Three of the five members of the Fayette County Board of Education instructed system staff to take the proposed budget back to the cutting board. The proposed budget exceeded expected income by nearly $19 million.
During the May 24 budget work session for the FY 2011-2012 school year that begins July 1, the three — Chairman Bob Todd, Vice Chairman Marion Key and freshman member Sam Tolbert — told Superintendent Jeff Bearden to take his recommended budget and prioritize its components for the May 31 meeting so that the nearly $19 million in expenses exceeding revenues can be pared down significantly.
Bearden near the end of the budget meeting said he was recommending the General Fund budget that included $189,070,871 in expenses and $170,228,865 in revenues, a difference of $18.84 million. That shortfall could be made up by using the expected June 30 fund balance of $19,139,574, thereby resulting in a June 30, 2012 fund balance of $297,568, Bearden said.
Spending the June 30 projected fund balance of $19.1 million to balance the budget would leave the school system with a year ending balance on June 30, 2012 with approximately $300,000 to try and ride out the FY 2012-2013 school year that is expected to see a continuation of falling revenues and increasing expenses such as healthcare costs.
Board members Terri Smith and Janet Smola said they supported Bearden’s recommended budget and his recommendation that the school board begin meeting this summer to determine ways to cut expenses for the FY 2012-2013 school year. Smola added that some cost-cutting measures could be implemented in the second half of the upcoming school year.
“My goal is to get the budget adopted and then to meet immediately for 2013 to get to significant cuts, maybe $15 million, if the board will accept this,” Bearden said.
For their part, board members Sam Tolbert, Marion Key and Bob Todd disagreed with putting off the determination of where to cut expenses. Tolbert suggested that Bearden prioritize items for the May 31 budget work session and be prepared to present a list of those items so that up to half of the $19.1 million fund balance on June 30 be available on June 30, 2012 rather than the $297,568 that would remain if Bearden’s recommended budget were adopted.
Todd reiterated the idea of prioritizing a list of potential cuts that would provide a cushion for the fund balance going in to the 2012-2013 school year next July.
Todd and Key agreed with Tolbert and, though no vote was taken, Bearden was tasked with fulfilling the majority opinion.
Bearden indicated that he would do as instructed, adding that those re-worked figures would have a definite impact on employees.
Also at the meeting, the General Fund numbers had been re-worked from the previous week with the result that what had been projected as $169.6 million in revenues is now listed at $170.2 million and what had been listed as $191.8 in expenses is now listed at $189 million.
The biggest difference was in personnel dollars, said Comptroller Laura Brock. Those re-worked figures, which Brock noted had been extremely preliminary, included variables such as Social Security that are customarily entered at a standard rate of 7.65 percent for each employee. Calculated by hand, those numbers led to a re-adjustment of more than $2 million in salaries and benefits package that totals approximately $170 million.
The approximately $600,000 that was added to the revenue side came from the inclusion in the General Fund of transfers from the community schools revenue account that holds deposits from facilities rentals, driver’s education and other income sources.
Whatever the FY 2011-2012 budget turns out to be, the reality is that the school board has a number of tough decisions to make long before the 2012-2013 school year begins. A glance at the budgets of the county’s other tax-levying entities tells that tale.
Fayette’s student enrollment figures continue to drop and that decline is expected on continue at least for another year. Those enrollment numbers, now at about where they were a decade ago, directly translate into the dollars that come from the Georgia Dept. of Education despite other state cuts that may or may not be forthcoming.
And at the local level, the tax digest continues to fall precipitously for the second year, again generating fewer tax dollars to fund the school system.
For the Fayette school system there are few places to turn given that the board for the past two years has levied the maximum millage rate allowed, 20 mills, under state law.
While not a straight apples-to-apples comparison, the situation with the school system next door in Coweta County is close enough to reference.
Coweta’s school board this week tentatively adopted a $165.5 million budget for FY 2011-2012, a decrease of $200,000. Coweta has more students, more employees, better pay for teachers and they did not furlough teachers last year. And, being fiscally conservative, Coweta has $18 million in a reserve account that only the school board can touch.
