Madison County school leaders expect five furlough — or “amended calendar” days — next school year, but no layoffs are planned. And there will be no tax rate increase to fund school operations.
While there is no reduction in force (RIF) plan in place for this year, the long-term financial outlook for the school system includes some ominous clouds, especially in 2013-2014, when the system’s reserve funds could dip below standard levels.
“We don’t see the rainbow yet,” said school superintendent Dr. Allen McCannon. “We still see more valleys to go through.”
McCannon said he’s been informed by county chief appraiser Robin Baker that the schools should expect a 10 percent reduction in the county digest. That correlates to a 10 percent reduction in local property tax revenues for the school system, a drop of $1.14 million.
Only 24 percent — $9.9 million — of Madison County’s projected $40.8 million budget is funded through local revenues. The state will provide $28.8 million in revenue for county schools for the next school year, including a $1.7 million boost in “equalization funds,” which help level the field between rich and poor school systems. Madison County ranks 161st out of 180 systems in terms of local tax support.
Nevertheless, the school system anticipates total revenues at $38.9 million for 2012-13. That means the schools will have to pull from reserves, which are estimated at $3.8 million to begin the fiscal year to cover the revenue shortfall for the upcoming school year.
Ultimately, the schools expect to start the 2013-14 fiscal year with a reserve balance of $1.86 million. That means a revenue shortfall in the 2013-14 budget could wipe out the reserves.
Consequently, McCannon and assistant superintendent Bonnie Knight say the next fiscal year will be a real strain on the system. McCannon said he anticipates 10 “amended calendar” or furlough days in 2013-14. The school system has had six, five and five amended calendar days over the past three years. McCannon said the system has had regular calendar cuts to avoid massive hits in any one particular year. But he expects 2013-14 to be worse than previous years.
“It doesn’t look good for fiscal year ’14,” he said.
Knight notes that revenues have been on a downward trend for the past four years. She added that if revenues had held at the 2009 level, the system would have had an additional $7.3 million in revenues over the past four years. Likewise, Knight said that, according to the state’s own funding formulas, Madison County should have received another $17.9 million revenues over the past four years. This shortfall in the funding formula is called an “austerity cut.”
McCannon said the school system is constantly looking for ways to cut costs. With the bad economy, the natural turnover through retirements has slowed in many fields. The school system is trying to entice some long-time educators with retirement packages, noting that if the educators go ahead and retire, the natural influx of younger, lower-paid teachers will reduce costs for the system. It’s a natural flow that has bogged down in recent years. The system could have approximately 10 retirees this year, Knight said.
Meanwhile, the schools have cut technology costs $130,000 this year. Knight said school board technology manager Amy Denman renegotiated license and maintenance fees and held off on some planned updates to equipment. McCannon said the schools have also cut textbook costs.
The superintendent said the state is not providing the funding it should for local systems. And he said system employees have felt the pinch. He noted that some teachers’ net pay is $3,000 to $5,000 less than it was four years ago.
“In order to deal with the austerity cuts (from the state), local systems have taken away what teachers would have made,” he said.
Also looming on the horizon is the issue of health insurance coverage for non-certified or “classified” school employees, such as bus drivers, cafeteria workers and parapros.
Many of these jobs pay very little and the primary perk of the position is a good health insurance plan. But the state is backing out of funding these costs and planning to leave local systems to deal with the expense.
“Many people took these positions because of the benefits,” said McCannon. “Now the state is wanting to change the game.”
The superintendent said the issue has not been resolved and he foresees some sort of conflict at the state level regarding the benefits.
“We’ll just have to wait for a decision to be made so we know where to go,” he said.
