With state and federal funds dropping and various expenses rising, the Madison County School Board is set to “roll up their sleeves” to prepare a 2013-14 budget that would avoid dipping deep into its contingency fund.
A draft budget approved Tuesday night would draw $2.84 million from the district’s $4.2 million reserve.
However, Madison County’s school board has put itself in a better position than most Kentucky school boards, said Superintendent Tommy Floyd.
For the past five years, the school board has used no capital outlay money for its general fund and has accumulated a capital outlay reserve of nearly $5 million.
However, cost increases and funding decreases are showing no signs of stopping.
“Since I’ve been on this board, we’ve been talking about saving for a rainy day. And now those clouds are gathering,” said board chair Mona Isaacs.
The draft budget anticipates a $400,000 decrease in state SEEK (Support Education Excellence in Kentucky) funding. Last year, the district received around $38 million in SEEK funds, which was $800,000 less than the previous year.
“What does this mean? This means it is somewhere around a 2008 figure. Which means Kentucky’s investment in base SEEK per child is a figure that is not a 2013-14 figure,” Floyd said. “These are pretty difficult times. Our state has not kept up financial support for Kentucky schools. For seven years, I’ve played the subtraction game as far as SEEK is concerned.”
Transportation also is an area that has received less state funding in recent years, Floyd said. In 2004-05, the district faced a $153,659 reduction in state transportation funds. In the 2012-13 budget, that shortfall could be as much as $2.1 million.
If the board does not vote for a property tax hike this year, expected revenue from local taxes would be about $20 million. This figure is just $60,000 more than what was budgeted last year, because of an anticipated increase in motor vehicle tax revenue, said Debbie Frazier, the district’s chief financial officer.
She also budgeted $5 million in anticipated revenue from the utility tax. In the 2011-12 school year, the tax generated $4.7 million.
“When we have 60 to 70-degree days in January, that seems to definitely impact our utility tax,” she said.
Rising unemployment and retirement costs also will “dramatically impact” the budget, Frazier said.
Unemployment historically cost the district around $30,000 annually. That now exceeds $200,000.
Teacher retirement, which was once totally state funded, is projected to cost the district $600,000 in 2013-14; and $1.2 million in 2015-16.
Retirement costs for classified staff also have increased. In 2003-04, the district paid out $470,469. In 2012-13, more than $1.8 million was budgeted.
The budget anticipated a 0.5 percent increase in personnel costs because of step and rank changes on the teachers’ salaries, even with no base pay raises.
For example, a new teacher just out of college starts at $35,850. After one year of experience, that increases to $36,070.
Teachers eventually are required to obtain a master’s degree and move up in rank. After the fifth year of experience, plus a rank increase, a teacher makes $43,869.
Step and rank changes are different than pay increases, Floyd point out after board member Mary Renfro asked if teachers were not getting raises.
In 2009, the state mandated that districts increase teachers’ base pay by 1 percent, which cost the district between $450,000 and $475,000, Floyd said.
Increases in base pay normally are up to the school board, and none have been given since 2009, he said.
Starting in February, district officials will begin to visit each school to determine their base staffing needs. They also will look at district programs (foodservice, transportation, preschool, etc.) as well, the superintendent said.
“These are tough times, and we don’t want to reduce staff. We don’t want to end programs … But citizens do not need another tax increase,” said board member John Lackey. “I’m not a Tea Party person, I can vote for a tax increase, as long as I am satisfied that all of the possible economies have been made, and I don’t think you’ve done it.”
Lackey mentioned a 2011 Richmond Register article that compared central office staff costs to other districts with similar numbers of student “where there was a lot less staff at the central office than there is here. My guess is, there are some positions that we can do without.”
“I’m with John (Lackey),” Renfro said. “I think there are things we have to cut back.”
Around the same time last year, Lackey submitted a list of 20 suggestions where he thought the board could make economies, he said. “I don’t think a single one of them was adopted, and I’ve got two or three more now. I will submit those ideas again.”
Some of those suggestions included: “Eliminate all assistant principals except for one per school; eliminate Middle College; eliminate at least one of the instruction supervisors — maybe all of them; establish a policy discouraging employment of future people who already draw public pensions; or eliminate assistants to assistant superintendents, except whoever assists Debbie Frazier.”
Floyd said over the next few months, the district will take the board’s suggestions, determine the pros and cons of each and return with a report on how they would affect students.
The draft budget was presented as a “worst-case scenario” he said.
“We should show you what would happen if we didn’t roll our sleeves up and ask some questions,” the superintendent said. “And we’re going to disagree – some of you like to disagree. And that’s cool, because that’s how we get better. But in then end, we’re going to have 10,600 students who depend on us to offer them a quality program that gets them college and career ready.”
Floyd also mentioned the “really passionate people” in the community who give input to the school district.
“Surely it’s no secret that part of the problem is that we need that same energy turned outward so that Kentucky will fully fund its schools,” he said. “There are no superintendents out there that are feeling any differently than I am, or school boards feeling any differently than you are.”
Crystal Wylie can be reached at email@example.com
or 623-1669, Ext. 6696.
District anticipates $400,000 shortfall in state funds
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