The Troup County School System will see an estimated $5 million shortage for the fiscal year 2013 budget.
Schools Chief Financial Officer Don Miller told the board Tuesday that increased personnel costs and a shortfall in state funding has left a projected deficit for the budget.
“In spite of all the cuts in fiscal year ‘12 to balance the budget, we’re back at a $5 million problem,” he said. “Our dilemma is achievement standards keep going up and dollars keep getting cut.”
A large portion of the deficit is caused by underfunded state grants.
“The big thing is you’re seeing state funding drop from 62 percent to 50 percent,” during a period from 2008 to now, Miller said.
Troup only received 82 percent, or $41 million, of the quality-basic-education grant from the state. The state equalization grant is funded at only 68 percent of what it should be, Miller said.
“People wonder why you’re doing cuts, well those are $12 million in cuts right there,” he said. “The underfunding of the grants created a $16 million shortfall. The fact that we’re only down $5 million with this much shortfall says a lot.”
The school system’s cost for health care and retirement benefits also have put a strain on the budget.
Classified health insurance for employees like bus drivers and food service workers will increase more than $4.5 million annually. Retirement increases come at an impact of $700,000 each year.
Salary and benefits make up almost 89 percent of the system’s total budget, and other expenditures have not increased during the past eight years, Miller said.
In fiscal year 2004 the school system spent $11.4 million on items such as utilities, fuel, supplies, maintenance, property insurance and textbooks. Eight years later, the system spends $11.6 million a year, only a $200,000 increase despite inflation and rising fuel prices, Miller said.
“That’s the effort that has gone into this system,” he said. “I was shocked when I saw this.”
The school system does have $15 million in reserves it could use, but that does not help long term.
“We are working to use reserve funding for a year … but using reserves does not solve the problem,” Miller said.
The reserves could theoretically fund through fiscal year 2014, but would leave only $33,000 for future problems.
“That’s how quick $15 million would disappear if you’re not taking actions to deal with the problem,” Miller said.
While the system has not discussed any specific reductions to its budget, there are options. More schools could be consolidated or closed. Cannon Street Elementary School was closed last year, saving the school system $1.1 million.
Other cost-saving actions taken for the fiscal year 2012 budget included reducing staff development, increasing after-school program fees, cutting back on supplies and equipment, and trimming some staff at the central office and other locations. A portion of reserve funds also were used.
Programs, budgets and staff also could be reduced. The system also could choose to have leave-without-pay days, or furloughs.
“We’re not talking about specific things we’re going to do at this point,” Miller said.
State Sen. Josh McKoon was in attendance to hear Miller’s presentation to the board. Miller said he sent off informational sheets to local representatives detailing the system’s financial strain, and McKoon was the first to respond.
Also Tuesday, the board chose John Darden to act as chair this year, replacing Shelia Rowe. Alfred McNair was selected as vice chairman.
Board attorney John Taylor also updated the board on its redistricting map, which was completed last month.
The map was sent to the state reapportionment office and a bill has been drafted. State Rep. Randy Nix was expected to propose the bill with the map soon, Taylor said.
The next step after the bill passes would be for it to move to the Department of Justice.
Read more: La Grange News - School system projects 5 million shortfall
