The Georgia Senate passed, and the House in considering, a bill that prevents school systems with more than six percent of their operations budget in a reserve funds account from imposing additional furlough days on school system employees prior to June 30. But for the Coweta County School System that action, if it becomes law, will matter little since the school board previously said it would absorb up the three furlough days.
Sponsored by Sen. Preston Smith (R-Rome) and co-sponsored by Senate Finance Chairman Ronnie Chance (R-Tyrone), the Educator’s Salary Protection Act, Senate Bill 515, passed on a vote of 35-11. The measure is now in the Georgia House.
The proposal prevents a school system with more than six percent funding in its reserve accounts from furloughing employees when funding is readily available to prevent those furloughs, Chance said.
Chance said the state has exhausted its reserve account of almost $1.8 billion over the last two years. Most of the reserve funding went to education spending, he said. Meantime, state revenues have decreased 27 percent, he added.
For his part, Sen. Mitch Seabaugh (R-Sharpsburg) voted against the measure. While underscoring the good intentions of the bill, Seabaugh said the state should keep its distance from the fiscal issues faced by specific local school systems.
“SB 515 is a well intentioned bill. The state has used all of its reserves in trying to minimize cuts throughout the budget, including funding that affects education. But there are school districts who have held onto reserves while furloughing teachers. SB 515 addresses the situation where those districts who have healthy reserves and directs them to use reserves to pay for salaries instead of furloughing teachers,” Seabaugh said. “I voted against the bill. While I believe we should do all we can to minimize cuts in education, I voted against the bill because I felt that we at the state shouldn’t be trying to manage local affairs. We do not know all of the financing challenges any particular district may face. Forcing them to pay teachers from reserves this year may deplete funds and therefore force layoffs the following year. I just felt it best that each district be allowed the discretion. Teachers in that district could work with the board to figure the best course of action.”
Chance said school systems statewide have a total of $1.2 billion in reserved funds accounts in which those funds are unencumbered. But in the case of the state, said Chance, Georgia no rainy day funds remaining.
The situation in Coweta County, at least in terms of reserve funds, is markedly different. Coweta School Board members last month said the school system would absorb up to three upcoming furlough days if state funding for those days was withheld. Coweta currently has more than $22 million in its reserve funds account.
Commenting in mid-March on the school board’s decision to absorb up to three state-imposed furlough days, school system spokesperson Dean Jackson said the board was expecting legislative efforts to balance the state budget that ends June 30 to potentially include cuts to the state Dept. of Education that would by passed on to local systems in the form of three additional furlough days.
But Jackson said that eventuality will not have to show up on employees’ paychecks as a reduction in pay since the school board as of February has instituted sufficient cost savings measures to absorb the cuts that would amount to approximately $600,000 per day.
“We should be able to do that without dipping into the reserves,” Jackson said.
The school system during the recession has put $1-2 million per year into the reserve account, Jackson said. Coweta’s general fund budget sits at approximately $172 million.
“Georgia’s teachers are one of our most valuable resources; day in and day out they help mold our children into the bright young adults that will become our next generation of company owners, innovators, and even educators,” said Chance. “I am encouraged by the actions of my fellow legislators in passing SB 515. The Senate has demonstrated that we value the role of educators in our community and we will work diligently to protect their pockets in a down economy.”
But for schools systems like Fayette County the law, if enacted, may not apply since the Fayette School System does not maintain an officially designated reserve account.
Specific to Fayette County, the school system began the 2009-2010 year with a budget totaling $185.5 million. And while the school system has no specified reserve fund account, it did carry over a $4.5 million surplus from the previous year and, as of mid-March, anticipates ending the school year June 30 with an additional $8.15 million surplus, for a total of $12.659 million.
Fayette School Board members earlier this month said they would wait until April to determine whether to absorb the anticipated furlough days for all school system employees or to impose the furloughs in order to have a larger surplus amount for additional cuts expected for the coming school year beginning July 1.
Education spending in Georgia increased 34 percent between 2004 and 2010, Chance said. The FY 2004 budget included $8.59 billion for education spending. The FY 2010 General Budget contained $11.47 billion for education spending, he said.
