Newton County schools may not face any budget cuts in the upcoming fiscal year, but could be in for “several million” dollars of cuts in 2013, the superintendent said Tuesday.
Dr. Gary Mathews, superintendent of Newton County Schools, told the Board of Education that the current projection for the 2012-13 schools budget would avoid cuts by using more than half of the general fund’s balance, which is the remaining fund balance that carries over from year to year and can be used as a cushion when revenue falls or expenditures increase.
Mathews said Tuesday he wanted to avoid budget cuts next year in hopes that the halting economic recovery will take hold and gain steam in the next 18 months, leading to a recovery of tax revenue. He said he was pessimistic about funding levels from the state and federal governments holding steady.
“For the coming 2012-13 year, we hold pat,” Mathews said.
According to current budget projections, the school system would weather the 2012-13 fiscal year without substantial cuts, despite an anticipated “worse case scenario” drop in tax revenue of 8 percent, by using more than half of the $14.1 million general fund balance. That would leave a projected $6.6 million to start the 2013-14 year.
Without any spending changes, and assuming no increases in revenue, the schools would finish the 2013-14 year with a $2.4 million deficit. Mathews and Peggy Bullard, the district’s business manager, said the budget would have to be cut by about $6.8 million to maintain a 3.3 percent fund balance, or about $4.5 million.
“Various experts throughout the state have recommended that we maintain a fund balance of at least 7 percent of the budget, which would amount to $9,546,904,” Bullard said in a memo to the BOE.
Mathews said it, “would be premature to speculate as to specific cuts in the 2013-14 budget.”
On Tuesday, he credited “efficiencies” the Board of Education adopted last year, including privatizing the county alternative school, cutting more than 200 positions and changing the district’s transportation plan, for the reason cuts may not be necessary next year. In all, the BOE approved nearly $8.3 million in cuts last year.
Bullard said 219 positions were eliminated, though many were retirements and transfers that were not refilled. She said she did not know exactly how many people had been laid off, as opposed to how many retired or transferred.
Those changes produced an additional $4 million in unanticipated savings this year, much of which the BOE voted to give to school employees in the form of a two-day pay bonus – essentially paying back two of the six furlough days.
Board members on Tuesday discussed whether to reduce the employee furlough from six to four days for next year. “We just voted to give them some days back because they’ve been devoted employees,” BOE Chairman Almond Turner said. “I would let them keep the days and deal with it later.”
Mathews and BOE member Eddie Johnson urged against that, however, saying the $820,000 the foregone furloughs would cost next year would just add to the 2013-14 deficit.
“I think we have to exercise fiscal responsibility to project to the public,” Johnson said.
The school system is projected to spend $131.6 million this school year, about $1 million more than the projected revenue and down from $133.4 million last year. If that projection holds, the fund balance would be $14.1 million at the end of this year.
Anticipated cost increases, such as state health insurance, textbooks and the Newton County Career Academy, would push next year’s expenditures to $134.8 million, while revenue is expected to fall to $127.4 million from $130 million this year, according to the school system business office.