The Fayette County Board of Education heard last week its funding next fiscal year could be more than $10.3 million less than what it currently gets, bad news for a system already reeling from $12.65 million in cuts so far this year.

Comptroller Laura Brock at the Jan. 26 meeting gave the board a look at several factors that could influence budget calculations on next year’s budget cycle that begins in July.

Austerity cuts by the state, said Brock, have totaled $39.46 million in the past eight school years, with the largest cuts coming this year and, to date, totaling $12.65 million.

Brock emphasized that there is no current way to determine what form and magnitude austerity cuts from the coming school year might resemble. All indications have been that next year will be worse, partly because the state has already used most of the federal money and, consequently, the state will not see the same level of federal money to shore up the cuts, Brock said in a prepared statement.

The tax digest, too, is a potential concern for next school year’s budget. Brock said the tax assessor’s office knows that the digest will decrease but that level is currently unknown. Unsubstantiated sources outside the assessor’s office that are the functional equivalent of rumors suggest as much as a 7 percent decrease, she told the board.

Brock noted that every 1 percent decrease in the tax digest represents approximately $900,000 in decreased local revenue. Following that calculation, a decrease in the digest of 3 percent equals $2.7 million while a 7 percent decrease in the digest represents a $6.3 million hit to the school system. Further, she said, those numbers do not take into account a possible decline in the percentage of collections.

Also on the budget radar are staff benefit costs. The school system currently pays a percentage of the state base for all certified employees. That will change in July when the school system’s costs will be based on the specific plan chosen by individual employees.

Brock on the potential impact of the LFMS said it represents a reduction to the school system’s state-funded Quality Basic Education (QBE) earnings formula. Consequently, increases in the digest and decreases in the sales ratio result in an increase in the LFMS because they lower the state paid QBE dollars. The school system could find itself as much as $4 million to the negative in state revenue in this area, said Brock.

The LFMS in the QBE formula refers to the portion of the direct and indirect instructional costs that the state expects local systems to pay with locally raised funds. Currently, the state requires local systems to pay an amount equal to 5 mills of property tax generated within their taxing authority.