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School budget picture ‘bleak’Tue, 05/20/2008 - 4:35pm
By: Ben Nelms
Supt. DeCotis in budget hearings with school board: Will taxes have to be raised? Fayette County School Board members will soon begin deliberations on the 2008-2009 budget that takes effect July 1. Portions of a preliminary budget review were discussed in brief Monday night, though board members said the undoubtedly lengthy discussion would be better held at a budget workshop now scheduled for June 2. Front and center in that discussion will be budget needs and potential cuts in expenditures needed to offset a weakening local economy and increasing costs. The suggested FY 2008-2009 preliminary budget review provided by Comptroller Laura Brock showed initial proposed cuts of $527,000, though additional cuts will likely follow. “The budget picture is kind of bleak for us and private industry,” said Superintendent John DeCotis. “We will try to come up with a budget that will not impact the classroom.” Figures showed that total receipts from all funding sources for FY 2008-2009 under the preliminary budget review are estimated to generate $193,186,231 at the current 18.596 millage rate, compared to adjusted proposed expenditures for FY 2008-2009 of $196,789,934, a difference of $3.6 million. The problem is with revenues, Brock said. Those problems include items such as decreased tax collections and a reduction in interest rates. Not without consequence is the slow economic growth anticipated at 2.61 percent for the year and the loss of students that generates income. “In a tight year where you lose students and have a weak housing market, you have to find places to cut,” DeCotis said. “It’s going to be difficult to continue to provide services people are accustomed to. It will be tight for a couple of years.” The expenditure side of the budget is also not without its problems. Affecting the budget during the current school year and perhaps even more next year will be the cost of energy, mainly fuel to run schoolbuses. The 2008-2009 budget carried those costs at $763,000, though in recent weeks Brock told board members that figure could reach $1 million by the end of the fiscal year on June 30. The suggested 2008-2009 budget proposes a $1.2 million allotment for energy, a 57.27 percent increase over the previous year. DeCotis told board members areas being primed for cuts included the reduction of 34.5 positions by attrition, reducing overtime costs, the potential for reconfiguring bus routes, reducing the number of summer employees and having a summer schedule that consists of a four-day work week. Personnel, said DeCotis, accounts for 88 percent of the budget. The repurposing of East Fayette Elementary will also amount to a $1 million savings, he said. In terms of how the budget affects the millage rate, Brock provided board members with information showing that even with more than $525,000 in adjusted expenditures and total adjusted expenditures of $196,789,934, the millage rate would have to increase to 19.35 mills, an increase of .754 mills, to generate sufficient revenue to come close to covering current preliminary expenses. The expense figure will likely change during the budget workshop. The potential also exists for an increase in the bond millage rate. Slow economic growth and the current debt service may require a .6 mill increase to cover the shortfall. The amortization schedule shows $20.710 million in FY 2008-2009 but with collections of $17.311 at the current 3.55 mill bond rate. Making good on the $20.710 million would require additional tax collections of $2.899 million, or .6 mills. The bond debt service will see a dramatic decrease within the next two years, when the figure drops to $12.673 million in FY 2010-2011 then continues a steady decrease through 2027. The June 2 budget workshop will be followed by additional budget talks, if needed, at the June 16 monthly meeting and a June 23 called meeting for a vote in time to have the budget approved prior to the June 30 deadline. login to post comments |