It’s full-speed ahead for a 3 percent one-time pay bonus for Bulloch County school system employees, and no school-related tax increase for local property owners. The Board of Education tentatively adopted its fiscal year 2017 budget Thursday evening.
The bonus for all school system employees, called a stipend by officials, is being funded from a $1.7 million increase in the state funding the school system receives. But the board is also spending down its reserve as it continues the increased local funding it initiated last year to all 15 schools.
That funding was intended to make up for Georgia’s recession-period “austerity” cuts in per-student funding in advance of the state government eliminating the last of these.
Other costs increase
Other added costs, including some beyond the board’s control, are also contributing to spending that exceeds projected revenue in the new budget, just as it did in the old one. Projections that Chief Financial Officer Troy Brown explained at an earlier meeting included an increase of about $400,000 to the teacher retirement system, about $700,000 to the state health plan and about $600,000 in step increases for employees moving up the pay scale.
But in the budget he presented for the board’s approval, the deficit spending had been reduced by about $300,000, from almost $4.1 million in Brown’s earlier projection to a shade under $3.8 million.
“We were able to identify items that we could cut and made additional cuts from several different departments,” Brown said, “from personnel to software to various materials.”
The budget was tentatively approved on a motion from District 2 board member Mike Sparks, seconded by District 3 member Dr. LeVon Wilson. A final vote is slated for June 25.
This budget projects expenditures and transfers totaling $86.26 million against revenues of $82.47 million for the school system’s general fund. After starting the new fiscal year this July 1 with a $16.4 million balance, the general fund is projected to end the year June 30, 2017, with a $12.6 million balance.
But that would still be about 14.6 percent of the annual spending, very close to the 15 percent reserve the state long set as a maximum.
The reduction in the reserve during the past year was not as steep as originally projected. Among other factors, not all schools spent the full amount allotted them in the board’s attempt to make up for lingering effects of previous funding cuts. But many principals reported using the money to hire additional teachers or other faculty or staff members.
Stipend vs. raise
The board unanimously approved the 3 percent one-time pay bonus for all employees at the previous meeting in May. It is projected to use $1.5 million of Bulloch County’s $1.7 million share in increased state funding.
Gov. Nathan Deal originally proposed a $300 million statewide increase as sufficient for a 3 percent raise for teachers. But the appropriations bill approved by the Legislature states more broadly that the money gives local boards “flexibility to eliminate teacher furlough days, increase instructional days, and increase teacher salaries.”
The Bulloch County Schools eliminated furlough days two years ago and were back at a full 180-day school calendar in 2015-16. Last year, the board also gave employees who don’t have teaching certificates a 5 percent raise in base pay and refreshed a long-frozen local salary supplement to give teachers roughly a 1.5 percent raise.
So this year’s one-time stipend was adopted as a way to pass the new state funding along to employees without committing to a long-term raise.
No holdout vote
Last year, District 7 board member Mike Herndon voted against the final version of the 2015-16 budget when it included both the raises and the austerity-cut restoration and resulted in a reduced fund balance. This year, when Herndon is the chairman while in his final year on the board, he voted for the 2016-17 budget, despite another projected reduction in the balance.
“I think it’s a good budget,” Herndon said Friday. “Again, with restoring the austerity funds last year at 100 percent including the raises, which I was for, I just wanted a little more conservative approach with the austerity funds, but when we started down that road we can’t really change that now."
Principals already added personnel and started programs with last year's increased funding, he noted.
What Herndon pushed for last year was a 75 percent restoration instead of the 100 percent local restoration of austerity cuts that was given, he said.
Any savings at this point, he said, could help the board not have to increase the millage rate in coming years as construction and consumer spending increase, improving property and sales tax revenue.
By restoring some of the previously reduced state funding, the governor and Legislature in effect gave back some of the money the local board had already taken the initiative to spend. This, Herndon said, partly fulfilled his hope that things would get better.
But he said board members still have a lot of concerns, with state officials looking at implementing a new funding formula for schools next year and with the economy still not fully recovered.
“We’re still concerned about what the future holds, of course, and all of the board is trying to be good stewards of the money and the finances,” Herndon said.
This, he said, is why the board opted for the one-time stipend rather than a further raise that would continue in future years.
“The reason we did it that way this year is because we don’t want to bind ourselves to something that the state may not continue,” Herndon said. “We don’t want to be in a situation where we’re having to take back (a raise) or raise taxes to accommodate something that was taken from us.”
Herald reporter Al Hackle may be reached at (912) 489-9458.