No Funding Relief in Sight For Cherokee School District
The Cherokee County School Board's work session on Thursday yielded no good news going into the early stages of compiling the fiscal year 2014 budget.
While it could be a "flat year" for the Cherokee County School District when it comes to predicting revenue growth, there is still a chance that furloughs could be implemented for the 2013-14 school year.
School district staff on Thursday during the school board's work session provided updated information on the financial outlook for the district. They also included information on how the sequestration could impact the district in the future.
Candler Howell, assistant superintendent of financial management, warned the district on its dwindling reserve fund balance.
To make up for state funding shortfalls, the district has had to dip into its reserves, and the fund currently has about about $28 million.
Howell expressed his discomfort at the current balance, adding the district's reserves should be around $45 million.
“We’re getting down to a dangerous level," he said.
Howell noted that may force the district to borrow more and earlier for its tax anticipation notes.
On the good side, Cherokee County Chief Tax Assessor John Adams believes the county will see a "flat year" when it comes to revenue, so no drastic shortfall at the local level is expected, Howell added.
While the upcoming fiscal year budget won't have any drastic cuts, it's the following year's budget that could suffer.
Kenneth Owen, supervisor of iinternal audits, grants accounting and budgets, told the board that sequestration at the federal level could hit the district hard and its affect could be "magnified." He's been told to expect anywhere from 5.2 percent to 8.2 percent in cuts.
However, Owen told the board staff is preparing as if they will take a 8.2 percent, or $1.2 million, hit.
The cuts will have the biggest impact on the district's most needy students, such as those who attend Title I schools (institutions with a higher percentage of free and reduced lunch recipients), those who speak English as a second language or those students who take advantage of the Migrant Education Program.
One program that would potentially take a hit is summer school sessions at Title I schools.
“We’re trying to protect the classroom for the full school year wherever possible," he added.
Superintendent Dr. Frank Petruzielo noted the lack of funding will make it challenging for the board to accomplish its three objectives laid out its 2013 legislative priorities: to restore the school calendar to 180 days, to reduce class sizes and to eliminate unpaid employee furloughs.
The district has had to cut $26 million from its budget due to state austerity cuts and an additional $30 million due to the "dramatic" drop in local revenue.
Unlike other counties with larger commercial properties, Cherokee County is primarily residential in nature, and Petruzielo said the housing market meldown and foreclosure crisis have both hit the county hard.
For example, Petruzielo noted that five years ago, one mil would generate $7.8 million for the district. As of 2011, that same mill now garners $5.8 million.
“We’ve done our level best to try to protect the classroom in an environment where we’re clearly 26 million short from what we need from state and we are way down on our local revenue," he added.
Another "problem" the superintendent noted is the replacement of the birthday tax with a one-time title fee.
The district historically has collected $12 million each year from the ad valorem tax and that number could drop "precipitously" if more people opt out of the birthday tax when they purchase new cars.
"With other revenue problems we have, that would really push over the edge if the (state) legislature...got amnesia about the commitment to make us whole and make sure we don’t lose money as a result of this wonderful new policy," he added.