Fayette BoE’s FY 2012 budget relies on $16.4M reserves to plug deficit hole


They had talked about the Fayette County School System’s $186.66 million FY 2012 budget that takes effect July 1 for weeks, so the June 21 meeting came down to a 3-0 vote to approve, taken with no comments. The $186.66 million expenditures portion of the General Fund budget recommended by Superintendent Jeff Bearden carries a revenue estimate of $170.2 million, a deficit of $16.4 million.

The school board’s vote included the use of $16.4 million in current fund balance to make up the difference for the school year that begins in August. That will leave a projected $8.6 million in the fund balance a year from now.

Bearden in an earlier statement told the board his new proposal called for no calendar reductions that would lead to payroll cuts, but did include the $900,000 in administrative cuts along with $3 million in “recently found” funds from money owed by the state for employee healthcare premiums already paid, $800,000 in adjustments to state revenue owed to the school district, $250,000 in additional property tax receipts and a data entry error that accounted for a duplicate entry of $1.5 million.

Though adopted June 20, Bearden and some on the board have said discussions should begin in August to address the FY 2013 school year. The reason for the need to make plans for the near-term future is clear.

Like much of metro Atlanta, Fayette County is still in the midst of the recession.

Despite the economic rationalizations by Washington and Wall Street Fayette’s tax digest that will be released in August is expected to show a 4-5 percent decrease over last year. That directly translates into fewer property tax dollars to fund the school system again this year.

And on the other side of the revenue equation, state dollars linked to student enrollment figures continue to fall as Fayette’s enrollment continues to shrink.

The school system ended the FY 2011 school year with attendance levels that resembled enrollment numbers not seen since 2002. Enrollment numbers are also expected to decrease again in August.

Translation: either the monetary value of the county had better pick up quickly and substantially and/or Fayette had better recoup hundreds of its lost students.

Otherwise things will only be worse a year from now.

And that’s the rub. That is because the school system is expected to end the FY 2012 year next June 30 with a fund balance of $8.6 million. That is about half of the amount that was needed to balance the FY 2012 budget.

So with stagnant or continued falling state and local revenues, and unless other unforeseen changes occur, the school system will have to significantly reduce expenditures.
And that is where the conversations will begin in August.