'One of the most difficult budgets': School division forced to take out loan amid financial difficulties

Manitoba school division borrowing money River East Transcona School Division is borrowing money for the first time in two decades. CTV's Mason DePatie reports.

A mix of increased enrollment, inflation, and a lack of surplus funds has River East Transcona School Division (RETSD) borrowing money for the first time in two decades.

The school division approved its 2023/2024 budget on Tuesday – a feat Elise Downey, the division's CFO and secretary-treasurer, said was extra challenging this year.

"I've been doing this for nine years, and this was probably one of the most difficult budgets that we've had to get through," she said. "Lots of tough decisions. Lots of tough discussions."

Of the $224 million budget, 86 per cent will go to salaries, leaving 14 per cent to cover everything else. It's not enough for two additional purchases needed by the division.

The school division is borrowing $650,000 from the bank to cover the cost of new transportation and student record systems.

"The student information system that we currently have is coming to the end of its useful life, and so we do need something else," explained Downey. "You can't function in a school division without a student information system."

The division said the annual payment for the loan will be included in its balanced budget and will be paid back in five years.

"We need to provide the education for the students of Manitoba. Unlike other levels of government, we cannot carry a deficit year-to-year. We have to pay as we go," said Rod Giesbrecht, who is on RETSD's board of trustees and is the financial committee chair.

In a statement to CTV News, Minister of Education and Early Childhood Learning Wayne Ewasko said in part, "What I can tell you is the division received an increase of $11 million this year, one million more than they said they needed at a minimum when I met with them last November."

"It equates to a 9.8 per cent increase in 2023/24, building on the 5.0 per cent increase the division already received in 2022/23," added the statement.

Giesbrecht said the November assessment didn't account for increases in enrollment.

"Provincial funding over the last number of years has been substantially shorter than what we needed in comparison to inflation as well as the number of new students we are receiving," said Giesbrecht.

Giesbrecht said the need to take out a loan highlights how the provincial government needs to change its funding model.

"Begin again that which they started, which is why we desperately need a new funding formula for River East Transcona School Division, and I believe every division in this province," Giesbrecht said.

A new funding formula was slated to happen for this year's school budget cycle, but the province delayed it by a year.

Giesbrecht said if the government doesn't come up with an adequate funding model by next year, the RETSD will have to start making deep cuts in the classroom.

OTHER SCHOOL DIVISIONS

Alan Campbell, president of the Manitoba School Boards Association, said some school divisions do keep a line of credit, but it is rare to take out a loan like the RETSD.

Campbell said many school divisions are dealing with tough financial situations.

"School divisions have extremely difficult decisions to make whether they are reducing stuff, cutting programs or taking out a bank loan to keep their heads above water."

Campbell said despite the Manitoba Government's latest budget touting the single largest increase in public education funding since it took power, it comes after years of underfunding.

He said many school divisions would be upset if the new funding formula is delayed again.

"That would be problematic for many divisions who look at the system as antiquated and problematic at best."