Faced with more reductions to their revenue, the Newton County Board of Education was forced to make more cuts to its budget in an effort to make up for approximately $6,300,000 in expected revenue that the system will not receive.
The loss of revenue comes from both the state (more than $4,500,000) and locally (approximately $1,500,000), and Superintendent Dr. Steve Whatley was quick to point out there may be more reductions in revenue forthcoming.
When the Fiscal Year 2010 budget was approved by the board in June it was with the assumption that the Newton County School System would receive $51,247,395 in local revenues and $94,960,832 in state revenues with expenditures at $149,369,006. There were also reductions in employees and in days worked for some employees and restrictions on spending. The ending fund balance was projected to be around 7 percent.
Since that time however, the board was informed of several reductions in funds. The Quality Basic Education (QBE) funds were reduced by 3 percent, teachers and staff were required to take a three-day furlough, the health insurance rate has been decreased and transportation revenues are still being finalized for state reduction. Additionally, local revenue was lowered by approximately $1,500,000 bringing the total loss in excess of $6,300,000 for the FY10.
“If no adjustments were made in expenditures then an ending fund balance June 30, 2010 would be less than 3 percent or approximately $4,400,000,” reads the superintendents recommendation to the board. “The state revenue situation remains unclear with further reductions in the system’s state earnings a distinct possibility.”
It was recommended – and the board approved – several additional reductions in order to attempt to make up for the lost funds. Beginning December, employees will be charged $21 per month for single dental/optical/hearing coverage – which is currently offered at no cost, reducing an additional day in the work calendar for certified and classified administrators and staff at pay grade 12a and above. The compensation for board of education members will also be reduced in the same proportion as administrators.
Although it is not recommended as an elimination, the district’s contribution to individual employee health insurance premium will be frozen at the current rate of $81.10 and $66.10 per month, though it is anticipated that an increase in the employee’s portion of state health insurance beginning with the December deduction for the January 2010
The board will also be eliminating summer school and the 20-day instructional extension program, reducing further the encumbrances for textbooks and instructional materials, cutting the operations budgets for maintenance, energy, fuel and supply and limiting technology purchases to replacements for essential equipment which is no longer working.
The biggest concern seemed to be the decrease in contributions by the NCSS to the supplemental retirement plan beginning in October. Currently, the NCSS contributes 5 percent, but will cut that to 3 percent. This would be a cut that would be routinely reviewed and that would be moved back to the original contribution of 5 percent as soon as fiscally possible.
“Is there any realm of possibility of replenishing the 2 percent reduction at a later date?” asked board member Eddie Johnson.
“I can’t promise any future action,” said Whatley. “We will just have to look at that down the road.”
“I know we are in some trying times and very difficult times but I have some serious concerns that we are going to impact our ability to recruit and retain some of our best teachers by taking away from their long-term retirement fund. I think we should not allow our teachers to bear the burden of these hard times.”
“You know Eddie, all of us feel that way,” replied board member Cathy Dobbs. “And as we look to the future we are hoping out economic stability returns… There are some systems in this state that don’t have an ending fund balance and are operating at a deficit. Every county in this state is doing the same thing, having to cut in places they don’t want to cut.”
According to Whatley the only other option the board could find that would allow them to continue contributing the full 5 percent to the supplemental retirement would be to cut take-home pay – something all board members were emphatically opposed to.
“We chose not to alter the take-home pay,” explained Whatley. “Because it was something that people needed now and they had bills to pay, versus a supplemental retirement that is over and above the teacher retirement system.”
Johnson said that he was still opposed to the cuts to the supplemental retirement and requested a commitment by the board to replace all lost funds as soon as it was financially possible to do so.
“Things are going to turn around and it shouldn’t be an issue,” he said.
“Let me ask you something,” said board member Johnny Smith. “I would love to replace it [supplemental retirement cuts], but we are not going to some out of this for seven, eight, 10 years. How are you going to put a number on that?”
“I’m not going to go and debate that,” said Johnson. “It’s simple math – 101 math. That’s it.”
“If we take out $1.5 million we replace it at a given time later. That’s it,” reiterated Johnson.
The board voted 4-1 in favor of accepting the superintendent’s recommendations for the additional cuts with Johnson voting against it.
According to Whatley, the goal was to not have to make reductions in take-home pay or to require furlough days other than the three already scheduled. He did caution that the
The estimated savings by making these reductions is $3,274,370. The remaining loss of revenue will be taken from the ending fund balance of the budget but still at a loss of more than $3 million.