The Fayette County Board of Education on May 24 will hold a budget work session on the FY 2011-2012 budget that takes effect July 1. Recent figures pertaining to expected revenues and expenditures show a different story than most in Fayette County are accustomed to. The ongoing recession has effectively neutralized the long-sustained glory days when annual leaps in the Fayette economy boosted local property tax operating revenues along with increases in state dollars received from climbing student enrollment, both of which are now in decline. This year notwithstanding, the more serious budget considerations for FY 2012-2013 are less than a year away.
The most recent revenue and expense projections came at the May 17 regular session where expenditures for the upcoming school year were estimated at $191.8 million, compared to $180.4 million for the current year that ends June 30. Nearly the entirety of the $11.370 million difference came from $10.94 million in state-required teacher step increases, additional increases in healthcare benefits and the recent full restoration of the 4.5 percent pay cut instituted by the board two years ago.
On the revenue side, Fayette continues to take hits from the recession. Figures released by the Georgia Dept. of Education just prior to the May 17 meeting showed that state dollars, including those associated with Fayette County’s falling student enrollment, will decrease by approximately $4.7 million in the coming school year. Meantime, Fayette County’s falling tax digest, projected by Tax Assessor Joel Benton to decrease 4 percent or more this year, is likely to bring in $4.5-5 million fewer dollars during the FY 2011-2012 school year, school system finance said.
That double hit brings projected revenues to approximately $169.6 million compared to the $191.8 million in potential expenditures, a difference of $22.2 million.
The currently projected $22.2 million shortfall in expenditures over revenues, or at least the majority of it, could be offset by what is expected to be a $18.9 million fund balance as of June 30. Without downward adjustments to the expenditure side the school system would end the coming school year in June 2012 in the hole with a fund balance of -$3.3 million.
The bottom line expenditure figures from the May 17 meeting may well look somewhat different when the board meets on May 24. The results of the continuing effort to review payroll data and personnel allotments affecting the expenditure side of the budget will likely be presented Tuesday night, Comptroller Laura Brock said Friday.
Unfortunately, the school system and school board have bigger fish to fry in the near future. While the school board could approve a FY 2011-2012 budget that is balanced or near-balanced, it is the budget just one year from now that will bring much bigger problems unless the economy does a near-miracle turn around or unless significant cuts in expenditures are made.
School system projections for the FY 2012-2013 school year show continued decreases in student enrollment and state dollars, further decreases in local tax digest revenues and increases in expenditures. The difference between FY 2011-2012 and FY 2012-2013 is that there will likely be no multi-million dollar fund balance to rely on, no more federal dollars and no more ability to increase millage rate since Fayette tax payers are already being assessed at the state-maximum 20 mills.