The Hazlehurst City School District will begin the process of overcoming a severe budget deficit in the coming year.
Financial advisor Suzanne Smith, who was appointed by the state to guide the school district through its money problems, explained the proposed budget in detail during a public hearing held last Thursday evening. The public hearing is required by state law as part of the budget process, but it is also “an opportunity to present the educational plan in dollars and cents,” said Smith.
Normally the budget process begins in late February or early March, but after the state takeover the budget process had to be expedited as soon as state personnel had a handle on the situation within the district. There was no time this year to get much input from teachers and principals, Smith told the crowd.
The school district operates out of 31 different funds, each fund with its own purpose, Smith explained. In addition to nine general funds and 20 special revenue funds, the district has two permanent trust funds: 16th Section and the scholarship trust fund. The district has to follow strict guidelines about how to spend the money in each fund – money
intended for a specific purpose can’t be used for something else.
Certain funds were found to have a deficit fund balance. This happened in several funds in the 2007-08 school year in violation of state law, Smith explained. Two major deficits as of July 1, 2008, were in the district maintenance fund and the food service fund.
To overcome the deficit, Smith explained, “We have to take in more revenue than is expended – for more than one year. That means we can’t spend all the new revenue that comes in.”
Revenue from local taxes makes up 17% of the budget, with another 56% from the state, 22% from federal funding, and 16th Section and other totaling 5%. Most districts are about like this, explained Smith.
“There is enough money here to educate children,” she said. “That’s a good thing.”
Priorities in the new budget will be to protect the instructional process and to begin the task of overcoming the deficit.
“We can’t do everything we want to do for the students,” Smith cautioned, because the money just isn’t there for it all. Federal monies will be used whenever possible to supplement in areas that have been cut. The substitute programs might not be exactly the same, but they will address the same needs.
Projected expenditures for the 2008-08 school year are $15,530,887.95. Smith advised that they hope revenues exceed expenditures by about $600,000. Unspent funds can be carried over from the previous year in several categories. State officials hope the district can make a significant dent in the deficit in one year.
Areas targeted are excess personnel along with budget tightening in other non-personnel areas.
Smith broke down the budget into detailed areas for the crowd at the public hearing. These details are available for review at the school district office.
CHANGES THIS YEAR
Differences in this year’s budget from last year’s include state mandated salary increases for teachers with 25 years experience, increases in health insurance costs, 20 fewer certified positions, 20 fewer non-certified positions, increased utility costs, decreases in projected gas usage (due to cutting six bus routes and increasing efficiency of those remaining).
The budget includes a four percent increase in operational ad valorem tax levy, as allowed by state law, which is expected to bring in about $90,000. But this increase is offset by a $174,585 decrease in the debt service tax levy, which should not result in a net tax increase.
Based on 1,530 students enrolled, per pupil expenditure will be $8,229 in the proposed budget.
The focus will be on instruction this year, but there will be money budgeted for the athletic department, band, and field trips.
Breaking down the budget into categories, 57% will be spent on instruction – this covers anything that goes on in the classroom, Smith explained.
Another 33% will be spent on support, which covers transportation, building maintenance, counseling, general administration, libraries, and other items. Smith explained the state’s formula for determining how much is spent on administration. Under state code section 37-61-9(4), the current law allows the district to spent $675,000. The proposed budget allocates only $358,500 for administration.
Non-instructional expenses will be 6% of the budget, which includes food service.
16th Section will be less than 1% of the budget.
The remaining 4% will be spent on debt service.
Millage last year was 34.23 mills. The worst case scenario, explained Smith, would be an increase of 1.65 mills for this year’s budget, but that’s assuming there has been no growth.
The proposed budget will be presented to the school board for approval at 5:30 p.m. Thursday, August 14. The school board and conservator will approve both the individual fund budgets as well as the overall combined budget.