A recent decision by the state of Georgia to cut an additional $2.2 million in funding to the Bulloch County School System for the coming fiscal year has forced school officials to redo the system budget to handle the unexpected shortfall.
Charles Wilson, assistant superintendent of Business and Finance, said funds from the federal stimulus package the state originally earmarked for education were being redirected back to the state to deal with its own budget shortfall. He said the school system was anticipating a $5.3 million cut from the state and had planned its budget accordingly, but the system now must look at cuts adding up to $7.5 million.
“We saw the economic downturn coming and we've dealt with it head on in adjusting our budget," Wilson said. “I believe the school board and the administration have been responsible in the entire budget process. But the state keeps changing our funding.”
The school board was scheduled to talk about the budget at its March 25 meeting, but postponed discussion after Wilson gave his report on the additional revenue cut. The board will meet tonight at 6 p.m. in the school board offices on Williams Road.
“As a board, I believe we need to look at the budget issues and possible options in dealing with the issues in a methodical way,” said school board member Edwin Hill. “We don't want to make drastic decisions without fully exploring the impact of any decision on the education of our kids.”
Wilson said about 60 percent of the school system's approximately $87-million budget is funded by the state. The rest comes from federal funding, a portion of Bulloch's local sales tax and from part of property taxes paid by residents.
"Obviously, in a down economy, sales tax revenues are lower than the year before, because people are buying less," he said. "This year we are tracking approximately $1 million below where we were last year in sales tax revenues. This is first time I have seen a reduction in revenue from the previous year since I came here 13 years ago."
Wilson said the school system put a plan in place last year to eliminate 75 staff positions through retirement and attrition. He said that even with those position cuts, the budget still would be about $2 million short this year. Wilson said the system was planning to tap its reserves, or fund balance, to make up the difference.
But that plan was in place before learning of the additional loss of $2.2 million.
“We had a three-year plan in place to manage the cuts using some of the fund balance,” Wilson said. “We thought the cloud would be lifting by then. But the $2.2 million funding cut and forward direction we've received from the state forces us to re-evaluate everything.”
The school system currently has a fund balance — reserves — of $10.9 million. If no changes are made — no layoffs, no program reductions and no millage increase - and funding continues to decline, Bulloch's fund balance will be gone by fiscal year 2013 paying for budget deficits, Wilson said.
Dr. Lewis Holloway, superintendent of Bulloch schools, said the current budget figures in six furlough days for all school system employees, including administrators. But a bill passed by the Georgia House and awaiting action in the Senate could prevent the BOE from instituting any furlough days.
The bill says if a system has a fund balance that's more than 6 percent of the budget, then it can't furlough any employees. Bulloch's fund balance is approximately 12 percent of the budget.
“If that passes, we really would be up against the wall,” Holloway said.
Hill said the school board always likes to look two and three years down the road in planning the budget, but “that's becoming increasingly difficult given the uncertainty of the economy and state funding.”
Hill listed three options he classified as drastic that the school board would be forced to consider if funding and revenue continue to decline: staff layoffs, program cuts and a millage increase.
“Clearly, layoffs and program reductions are last ditch options because that would directly affect the quality of education we offer our children,” Hill said. “Similarly, a millage rate increase would be a final course of action, and only after we went through our budget completely and looked at every expense. We would make sure our house is fully in order before we decided to place any additional burden on the taxpayer.”
Hill urged residents to attend school board meetings and learn about the budget woes.
“It's a very tough fiscal environment and I want our community to be aware of the issues we are dealing with,” Hill said. “As a board, our primary concern is providing a way for our system to deliver the best education possible to our children. That's the best investment we can make. But finding ways to fund that investment is getting increasingly more difficult.”
James Healy can be reached at (912) 489-9402.