Coweta BoE set to adopt $168 million budget

The Coweta County Board of Education on Monday gave tentative approval to a $168.5 million General Fund budget for the 2012-2013 school year that begins July 1. Final approval is expected on June 12.

Like every other county in Georgia, Coweta finds itself in the grips of a seemingly endless recession that continues to take its toll on local revenues that account for much of the school system’s income. Yet the budget comes with no reductions in K-12 academic offerings, no reduction in the 180-day school year, no additional cuts in educational programs or services and no salary reductions for employees working 180 days or less other than state-budgeted Pre-K reductions. In terms of class size, the budget does come with the addition of one student in Kindergarten, second and third grades.

Coweta County School System funding has been reduced since FY 2003 because of state cuts instituted as a result of lower state revenue collections, according to school system spokesman Dean Jackson. 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 school system faces a number of challenges for the 2012-2013 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; and

-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 board in giving tentative approval for the $168.5 million budget did so by using $10.4 million in the fund balance to make up for the shortfall in 2012-2013. The fund balance on June 30 is expected to total $30.3 million, of which approximately two-thirds will be carried over next year.

The $10.4 million in operational reserves is being budgeted to cover those revenue shortfalls in 2012-2013. However, provided that the school system is able to continue creating budget savings during 2012-2013, as it did in 2011-2012 and in several previous fiscal years, actual reserves used could be as low as $7.5 million, said Jackson.

Jackson said the 2012-2013 budget tentatively approved by the board would also maintain property tax rates at the current 18.59 mills, which the board has maintained since first setting that rate in the summer of 2004.

The school system has historically operated with a fund balance of between 6-8 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.

In addition to the General Fund, there were three other budget funds tentatively approved by the board as a part of its total 2012-2013 budget, said Jackson.

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. A total of $17,440,500 in debt service expenditures are budgeted for 2012-2013, which will retire outstanding bonds held by the school system on Feb. 1, 2013, said Jackson.

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.