Fayette School Board budget talks: Expenses still outstrip revenues by $14 million
New proposals by Fayette Schools Superintendent Jeff Bearden would cut up to $4.4 million in a proposed budget where expenses will still exceed revenues by more than $14 million, but it will leave $5.7 million in the bank to help offset the certain shortages that will continue in 2012.
The Fayette County Board of Education held another budget work session May 31 in an attempt to reconcile the FY 2011-2012 budget that, as presented a week earlier, would leave the school system with expenses exceeding revenues by $19 million and wiping out the fund balance to do it, all while there is no end in sight to the recession.
Bearden at the May 24 meeting recommended a General Fund budget that included $189,070,871 in expenses and $170,228,865 in revenues, a difference of $18.84 million.
That shortfall could be made up by using the expected June 30 fund balance of $19,139,574, thereby resulting in a June 30, 2012 fund balance of $297,568.
Bearden in addressing the proposed budget added that, if adopted, his intention would be to then have the board begin meeting this summer for the FY 2012-2013 school year that begins in July 2012 to make significant cuts that could amount to approximately $15 million.
But that did not occur May 24 since three of the five board members wanted to have the budget numbers re-worked so that some of the cuts could be potentially made for the upcoming school year rather than making all the cuts 12 months from now.
Voicing that opinion were Marion Key and Bob Todd and Sam Tolbert, with Tolbert suggesting that Bearden look at the potential for cutting approximately $9 million out of the proposed budget. Board members Janet Smola and Terri Smith supported Bearden’s recommendation.
Bearden returned May 31 with a two-part proposal that cut more than $900,000 from the original proposal or one that would cut $4.4 million in expenses. The proposal came from two large budget categories: administration and personnel.
Bearden proposed $916,458 in cuts from a number of administrative line items and/or a $3.44 million cut by reducing the school year by two student days and five days overall. Those specific days would need to be worked out if the proposal meets with board approval, Bearden said.
Expenses under the first option would be $188,154,413 while the expenses after the administrative and school calendar cuts in the second option would total $184,712,413. Revenues projections remained unchanged at $170,228,865.
So “option one” would translate into a budget where expenses exceed revenues by $17,925,548 and “option two” would result in a budget where expenses would exceed revenues by $14,483,548.
Comptroller Laura Brock reported that the expected June 30 fund balance, as of the May 31 payroll, would be $20,227,919. Under “option one” the year ending fund balance on June 30, 2012 would be $2.302 million while the balance under “option two” would be $5.744 million.
Even if the board adopts the “option two” recommendation with its June 30, 2012 fund balance of $5.7 million in the checking account, the FY 2012-2013 school year could easily see an additional $10-20 million in expenses exceeding revenues that will come to bear in that school year.
That exact amount will not be known for some time and is something that the school board will have to address quickly, as Bearden and board members have said, based on what we know now about the state and local economy and what local and state economic forecasters expect to occur in the next two or more years.
The school board will continue budget discussions at the June 7 work session.