil. Among the 39 percent of public school districts that had sufficient funds allocated for energy for FY 01, there was an average surplus of $14 per pupil in funds initially budgeted for energy needs.

The likelihood that districts experienced an energy budget shortfall in FY 01 varied by district size, with small districts less likely to have experienced a shortfall than either midsized or large ones (56 percent compared with 72 and 80 percent, respectively). Among the districts that had experienced a shortfall, however, the mean shortfall per pupil was higher in both small and midsized districts than in large districts ($36 and $28 versus $21 per pupil).

The likelihood of a shortfall also varied by metropolitan status and region. Urban school districts were more likely to have insufficient funds than suburban or rural districts (82 percent compared with 60 and 59 percent, respectively). Among these districts, the mean energy shortfall per pupil was lower in suburban ($23 per pupil) than in rural districts ($32 per pupil).

Districts in the Southeast were the most likely to experience a shortfall; 81 percent of districts in the Southeast had insufficient funds, compared with 57 percent in the Northeast, 58 percent in the Central region, and 61 percent in the West. However, the size of district shortfalls in the Central region tended to be higher than in any other region ($35 per pupil, compared with $24 per pupil in both the Northeast and West and $20 per pupil in the Southeast). Districts with overall FY 01 budgets per pupil in the mid-level range were more likely than those with overall budgets in the high range to have insufficient energy budgets. That is, 65 percent of districts with mid-level overall budgets per pupil for FY 01 had insufficient funds allocated for energy needs, compared to 52 percent of districts with high overall budgets per pupil.

Districts that allocated 3 percent or more of the overall budget to energy needs were less likely to experience a shortfall than districts that allocated less to energy needs. About half (49 percent) of districts that allocated 3 percent or more had insufficient funds to cover energy expenditures, compared with about two-thirds of districts that allocated either 1 percent or less or 2 percent of their overall budget to energy needs (69 and 68 percent, respectively).

As noted above, the likelihood of an energy budget shortfall varied with district size and percentage of budget allocated for energy. Hence, it follows that the likelihood of an energy budget surplus varied by both of these district characteristics. Small districts were more likely than either midsized or large districts to experience a surplus (44 percent, compared with 28 and 20 percent, respectively). The size of the mean energy budget surplus per pupil was higher among the small districts than among the large districts ($23 versus $10 per pupil).

The proportion of districts that experienced an energy budget surplus was higher among those that allocated 3 percent or more of the budget to energy needs than among those that allocated less to energy: 51 percent, compared with 31 percent of districts that allocated 1 percent or less and 32 percent of districts that allocated 2 percent to energy. The size of the mean energy budget surplus per pupil increased with the percentage of the district budget allocated to energy needs, ranging from $7 per pupil among districts that allocated 1 percent or less to $23 per pupil among districts that allocated 3 percent or more.

Further examination of the relative size of energy budget surpluses and shortfalls revealed few differences by district characteristics (Table 5). Using the median surplus and the median shortfall reported on this survey to categorize districts (small surplus/shortfall vs. large surplus/shortfall), comparisons were made by district characteristics. Among districts that had experienced a surplus, only one difference was detected in the size of the surplus: 57 percent of small districts compared with 40 percent of midsized districts experienced a large surplus. Among districts that experienced a shortfall:

• Small districts were more likely than large districts to experience a large shortfall (54 percent versus 37 percent).

• Districts that had allocated 1 percent or less of the overall budget to energy needs were more likely to experience a large shortfall than districts that had allocated a higher proportion of the overall budget to energy needs (67 percent versus 42 and 48 percent, respectively).

Factors Associated With Insufficient Funds for Energy Needs in FY 01

Respondents from the 61 percent of districts that had experienced a shortfall were asked to identify the main reason why the original⁹ FY 01 energy budget was insufficient. Table 6 shows the primary factors associated with shortfalls as identified by district respondents: increased unit costs for energy (83 percent), increased need for energy due to adverse weather conditions (8 percent), increased need for energy due to construction (5 percent), and other causes (4 percent).

The likelihood that districts identified adverse weather as the main reason for the shortfall varied by several district characteristics:

• Small districts (11 percent) were more likely than other districts (3 percent of both midsized and large districts) to cite weather as the main factor.

• Twelve percent of rural districts identified weather as the main reason, compared with 3 percent of urban districts and 4 percent of suburban districts.

• Districts with low overall FY 01 budgets per pupil were less likely to attribute the insufficiency to adverse weather than districts with mid-level budgets per pupil (3 versus 11 percent, respectively).

Level of Difficulty and Reasons for Difficulty in Responding to Increased Energy Costs

The 61 percent of districts that had experienced a shortfall reported various levels of difficulty in responding to increased energy costs in FY 01. Twenty-eight percent indicated that it was very difficult to respond, 39 percent found it moderately difficult, 24 percent reported that it was slightly difficult, and 9 percent said that it was not difficult (Figure 2).

The questionnaire asked districts that had insufficient funds allocated for energy needs to report why responding to increased energy costs was difficult. As shown in Figure 3, districts reported various individual reasons or combinations of reasons for the difficulty:

• Three-quarters (75 percent) of the districts that experienced a shortfall were unable to garner additional funds and had to reallocate funds from other programs.

• About half (53 percent) tapped unappropriated surpluses.

• About half (46 percent) used a large proportion of the nonpersonnel budget.

Other reasons why districts found it difficult to respond to increased energy costs included the need to institute severe austerity measures (20 percent), reluctance to approve increases in the level of energy funding by authorities (i.e., administrative approval not immediately forthcoming) (19 percent), the need to raise school taxes (8 percent), the need to roll the shortfall over to the next fiscal year (8 percent), and the need to use short-term loans to finance the shortfall (7 percent). About 4 percent indicated that some other measure had been taken to respond to the situation.

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⁹ During pretesting, it was learned that school districts often revise the budget after the start of a fiscal year in response to unexpected occurrences. One example that often led to changes was unforeseen energy expenditures. Therefore, the questionnaire asked about the original district budget for energy.

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