Final vote on schools' budget June 12From Staff Reports
The Coweta County Board of Education in a called meeting Monday voted to tentatively approve an operational budget of $168,516,698 for the 2013 fiscal year.
Final approval of the budget will require a second vote, which is planned for the regular monthly board meeting June 12.
The FY 2013 budget tentatively adopted Monday will not differ substantially from the Coweta County School System’s FY 2012 operational budget, said school system spokesman Dean Jackson. No reductions in K-12 academic offerings are anticipated.
School system funding has been reduced since FY 2003 because of state cuts instituted as a result of lower state revenue collections. There have also been decreases in local tax revenue in the two most recent fiscal years, and a slight decrease in the tax digest was budgeted for the upcoming fiscal year, Jackson said.
The Coweta County School System faces a number of challenges for the FY 2013 budget, including:
• A continuation of austerity cuts to state funding.
• A revenue reduction of approximately $4.2 million in state funding due to the legislature voting to adjust the formula used for distribution of equalization funds for school districts.
• A revenue reduction of approximately $1 million in state funding due to a recalculation of the Local Fair Share of the school system.
• An expenditure increase of approximately $1.8 million will occur due to an increase in employer rates for classified employees’ health insurance.
• An estimated 2 percent decrease in the local tax digest, which would result in a decrease in local revenue of approximately $1.3 million. The actual digest will not be known until later in the summer of 2012.
Superintendent of Schools Steve Barker noted that the school board anticipated this year’s current shortfall because of a continuation of state budget cuts, an ending to federal emergency funding, the increase in insurance costs for non-certified employees, and an additional decrease in state funding due to a recalculation of the state’s equalization formula (though the size of this year’s decrease in state funding due to equalization was more than expected).
The school board has built and maintained the school system’s reserves over several years in anticipation of steep declines in revenue, which allowed Barker to make the following recommendations for the FY 2013 budget to the school board:
• No additional cuts in educational programs or services.
• No reduction in the school system’s 180 instructional days for students.
• No salary reductions for employees working 180 days or less, other than state-budgeted Pre-K reductions (which has already been set by the state at 179 days).
• A slight increase in average class sizes, amounting to an additional one student in kindergarten and one student in second- and-third grade classes.
The school board adopted those recommendations during its tentative approval of the budget Monday. The FY 2013 budget tentatively approved will also maintain property tax rates at the current 18.59 mills, which the school board has maintained since first setting that rate in 2004.
The school system will use a portion of its fund balance to cover this year’s expected shortfall in funding from the state.
$10.4 million in operational reserves is budgeted to cover those revenue shortfalls in FY 2013. However, provided that the school system is able to continue creating budget savings during FY 2013 — as it did in FY 2012 and in several previous fiscal years — actual reserves used could be as low as $7.5 million, Jackson said.
The system currently has a fund balance of $21.1 million, on the accrual basis, or approximately 13 percent of total operations.
The system has historically operated with a fund balance of between 6 and 8 percent of operations, Jackson said. Use of only $7.5 million of reserves will leave the school system with approximately 8 percent of operations in its fund balance. The system will be able to meet payroll obligations and maintain an adequate cash flow without borrowing, and will be able to cover worker’s compensation and unemployment with existing balances, he said.
The FY 2013 school system budget tentatively approved Monday includes a General Fund budget of $168,516,698. That budget is funded principally by state revenues and local property taxes, and reflects an increase from the school system’s General Fund budget of $165,483,455 adopted for FY 2012, and a decrease from the $175,931,581 budget adopted for FY 2009. The General Fund includes the largest portion of funding for instruction and pupil services, maintenance and operation of schools, transportation, and other operational costs.
In addition to the $168.5 million General Fund, there were three other components tentatively approved by the board as a part of its total FY 2013 budget.
They include $22,320,106 in Special Revenue Funds, which accounts for funding sent to special federal programs such as Title I, federal lunch programs, and IDEA.
Also included is $50,334,681 in Capital Projects Funds, which accounts for construction and other capital expenditures during the year. School construction and debt service are funded principally by Educational Special Purpose Local Option Sales Tax (ESPLOST) revenues. The system also receives some state funding for construction.
Debt Service payments are made from ESPLOST collections already on-hand and set aside specifically towards short-term (five-year) bonds issued for construction projects under the current one-cent ESPLOST. $17,440,500 in Debt Service expenditures are budgeted for FY 2013, which will retire outstanding bonds held by the school system on February 1, 2013.
Those funds, combined with operations funds, total $258,611,985. When adopted in a final vote in June, the budget will take effect on July 1.