For the first time in five years, the Bulloch County Board of Education is looking at a budget that projects the school system will take in more money than it spends. And that includes a recommended 2 percent raise for all employees.
Actually, the school system's revenue in the current fiscal year, which ends June 30, is on track to exceed the $88.4 million that was originally budgeted by $1 million, and spending from the general fund never reached the budgeted $90.6 million total. So balance was already being restored.
But for the projected FY 2019 budget, which Chief Financial Officer Troy Brown presented to the board last week, the school system benefits both from the final restoration of state funding after recession-era austerity cuts and from shifting some purchases to the Education Special Purpose Local Option Sales Tax. Gov. Nathan Deal announced the elimination of the last vestige of austerity cuts about two weeks ago, and Bulloch County voters approved a five-year E-SPLOST renewal, with "general fund relief" included, last November.
"Drum roll!" Brown said, concluding his presentation. "I won't dance, but I love to see this. This is something that we haven't been accustomed to seeing. … For the first time in a while, our expenditures are below our revenues. Yes, I will say that again. Our expenditures are below our budgeted revenues."
Superintendent Charles Wilson had laughed, Brown said, when he first told him the amount of the projected surplus: $4,670. That is tiny in relation to a proposed $95 million general fund budget. It allocates money to a school system with more than 10,500 students and 1,500 employees and doesn't include some separate budgets, such as the one for E-SPLOST.
"But by golly, our revenues are greater than our expenditures," Brown said.
The final step in phasing out austerity cuts will bring Bulloch County Schools almost $1.1 million in additional state funding, Brown predicted. This is part of an expected increase of almost $5.1 million in total state funding to the local system. Other parts include $1 million for enrollment growth and program changes, $1.2 million for an increased employer share in the Teacher Retirement System, an equalization grant because Bulloch's per-child tax base is lower than average, and funding for step raises for experience and training.
A smaller revenue increase, $492,938, is expected from local taxes, including 1.5 percent projected growth in the property tax digest and 3.7 percent in the regular Local Option Sales Tax.
Explaining a list of spending increases totaling $6.47 million, Brown matter-of-factly noted the raise proposal.
"The superintendent has recommended a 2 percent salary increase to all employees, certified and noncertified," Brown said.
He noted that the governor had not changed the state salary scale for teachers but that the state scale is now optional anyway for Bulloch County, as a Strategic Waivers School System.
But Superintendent Wilson spoke up to give Deal some credit for the locally proposed raise.
"He did make it possible by what he did in ending the austerity reduction," Wilson said. "I'll give him credit for that."
Brown agreed, noting that the amounts — $1.1 million from state austerity cessation and a little over $1 million for the locally proposed raise — are almost equal.
The budget also proposes a $2 million increase in per-student local funding to individual schools. This includes an increase from 70 percent to 80 percent of the "local values" funding Wilson recommended last year plus the effect of enrollment growth. Another $2.1 million would go to Teacher Retirement System increases, with the state's pass-through funding, $1.2 million, only covering the TRS hike for certified educators.
The one spending-side item Brown called "good news" is a $705,267 decrease in general fund spending through central office departments. He attributed this mainly to shifting expenses out of the general fund to the E-SPLOST fund. By law, this money cannot be used for salaries, but textbooks, e-books, other technology and school buses are among items now to be purchased with E-SPLOST.
If the board adopts the budget as presented and all goes as planned, it will leave intact a projected $13.5 million July 1, 2018, balance to still be the year-end balance on June 30, 2019. Brown noted that this amounts to a reserve of 14.25 percent, only now back below a 15 percent state guideline for school system reserves.
Brown has said that guideline is meant as a maximum, but the Bulloch County Schools were not penalized for exceeding it when they amassed a larger reserve beginning a decade ago. During the recession years the local board cut spending, instituted teacher furlough days and eliminated about 100 jobs through attrition. As of 2015, the school system had a more than $19 million fund balance, against a then-smaller budget.
After halting furloughs, for the past three fiscal years the school system has restored some jobs and given some across-the-board raises. Beginning several years ago Brown and Wilson also proposed, and the board last year partially funded, giving each school additional money per student, based on "local values" such as a perceived need for more counselors and art, music and physical education teachers than the state provides, but to be spent at the discretion of principals and their leadership teams.
All of this was done without increasing property taxes, although Wilson had suggested a millage rate increase in 2015.
"I want to give Mr. Brown credit and this board credit, too," Wilson commented during Thursday evening's meeting. "If you think about this, in the last five years we have very intentionally, looking through the storm clouds … in the use of our fund balance we stuck to our values. We've addressed a lot of things in terms of the funding formula for students, salaries for the teachers. We stuck to our values; we stuck to our plans — congratulations."
District 1 board member Cheri Wagner said "really the community as well" deserved thanks, especially for voters' support of the E-SPLOST extension.
A further budget presentation is slated for April 26, with the board to consider it for tentative approval May 10 and final adoption May 31.
Herald reporter Al Hackle may be reached at (912) 489-9458.